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Special report: Why NZ needs a bipartisan grand coalition for economic reform, not tweaks to the RBNZ Act
November 20th, 2009Watch video on our video page here.
Bernard Hickey delivers a special report on Labour’s decision to abandon 20 years of political consensus on monetary policy and start a debate on other ways to manage interest rates, exchange rates and the economy.
Labour leader Phil Goff isn’t suggesting any hard solutions yet but Prime Minister John Key has already brushed aside the attempt to have a debate about monetary policy, saying Labour just wants higher taxes. But there should be a debate as the current setup doesn’t appear to be working for exporters who face a higher currency whenever the OCR is lifted to cool down the housing market.
There are various additional tools that could be used besides the Official Cash Rate, including new rules on capital adequacy for bank lending, new rules on banks’ loan to value ratios, a mortgage interest levy, an adjustable GST and further use of the Reserve Bank’s new Core Funding Ratio.
The Reserve Bank could also manage the exchange rate or target other variables besides inflation, including GDP growth or unemployment.
But my view is Labour and National should get together to build a grand coalition on structural reform that includes a broader, flatter tax system that encourages investment in exporting and discourages investment in housing. National and Labour could concede to each other taxes on property and a higher GST. Tinkering with the act or trying new tools won’t work.
We need significant structural reform to rebalance the economy and it will only happen with a bold and bipartisan approach.
Tags: Bernard Hickey, bill english, David Cunliffe, John Key, monetary policy, National, Phil Goff, Reserve Bank Act, tax
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November 20th, 2009 at 1:42 pm
” Go for your life ” , absolutely Bernard . But why is John Key being so obdurate ? We are finally ( 9 years too late ) getting some sense out of Labour . However JK , frankly , is behaving like a prat ! What gives here . The reforms are long over-due . Let the debate begin . John , another ” NO ” ?
November 20th, 2009 at 2:14 pm
Too late now …right John? Our principals have been nailed to the flagpole and in hope we trust…or some crap like that…as for the tweaks and twiddles in Bollard’s toolbox…it’s a load of old gummy bears. The Banks rule and pick the tool to suit the game which we all know will stay the same. The property ponzi economy is set to rumble on into the night, from which there will be no dawn…a game where every peasant is a pawn. Your move Roger!
November 20th, 2009 at 2:47 pm
Wally : Wooden ya think that a small country like NZ has the advantage of nimbleness , compared to great collusses like the US and PRC . So why are we so slow and mind-numbingly thick ? Glimmers of light from Labour , at last . Twitches of life from Wild Bill . Impressions of rigamortis from Jelly Key ! ( and Wal , gummy bears never get old , where I live )
November 20th, 2009 at 3:30 pm
Hot off the NZMEA press…
‘Exporters need monetary policy changes’
Changes to the monetary policy framework are needed to put an end to wealth transfers from the tradeable sector say the New Zealand Manufacturers and Exporters Association (NZMEA). Other countries with exchange rate stability as the central focus of monetary policy have achieved significantly higher long run economic growth; it is time New Zealand followed their lead.
NZMEA Chief Executive John Walley says, “It is not surprising that when changes to the framework are suggested the recipients of that wealth transfer, the non-traded economy, speak up in opposition. All of us have the same interests in the long run, but short term who wants to give up on a good thing?”
“Phil Goff and Labour are right to point out that the past consensus on monetary policy has not served New Zealand well. We can do better; if the Government is seriously interested in raising productivity, the stability of medium term export returns via a stable exchange rate is the single most important factor.”
“It is clear what a stable exchange rate has done for Singapore’s export growth,” says Mr. Walley. “The same results can be achieved here with the right policy framework.”
“It is worth noting that Singapore has performed better than New Zealand for decades with lower interest rates, lower inflation and a stable currency.”
“There is no point complaining about the imbalances in the economy while attempting to crush any ideas that that could fix the problem. This problem goes deeper than any parliamentary term so party politics must be put aside to develop a solution.”
…. and well said Bernard. Have yourself an extra expresso.
November 20th, 2009 at 4:02 pm
I see efficient manufacturing facilities, good products and low cost business structures, we know our farmers are efficient. All have relatively low wages, high levels of staff engagement and yet most of those operations cannot do much more than scratch a living.
Something is badly wrong when good operators cannot do better.
This is not their fault it is the way we chose to set up the economy. Unless we can capture value of our people in support of the ‘must trade’ nature of the New Zealand economy we are all doomed to live in an economy in free fall.
Wealth transfers to the non-traded economy have to stop and soon.
November 20th, 2009 at 4:14 pm
I’m sooooo pleased not to be a gummy bear at Roger’s place! That glimmer from Labour was a flash in the pan. Good for a media headline and that’s all. Sorry but the pathway was decided by the banks some time ago. First they told John to join Rudd in protecting the bankers position. Then they tilted the playing field about 45 degrees so ensure the bubble always rolled back down their end where they could pump it a bit larger. The RBNZ toolbox rollout is bumph for the peasants. The banks are all powerful and any time a squeek emerges from the Cabinet room, they email the latest reports on the state of Ireland’s economy. A gentle reminder of what happens when bubbles go POP.
November 20th, 2009 at 4:22 pm
The headline would read: “Expats return in droves to partake in economic euphoria”. Guaranteed I would be one of em. We will see, wont we Johnny boy.
November 20th, 2009 at 5:18 pm
Yes monetary policy is not everything, but if it is not addressed there will be no worthwhile change in this economy.
Farming and farmers have been abused by an over valued exchange rate driven by the highest interest rates in the OECD for almost a quarter of a century. This has resulted iin lower productivity and a huge debt mountain for farmers and New Zealand.
Congratulations to Labour and Goff for having this courage and vision.
Rose C. Evans
November 20th, 2009 at 5:57 pm
It would be good if we got down to causes, rather than symptoms. Not sure that private urban (the majority) folk have much choice. They are urged to consume, and many rely on the consumey-go-round – it’s where they get the income to fund the consumption to….
So legislating to stop them adding to their major asset (or stuff stored thereabouts) is pushing …… uphill. Increase incentives to save (and retire debt), rather than consume?
Gonna be a lot of p…..d retailers.
Way to go though, but I still don’t see why not a Capital Gains Tax.
I think – with respect – that the ‘debt mountain for farmers’, was largely greed-induced and self-inflicted.
And while both are mentioned above – we haven’t yet clearly delineated the difference – and it is a difference – between productivity, and efficiency. The latter is the essential commodity..
November 20th, 2009 at 6:25 pm
ISN”T a JOHN another name for DUNNY in AMERICA.
Down the PAN, if he doesn’t do SOMETHING…and…soon. Too busy lining their pockets…and jet-setting, me thinks.
Must be a silk lining out of a SOWs ear. …PORK….they could stuff em selves sick.
SOLUTION….SAVE MONEY on HOSPITALS, NOT FROM THE GREEDY wastrels.
BAIL out the intemperate, not the people who CREATED no problems.
I grant you we need some sense in EXPENDITURE on all counts.
Personally ….I would start at the TOP and work DOWN.
Always the 80-20 rule…. THE 80% in this case are the problem, not the SOLUTION.
TOILET training for POLLIES …next, mustn’t smack em though.
November 20th, 2009 at 7:37 pm
Why would anyone with the cumulative intelligence of Buffett and his advisers buy a major stake in the decrepit US railroad system? Warren’s move to buy this railroad is motivated by the following calculated bets:
His awareness of the imminent oil crisis and his long term vision of what life will be like with oil shortages. Oil is on a roller-coaster ride. Demand is soaring, particularly from energy hungry economies like India and China. But production is decreasing with Peak oil, point where the maximum rate of oil extraction is reached, predicted in 2010 by the ASPO (Association for the Study of Peak Oil and Gas). If not 2010, as previously reported in Oil-Price.net many analysts believe that the oil peak would most certainly be achieved by 2020. This will cause serious adjustments in nations around the world and the US in particular……
…and NZ ?
Do we have economic measures in place to tackle upcoming shortages in energy/ transportation sectors ?
Yes, when needed, Walter we import that stuff (knowledge/ equipment/ goods/ etc.
It is cheap from Vietnam/ China/ India.
Great !
November 20th, 2009 at 7:40 pm
Perhaps we are suggesting that macroeconomic policy as a whole must be taken out of the political sphere. Politicians have a three-year horizon, but sound macroeconomic policy must be set on a time span at least five times as long.
New Zealand led the world in giving its independent Central Bank the right to set interest rate policy. We should now lead the world by giving the Central Bank the right to determine macroeconomic policy.
Democratically-elected governments should decide how to spend the available funds, NOT how much funding to make available (otherwise they will borrow unlimited amounts of funds to pay off special interest groups).
November 20th, 2009 at 10:54 pm
In nut shell nicely put Bernard. Unfortunately there is not much time to pay down debt and get productive and competitive. I think events are going to over take us first. I hope I’m wrong.
November 21st, 2009 at 3:28 am
Bernard, you really are a scared little monetarist finger puppet:
“There are various additional tools that could be used besides the Official Cash Rate, including new rules on capital adequacy for bank lending, new rules on banks’ loan to value ratios, a mortgage interest levy, an adjustable GST and further use of the Reserve Bank’s new Core Funding Ratio.”
Everything you proffer here is tinkering with the societal motor downstream of the carburretor which is out of tune, meaning you can tinker all you like, but as long as that carburretor remains out of tune the societal motor is going to run like a lemon, out of balance, on its way to a premature demise.
Bernard, you said on radio live this morning that NZ should not start printing money like everyone else because it would be inflationary, I put it to you that we are, in a roundabout way, already printing money, only we are doing in a bizzar, grazy way by having the central bankers monetise $110 billion dollars worth of NZ Sovereign and local govt bonds over the next four years which we will pledge to pay back with compound interest out of the future taxes of the nation. This will see the interest that flows out of this nation as rent on our money supply exceed $45 billion dollars, put this in perspective with the $14 billion we currently spend on the entire health budget, or the couple of billion here or there the powers that be are trying to scrimp and cut in tax reforms or cuts to govt expenditure and which one do you think we should be hardout targetting.
There are factions within all political party’s, anything of common decency will always be under constant threat of the slaveminded exploitive elite who seek to infiltrate and convert those decent causes into commercial pyramid scams, history is full of it, thus if David Cunliffe shows signs of wanting to reintroduce the Labour Party to its honourable founding ideals and the spirit of men like John A Lee, who lost an arm in battle for the freedom of this nation, then went on to lead the charge for the implementation of public credit used to begin our state housing project, then departed to form the Democrats for Labour when they surrendered to the threats of the private central bankers once more, or other disgruntled public creditors that branched of to form Social Credit, I say, I will take a wait and see, all power to you stance.
