We’ve previously reported on the gallant attempts of One Nation’s Malcolm Roberts and the Nationals’ John Williams to whip up interest in their Lending to Primary Production Customers inquiry. But things reached a low ebb at a hearing on Monday when the chair had one of his own staff appear before the committee. Darren Nelson, who works for Roberts, appeared before the committee in his capacity as the “Austrian economist” (sic) of LibertyWorks, a far-right libertarian outfit partly run by dumped IPA blogger Alan Moran. Both Nelson and Roberts immediately disclosed their employment relationship.

What followed was a strange journey into far-right economics that rattled John Williams, the soon-to-retire Nat who has worked his backside off to expose the crimes, scandals and unethical behaviour of major banks. Instead of talking about lending to primary producers, the ostensible subject of the inquiry, Nelson wanted to give a presentation to his boss about how banks created money out of nothing and the whole financial system was therefore profoundly flawed — reflecting, in his view, the fact that governments were intervening when they shouldn’t.

This appeared to have less to do with lending to primary producers and more to do with Roberts’ similar obsessions with what he (wrongly) calls “privately owned central banks“, which he believes create money out of “thin air” as part of the global climate change conspiracy run by banking families like the Rothschilds.

[Another stellar conspiracy theory from One Nation’s Most Wacky]

Williams, however, got sick of hearing about banks creating money.

“With this witness, are we allowed to ask any questions, or do we sit here and listen?” he asked Roberts.

Then he decided to have a crack. If banks simply conjured money out of nowhere, he wondered, why did they bother paying people interest to deposit with them? This befuddled the Austrian economist.

“If they only need about 10 per cent of the money they lend,” Williams said, “why do they carry out securitisation?”

“I would be starting to talk about something I don’t know a whole lot about,” Nelson replied.

Williams repeated his question several times: “Why would they pay people three per cent to put their money in the bank?”

“I’m not sure,” Nelson replied. “You’d have to ask the banks that …”

“Under this theory,” Williams objected, “they wouldn’t need the funds — this is what I’m saying. Why would they do it? If they can just create money out of fresh air, why would they carry out securitisation? They don’t need it under your theory. So why would they go down this road of securitisation if what you say and our previous witness says that they can just lend money out of fresh air, why do they need securitisation? This is where I’m baffled.”

Roberts and Nelson then combined to insist that this was the way banking really worked. Williams was unimpressed. “This is the point, Chair and Mr Nelson. If you are saying banks can just lend out squillions of dollars and they don’t need money in the bank, why do they go on a mission to get money in the bank?”

The issue remained unresolved when “morning smoko” arrived and Nelson departed, presumably for the short trip down to Roberts’ Senate office.