Breakfast briefing: Central banks realise they have to get more serious in the inflation fight

Economy / news

US inflation expectations stay high, fear of job loss higher; China posts huge trade surplus; Germany posts surplus too; Australian inflation in focus; UST 10yr at 4.81%; gold dips and oil stays high; NZ$1 = 58.6 USc; TWI-5 = 61.8

9th Sep 26, 7:22am by David Chaston

Here's our summary of key economic events overnight that affect New Zealand, with news inflation is high and rising around the world and central banks are confronting a change in priorities to get it under control. Their slow action is undermining their cred in the communities they serve. And that slow action has them facing some tough choices.

But first, the overnight Pulse dairy auction brought slightly softer prices except for WMP which was little-changed. The dips in the other commodities was cushioned by the lower NZD.

With the US back from holiday, more data has been released today. Of note is the ADP weekly employment data. The week-over-week change to their four-week moving average is less than +12,000 and that is nowhere near enough to confirm the last strong US non-farm payrolls report.

Meanwhile, the New York Fed's August consumer inflation expectations survey held the one year ahead data at 3.6%, basically where it has been since rising to this level in April. Expected price growth for petrol rose to 4.6%, and for food to 5.3%. Worries about the labour market intensified, with those surveyed seeing unemployment will be higher in a year now 44% of the survey, the highest level since April 2020.

And that is mirrored in the September update NFIB Business Optimism Index It fell away and by slightly more than expected. Inflation is now tied with taxes as the second top small business issue.

Consumer debt rose again in July in the US, up an outsized +4.2% from a year ago. Driving this surge were non-revolving debt borrowings, like car loans, student loans, and personal loans.

China has posted a strong trade result for August, with exports and imports up strongly, resulting in a fatter trade surplus. That surplus widened to +US$119 bln from +US$101 bln in July. It's surplus with the US accounted for +US$29 bln of that. Their August exports were up +25% and their imports were up +28.2% from the same month in 2025.

Germany also reported a larger July trade surplus, but it did so in a defensive way. Exports fell from June (-0.8%) but imports fell more on that basis (-5.7%) so its surplus widened to €21.3 bln in the month. Year-on-year however, their exports were up +6.1% and their imports were up +3.0%. The key reasons for the July import fall were a -7.5% fall in imports from China, and an -8.3% fall in imports from the US.

In Australia, consumer sentiment is retreating. The Westpac-Melbourne Institute August survey shows a raft of negative pressures. Household finances are coming back under pressure from higher fuel and rate rise fears. The housing downturn is starting to weigh on sentiment among homeowners. Nearly two thirds of consumers now expect mortgage rates to rise. And consumer unease about jobs, especially for construction and hospitality workers, is on the rise.

And things are little better in the business sector. The August NAB survey of businesses shows business conditions fell 5 points and turned negative for the first time in six years. Business confidence fell 2 points and now 12 points below its January level, and worse, profitability fell 10 points as input costs continued to outpace price recovery increases.

Meanwhile, RBA deputy governor Andrew Hauser said overnight that inflation is the major problem for Australia's central bank. He acknowledged Australians are struggling with the continued high cost of living and rising interest rates. But he also indicated those rates could rise higher in the coming months, because of their focus on fixing the key inflation problem. The Australian Government 10 year bond yield rose on the news, now its highest since 2011.

Separately, it is also probably worth noting that the price of EU carbon permits is rising again, now at €85.40/tonne (NZ$160/tonne). That is far from the NZ$50/tonne available locally.

The UST 10yr yield is now just on 4.81%, a rise of +1 bp from yesterday at this time. The 30 year yield is at 5.26%, up +1 bp. The key 2-10 yield curve is now at +40 bps (down -2 bps). Their 1-5 curve is now at +43 bps (up +1 bp) and the 3 mth-10yr curve is at +107 bps (-1 bp). The China 10 year bond rate is holding at 1.68%. The Japanese 10 year bond yield is now at 2.91%, unchanged as well. The Australian 10 year bond yield starts today at 5.20%, down -2 bps from yesterday. The NZ Government 10 year bond rate is now at 4.79%, down -2 bps.