I disagree with Phil Goughs’ statement that you have the luxury of waiting 18 months until the lead up to the next election before protesting very, very loudly and shining some light on the impending debt repayment crisis and the opportunity it will give for the co-operatives of the corporate raiders to announce we once again have no choice but to sell our public necesities of life to them for a pittance their true value to temporarily alleviate our perpetually rising debt for the third time in recent history. I predict this will occur before the next election and you will find those that co-operated to make it happen not giving a frig if they get elected again as you will find them working as overseers for our new owners, all except John Key, as I allege he is still very much a central banker out here to oversee the takeover goes to plan.
To those of you who still find it hard to comprehend that our government has been reduced to a state of impotence by such a sinister plot, and that it currently matters not who you have in power, I give you my latest work of passion, my partly completed excerpts of Ruth Richardsons’ book – Making A Difference – published 1995:
Anyone who first reads my previous excerpts from Walter Nash, Rob Muldoon, Roger Douglas, Helen Clark, Jim Bolger that can be found here:
http://publiccreditorbust.blog.com/
Then Ruth Richardsons’ excerpts, and still wont admit that there is something very down and sinister that has taken place in this nation that has transended any party or ideological boundaries due to the external influences of foreign lenders upon our social and economic policy, I accuse you of being a fool or a liar.
http://publiccreditorbust.blog.com/2009/10/07/ruth-richardson-takes-the-baton-from-roger-douglas-on-behalf-of-corporate-raiders/
The advantages of the reinstatement of our sovereign public credit facilities would be:
- elimination of inflation
- increase of equal economic opportunity
- decreasing unemployment
- considerable lowering of prices of goods or services that would make up for the loss of any interest on investments, and reduce the coercion to have to invest in dodgy schemes to keep up with inflation.
- stable sustainable economy
David Cunliffe, if you need a researcher, unlike Roger Kerr, I work for the cause of Public Credit and the future freedom of my kids, not for money, all you need to do is ask.
November 21st, 2009 at 7:47 am
For best result, you might want to start the video and pause it for about 10 sec before resuming it. This is to allow the video to play it in your screen smoothly without any intermediate stoppage.
November 21st, 2009 at 7:55 am
I agree with Simon; that events will likely precede action. I have no doubt that most G20 central banks understand exactly what is going to happen and what will replace Bretton-Woods II. New Zealand is not strategic enough to play any part in these discussions. We will simply do as we are told – much like today. The only two choices ahead of us are:
Do we accept our assigned place in the New World Order?
Do we de-couple and go it alone?
November 21st, 2009 at 8:09 am
Iain reading your articles and I “move into a learning mood” – but still not always understanding – hmm !
I’m interested about your opinion of the real economy and your view what should be done to improve the situation, especially in relation import- export and planning our economy.
I’m sure you are also of the opinion we cannot maintain our standards of living- please explain why.
Cheers Walter
November 21st, 2009 at 8:37 am
Hey Walter : Blasting Nor-west wind down here . OK in Kaikoura ? Regarding Warren Buffett ( prostrates myself on floor , muttering ” I am not worthy , o’ master ” ) : His railway purchase seems strategic , before oil price rises , and in a busy long stretch of US freight . He paid a fair price , ‘cos it included much of his own money . Cullen in NZ paid exhorbitent price , ‘cos it was only tax-payers’ money , to nationalise Kiwi-Snail .
Have I missed a question ? It gets sticky when I have a mouth full of gummy bears . Gooey ooze all over keyboard . ………. You may have noticed , I dribble alot .
November 21st, 2009 at 8:58 am
Iain Said “Bernard, you really are a scared little monetarist finger puppet:”
Hilarious
Iain I applaud you for your persistent expose’ of the corrupt central banking cartel.
“Give me control of a nation’s money and I care not who makes her laws.” – Mayer Rothschild
November 21st, 2009 at 10:11 am
Anyone remember one of the election debates…Key was asked if he could work with labour….his comment was along the lines he could work with anyone who had good ideas to help the growth of NZ…its what is best for NZ not political differences.
Iain Parker Says:
“Bernard, you really are a scared little monetarist finger puppet:
“There are various additional tools that could be used besides the Official Cash Rate, including new rules on capital adequacy for bank lending, new rules on banks’ loan to value ratios, a mortgage interest levy, an adjustable GST and further use of the Reserve Bank’s new Core Funding Ratio.”
Everything you proffer here is tinkering with the societal motor downstream of the carburretor which is out of tune, meaning you can tinker all you like, but as long as that carburretor remains out of tune the societal motor is going to run like a lemon, out of balance, on its way to a premature demise.”
Interesting comparison…seems you havnt done a lot of work on cars….
BH is basically saying lets return the tools to the RB that caused this whole crisis.
Yeah mess around with a carburetor that GM has spent millions researching, and the car will screw up….put the carb back to ‘factory’ and it will run stable again…even on modern unleaded fuels.
These tools where in place for…a very long time…NZ markets had their LITTLE booms and busts… put aside the later Muldoon, yrs….but over all we where quite stable, and any great influences where imported, rather home made.
“Congratulations to Labour and Goff for having this courage and vision.
Rose C. Evans”
Its not courage or vision, its just plain old fashioned commonsence, and convienent political ambition.
When Goff was asked in high school what he wanted to be “Prime Minister”
I was there at the time …Clarke just got the jump on him.
November 21st, 2009 at 12:25 pm
One thing’s for sure, hedging up to the Aussie dollar like some people wanted to do would have been a disaster for farmers and exporters.
The aussie is expected to get to parity with the US possibly within six months, and is will be moving up faster than the kiwi dollar.
It proves the arguments wrong of some people that the Aussie dollar being a bigger currency can’t get moved around by the carry trade as much.
Apparently the Brazilian currency has had this problem with the carry trade for years, and is a bigger currency again.
November 21st, 2009 at 1:30 pm
phil – or maybe Auz, Brazil and NZ have something in common, they have similar monetary policy; which is quite unlike Singapore say:
http://www.interest.co.nz/ratesblog/index.php/2009/11/20/opinion-what-new-zealand-can-learn-from-singapores-monetary-policy/
Re. “hedging up to Auz dollar”, maybe you mean pegging to, as that is what some have called for – would have not been so bad for trade in and out of Auz, our largest trading partner, not my favoured option anyway, because we’d still be getting steam-rollered by Chimerican QE and we simply be importing Auz’s monetary policy – which is certainly what we don’t need. So what can we learn from the likes of Singapore?
November 21st, 2009 at 1:43 pm
Will modify my question, what can we learn from the likes of Singapore, Guernsey, North Dakota?
November 21st, 2009 at 3:48 pm
Agree with Alastiair. Suggestion to Interest.co.nz, offer Iain Parkin “Guest blogger” column, he is probably most popular commentator anyway.
November 21st, 2009 at 6:46 pm
Nice idea Allen, but better yet – how ’bout interest.co.nz stage a televised debate:
Iain Parker, Raf, Andy Hamilton and Steve Netwriter vs John Key, Bill English, Gerry Brownlie and Steven Joyce.
Interest.co.nz as sponsor (It’s bloggers vs the Government’s front bench) could also approach the TAB and give the public the chance to bet on the likely winner.
Now, all we need is the right question.
November 21st, 2009 at 7:16 pm
Iain Parker hit the nail on the head with ,
“I put it to you that we are, in a roundabout way, already printing money, only we are doing in a bizzar, grazy way by having the central bankers monetise $110 billion dollars worth of NZ Sovereign and local govt bonds over the next four years which” .
I cant see any NZ govt ever making wholesale changes to monetary policy. We are just too small and any policy moves designed to weaken the control of the foreign banks will be resisted. The bankers and speculators (not to mention the IMF) would see that the country paid a severe price for any attempt escape thier clutches.
Reading the book The Web of Debt at the moment and its a great story detailing how the banks have wrestled control of the money supply away from governments worldwide and in the process ensuring that governments pay interest on the money they issue rather than allowing governemnts to just issue thier own debt free money. Who new the US Fed Reserve is majority owned by Chase Bank and JP Morgan and thus all the new money being printed in the US will result in billions of $ interest being paid to these banks.
November 21st, 2009 at 8:15 pm
Kate – that’d be a one-sided whitewash. Better to even things up a bit and let JK have four more MPs in his team.
November 21st, 2009 at 8:16 pm
@Kate,
In other countries politicians have to face up to experts and the public for an hour on a weekly base and about all sorts of issues – why not here in NZ ?
By the way I made that suggestion several times years ago to TVone.
I also asked Bernhard to take Iain on board months ago.
November 21st, 2009 at 8:20 pm
It’d be good if Iain were able to do a short sharp guest blog, agreed.
Why not?
November 21st, 2009 at 8:24 pm
@Les
..but make sure the 4 more MP’s are musicians/ comedians and can give their friends a most needed break.
November 21st, 2009 at 9:49 pm
Hey Walter : You see the march in Auckland today ? 4000 or so , with placards , demanding that the politicians listen to the people . See any politicians addressing the crowd ? Sadly , they are not as accountable as those in your homeland . It is good to hear from your experience , ‘cos is shows how much we don’t have here . Politicians willing to hear , would be a start .
November 21st, 2009 at 10:53 pm
Rogie you wrote:
See any politicians addressing the crowd ? No – the police did, but not like in America !
http://www.youtube.com/watch?v=QSMyY3_dmrM
… strange developments happening over there !??
November 21st, 2009 at 10:56 pm
“I cant see any NZ govt ever making wholesale changes to monetary policy” I can its known as doing as the IMF tells you. Just look at the state of Ireland…NZ can get there depressingly quickly….
What we have not learned and seem destined to never learn is who ever holds our debt calls the tune. It happened in the 1930s…..NZ suffered because the Pollies got us in a sorry state, so this is in danger of happening again. I wonder if its accidental or on purpose at least for National….selling off state assets and decimating the public sector would be music to the OECD’s, IMF’s and National supporters ears…so I have to wonder if this accidental plan will work out exactly what National wants, ie forced to do exactly what it wants by external factors…..in Labour’s case they’d spend our way there and probably quicker…..
I am disapointed with JK’s knee jerk Labour wants to raise taxes, indeed they might but ignoring the necessity to raise taxes for too long by borrowing just makes it worse when it finally happens. It amazes me we have so many ppl dodging their responsibilities on so many levels, we have debt, we seem to need more tax to pay for it, and/or reduce services and/or pensions….someone make a decision please, and no not the borrow a bit more one.
I mean I have my little household expenditure spreadsheet, its quite easy to buy something on the plastic and then pay it back…..except of course that future money is then commited plus loss of $ in interest payments….I really fail to see why this effect seems to escape the Pollies….oh wait its because its our credit card they are using and not their own…..silly me.
regards
November 22nd, 2009 at 12:48 am
‘…discourages investment in housing…’
Why do you want to discourage investment in housing? There is a housing shortage, that part of the problem.
November 22nd, 2009 at 9:35 am
Mathew there is no housing shortage that is the impression real estate agents like to give to try and drive prices up but thats like walking onto a car yard and the salesman saying they have a shortage of cars and then trys to sell buyers the same car. There are around 1500 properties sold each week in NZ but over 50,000 houses available to buy, there is no reason to be competing against another buyer. If there is another buyer wanting the same house then forget about it and make a lower offer on another house to ensure you are the sole bidder if its turned down then try another untill you succeed. Over 1/4 of houses for sale have been listed for over 5 months, whatever you do don’t listen to real estate agent spin.
