Bernard

This what I think, Alert: 30/04/09:

http://www.omo.co.nz/

The Borderless Banking Empire will not pass on the rate cuts now that their co-opearatives are back in place and their is no political will to have KiwiBank keep them in check by way of competition. KiwiBank is our lifeline to eventual financial sovereignty, if it goes we will quite possably remain a colony in servitude for good if this insanity is allowed to continue.

@Glenn
Insignificantly compared with unemployment

The whole banking system is heading for Nationalisation precisely because of the hole it is being dug into by the Reserve Banks.

Interest Rates are meant to reflect the balance between people's willingness to save and the demand for finance. Cutting interest rates in response to every crisis is only going to lead to the extension and entrenching of malinvestment in the economy; none of which will be with "saved" money, but with borrowed and newly created money. It is going to lead only to further reductions in productivity and further crises.

Not that the nationalisation of the banks, when it comes, is going to solve this problem, on the contrary..........

Phil Best - you have in that post just exposed, for all your long cut and paste jobs, that it would appear you have actually read very few of them, because that post displays a complete lack of understanding of the modern banking system put in place since the Goldsmiths scam was busted in 1600's.
When the banking industry itself admits that currently 97% of the worlds money supply enters circulation as interest bearing credit, to suggest the basis for the charging of interest is any longer anything to do with the risk to savers of redistributing there savings for forward economic expansion is as about as lame as the old Bob Jones war cry of "despite what the funny money people say(Social Credit),everyone knows banks only relend their deposits".
After the Goldsmiths were busted loaning out more paper receipts at interest than they had gold to honour there lendings the abitrary rulers of the time legalised and co-operated in the scam in return for money to keep them in power. However when representative government finally prevailed it was realised that the increased money supply from their fraud had actually expanded the economy and raised living standards for a period until the desparity of wealth gained by the fraudsters turned the wider populous into debt slaves as they used their booty to monopolise commerce. The beneficial prospects of the process of credit creation were realised, but how was it to be ensured who ever had control of the power of credit creation would use it for public good and not abuse for public extortion.
Those that had run the scam suggested as they have the expertise that they be put in charge of administration of banking with an aim to issuing credit in a prudent manner for the public good. For which any interest charged on the created money supply would be at a rate that covered infrastructure costs plus a fair and reasonable reward for the administrative service.
To prevent the risk of the system once again being used against the people, the peoples representatives would have the power to regulate the banking sector.
From that time on the battle between inherantly slaveminded bankers and regulators has ensued. When regulation is in decent hands, credit serves the populous, the charging of interest is equal to service. When regulation is in indecent hands, excess created credit to repayment ability is issued and interest becomes enslaving payments of tribute.

Phil there is nothing morally or ethically wrong with the process of credit creation, it is just that every regulatory government protection that the private bankers put forward in the international inquiries and royal commissions of the 1930's and 50's and most every decade since, as the reason it was still safe in their hands have slowly but surely been dismantled by political favour passed in reward for political donations of the banking sector.
The indecent elements that control the international credit creation system at present and their paid off politacal co-opearatives have abused the system to enslave the masses in debt. We are currently being sold the line that it is our own greedy fault, thus it is the masses that must suffer and pay reparation.
I say it is time we elect decent representatives that can once again be trusted with control of the created credit mechanism for public good and that the fraudsters should lose the ill-gotten gains in the debt realignment that needs to occur to prevent the world devolving back to a raw animal state of shear survival.

Iain - many thanks, very educational..

Certainly some sort of reform seems required in this space and thoughts initially go along the lines of appropriately capitalising Kiwibank to provide appropriate cost of cap. relief/competition for business loans - a practical first step. Which would be best done with a suitable inflation control method, as I and others have discussed elsewhere on this website. (We couldn't be confident of the OCR to restrain any resultant inflation retrace.) See:

http://www.interest.co.nz/ratesblog/index.php/2009/04/16/special-report-...

Anyway, if you've not already seen it, also see:

http://www.interest.co.nz/ratesblog/index.php/2009/05/01/agriculture-len...

Cheers, Les.

Iain Said:
"Phil there is nothing morally or ethically wrong with the process of credit creation, it is just that every regulatory government protection that the private bankers put forward in the international inquiries and royal commissions of the 1930's and 50's and most every decade since, as the reason it was still safe in their hands have slowly but surely been dismantled by political favour passed in reward for political donations of the banking sector."

I have to disagree with that statement Iain their is something immoral and unethical about the current process of credit creation with or without government regulation.