Wall street is back from holiday and a bit lower with the S&P500 down -0.5% and the Nasdaq down -0.2%. Overnight European markets were mixed between Frankfurt's +0.1% dip and London's -0.1%. Yesterday Tokyo closed down -1.7%. Hong Kong was down -0.4% while Shanghai firmed a minor +0.2%. Singapore ended up +0.2%. The ASX200 ended its Tuesday trade down a full -1.0%. The NZX50 ended down -1.1%.

The price of gold is now at US$4386/oz, and down -US$21 from yesterday at this time. Silver is little-changed at just under US$66.50/oz.

Oil prices are little-changed but still very high at just over US$92.50/bbl in the US, while the international Brent price has dipped -50 USc to just over US$97/bbl. Hormuz transits still low today with just nine ships exiting over the past 24 hours, and six tankers escorted (2 dark with transponders off) and six entering for new loads (1 dark). The Red Sea activity is marginally higher than yesterday with about 20 each way at the Yemen chokepoint.

The Kiwi dollar is down -20 bps from yesterday, now just on 58.6 USc. Against the Aussie we are down -30 bps at 81.1 AUc. Against the euro we are down -20 bps at 50.4 euro cents. That all means our TWI-5 starts today at just over 61.8, down -20 bps from yesterday.

The bitcoin price starts today at US$78,564 and down -0.8% from yesterday at this time. Volatility over the past 24 hours has again been modest at just under +/-1.1%.

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Source: CoinDesk

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42 Comments

by Colin Maxwell | 9th Sep 26, 7:43am 1788896639

"Here's our summary of key economic events overnight that affect New Zealand, with news inflation is high and rising around the world and central banks are confronting a change in priorities to get it under control. Their slow action is undermining their cred in the communities they serve. And that slow action has them facing some tough choices."

This breakdown hits the nail on the head regarding the erosion of central bank credibility.

However, the "tough choices" these institutions face are actually a mathematical impossibility.

By acting too slowly, they allow supply-side inflationary forces, like oil and energy shocks, to firmly embed themselves into the global economy. The trap they are in now is structural...

The Policy Trap - Raising monetary rates cannot produce more energy. Instead, tightening right now only serves to speed up the stagflationary cycle by choking off production while costs stay high.
No Tools Left - Central banks are stuck in a lose-lose scenario. If they keep hiking rates to chase supply-driven inflation, they risk triggering a sovereign debt and bond market meltdown. If they ease rates and restart the money printing presses, they completely sacrifice the purchasing power of the currency.

Ultimately, it is a choice between destroying the productive economy or destroying the fiat currency itself.

This structural dead-end signals the eventual winding down of the Western-centric fiat experiment, as the global financial base inevitably shifts East toward hard-backed assets and entirely reconfigured reserve portfolios.

by Averageman | 9th Sep 26, 10:51am 1788907916

So is it a good time or a bad time to be interest only leveraged to the hilt... answer is obvious really.

Popcorn getting spicy.

by Yvil | 9th Sep 26, 2:44pm 1788921899

The answer is obvious to smart people. The very high inflation is terrible for depositors, as it devalues their savings. In the same way it is great for mortgagors as the balance they owe is equally being eroded by high inflation. Interest rates won't be able to be lifted significantly because governments are too indebted. The currency will be sacrificed at the expense of inflation.

by Colin Maxwell | 9th Sep 26, 11:04am 1788908640

Clive Thompson gives a very realistic summary of the machinations of the global bond markets.

https://www.youtube.com/watch?v=MGgHPP3-5uY

IMO, it is well worth a watch for anyone struggling with coming to terms with the financial terminology/jargon etc, and especially as this varies from country to country. Here are some time-stamps that I thought were of particular interest...