November 22nd, 2009 at 9:42 am
Don’t post complete rubbish Matthew…there is no bloody shortage ok. The same drivel has been shoved down Aussie pie holes along with crap about prices always rising. There are some locations in the cities where some properties are selling for high prices for a variety of reasons….but there are many locations across the country where properties remain unsold after years and where average prices have collapsed…again for a variety of reasons. Investment in housing assumes there will be a return on the investment, either through rent or capital gain thanks to our stupid govts encouraging this avenue of tax evasion, especially for themselves. They pork a bubble by allowing a flood of immigrants..having first bought as many properties as possible with loan money…then with the help of the stupid media screaming boom BOOM…they flog their property and reap the fat returns. Do it quickly and the chances are you will be rolling in loot. Then the BOOM turns to BUST. The shits are left with their loot while the peasant families are left with debts and price bloated property. That has been the NZ way, thanks to the scum we have voted into power.
November 22nd, 2009 at 9:50 am
“The number of mortgagee sales around the country has bounced back to a record high after dipping briefly in August, dashing hopes the worst effects of the recession may be over. Terralink managing director Mike Donald had expected the figures for September to be up on the previous month but was surprised by the scale of the increase” (Stuff)…..any comment Matthew???
November 22nd, 2009 at 10:12 am
Housing is so.. yesterday.
November 22nd, 2009 at 10:24 am
Call COMEX , AndrewJ : Gear up on precious metals . Go GOLD . Slip in some SILVER . Make PLATINUM your pal . Leverage is the key . You canot go wrong . Easy peasy as picking up nuggets !……….. Houses …….So passe , dear friend . Call the 0800 hot-line , the experienced operators in Manila / Mumbai are waiting to hear from you .
November 22nd, 2009 at 10:33 am
The best deals are in Lagos Roger…!
November 22nd, 2009 at 10:49 am
Good one Andrew
November 22nd, 2009 at 10:54 am
Iain Paker is a commentator of rare analytical skills – and that’s coming from a 100% gold standard man! If you must insist on a system of fiat money – then I suggest you listen to him – very carefully! In the meantime Iain I leave you the thoughts of the the Roman legate Cicero. We cannot say we were not warned:
“A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself. For the traitor appears not a traitor;
he speaks in accents familiar to his victims and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation,he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist. A murderer is less to fear.”
Marcus Tullius Cicero
106-43 BC
November 22nd, 2009 at 10:58 am
An interesting Sunday! The millionaires factory and one other mob across the Tas picking 20% market gains in 2010…cnbc screamers yelling about gold ETF funds and the end of the Dollar rally…Ben blathering on about leaving rates near zero for the rest of time…the UK wet and broke but with Brown hanging on…and in Noddyland surprise surprise..mortgagee listings keep going up..quickly! We must be in for a Barefeet and Tommo blather about a property boom this summer.
November 22nd, 2009 at 11:01 am
Succint Wally.”Andrew-Housing is so…yesterday”-and forever,one of the basics,before money
November 22nd, 2009 at 11:04 am
Wally, you missed out this time, get over it.
November 22nd, 2009 at 11:33 am
Wally, the underlying financial pathology is deeply deflationary, as I have suggested many times. Thus, house prices should collapse! Yet, these are the very circumstances in which hyperinflation poses the greatest risk because it is against such a backdrop that the politician – at the behest of the banker who commands him – will stimulate and stimulate with more and more debt money and then, ultimately, he will monetize. Watch then the billion dollar Kiwi house and the cries of ‘brother can you spare a wheelbarrow’ as people struggle to the empty shops with their piles of worthless cash. Watch then the foreigner, with some relatively less debased unit, simply help himself to your country.
It is unfashionable to quote the bible in New Zealand these days (although, unlike Britain, doing so still carries no risk of arrest and showtrial). However, reflect on the irony of the prodigal son. He squandered his father’s inheritance. Today, we squander our children’s inheritance – we would throw away their future for another 10% per annum on our house price. For 20% we would exile them to the stygian pit. For them, we seek no ‘fatted calf’! – just the prospect of a life of debt enslavement so we can boast over the dinner table about ‘how much we made’.
November 22nd, 2009 at 11:45 am
“..our children’s inheritance..”…don’t you mean the future wealth for the million
migrants the govt plans to let in? That’s the problem with pipe dreams…always expect a politician to turn up and steal what they can. You are right about property deflation…already happened in rural sector…also about inflation soon to destroy the savings of those who believe the liars in the House.
November 22nd, 2009 at 12:07 pm
Wally, One is most suspicious that National will move to flood New Zealand with a replacement population – a replacement population less wedded to the ideas of participatory democracy and property rights than has hitherto been the case. This is one of the key reasons for the assault on Christianity in Britain – because it is on the basis of the law code of King Alfred the Great – which he reposed on biblical principles – that Pommy security over private property is based. Similarly, it is upon that system, that so much of our property rights repose here in New Zealand.
A fascist system of government (which we are moving towards) is incompatible with the ideas of Alfred – which still influence our lives to this day. Therefore, the core philosophy on which those ideas were based must be extinguished and, if people do not believe me, I suggest they do their own due diligence on what is happening in Britain! As one of your previous Prime Minister’s famously noted – “where She goes, we go”.
November 22nd, 2009 at 12:56 pm
Big Malcolm : I had a niggly naggly feeling that was wot Queen Helen was heading us toward . As per her Chinese friends , in Tibet . I don’t think that National would deliberately connive to dis-empower Mom & Pop kiwis as you envisage . Unlike Labour , National don’t embark upon such strategies by design , they are too stupid . It will occur , under their very noses , by their benign Pollyana ” she’ll be right ” ethos .
November 22nd, 2009 at 12:59 pm
Gee Malcolm, that fascinating, and I saw a bigfoot once, right after they faked the moon landings. Meanwhile, back @ ravinglooneyconspiracytheory.org….
November 22nd, 2009 at 1:05 pm
Hey Pete : Think we ought to re-name ” interest.co.nz ” , as ” ravinglooneyconspiracytheory.org ” ? There’s alot of it about . Sun-spots ?
November 22nd, 2009 at 1:42 pm
Kieran and Wally,
So the real estate industry has managed to create a myth of housing shortages in order to drive up prices, and this myth has been able to be sustained throughout one of the most severe global recessions in modern history?
They must be truly amazing people. Do they have a secret underground network of caves in which they organise this grand deception?
‘There are some locations in the cities where some properties are selling for high prices for a variety of reasons….but there are many locations across the country where properties remain unsold after years and where average prices have collapsed…’
Yes, funnily enough, location is quite important to the value of real estate, but thanks for pointing that strange phenomenon out.
November 22nd, 2009 at 1:51 pm
Malcom you are right its not PC to quote from the bible it also says in proverbs “a debtor becomes a slave to the lender”but that doesen’t tickle our ears. Its about time christians came out of the closet and started teaching the truth about debt. I don’t blame the ‘fiat based money system’ I blame Individuals who willingly sign themself up to a lifetime of servitude in the hope of making a tax free capital gain. I personally don’t think a gold based system is the answer I beleive the answer is a return to christian based principles on an individual level. Fiat bankers don’t force the population to take on debt its not the systems fault we no longer live within our means and don’t save. No amount of monetary policy or system change is going to stop people from taking on debt isn’t leverage and gearing the path to easy riches? saving is so yesterday
Mathew lets wait and see how property fares through 2010/11 with tax changes and higher interest rates that will be the true test of how resilient housing is.
November 22nd, 2009 at 2:04 pm
Kieran – Good on you for coming out of the closet. I never even suspected, you seem so straight.
November 22nd, 2009 at 2:26 pm
Pete – I have simply suggested that Christianity is incompatible with the system of fascism that we are moving to – particularly because of the system of individual property rights that it is associated with. Fascism is, after all, merely the melding of the institutions of state with big business – as, I beleive, Benito Mussolini reminded us.
You may, or may not, be aware that after the second world war Adolf Hitler’s close friend, and former procurements minister Albert Speer, explained for us the Führer’s thoughts on relegion and fascism:
“Hitler had been much impressed by a scrap of history he had learned from a delegation of distinguished Arabs. When the Mohammedans attempted to penetrate beyond France into Central Europe during the eighth century, his visitors had told him, they had been driven back at the Battle of Tours. Had the Arabs won this battle, the world would be Mohammedan today. For theirs was a religion that believed in spreading the faith by the sword and subjugating all nations to that faith. Such a creed was perfectly suited to the Germanic temperament. Hitler said that the conquering Arabs, because of their racial inferiority, would in the long run have been unable to contend with the harsher climate and conditions of the country. They could not have kept down the more vigorous natives, so that ultimately not Arabs but Islamized Germans could have stood at the head of this Mohammedan Empire. Hitler usually concluded this historical speculation by remarking, “You see, it’s been our misfortune to have the wrong religion. Why didn’t we have the religion of the Japanese, who regard sacrifice for the Fatherland as the highest good? The Mohammedan religion too would have been much more compatible to us than Christianity. Why did it have to be Christianity with its meekness and flabbiness?”
As to the moon landings and conspiracy theopries it was, of course, John F. Kennedy who instigated that programme. Yet what did Kennedy also warn us about:
The very word “secrecy” is repugnant in a free and open society; and we are as a people inherently and historically opposed to secret societies, to secret oaths and to secret proceedings. We decided long ago that the dangers of excessive and unwarranted concealment of pertinent facts far outweighed the dangers which are cited to justify it. Even today, there is little value in opposing the threat of a closed society by imitating its arbitrary restrictions. Even today, there is little value in insuring the survival of our nation if our traditions do not survive with it. And there is very grave danger that an announced need for increased security will be seized upon by those anxious to expand its meaning to the very limits of official censorship and concealment. That I do not intend to permit to the extent that it is in my control. And no official of my Administration, whether his rank is high or low, civilian or military, should interpret my words here tonight as an excuse to censor the news, to stifle dissent, to cover up our mistakes or to withhold from the press and the public the facts they deserve to know.
Would the above sound anything like America or Britain today?
ps: Kieran. I know where you are coming from but fiat bankers do force debt upon the population. I’m sure Iain can explain this better than me but remember – even if you personally have no debt – you still have a share in the national debt of this country and it is the monetization thereof that you should fear. Also, the bloodiest episode in the history of Britain’s Islands was triggered by imposed debt under the auspices of Emperor Nero. Tacitus reminds us that the Iceni and Trinovantes (Norfolk, Suffolk, Essex etc) were forced to take on vast debts issued by – guess what Peter and Roger – a replacement population which comprised amongst other things a ‘retirement immigration component’ (old Roman Centurions etc). Usurious rates of interest were charged and guess what else. At that very time the Roman Governor, Suetonius Paulinus, moved to exterminate the adherents of Britain’s historic religion druidism – why?. Well Tacitus points out that their ideas were incompatible with the creation of the corporate Roman state and they were “feeding the native resistance across Europe”.
