Steve Killelea

Modern Monetary Theory or quantitative easing is that the government can print money and give it to the banks.

And then as long as the debt's back to the government,

then the government's not going to foreclose on itself.

So it's all fine.

But gee, we can go back to the Chinese times.

And what we found then is they started to print money and ended up with runaway inflation.

We'll see it again and again and again, recording through history.

So the age we're in at the moment, and I'm not an expert on this by any means, but I'll throw in a couple of comments anyway.

I think in the current age we're in, we've got very, very low

inflation and that's why we can actually do this so now if you think what's creating the very very low inflation in some places negative is twofold one is is we've improved our manufacturing processes costs of goods have increased we're also finding in the way in many of the western countries in the world workers the rights of

been eroded, and we're also seeing decreases in the average wages in many countries as well.

This is particularly true, let's say, in the US, across Europe, and we could see it in the last few years in Australia.

So now, under those kind of environment, you can do it.

But the issue, and I know this one is a fact, if you're looking at the banks at the moment, they're swimming in money.

There are a couple of banks I can think of, if you went to at the moment and you put $5 million in them,

you get from 30 to 90 day bills, you get one interest rate.

If you put in over 5 million, you get 0.2% less on your interest rate because it's so much money, they don't know how to get it out.

That was part of the reason for the government relaxing its lending regulations last month.

So it's one thing to have all this money sloshing around in the system.

The other question is where does the money go?