~ 3:40 He notes that there are concerns right around the globe, not just in the US

~ 6:45 UK 30 year gilts at a horrendous 5.9-6% right when their Debt:GDP ratio is the highest it has ever been - also the Ausy 30 year at 5.68%.

~ 15:30 Around the world interest on public debt is rising much faster than GDP is rising, and becoming a bigger component of governments budgets every year. If this keeps happening, sooner or later investors realise that this is becoming a debt spiral that is never going to end.

~ 17:00 The worry that governments print money to pay off all its debts, effectively creating some sort of high-inflation, or worse, a hyper-inflation, and then the government starts to bring in restrictions, and possibly the CB startsa new currency, lets call it currency B, or the New Dollar, or New Pound, New Euro, or lets call it a CBDC (Central Bank Digital Currency), it doesn't really matter what they call it. They bring in this new currency, and the government passes legislation to say that you can only use the new currency, the old currency is still valid for certain things, but it becomes more and more restricted, and so it becomes almost impossible to change your old currency into the new one.... .... there are many other scenarios, but none of them are good for bond-holders, and that is why, when investors invest in longer dated bonds, they expect a higher interest rate to accoint for that increased risk.

by Yvil | 9th Sep 26, 2:46pm 1788921985

"Ultimately, it is a choice between destroying the productive economy or destroying the fiat currency itself"

Indeed, and there is one clear answer: the currency will be sacrificed.

by JimboJones | 9th Sep 26, 7:50am 1788897034

I've been interested in the different approaches of the RBNZ and RBA. The RBNZ killed inflation dead by destroying the economy, although it has resurfaced again. The RBA had a lighter touch and inflation in Aus has been high for a while now.

I'm starting to change my mind and think the RBNZ has done a better job. Inflation has been too high in Aus for too long, and they're left with both high inflation and a reasonably high cash rate that will be hard to raise much further. Although those in NZ that have lost their job may think otherwise.

To be fair Trump tarrifs and the war didn't exactly help the RBAs cause. Without those maybe their approach was more appropriate.

by powerdownkiwi | 9th Sep 26, 8:19am 1788898794

Try thinking like an engineer.

They are facing a physical impasse, globally. Much less energy going into the System. Much damage to infrastructure. Increased bidding for ever-less. Triage. And a never-bigger collection of digital forward bets - far too many, and climbing.

And their 'tools'?

Interest-rates? That's a tool?

Spare me.

by interesting1234 | 9th Sep 26, 9:04am 1788901485

I'm starting to change my mind and think the RBNZ has done a better job.

You forget that most float their mortgages in AUS so changes in interest rates hit immediately and stir behavioural change. While this historically has seen AUS have a quicker drop in inflation, they also are coming off off a mass wash of money flowing through the economy via their housing boom (as we saw 2020-2021) along with higher oil prices, all fueling (pun intended) inflation.

The RBNZ has stifled the economy after failing to tick up the OCR in 2020 despite the known increase in money supply and it's expected effects, and now with higher input prices from a low NZD flowing through to consumer goods, coupled with high prices for essentials (food, transport, rates, insurance, electricity) they are trying to drop inflation by pulling more disposable income from the masses, which will only have a worse impact on businesses as people cut spending even further.

We are in a pickle, and govt and RBNZ are not coordinating their response in a beneficial manner. Govt is spending wastefully with consultants while cutting spending in areas of necessity (health) while they claim to be doing the country a favour, and RBNZ sucking more from the economy.

by KKNZ2025 | 9th Sep 26, 9:31am 1788903064

"The current National-led coalition government has reduced public service spending on contractors and consultants by over $915 million since taking office, compared to the previous Labour-led government's peak spending."

https://share.google/aimode/rAGOYLnpuyvEQg7Xi

by powerdownkiwi | 9th Sep 26, 10:53am 1788908033

Average vs peak?