History, as Mark Twain once reminded us, may not repeat but it does have a remarkable tendency to rhyme. I’ll leave you with the thoughts of one of the greatest British Statesmen of the 20th century who, as Prime-Minister, led a country that had risen to heights of power unseen since Rome’s heyday. Perhaps he knew a bit about how power really works?
“The government of this country has not only to deal with governments, kings and ministers, but also with secret societies, elements which must be taken into account, which at the last moment can bring our plans to naught, which have everywhere their unscrupulous agents, who incite assassinations and can if necessary lead a massacre.” -Benjamin Disraeli, at Aylesbury, Sept. 10, 1876
November 22nd, 2009 at 3:45 pm
Malcom you say “even if you personally have no debt – you still have a share in the national debt” true but national debt reflects our collective attitudes I will never be free of national debt either unless the collective attitude changes to wanting savings not mortgages and surpluses not deficits. Dictatorship is forcing something on a population that doesent want it ie smacking or prostitution or a debt free money system unless of course you do want facism but only if Iain is the dictator instead of Helen Clarke or John Key!!
November 22nd, 2009 at 4:46 pm
Afternoon All,
Have taken a couple of hours reading threads in an attempt to get up to speed. In the interest of time this post will encompass answers to other threads:
Firstly, thanks to any who have humbled me by suggesting I be given an official spot on this blog. Unfortunately, unless there is a fulltime position available as a public credit advocate that would allow me to pay my mortgage, feed my family and save enough that I dont starve when I get to stop working, I simply could not commit to doing anything involving a deadline of any sort on top of what I already do with local Taranaki papers via letters to editor, including 500 odd words fortnightly in the Opunake Coastal Newspaper, that just happens to be one of only 3-4 independents left in a sea of foreign owned corporate media, and the research for the free comprehensive monetary information source I am attempting create at http://publiccreditorbust.blog.com/
The current situation of me being able to comment on this blog when able suits my situation best, and I am encouraged by how much the subject of money supply and the longtime struggle between private and public credit have been expanded. Even more heartened everytime I see another person finally “get it”, and even more when I hear of representative bodies state they are going to make public credit one of their policies. Everytime this occurs, is like a brick lifting off my shoulders, and no doubt a brick lifting off those alive or dead in this nation which has such a proud history of public credit advocacy.
Les you asked for suggestions of what needed infrastructure could be used to back our own debt free powered money base. I would first like to remind that it does not all have to be new needed infrastructure, it can spent into circulation to provide maintanence or upgrading of existing infrastructure that has fallen into disrepair or been closed down because we “cant afford” to keep it open due to compounding interest on our current debt based private money supply seeing more and more of the nations wealth transferred into the hands of central bankers and their transnational corporate subsidiaries. The new sources of infrastructure required put their own hands up – sustainable energy projects – tidal power, geothermal, wind, hydro all built with our own money, borrowed from no-one, owed to no-one. This would see our manufacturers and exporters benefit immediately and ensure that our own natural resources are not charged back to us with the central bankers credit incorporated into the pricing. As our own currency in circulation increases we use it to pay down foreign debt and repatriate our necesities of live. We can’t be accused of reneging on our current debt contracts or expropriating the natural resources currently in the hands of transnational corporates because we have made good our sovereign Kiwi dollars by the exact same process as the central bankers accept as making good our sovereign Kiwi bonds which they currently monetise with their created credit. We have, for now, the advantage, via Kiwibank, of owning our own means of money distribution infrastructure outside of control of the private central banking network.
Walter, in tying in with above, yes this nation is going to have to be educated that we have the means to supply everyones needs, but not everyones greeds. The cost of credit will become cheaper but it will be less required and less easy to obtain by the reinstatement of required deposits, people will be less reliant upon credit as once the current usurous cost of foreign credit is removed from pricing they will obtain more immediate advantage from their efforts than having to borrow forward. A government and its advisors infiltrated by self interested individuals combined with a self interested individualist electorate is what has allowed the central bankers to coerce us into paying for our own slavery by debt.
Mark Hubbard, tying in with above, once our infrastructure deficit has been alleviated and manufacturers could start spending on new automated technologies what they would save from reduced debt servicing, if we then did not change the game we would end up with no money in circulation and the unemployed dying of famine, thus after the hard work has first been done, only then could we start issuing a National Dividend to address the gap between available goods and purchasing power.
Mark, every ideology that has operated under the usurous terms of the private central bankers and the external influence over economic and social policy has ever stood a chance of being judged on its own merits. Although I have produced more than enough evidence to enlighten most of an open mind you still blame only rampant Socialism as though it has had no external influences, whilst denying that those same externalities have infiltrated Capatalism and via deregulation have made it into what most interpret to be what you are seeking, and that what you appear to advocate is a nasty world of abitrary rule of the strongest fuedal element.
Malcolm, I request that before you have us return to the Gold Standard, that you research deeply just who currently holds the most gold in the world today, for if we return to a gold standard or any other commodity for that matter, those that own the most of that commodity are immediately going to monopolise the money supply, and as before they will immediately begin to charge those that dont have it for the use of it. Read below, Rothschilds announce getting out of gold, gold price drops, central banks sell, IMF tell central banks to lie about how much gold they hold, who has the gold? did Rothchilds drive price down in order to increase their holdings at a discount?
Who are the 20% of private owners:
http://www.galmarley.com/framesets/fs_commodity_essentials_faqs.htm
Friday, 16 April 2004
“The news that the bankers Rothschild are to withdraw from the gold market, in which they have been a major player for two centuries, has been hailed as the end of an era…………More significant, however, was that in the process the Rothschilds created the world of banking as we know it today. Nathan operated principally as an underwriter and speculator in the early 19th-century bond market. He and his brothers invented, or at any rate popularised, the government bond, which allowed investors, big and small, to buy bits of the debts of sovereign states by purchasing fixed-interest bearer bonds.
Governments liked this because they could use them to raise colossal sums of money. Investors liked them because they could be traded – at prices that fluctuated in relation to the performance of the issuing government – and shrewd investors could make big sums. It brought investment in railways, the industrial revolution and ventures like the Suez Canal. The Rothschilds got a cut of everything.”
http://www.independent.co.uk/news/uk/this-britain/the-rothschild-story-a-golden-era-ends-for-a-secretive-dynasty-756388.html
April 19, 2004
“Secondly, when the Rothschilds talk about getting out of gold, what do they mean? This is a firm that has been a known pioneer in making gold loans. In other words, they have been big short sellers of gold. Baron David as quoted above noted that one reason for “getting out of the gold market” was because “gold firms are buying fewer hedges.” In other words, lending gold was not profitable. When I first read this article, I suspected what the “Financial Times” article was being used by the Rothschilds to mislead the public into thinking they were “getting out of gold” as in selling all the gold they owned, when in fact, I suspected they were actually getting out of the business of lending gold. That is quite different than “getting out of gold”-though loosely defined (since lending has been their main business in gold), it could be construed as an accurate statement………….My rat-smelling suspicions were confirmed on April 16. As I was going for my bike ride workout, I noticed an article two days later in the “Financial Times” titled, “Going, Going, Gold.” “The barbarous relic, as Keynes called it, is crumbling to dust. When even the venerable NM Rothschild has quit the gold market and the Bank of France, among the most stubborn of the official goldbugs, is thinking again about its bullion holdings, the end of gold as an investment has come a little closer…………………My guess is that the Rothschilds are actually doing exactly the opposite of “getting out of gold.” In fact as short sellers of gold they were always “out of gold.” So in fact, what “getting out of gold” actually means is that they are “getting into gold”-not only as they unwind their short positions, but I suspect as they begin to buy more and more of the yellow metal so as to accumulate more and more power when, as James Sinclair opines below, gold rises not just to $480 but to $1,500!”
http://www.gold-eagle.com/gold_digest_04/taylor041804.html
“Meanwhile the International Monetary Fund has instructed central banks to lie about their gold reserves — to count gold loans and swaps as gold in their vaults. So as not to be so audacious without backup to validate our more than dramatic claim, let me explain. Canadian GATA supporter Andrew Hepburn posed the following question to the IMF in October 2001:
Why does the IMF insist that members record swapped gold as an asset when a legal change in ownership has occurred?
http://www.gata.org/node/11
“GATHERED around a table in one of the Bank of England’s grand meeting rooms, the select group of Britain’s top gold traders could not believe what they were being told.
Gordon Brown had decided to sell off more than half of the country’s centuries-old gold reserves and the chancellor was intending to announce his plan later that day………..Finding the truth – The Sunday Times has been battling the Treasury for 18 months to obtain documents revealing the advice it received on the sale of gold, writes Holly Watt.
Under freedom of information laws, the paper has asked for statistical information relating to the decision to sell gold; minutes of ministerial meetings; official correspondence and studies into the aftermath of the decision.
Before the 2005 election the Treasury rushed out comparable information about the Conservatives’ darkest economic hour, Black Wednesday, but it took it five months to turn down this request, although it is required by law to respond within 20 working days.
Among five exemptions it has claimed to block publication is that “such information relates to the location (past or present) of the UK’s gold holdings, which, if made known, could increase risks to security”. This information is on the Bank’s official website.”
http://www.timesonline.co.uk/tol/news/politics/article1655001.ece
Electronic currency and accounts as a means of exchange and transfer, I believe, can serve society provided than can be made transparent and protected from tyranny and kept within the bounds of available sustainable resources. That would also entail the world having a great big discussion on family planning in hope that some voluntary consensus can be come to. Hopefully in time before the likes of those that are currently advising Obama might have their way by force:
“These ideas (among many other equally horrifying recommendations) were put forth by John Holdren, whom Barack Obama has recently appointed Director of the White House Office of Science and Technology Policy, Assistant to the President for Science and Technology, and Co-Chair of the President’s Council of Advisors on Science and Technology — informally known as the United States’ Science Czar. In a book Holdren co-authored in 1977, the man now firmly in control of science policy in this country wrote that:
• Women could be forced to abort their pregnancies, whether they wanted to or not;
• The population at large could be sterilized by infertility drugs intentionally put into the nation’s drinking water or in food;
Sorry about the lenght folks, I realise everyone is not as keen as going as deep as I am, but I just love history and what it shows us.
Goodluck to you and your families.
November 22nd, 2009 at 4:46 pm
Wally and Malcolm, One day you will need to cash in your gold and silver and you will end up with ‘fiat money’ The risk is that hedge funds are using leverage to take large positions that may need to be unwound in a hurry, resulting in huge downward pressure on prices.
What we know is that while household debts are too high to maintain the bubble cheap govt money is creeping into equities and commodities. However I do believe it wise to own some gold, as I do. Im looking at the bubbles in these markets with fear and trepidation as when they go who is going to be the big loser,’The Taxpayers’?