Allowing a sytem where by those in power can borrow money into existence and hereby inflate the money supply violates a long established principle that in order for something to act as money it must be a good store of value this principle flows from the fact that in order for me to accept money from you in return for my goods and services, I need to be able to turn around in the future and purchase goods and services using that same money.

If the money can't store value over time and is in fact losing value via inflation then the individuals in society will always find themselves in a never ending spiral of trying to get rid of their money as quickly as possible and at the same time those individuals will need to be finding ways in which they can increase their household income lest they fall out of the middle class and into the poor underclass.

Their is no real difference between an inflation rate of 5% per annum and one of 500% per annum. Just because you can't see a process happening in real time doesn't mean its not happening. A mountain can still be growing even if you can't see it.

If you are going to make the argument that the NZD or the USD is a good store of value then I would be forced to call you a BOB JONES since you are making a false statement that is just as ridiculous as his claim.

The USD has lost 95% of its value since the inception of the federal reserve in 1913, at the same time look what has happened to the family income, their was a time that one income could support a family, today both parents must work to maintain the family, whats next will the children have to work as well??

The US inflation has already happened, note just because the price inflation hasn't happened doesn't mean the money supply inflation hasn't already happened. Look at the federal reservers balance sheet they have been buying all sorts of toxic assets for the last year I think its now 2 Trillion USD. Ben Bernanke thinks that once he starts to see price inflation he can reign it in by selling all those toxic assets and hereby soaking up all those dollars. Once again I call Ben Bernanke a BOB JONES since he also is making a ridiculous claim. In order to soak up the dollars he will need to sell those toxic assets for the SAME price he paid for them, thats a mighty big assumption on the part of a man who has been wrong about the economy far more times than he's been right, remember this is Ben "subprime is contained" Bernanke!!!

David C - apoligies, sometimes when you write things in haste in the middle of the night with your eyes hanging out of your head they dont come out quite right. I am on the same page when it comes to what you cover above. What I meant is there is nothing wrong with a fiat currency system as long as the created currency monetary base is spent into circulation in sustainable productive prudent manner. This it would not be the cause of inflation because it does not enter circulation as compound interest bearing debt at the base as it does now. I explain my thesis more fully here;
http://socialcreditorbust.blog.co.nz/solutions%20for%20credit%20crisis/

I too feel the "skeletal consensus", Iain.

Would you agree that there are very few nations that have currently gone beyond that point? I read somewhere (Bjorn Lomborg?) that if Tasmania were built out at Hong Kong density, all 6.5 billion humans could live there.

I think that humanity could afford to spread out a bit more and utilise the resource-rich regions that are badly utilised today. I reckon NZ could provide affordable housing for about 30 million people and still have a substantial agricultural export surplus. If NZ ever got invaded and taken over by a totalitarian power, this would happen.

I strongly agree with the central thesis of Julian Simon's book, "The Ultimate Resource". The ultimate resource is people. A kind of companion argument to Julian Simon's, is George Reisman's "Environmentalism Refuted" - the guy's intellect is colossal. Human ingenuity results in better and better utilisation of the earth's resources.

http://www.mises.org/story/661

I have precised George Reisman's amazing intellectual argument on the subject of the earth's resources as follows (but I still recommend everyone reads the whole essay).

We have actually barely begun to prospect the entire surface of the earth, and under the sea bed, for all known resources.
As mankind becomes more technically advanced, he discovers uses for more and more resources. Many of the resources we use most today, we did not use at all until we discovered how to use them.
There is no reason to believe that we have come to an end of that process. That is, we will yet discover resources that give us even more power over our well-being than the resources we currently make use of.
The more capital accumulated by mankind, the more access we get to resources. We can drill deeper, extract elements more efficiently, access the resources under the sea bed, and so on.
Furthermore, that accumulation of capital underpins the research and technological progress that bring ever more resources within our purvey, and anything that restricts or harms that process of accumulation of capital, will have an effect of "self fulfilling prophesy" regarding resources.
Apart from what has been blasted into space, every molecule in every substance "used" by man, is still here and will be able to be re-cycled one day; a lot of it has merely been re-ordered to man's advantage meanwhile. Even every carbon molecule that has been burnt to extract energy, returns to the biosystem after a short time in the atmosphere, and will be able to be accessed again for the purpose of energy, by our descendants at some time in the future.
Although Reisman does not say so, it is such a beautiful system, I think some very intelligent designer must have had a hand in it!

No debt , no credit facilities , and it's back to horse & buggies , mud huts , decades of grinding poverty for all of us ; except for the landed gentry , royalty , and politicians . And as much as I'd love to see bankers and car salesman bite the dust , I don't wish for the rest of us to join them . ( Christ biffed the usurers out of the temple , the worship house , not out of the town entirely )