The devil in the detail...

by The Person | 9th Sep 26, 1:33pm 1788917616

labour peaked at $1.27b, but had reduced below that before national took office. Now national have "saved" cumulative $915m by keeping under $1.25b. something doesn't add up in your link.

by powerdownkiwi | 9th Sep 26, 1:41pm 1788918101

Quelle surprise

by KKNZ2025 | 9th Sep 26, 3:40pm 1788925209

I provided an AI summary in response to "interesting1234"s unsupported claims of "Govt is spending wastefully with consultants". A brief review of the links confirmed that the "$915M reduction since taking office" was over the term.

Interesting also that the usual suspects kneejerk response is to attempt to undermine the point & fact that National are spending a lot less on consultants than Labour. Quelle surprise.

by The Person | 9th Sep 26, 5:58pm 1788933504

seems like the 915M saving is compared to some fictional alternative reality where they spent 300M/year more than labour did at it's peak.

by Jack Lumber | 9th Sep 26, 9:15am 1788902158

Having just spent 4 weeks in Aus I was shocked at how expensive it has become. Try the US for a real scare if your brave - feels like Nero is in charge there.

by bulls hit | 9th Sep 26, 10:30am 1788906630

For sure. Any young people looking to shift across the Tasman need to have eyes wide open. Opportunities may be better but other than cheaper petrol, groceries and most everything else are as expensive as here. And then consider the exchange rate

by Harry B | 9th Sep 26, 8:44am 1788900243

All this has the making of another global financial crisis in the months or year ahead

I lived with the days of high interest rates and high inflation but a whole generation have only experienced very low interest rates and of course the debt levels are so much higher so any small increase in interest rates has a big impact

I don’t think we have seen all the impacts of higher oil prices etc feed through into inflation , I feel it will go higher.

And on top of this government debt around the world has increased significantly meaning they are going to have to pay a hell of a lot more in interest, where does the money come from?

Buckle up, I don't see a good outcome

by powerdownkiwi | 9th Sep 26, 9:19am 1788902389

Interest is exponential.

So it was always a Ponzi - double or quits, twice the size each next round.

Why anyone thought that was forever, beats me.

But thinking ahead, the physics doesn't alter. The sun will rise irrespective of money. Emit carbon and you warm the planet - eventually beyond life-supporting parameters. Don't emit carbon, and you cannot do enough to repay the currently-held debt. Bet on more resources being available for extraction, forever, and your last betting-round will fail, and fall further than any prior.

And 2008 was never 'fixed' - more or less a 'doubling' ago. As shows up in numbers like 40 trillion (whatever that means).

Yes, buckle up.

by Colin Maxwell | 9th Sep 26, 10:16am 1788905797

Perhaps we could debate, PDK, that there is a degree of assertion in your comment, masquerading as inevitability.

Yes, Earth's climate is affected by CO₂, and yes, adding CO₂ has a moderate warming effect. But jumping from that proposition to “eventually beyond life-supporting parameters” is a huge leap.

Earth has been considerably warmer, and atmospheric CO₂ considerably higher, for extended periods in its geological history. Life didn't merely survive those conditions - the biosphere repeatedly flourished under them.

As you well know, CO₂ is also not some form of atmospheric poison, it is the fundamental carbon feedstock for photosynthesis, and excessively low atmospheric CO₂ is itself a constraint on plant life.

And the climate system is vastly more complicated than the simplistic “emit carbon → planet eventually becomes uninhabitable” narrative suggests. Earth's temperature is determined by the interaction of solar output, orbital configuration, axial tilt, precession, albedo, atmospheric composition, oceans, ice sheets, clouds, water vapour, vegetation and a host of other feedbacks.

In particular, Earth's orbital geometry, the eccentricity of its orbit, its axial tilt and the precession of the axis, produces enormous changes in the geographical and seasonal distribution of incoming solar radiation.