I believe our household debt levels are too high and it would be too difficult to create another housing bubble as wages are not inflating in fact more than likely deflating, I dont see a situation developing that would eventuate in NZ heading to an outcome similar to pre-war Germany. What ever happens next we will be in it along with all the other indebted countries and currency destruction is a likely outcome. Higher taxes must be getting closer as the Govt resists large cuts in spending.
November 22nd, 2009 at 5:06 pm
Mark Hubbard, Roosevelt lived to regret not taking the advice of congress 1932:
““An overwhelming majority of the U.S. Congress (289 to 60) favored it as early as 1932, and in one form or another it has persisted since. Only the futile hope that a confident new President (Roosevelt) could restore prosperity without abandoning the credit-money system America had inherited kept Social Credit from becoming the law of the land. By 1936, when the New Deal (Roosevelt’s solution) had proved incapable of dealing effectively with the Depression, the proponents of Social Credit were back again in strength. The last significant effort to gain its adoption came in 1938.” (W.E. Turner, Stable Money, p. 167.)”
toggle down to The Goldsborough Bill if not interested in all the interesting stuff- http://www.michaeljournal.org/plenty50.htm
November 22nd, 2009 at 5:29 pm
Iain, while you have converted me to the perils of a debt based money system, I dont believe change will happen until the present system is well and truly broken. In the short term Im expecting the changes to MMP to be an attempt to reduce the risk of a rank outsider like Peters (or you) suddenly capturing a large part of the party vote due to disillusionment amongst voters as politicians finally expose the oligarchy really running the country and the disenfranchisement of the masses.
AEP again highlights the deflationary forces at work in the west;
Core inflation for factory goods in the US fell to minus 0.6pc in October from a year earlier, edging the country closer towards Japanese-style deflation despite massive monetary stimulus.
http://www.telegraph.co.uk/finance/economics/6592425/Core-deflation-in-the-US-continues-to-gather-pace.html
and from Mish, debt destruction coming to a town near you,
The very policies the Fed is using have failed in Japan and yet they expect a different outcome.
November 22nd, 2009 at 5:38 pm
Iain said: “Malcolm, I request that before you have us return to the Gold Standard, that you research deeply just who currently holds the most gold in the world today, for if we return to a gold standard or any other commodity for that matter, those that own the most of that commodity are immediately going to monopolise the money supply, and as before they will immediately begin to charge those that dont have it for the use of it. Read below, Rothschilds announce getting out of gold, gold price drops, central banks sell, IMF tell central banks to lie about how much gold they hold, who has the gold? did Rothchilds drive price down in order to increase their holdings at a discount?”
I think you make an excellent point, but the concern I have always had is that the banks will ultimately move to make debts redeemable only in gold. Faced with such a scenario what would we do in New Zealand? Would we go on to a system of social credit and simply default on the debts the bankers have landed us with? Or would we dig gold out of the ground? Our problem, as far as I can see, is that we have basically sacrificed our financial independence by foolishly accumulating such huge overseas liabilities. How could these debts be settled with money we simply create ourselves? If this can be done then I’m all for it!!!
AndrewJ: I am highly critical of those ‘hard hat’ types who want to sit in a bunker surrounded by gold and silver. Frankly, they would be much better off planting a decent vegetable garden and getting a life!!! Your warning about a big potential ‘take-down’ of anything leveraged is very important and I think people lose sight of this at their peril. As I have always said at this site, the underlying financial pathology is deeply deflationary and, whilst we assume the authorities can do a Weimar if necessary, this is not proven!!! In due course ‘Mr Market’ will deliver his verdict.
Incidentally, you mention ‘currency destruction’ but that is the very deliverer of hyper-inflation – irrespective of demand push-pull and wages etc. Look at the underlying depressionary conditions that existed in both Weimar Germany and Zimbabwe ahead of their hyperinflationary episode.
Seems to me there is some excellent but diverse debate on this site. However, for the most part, one gets the impression people have simply had a ‘gutsful’ of looking forward to a future of debt enslavement for themselves and their children – in a place where we should be enjoying ourselves. I think Iain’s idea of a meeting at some stage has merit and it seems to me three things need to be done:
1) Identify and acknowledge the nature of the debt/monetary problems we face.
2) Explore the options for a long-term resolution of the above.
3)Agree a clear strategy for a debt free New Zealand and recognise the fact that a new type of party will be needed to advocate for it.
November 22nd, 2009 at 5:45 pm
Well that was fun…let’s move on now and sort out whether there were gummy bears before the big bang?
November 22nd, 2009 at 5:50 pm
Please, don’t bring that fool into the game.
November 22nd, 2009 at 6:03 pm
Rogie, can you please in simple words, translate for me what Iain explained above. (Don’t use slang words)
November 22nd, 2009 at 7:25 pm
Malcolm said earlier”
“A fascist system of government (which we are moving towards) is incompatible with the ideas of Alfred – which still influence our lives to this day. Therefore, the core philosophy on which those ideas were based must be extinguished and, if people do not believe me, I suggest they do their own due diligence on what is happening in Britain! As one of your previous Prime Minister’s famously noted – “where She goes, we go”.
Day by day Britain’s descent into fascism deepens. Now, it would appear, formal legally sanctioned prejudice against the indigenous population is to be allowed.
http://www.thisislondon.co.uk/standard/article-23771143-harmans-equality-rules-to-decide-pound-220bn-contracts.do
“At work they found that employers hesitated to apply to the immigrant worker the standards of discipline and competence required of the native-born worker; they began to hear, as time went by, more and more voices which told them that they were now the unwanted”. Enoch Powell – Birmingham, 20th April 1968)
November 22nd, 2009 at 7:30 pm
We are rooted , Walter !
Unless we take control of our own currency , 100 % within these walls , we will ( by overseas encouragement ) remain over indebted , slaves to big corporations ( mostly banks ) , off-shore ……………… Where’s me gummy bears ?
November 22nd, 2009 at 7:42 pm
Wally : When-ever there is the promise of ” The Big Bang ” , Gummy Bears give you the sugar lift needed to last the distance , sometimes a whole 60 seconds . …….Yipppppppeeeeeeee !
November 22nd, 2009 at 9:22 pm
Iain (or anyone?)
Debt free money. I’m still not quite there yet. Read this recently http://rangerider.blogspot.com/2009/03/money-creation.html though. When a central bank buys a bond or a treasury bill then money is being printed, but because it’s based on debt, someone has to pay the interest on this, and in this case it’s the treasury that will be paying the central bank since the central bank now owns the bond. However, in our case, since both treasury and RB are government owned it’s just one department owing the other the interest bill. I can see that this is an issue in the US, because their central bank is privately owned their treasury ends up owing the banking system the interest on the money supply (but at the moment it doesn’t cost anything because it’s zero but not going to stay that way). So in our case because we have a Government owned central bank isn’t our money effectively debt free since it is one arm of Government owing another?
November 22nd, 2009 at 9:40 pm
Malcolm if the central bankers decreed that current paper based debt contracts had to be paid in gold they would have to be ultra confidence their global cabal is supreme and then atleast the public credit advocates would not struggle for supporters as it became obvious to every citizen upon the planet that the human species had reverted to type and overt slavery of the many at the hands of the slaveminded few again became “worldwide best practice”. If they reach that stage of confidence every attempt at a diplomatic revival of common decency would proven to have failed.
Walter we can balance our economy within, become wealthy from within, make exports the icing on the cake to be traded on a fair trade basis with other disgruntled nations, as opposed to exports being extracted under usurous terms to repay the tribute demanded upon our foreign money supply, terms that have proven to be insurmountable even in our best exporting periods, terms that are currently set to have us chase our tail and never catch it and drop to the deck dizzy, disorientated and completely submissive.
Why do you think these mongrels put so much effort into using NZ as their promotional perfect model, because NZ is seen as the most egalatarian capatalist democracy thats why, and that is why it punchs above its size on foreign policy, that is why the bankers fear little old NZ standing up, because the world would take note because we are not Iran, Russia, Venezuela, China.
South Korea, Ireland, Finland and the likes are starting to challenge the central bankers predatory lending practices, these are the “friendly” nations, we should be joining them in a global class action and approaching them for a “fair trade” agreement that does not involve opening up your belly to be gutted and hollowed in return.
Then when the world realises that many nations have been painted as “evil” only because they started to challenge the money masters, they to could be invited into a fairtrade clearing house. Eutopian, just call me an optimist.
November 22nd, 2009 at 10:27 pm
Malcolm,
“but the concern I have always had is that the banks will ultimately move to make debts redeemable only in gold.”
The banks will be long gone by that stage and their shareholders left with nada. That’s when public money will come to the fore.
The problem we have now is not of understanding the problem (though it can still be difficult to find agreement on the current set up so confusing as it is) nor is it of the options available (they have been covered on this site many times over the last 12-18 months). No the problem is engagement with the political process which holds power over the ability to make the necessary changes.
The previous and current government have shown no interest in entering into a debate on this issue. It’s interesting that Labour now wants to explore this but is that just for show or are they ready to really make something happen.
Otherwise it may well require a new political movement. It’s certainly something to think about over the summer hols.
November 22nd, 2009 at 10:35 pm
Fred, our RBNZ is currently a nuted nothing. Treasury, is the current name for the Economic Advisory Board, an institution of foreign banker operative economists imposed upon us when we were put into receivership for the first time in 1961. I will research when name changed, suspect during second receivership in 1984. It was in the receivership of 84 that the NZ Debt Management Office came into existance and now handles all our debt dealings with the outside world. The Treasury is as much filled with Kiwi kids brainwashed in foreign banker controlled learning institutions as it is still with banker operatives themselves.
For an indepth understanding of these arrangements, including the bizar circumstance surrounding a US central bank being made “Custodian” or the NZDMO and the RBNZ being removed as even the status of “agent” for the NZDMO, which really only mean’t we supplied the office staff anyway, please read my submission to the unofficial banking inquiry. I have a sneaking suspicion that the irrefutable evidence it contains has made certain people realise they can no-longer ignore the situation without being exposed as fools or liars:
http://publiccreditorbust.blog.com/2009/08/31/iain-parkers-submission-to-unofficial-government-banking-inquiry/
Fred you must remember in the world of corporate subsidiary entities, independence is often a thing of ceremonial token gesture. I was going to include a link to the recent research out of Switzerland that has tracked the related ownership of the worlds stock exchanges down to 10% of related party owners owning 80% of all stock, but I cant bloody find it again, I posted the link on this blog several times, can anyone help me find without wading through a hundred google search results?
November 22nd, 2009 at 11:21 pm
Iain said: “Malcolm if the central bankers decreed that current paper based debt contracts had to be paid in gold they would have to be ultra confidence their global cabal is supreme and then atleast the public credit advocates would not struggle for supporters as it became obvious to every citizen upon the planet that the human species had reverted to type and overt slavery of the many at the hands of the slaveminded few again became worldwide best practice”.