Those Milankovitch cycles have been a major driver of the glacial/interglacial cycles of the Quaternary. The planet's climate has consequently swung through very substantial natural changes without anything remotely resembling an event "beyond life-supporting parameters."

That doesn't mean anthropogenic CO₂ has no effect. Plainly it does. To me it means that “CO₂ warms the planet, therefore we are inevitably heading beyond the limits of life” is not a scientific argument, but a catastrophist extrapolation.

Maybe there is also a rather fundamental error in the financial argument too - compound interest may generate exponentially growing financial claims, but a financial claim isn't itself a ton of steel, a barrel of oil or a hectare of land.

The geological record rather conspicuously refuses to cooperate with the idea that a warmer Earth is synonymous with a lifeless Earth.

Perhaps the intellectually interesting question isn't whether CO₂ is “good” or “bad”, but rather where the climatic, ecological and economic costs and benefits sit across the enormously broad range of conditions under which Earth's biosphere has already operated.

IMO that is a debate well worth having.

To me, “eventually beyond life-supporting parameters” isn't an argument. It's an assertion of an apocalypse that has never been demonstrated - in fact quite the contrary.

by WinHonourHelp | 9th Sep 26, 10:47am 1788907641

100%

by Palmtree08 | 9th Sep 26, 10:58am 1788908305

Seeing as life can survive super heated hydrothermal vents at super high pressure on the ocean floor you are correct, the annihilation of Earths ability to support life isn't really in question for the next few hundred million years. Complex human society on the other hand, is ultimately unlikely to survive a 4degC rise in global average temperature cf pre industrial. Something your friends in the Kremlin and Beijing are working hard to achieve, with their plans to burn.

"Equilibrium global warming for today's GHG amount is 10°C, which is reduced to 8°C by today's human-made aerosols"

https://www.giss.nasa.gov/pubs/abs/ha09020b.html

Ironically it's other forms of pollution (Thanks China) that have prevented us from frying the planet so far.

by powerdownkiwi | 9th Sep 26, 10:58am 1788908327

Bollocks.

You need to stop going down rabbit-holes, CM.

The greenhouse effect is well understood - I use it myself.

And the lifeforms which existed before the carbon was locked away underground, DID NOT INCLUDE US. We totally evolved AFTER that era.

If you're going to opine on science, there is a threshold, eh? Stick to apples with apples, kind of thing. There is too much conspiracy rubbish out there as it is.

by Colin Maxwell | 9th Sep 26, 4:00pm 1788926418

“Bollocks.”

Oh yes, PDK… silly me.

For a moment there I almost forgot who was the arbiter of which questions may legitimately be asked in this realm.

Apparently “stick to apples with apples” means “stick to the questions that you have already decided have acceptable answers.”

Many of us could probably do with a set list, so that we don't make these blunders in the future.

by KKNZ2025 | 9th Sep 26, 4:05pm 1788926731

"silly you"...for questioning the gospel according to PDKs one true church.

Religious mania has a long history.

by powerdownkiwi | 9th Sep 26, 4:31pm 1788928265

There are ways to think.

Dispassionately, is a prerequisite start.

Logically, is good.

Laterally, is better.

In Systems, better still.

Critically - can point out why others have not arrived in the same place. Usually, they have omitted one of the stages; usually the Upton Sinclair quote applies.

As an example, opining that we are smart and will smart our way out because we always have - is cognitively deficient. Ring any bells? Delve, and you find that the major even held up as 'proof' that we can fix things we've stuffed up globally - the Ozone Hole - is actually just maintaining. Not fixed, not redressed; merely parried. And there isn't much else on the list. And there have never been 8 billion of us. Indeed. before fossil energy, no more than 1 billion (I wonder why that was a fact? I guess you'd call it gospel? I'd call it energy limits per head, but there you go).

by Colin Maxwell | 9th Sep 26, 5:15pm 1788930935

"There are ways to think.”

Ah yes, PDK. Thank goodness you’re here to provide the authorised thinking methodology for the rest of us.

And all of it so very dispassionately, logically, laterally, systemically, and critically too.

I presume the next stage is to claim the 99-year lease on the realm of permissible conclusions.

Could you send us the approved checklist? I would hate to accidentally blunder outside the approved box.

by The Person | 9th Sep 26, 5:59pm 1788933555

pdk thinking dispassionately?

by Palmtree08 | 9th Sep 26, 11:07am 1788908846

"Those Milankovitch cycles have been a major driver of the glacial/interglacial cycles of the Quaternary."

More concerning is the next hundred years, not the next ten thousand. The next ice age has been cancelled by humans using the atmosphere as an open sewer!

"New research suggests that the impact of humans on the planet is pushing back when the Earth might descend into its next ice age. While the Earth might have naturally cycled back into an ice age in 50,000 years’ time in the absence of emissions, we’re unlikely to see one for at least 100,000 years because of the CO2 we put into the atmosphere."

"https://www.carbonbrief.org/human-emissions-will-delay-next-ice-age-by-…"

by profile | 9th Sep 26, 3:09pm 1788923354

Calm down, humans did just fine and kicked off agriculture, beer and cities when the place was 3-5 degrees warmer. It wasn't until they banned ford rangers that the place cooled down again to be just right for Palmtree08 to wear his swanny.

"Sheet retreat during the Middle Holocene (~8–4 thousand years before present) are limited because geological records of a smaller-than-modern phase largely remain beneath the modern ice sheet. We drilled through 509 metres of firn and ice at Prudhoe Dome, northwestern Greenland, to obtain sub-ice material yielding direct evidence for the response of the northwest Greenland ice sheet to Holocene warmth. Here we present infrared stimulated luminescence measurements from sub-ice sediments that indicate that the ground below the summit was exposed to sunlight 7.1 ± 1.1 thousand years ago. This proposed complete deglaciation of Prudhoe Dome, coeval to reduced extent at other ice caps across northern Greenland, is consistent with interglacial-only δ¹⁸O values from the Prudhoe Dome ice column and ice depth–age modelling. Our results point to a substantial response of the northwest Greenland ice sheet to early Holocene warming, estimated to be +3–5 °C from palaeoclimate data. This range of summer temperatures is similar to projections of warming by 2100 CE."

https://www.nature.com/articles/s41561-025-01889-9

by Palmtree08 | 9th Sep 26, 4:15pm 1788927306

You'd probably be surprised how calm I am profile. I've come to terms with the human delusional sense of self entitlement. :-)

"In the analysis we focus on the intensity of the maximum temperature deviation relative to the preindustrial level, its timing in the Holocene, and the seasonal expression. In the model, the warmest HTM conditions are found at high latitudes in both hemispheres, reaching 5 °C above the preindustrial level, while the smallest HTM signal is seen over tropical oceans (less than 0.5 °C). This latitudinal contrast is mostly related to the nature of the orbitally-forced insolation forcing, which is also largest at high latitudes, and further enhanced by the polar amplification."

https://www.sciencedirect.com/science/article/abs/pii/S0277379112002168

As your reference says, "This range of summer temperatures is similar to projections of warming by 2100".

So this little frozen corner will surpass its early Holocene temperature spike with human caused heating soon.

by Palmtree08 | 9th Sep 26, 4:27pm 1788928067

"humans did just fine and kicked off agriculture"

So how is that cradle of ancient ag doing after a few thousand years of human environment degradation? "Large parts of modern-day Iraq, Syria, and Jordan now resemble dry plains or deserts rather than the lush landscape of the past."

"The region — the birthplace of irrigation and farming thousands of years ago — is now bracing for historic water shortages and agricultural failures. And such events will only worsen as temperatures continue to rise."

https://www.scientificamerican.com/article/climate-change-has-worsened-…

by powerdownkiwi | 9th Sep 26, 4:33pm 1788928424

CaCO3.