Iain, I think this is the intention, with conditions of irredeemable debt enslavement for all except a chosen elite. Study Europe for clues – with the calls now beginning (after the scandal of the Lisbon Treaty) for a pan-European Army. This would allow, exactly as in Roman times, for troops from one ‘region’ to be deployed into another where they have no affection for, or loyalty to, the local population. Moreover, witness over the weekend the ‘appointment’ of the ‘EU President’. No elections, no public input, just the Soviet Union all over again. When a coup d’état occurs in Fiji there is righteous indignation but, when it occurs in Europe, not a murmur of condemnation is heard.
Further investigation is needed in terms of article 2 of the European Charter on Human Rights which ‘appears’ (or has certainly previously appeared) to facilitate, amongst other things, summary execution for protest. Since, as I understand the situation, this accompanies the Lisbon Treaty there may be cause for very serious concern. I hope to be able to clarify this. Perhaps I could write to the new President!!!
I think the critical issue for the ‘banksters’ in Europe is whether it is possible to get the ‘infrastructure of dictatorship’ in place before the whole scam falls over and the impossible tensions in Europe (particularly over that piece of junk called the Euro) become unmanageable. Within this its important to remember that the Soviet Union fell over, not because the state had become impotent, but because the lies could no longer be credibly maintained. One senses the EU may similarly founder and, if it does, then the power of Europe’s elite will be dramatically weakened and, in consequence, the ‘banksters’ days could be numbered.
It may be that the elite has over-played its hand. With the case for ‘global warming hair-shirtism’ disintegrating daily and the decision not to appoint Tony Blair as Europe’s
president one see grounds for a little optimism. As they say, “you cannot fool all of the people all of the time”.
November 22nd, 2009 at 11:27 pm
Iain, after reading your article with interest, I feel a strong association of ideas. Over the next few days I will prepare an article to express my view with some more proposals of how NZ’s economy could do better. We definitely must become more independent from other countries/ companies/ banks/ foreign investors but not only within the monetary system. There are a number of other reasons why our economy is unbalanced = not working to satisfaction. We do need urgent corrections creating new ideas.
http://www.autisme-economie.org/article115.html
For a start:
It is very difficult for a chef to feed people sufficiently, when major ingredients are missing.
November 23rd, 2009 at 5:39 am
Iain,
NZDMO/Treasury. A Government can print all it likes locally, but when it comes to a govt spending money overseas, then you need to join the game (get a rating etc etc.). And sure if a Government prints money locally and spends it on creating assets then debt free money is created. The issue is whether you can build such an asset without requiring imports. I cringe when I see that Bill English is going to raise Xbn over the next few years, the question being what will they spend it on. Anyway, here’s what I think your system could look like in practical terms I’ve described it before but I’m not sure you have agreed that this is it. The Government tells the banks that it is going to remove the bank deposit guarantee and at the same time it is going to provide the public access to their own “reserve account”, ie an account at the reserve bank. This account is yout IRD number with a new bank prefix that equates to the public sector of the reserve bank. So anyone wishing to keep their money in a Government Guaranteed account simply transfers it into their reserve account. Of course the cost of this Guarantee to the government is simply the fiat money they can print if you want to draw your money out. These accounts need to be predominantly internet based, so the Government may have to build some infrastructure there. The Government tenders for agents to accept deposits (not just one bank like Westpac at present). It negotiates access to the ATM network, so withdrawing money should only cost the same as using another bank’s ATM. The only way to be paid welfare is to be paid via one of these accounts, same with public servants. Of course this scheme would not be popular with the banks (as money in these reserve accounts is not allowed to be used as leverage, it’s removed from the fractional reserve system, until it is spent of course, that’s when the banking system gets it’s hands on it).
November 23rd, 2009 at 8:20 am
Iain – World’s Stocks Controlled by Select Few:
http://tinyurl.com/nv9ufv
November 23rd, 2009 at 8:58 am
Fred – I think you point to the difficulty in Iain’s ideas. People overseas have got to be prepared to accept your ‘money’ otherwise you are going to wind up with a two tier NZ. Those who have foreign exchange and those who don’t. Ahead of any ’social credit’ type change $NZ would almost certainly collapse/be attacked by speculators leading to an explosion in our overseas liabilities (that our delightful politicians expand daily).
Nevertheless Iain makes many compelling points but the real issue is, that having allowed our politicians to ‘hyper-gear’ this country for trinkets and absurdly priced housing, how do we get out of the mess? Seems to me we will either have to directly default at some stage (with savage financial punishment from the ‘banksters’) or we just sell off everything. This is one reason I favour the re-monetization of gold (despite Iain’s intelligent warnings) because we have it ‘in-ground’ and it is effectively the potential capital with which to extinguish our debts. Once those debts have been eliminated we could certainly look at some broader monetary reform – which would need to have at its core a constitutional proscription on us ever getting into this dreadful mess again.
November 23rd, 2009 at 9:20 am
Malcolm
We have to realise we can actually control our own destiny. Dealing to the financial markets is very easy. I have proposed many times recently that the RB should have been selling as much NZ$ as possible in order to build a huge reserve of US$ with which we will pay off our external debts and therefore domesticate our debts. I believe we could have sold many billions into this recent $ sell off.
Then applying a financial transactions tax would see off any heavy speculation in the currency and once the external debt was dealt with the currency would find a level where our trade was in balance.
We could then develop a currency based around what we actually trade…our commodities both soft and hard. So that could include gold as part of a basket. Our paper receipts would then be very acceptable I believe.
So maybe we can all agree we need a hard currency, one backed by something of real value whether energy, food or shiny metals.
The sooner we do this the better as really it’s our only chance of regaining sovereignty and establishing independence. Otherwise as you note we will end up being squashed.
November 23rd, 2009 at 9:20 am
Malcolm, would the difficulty you mention be resolved by running a complementary currency scenario – say the existing NZD and the new debt-free money, call it the NZSD (‘S’ for sovereign). Those on government payrolls would be paid in NZSD, and one would assume these NZSD would only be accepted as fiat tender on NZ origin goods. So, you could spend them on for example locally-sourced meat, fruit and vegetables but not on imported plasma TVs (the latter would have to be purchased in NZD). I would imagine under such a scenario that the market would also set an international currency trading value between NZSD and NZD, the NZSD value based on fundamentals associated with our real economy.
November 23rd, 2009 at 9:50 am
Raf and Kate – I think the ‘inflection point’ is the issue. By this I mean could we get away with monetary reform before we were busted by the ‘banksters’. Within this, faced with growing public pressure for monetary reform, would our politicians accelerate the ‘hype-gearing process’ in order to make our escape more difficult? Whom – exactly – do they serve? This is a very important question that requires an answer, for it is central to this debate.
Gold in ground is New Zealand’s ‘thermo-nuclear’ weapon of debt destruction and, wisely deployed, it could incinerate our debts without the need for a Weimar style repudiation. Once the external liabilities have been extinguished – and the bankers shown the door – we could then reform our monetary system in a variety of ways. My view though is that we should move to a 100% gold standard – which is entirely doable – because it is the quality of money in circulation that matters and not the quantity (as I’m sure anymore recently arrived from Zimbabwe will tell you.)
November 23rd, 2009 at 10:15 am
Malcolm,
I don’t think we afford to wait too long. We have to get on with it now.
So on that subject who would be up for a small get together next year to discuss this in more detail?
Expressions of interest are invited. Email me at raf@sustento.org.nz
November 23rd, 2009 at 2:51 pm
Public awareness of the problem is very important. Anyone that supports a national debt free currency has my vote and full support. Monetary reform is the single most important issue of our time! NZ’s medium of exchange should be a social asset not a social liability as it is right now.
November 23rd, 2009 at 6:07 pm
“and the bankers shown the door”
Expanding on the (public access to a reserve account) idea above. No need to show them the door, rather, simply say after the guarantee has been transferred to the reserve account. You are on your own now, and are free to issue your own notes, backed by whatever assets you claim to have, including what $NZ you have on deposit yourselves in your reserve account.
And why do we need to dig up our gold to pay of the bankers debts. It’s not the government that is exposed to the 160bn in residential mortgages, or the 44bn loaned to the agricultural sector, unless . . . . the reserve bank has purchased mortgage backed securities recently.
November 23rd, 2009 at 8:10 pm
Fred & Kate
You raise some good points regarding trading with other nations and the required payment mechanisms, but at the risk of being labelled backward looking, why wouldn’t some trade be done via a barter system, or at least parts of international trade be done via bartering. Let’s face it, it is probably (not the best historian here) the oldest form of exchange of goods & services.
At the end of the day, you can likely apply the same economic situation and principles of a small local village to the larger country trading with another country scenario. All you would need is a willing country with their own similar set of challenges and the need for the goods (maybe lesser extent services) we produce more efficiently than many other countries. Or not? And if not, why not…?
November 24th, 2009 at 12:12 am
ctnz, you have encompassed the way forward very nicely by looking back:
” At the end of the day, you can likely apply the same economic situation and principles of a small local village to the larger country trading with another country scenario. All you would need is a willing country with their own similar set of challenges and the need for the goods (maybe lesser extent services) we produce more efficiently than many other countries. Or not? And if not, why not…?”
How to facilitate trade across borders if you destroy the current accepted most trusted currency(reserve currency) for that purpose is one of the toughest outcomes to predict with any certainty. I would like to emphasise that most truly financially literate people know with certainty what the final outcome is going to be if the relentless march of the current private debt based monetary system is let continue.
Lets start with this:
“Say, for instance, the money supply is currently zero. If a bank loans Person A and Person B $100 each and charges them 10% interest, the money supply increases to $200, yet total indebtedness increases to $220. As a result, the only way either one can pay the interest he owes is to capture a portion of the other person’s loan principal through the process of commerce.”
http://www.progress.org/reform21.htm
Currently the relentless pursuit of individuals trying to obtain enough of money in circulation to keep up repayment of their debt obligations sees much more exporting of goods between nations that need actually occur and many unsustainable practices occur within nations in the process, as points 4 + 6 of this link point out:
” – This creates frenzied competition in world markets and masses of near identical goods madly criss-crossing the globe in search of an outlet.
- Instead of international trade being based on reciprocal mutually beneficial arrangements where nations supply each others’ genuine needs and wants, the whole thing becomes a cut-throat competition to grab market share in order to stay solvent in a debt based economy.”
http://www.prosperityuk.com/prosperity/articles/negcon.html
ctnz, you are right, there are a growing number of nations who starting to act against the financial beggering of they neighbour that the current system promotes.
The best plain languaged and most easily visualised comprehensive thesis that I can find is the work of a man called Thomas Creco. He put a great case for an alternative electronic international debt free based trade clearing house system that keeps the money supply tied to goods produced. His site is a wealth of information and any new party or if Labour truly do return to their founding ideals, should include him in a new bunch of advisors along with the likes of Joseph Stiglitz, Simon Johnson, Michael Hudson. Creco has alleviated any grey areas for me around international trade under a debt free based public money/credit system:
http://beyondmoney.net/the-end-of-money-and-the-future-of-civilization/
November 24th, 2009 at 1:48 am
I have a quick question. How many people trade the New Zealand Dollar? I don’t mean how many people buy or sell some either. I mean at a wholesale level how many people are there setting the price? I would wager that there are not very many people involved in the bulk of the transactions. Does anyone know? How would I find out?
November 24th, 2009 at 12:22 pm
Iain – thanks for answering my question at November 22nd, 2009 at 4:46 pm. Yes, it’s not a problem. Re Creco, I’ll have to have a study. However, it would seem momentum for change is building all over the place:
http://www.socialtrade.org/index.php?option=com_content&view=article&id=6&Itemid=42&lang=en
http://online.wsj.com/video/the-coming-currency-revolution/25225F5A-B979-4609-A55D-1BAE9A1BA158.html
It’s not as though involving public credit is another planet type stuff, we in NZ have done it before, as they have in Auz and it’s being used in Guernsey and North Dakota – NOW.
The question is, why don’t we?
Perhaps a better question is, why don’t it even get discussed?
Who would lose out?
November 24th, 2009 at 1:06 pm
I’d also like to know why it doesn’t get discussed in NZ politics. Just out of interest, which influential politicians have brought this issue up in the past, if any?
November 24th, 2009 at 1:13 pm
@Alastair, because those who now issue interest bearing debt to us, “would lose out.” Simple really. Who says money don’t buy votes.
November 24th, 2009 at 10:46 pm
The banks would lose out and the global structure that supports them.
Whilst the bankers cannot hold back the force of leveraged collapse they still can keep the system afloat…just.
JFK….we know what happened to him.
Closer to home Jim Anderton is well aware of this issue but has never raised it publicly though did bring us Kiwibank which will become the distribution mechanism for public money.
The time is coming for this issue to rear its head. In the past the authorities and embedded interest have managed to squash it because it’s usually been one person crusading for change (like Iain for example).
to make this happen you will need a group of people with commitment and more importantly complete agreement….that’s the hard bit as often people have different ideas about the problem, solution and implementation. and that is where the authorities generally divide and rule.
November 25th, 2009 at 12:47 am
raf,
I think you hit the nail on the head in your last post. The only change will come when more and more likeminded people eventually get together and agree on a single most important issue despite having opposing views on other, subordinate problems that are likely solved by addressing a crucial core problem. What may even be more important than people meeting to form some group with a consensus on monetary issues, is the fact that typical kiwis can come here to this blog and read freely the various pros and cons that will stimulate debate in many homes in NZ. Without an eventual long and deep debate in most homes in NZ about what it is that really hold us back as a country as much as an individual, it will be difficult to get a broad acceptance of the pain it takes to free yourself from the vicious debt traps so many have so easily and happily run into.
November 25th, 2009 at 10:08 am
ctnz, raf, Iain, Les et al
Your debates and cogitations provoke a great deal of thought, research and debate in many homes – I can vouch for that. The task is to create a groundswell of anxious curiosity in those of us (95%?) who previously had no knowledge of economics beyond the headlines. You have an influence far beyond the readers of this blog.
November 25th, 2009 at 11:05 am
ctnz, raf, Iain, Les, Martin, et all:
Labour after announcing it’s changed position on monetary policy may well give this consideration. It’s not that it doesn’t make sense it’s just that so much money and resources are stacked up on the opposite side to say it’s wrong that it scares political parties.
That said Labour has crossed a bridge with what they have done.
November 25th, 2009 at 11:14 am
May I just say, if you do not like debt, do not TAKE it…
There has always been an alternative.
I have never taken debt as a way of LIFE.
However, I agree that we need reform. And more like minded people running the GOVERNMENT for the PEOPLE…not THEMSELVES and the SHON-KEY banks.
November 25th, 2009 at 11:15 am
Perhaps they will realise the magnitude of the opportunity they have. I am sure their analysts read this blog. What have they got to lose?
November 25th, 2009 at 11:24 am
SORE-LOSER,
The vast majority of the populace will take on debt because of their desire for goods/property/stuff not through rational decision. Desire overcomes rationality in the absence of knowledge and the presence of sophisticated marketing of debt. That is what this blog and others are up against if they are to make a difference to the zeitgeist.
November 25th, 2009 at 11:29 am
S-L,
You are quite correct about people being part of the problem. Financial illiteracy is widespread. As a budget advisor I see it all the time. So that’s one area we can work on.
Martin H,
They have a lot to lose….mainly power and perks. Never underestimate the power of the ego. Society may well look very different in a stable system which may take some getting used to. Government may be very small……the tax system on one sheet of paper….change is difficult and fear will be the primary emotion for most. Fear is easy for the powers that be to exploit.
Having said that I am convinced that NZ is the only country in the world that could pull this off.
November 25th, 2009 at 11:33 am
Radical change is the only way forward.
A concerted effort from everyone is needed to re-position New Zealand for the FUTURE.
Until we are in ACCORD on that, all we are doing is BLOGGING.
November 25th, 2009 at 11:37 am
raf, et al – “to make this happen you will need a group of people with commitment and more importantly complete agreement….that’s the hard bit as often people have different ideas about the problem, solution and implementation.”
IMO, it’s about 1) focus and being 2) pragmatic.
1) focus – what’s the key issue? In amonsgt Iain’s stuff and in various stuff I’ve looked at on sites like ‘Money Masters’, Chris Martenson’s crash course, ‘Money as Debt’, ‘Web of Debt’ and all that, there was quote repeated by one of the banking family partiarches, I think, and I think it went someting like, “Give me control of a country’s money supply and I don’t care how that country is governed.”. Or something like that, I don’t have time to look it up. Anyway, given various discussions we’ve had on inflation control, and associated NZD value and vol., etc., I’ve come to the view that the single most important PROBLEM is credit/money/debt issuance – because without being MORE involved in the control of that, controlling inflation/contraction of the money supply, once said money/debt is brought existence seems, very, if not too hard, especially as most if not all debt, is issued with interest, meaning there is an ever increasing demand for more debt, that is interest bearing, etc.
2) pragmatic – send spaceships to the stars to see if another more advanced civilisation can help out. However, before we get onto that let’s consider MIXING interest-free public-credit into the money supply, as we have done in the past, as Auz has done, as Guernsey and North Dakota do – NOW – on this planet! MIXING will keep both sides more honest, maybe.
Token-interchange systems, ’social dividends’ and all that are good discussion material, but maybe not for NOW, in other words avoid ‘red herrings’ and re-inventing wheels – WE DO NOT NEED TO:
http://www.interest.co.nz/ratesblog/index.php/2009/11/16/top-10-at-10-south-canterbury-losses-china-bubble-to-pop-mad-butcher-vs-chrisco-dilberts/comment-page-1/#comment-47427
http://www.interest.co.nz/ratesblog/index.php/2009/11/16/top-10-at-10-south-canterbury-losses-china-bubble-to-pop-mad-butcher-vs-chrisco-dilberts/comment-page-1/#comment-47457
And, currency backing with gold or whatever, maybe another ‘red herring’ – all such provides, IMHO, supposedly, is discipline. We could have discipline in issuance, without such backing, see examples. Can someone tell me the ratio of, value of gold derivative contracts, to actual gold?
Small incremental steps, that others have taken, make change more probable than trying to take quantum leaps – that never get done.
IMHO, Les.
November 25th, 2009 at 11:41 am
raf,
Yes, perhaps a change of that order of magnitude can only be accepted incrementally or in the face of total collapse of the status quo. Not too much time for the incremental option perhaps, but if a tipping point of awareness can be achieved, then maybe…
November 25th, 2009 at 11:48 am
The only language govt understands is what ‘press’ they are getting. The sooner Kiwis learn to work as a team to destroy govt support, the sooner you will start getting constructive govt.
November 25th, 2009 at 11:50 am
Another idea of how to improve our national economy.
Eco Industrial Park
We all agree NZ must become more productive in order to become more independent and wealthier as a nation. Many sensible articles have been written here introducing better condition in the monetary system and other measures.
Coming from a strong manufacturing country, I’m looking the situation from a different angle.
Fundamentally we must produce and export not only more, but especially more valuable widgets/ products. As a nation we cannot afford the volume of imports. We must reduce our massive account deficit and change from consumption to a manufacturing culture.
Obviously NZ has a reasonable good education system to provide the necessary potential for our workforce. Unfortunately talented and skilful young people export them selves to other countries, because of lack or more interesting and better paid job in other countries. Entrepreneurial skilled people setting up their businesses are often struggling to get access to resources – materials/ technology etc. in this country. As a nation this factors are economic suicidal.
To keep and attract “Brainpower” in New Zealand is an important step, but we must create opportunities accordingly for those people. A national Research and development centre combined with manufacturing and engineering school.
Walter
November 25th, 2009 at 11:56 am
S-L
“Until we are in ACCORD on that, all we are doing is BLOGGING.”
Seems to me that there is a great deal of accord around here, and there seems to be an ongoing convergence – exemplified by Les. There is an evolution of core principles happening, and the next steps are to give them a vehicle, then educate, motivate and lead. (IMHO!)
November 25th, 2009 at 12:01 pm
An interview with the veteran gold commentator James Turk on the subject of gold as money. Well worth carefully scrutiny!!
http://www.mmnews.de/index.php/Englisch-News/Gold-is-not-an-investment.-It-is-money.html
November 25th, 2009 at 12:32 pm
Malcolm,
There is obviously one heck of a lot of unwinding to do before (actual) gold could be reinstated as a reserve currency – unless an emperors new clothes position was taken. (If gold is “lent” doesn’t that imply that the borrower will be able to return it?) are the “bullion banks” any different to the trans-national banksters that would control our financial destiny?
November 25th, 2009 at 2:00 pm
Last RANT for a while. (reasoned and reasons).
All I have ever attempted to do was initiate CHANGE from the Status Quo that has pervaded and miss-managed New Zealand for the past 30 years that I know about.
That includes all the VESTED Interests of todays cronies, which unfortunately number in the approx 1.7 millions, led by over 120 MP’s and numerous civil serpents who only know how to MISS-MANAGE the whole process of evolution in New Zealand.
The turm-oil will never stop until those that perpetuate the problems are eliminated.
And OIL is the problem and also the catalyst for the Change required, over the next few years.
The MONEY problems are the distraction and the same people who caused those problems are MISS-MANAGING the next stage too, so they can BENEFIT again.
I had greater hopes, like many New Zealanders that KEY would be a CATALYST for this CHANGE needed. It seems that once a BANKSTER, always a BANKSTER, so all that is happening is more of the SAME. All CHANGE…NO CHANGE, except trivia.
When I talk to BANKSTERS on an almost daily basis, it is they along with their BOUGHT cronies in Government who are the PROBLEM, not the solution.
The lower level staff are just as bemused as the rest of the JOE PUBLIC…..NZ.