Their irrigation water evaporated, leaving ground-up rock particles - somewhat saline.

Southern Iraq has never recovered.

by Palmtree08 | 9th Sep 26, 6:36pm 1788935794

"water evaporated"

Yep, tends to happen at 45deg+ for months on end. ;-)

by profile | 9th Sep 26, 8:32pm 1788942734

"Large parts of modern-day Iraq, Syria, and Jordan now resemble dry plains or deserts rather than the lush landscape of the past."

Yeah, the Sahara was a jungle 8,000 years ago too. That will learn them to drive Ford rangers and not burn enough witches.

by Let me be Frank | 9th Sep 26, 9:01am 1788901289

https://en.wikipedia.org/wiki/Debt_deflation

by Nigel Ritson | 9th Sep 26, 2:39pm 1788921556

What are your thoughts re this links application to the article and discussion?

by Let me be Frank | 9th Sep 26, 5:22pm 1788931338

OK...i will admit I am lazy. The point of the link is for those seeking to understand the mechanics of debt to read the the link and apply its theorems to our situation.

We can expect certain actions to be taken given that situation (some we already can observe) and we can also see where it will ultimately arrive....as always the question is timing.

We must also remember that these theorems have been developed in a world that still had some capacity to increase its real outputs...that may no longer be true.

Some (such as PDK and myself, possibly others) see no capacity to increase real output...others appear to hope (believe?) there is more capacity to be found.

by Nigel Ritson | 9th Sep 26, 6:42pm 1788936124

I looked at the link and understand very little of it. No matter imo as the world financial system is long past the point where any adjustments on theoretical grounds can reduce international indebtedness, corruption,salve the ego's of power and status obsessed authoritarians, satisfy the lust to destroy life on the planet ( or conquer human stupidity and short term opportunism). Imo the shakedown will pivot around fear, greed and violence but I remain hopeful and need to be because I have grandchildren so work every day to try and make a better world.

by Let me be Frank | 9th Sep 26, 6:45pm 1788936347

Fair enough...the "shakedown" does exactly what you fear (imo)...and like you I have grandchildren and hope ( but not with great conviction) that something will improve the situation.

by Colin Maxwell | 9th Sep 26, 7:28pm 1788938885

If I may butt in here, Nigel, that entire Wiki link is a dreadful eCONomist's crock.

It completely obfuscates the fact that within the Western-centric fiat-casino-Ponzi model, ~97% percent of the broad-money-supply is created when commercial banks write up loans as debt instruments... wait for it, out of thin air.... that money never existed in he first place.

Under this grand wealth heist, the FIC and its related private monopoly-cartel of private banking corporations, get to pocket literally $trillions in terms of unearned economic rent, when this money should have been created as a public utility, for the benefit of egalitarian and sustainable societal wealth instead.

What-ever possessed Frank to imagine that... "The point of the link is for those seeking to understand the mechanics of debt to read the the link and apply its theorems to our situation."....is utterly beyond my comprehension.

The entire link is nothing more than a completely misleading distraction, attempting to disguise the fact that the entire status quo fiat experiment is going up in smoke right under our noses.... as we speak.

One of my all time favourite quotes, takes pride of place on my office wall. Written by the late Ross Ashcroft, it describes the mode of the true sovereign thinker which is the absolute polar opposite to this tripe in the Wiki link.

“To really understand something is to be liberated from it. Humanity's greatest ally is the self-educated individual, who has read, understood, delays their gratification, and walks around with their eyes wide open.”― Ross Ashcroft

by Let me be Frank | 9th Sep 26, 7:44pm 1788939847

your perspective Colin constantly ignores the fact that these theorems were developed during the period of 'gold standard'.

The reality is that fiat has existed alongside commodity currencies throughout history.

by Let me be Frank | 9th Sep 26, 10:26am 1788906413

Fiscal policy realities....

https://www.youtube.com/watch?v=e85be18144M