What legislation has come in to FIX these fraud and ponzi schemes being perpetuated daily……..to date…………NOTHING.
But the Emission Trading can be RUSHED through in a few days, with only a few benefiting. (Apt word that)….to BUY votes.
Same as an electrifying experience in AUCKLAND….to the tune of millions. Not well thought out or through…..as usual.
Same old, same old.
The number of Politicians who would be indicted for FRAUD in a TRUE DEMOCRACY is astounding, as per the same in FINANCIAL miss-management ala HANOVER, etc…
We all know who they are, but for some strange TWISTED reason, we seem to THINK that they are IMMUNE.
Well they are NOT, but only if we all do something COLLECTIVELY about them.
The have to be held to ACCOUNT. (Good word hat too.).
Then we can get on with FIXING the rest of the problems.
There are fine minds who can see solutions on this site. The rest of us will be FINED if we let these idiots take CHARGE of OUR future, via huge TAXES.
No wonder we have a precarious STATE. The State is precarious. THEY made it that way…..
This BAIL-out and borrow mentality is a ploy. NOT a long term solution.
We have solutions, but NOT with these same people running the the show who caused the very problems we are all feeling.
A country the size of a small city, should not have had these PROBLEMS. …ever.
Makes you THINK…
Wakey Wakey NZ.
November 25th, 2009 at 2:42 pm
A great summary of the problem THANKS SL, but what should WE be DOING do you think? And how to achieve a unified approach?
Try to pressure/nudge/help Labour to build on its brief show of motivation?
Demonstrate?
Write a consensus/discussion statement of where we are, the current direction, a new way forward? Use it as a basis for a conference to decide action?
Form a common sense party? (what happened to ‘NZIP’?)
or what? and how?
November 25th, 2009 at 10:38 pm
Les,
Point 2. Please see how this has gone in the UK. I made a proposal at a meeting in the House of Lords back in 2001 for that year’s PSBR (Public Sector Borrowing Requirement) to be created into existence in the form of public money. This formed the basis of the first Early Day Motion in Parliament, which has now gone through many versions.
http://www.forumforstablecurrencies.org.uk/
This is a very easy place to start. It’s a very sensible place to start. For example, the government approves a loan of $500m for some rail project (i’m not debating the merits of this). instead of a loan they actually create the money and put in into circulation via this particular project. that is “real” money which will stay circulating in the system with no interest attached to it.
Now in terms of showing how simple this is to do one could start with a smaller amount. The RB simply credits the Treasury with the money…..and away we go.
But wait…there is a hitch. the money supply has been expanded by the same amount. now if all money were created this way it would be easy to control as limits are easy to set. controlling the supply of money in the private banking system is much harder as we have seen over the last 30 years. but if they can introduce the core funding rule, they can tighten up the supply of credit in the same manner.
the result: money comes into circulation without interest. it cannot be cancelled…its like having real notes. this is the start of creating a real and stable supply of money. initially we would have a mixed system but at least it would be a step in the right direction.
that’s where we can start now……..but it’s worth looking at the experience in the UK and asking why it hasn’t made more progress.
November 25th, 2009 at 11:33 pm
raf,
Excellent link.
They certainly have not given up the cause…
UK petition for the adoption of public issued money.
http://petitions.number10.gov.uk/Money-creation/
November 26th, 2009 at 9:50 am
raf,
yep, as I’ve come to understand, and accept – it’s not ‘inter-galatic rocket science’. There are a variety of options to meet the same end, for instance one we’ve just been discussing over here, and something that could ideally fit in a new Kiwibank remit:
http://www.interest.co.nz/ratesblog/index.php/2009/11/24/opinion-exporters-need-to-learn-how-to-live-with-a-volatile-currency/#comment-48980
As for your point, “but it’s worth looking at the experience in the UK and asking why it hasn’t made more progress.” In answer to that, from my pov, who knows, many and varied I’d say. No doubt people could offer reasons from simple ignorance to outlandish conspiracy theories. I prefer the former, because I think until one understands how ‘insanely hilarious money’ (interest bearing debt) is created, one can’t get a good grasp on how useful ‘public-credit’ (so called ‘funny money’) could be in addressing our present problems with debt, inflation, ex.rate value/volatility and the generating positive impacts on the productive sector and hence NZ as a whole. Unfortunately, as I’ve found, when trying to study this subject, one is but a mouse click or so away from “outlandish conspiracy theories”, which might be entertaining, but are quite off putting to most people, I’d say, and as they are proffered they simply obscure the fact that using ‘public-credit’ has been used past, and present. All the “outlandish conspiracy theories” stuff does is give more support to the scornful jibes of ‘funny money’ – which is a great shame, especially when we see North Dakota, Guernsey using both ‘public-credit’ and interest bearing debt systems, together, plus NZ has already used ‘public-credit’ in the past, even quite recently with DFC ’soft loans’.
As you’ve shared, the present government seem to have no interest in even discussing such options, so maybe Labour might, given Phil Goff’s declaration of abandoning the concensus of monetary policy? Maybe they won’t either and it will be that the best way to have progressed using public-credit is via a new political party, but quite frankly I don’t feel that is likely to happen in NZ. I don’t think folk are up for it. I had also thought an appropriate CIR might be useful in progressing change, not because goverenment actually act on CIR outcomes, (clearly – too much pride to swallow) but because of the education that would have to accompany such, and because, maybe, either or both sides of the political divide might adopt some of the outcomes in their mandates.
I think education is the key on this one and has to end in people saying,”Well why not?” and that might come after they understand how ‘insanely hilarious money’ is created, as the start point.
Cheers, Les.
November 26th, 2009 at 10:01 am
Les,
I agree that a new political party is not the way to go. It’s really an implementation issue rather than a political bunfight. Having said that this is a clear election winner for Labour if they choose to have a very close look at it.
And yes the conspiracy theories are not helpful. The main problem in the UK is simply that there are too many layers of embedded interests to wade through. It’s also sometimes just too much for people to accept. The banking system we have is so ingrained that the truth is just too much to process. So again that’s why a slow start is the sensible approach. Simply start by adding small amounts of new money into the system and keep a close eye on money supply numbers.
Sunlight is the greatest disinfectant and we must simply pour huge amounts on the money system.
So a well funded lobby group can do this. Run seminars up and down the country, write articles etc..once the “product” has been decided up it’s simply a marketing exercise which is why avoiding politics is the best way. Ultimately we want people to understand it and see it as a better system than the current one.
In a large country there is no chance of this happening but in NZ we have size and small degrees of separation on our side.
November 26th, 2009 at 10:20 am
raf,
“….this is a clear election winner for Labour if they choose to have a very close look at it.” Maybe, but I wonder if they’ve got what it takes?
“….a well funded lobby group can do this. Run seminars up and down the country, write articles etc..once the “product” has been decided up it’s simply a marketing exercise which is why avoiding politics is the best way.” Could be a job for the likes of NZMEA and it’s mates. NZMEA is apolitical, independent of government and the vested interests likely to oppose:
http://www.interest.co.nz/ratesblog/index.php/2009/09/24/exchange-rate-reduces-price-volatility-for-nz-commodity-exporters-westpac-says/#comment-40828
Who knows, I’m just a member, but will be making this suggestion to NZMEA.
Cheers, Les.
November 26th, 2009 at 10:35 am
The will has to be for change and controlled and planned change to benefit the future of New Zealanders as a whole, not the continuation of the miss-managed economy, with us all acting as the serfs to pay the fraudulent.
There appears to be the will for change, but not the platform, as I have stated many times, the present incumbents are the problem, not the solution, based on their past and present performance and integrity.
Until there are more people inclined to do something, then all we are doing is going around the houses, so to speak.
Unfortunately many agree with my RANTS, which are intentional to provoke, but all we ever seem to get is pedantic’s who do not like my way of SHOUTING.
See, I can write in a sane and normal manner without shouting, when I choose.
When and if there is ever a groundswell of opinion, then and only then can we act collectively.
This could be done quite simply by taking this discussion off-line, to formulate a pressure group for change, if not a new Political Party.
The changes are many, I have my opinions, but I see too much vested interest in many of the writers viewpoints and little resolve.
New Zealand is a small country, it would be so easy to put it back on the right track, but the overwhelming majority can be bought so easily, as the present and previous Governments prove.
They ignore democracy, not promote it.
Comments please on a 100$ bill, unless of a like mind.
Seriously, here will do.
November 26th, 2009 at 12:10 pm
I think you have a least two options already for the lobby groups PEC and NZMEA. Well funded is the bit that is missing as both are funded by contributions of the productive economy and that’s not doing so well at the moment as you might have heard!
That aside the Productive Economy Council http://www.pec.org.nz is putting together a trust to fund exactly this activity as we need to drive people towards the right decision as it won’t happen in a vacuum.
The concept is easy, we set up a trust to promote, first the issues that need to be addressed in rebalancing the economy and driving for economic sovereignty and then the preferred and well considered solutions.
For someone like myself who’s opex has increased by around $40K USD a month thanks to nothing but the dollar the idea of putting another $4K a month into fighting the battle becomes very logical.
Multiple this by the entire Productive Economy around New Zealand and you have a real fighting fund for educating the population and then driving the points home during the election.
From where I am sitting now John Wally would have to be one of the trustees as his drive and credibility in this space is very important to the credibility of task ahead.
November 26th, 2009 at 12:19 pm
Selwyn – sounds good. As a member of NZMEA I request that you, as a member of NZMEA’s CEO Council, raise this activity and the topic of advocating ‘public credit’, for discussion within the NZMEA CEO Council and Executive, as soon as possible.
Cheers, Les.
November 26th, 2009 at 2:35 pm
With that level of support (none from responses) it looks like a real winner Les. Will do it anyway. Sel
November 26th, 2009 at 3:10 pm
It’s important to remember this debate should be about the monetary system not monetary policy as such. It’s an important distinction.
If the status quo is to be challenged it will need to be done on a foundation of robust argument and fact. So moaning about currency and interest rates has the potential to divert attention from the real debate.
A sound and stable monetary system will produce appropriate levels of currency and rates of interest.
November 26th, 2009 at 5:05 pm
Raf i dont think thats a problem. A lot of that debate is already going on behind many closed doors right now and its time to get the “SYSTEM” debate into the sunlight!
November 26th, 2009 at 8:48 pm
What raf said hit the nail on the head. We must keep the spot light on the key issue.
November 26th, 2009 at 10:51 pm
raf, Les, S-L, Alastair, Selwyn, Iain, others,
It is fascinating to follow this constructive, down to the nitty-gritty discussion. IMHO, one thing to be wary of (if the object is to get as many peoples attention as possible) is of being wrongly interpreted at the outset as being a self interested lobby group. If people jump to that assumption, education (of potentially interested public) will be near impossible.
From a marketing point of view (can’t be ignored), interest.co.nz has many advantages as a place to continue the evolution of these ideas and their promotion. It is widely seen as neutral and accessible and its branding is of a service providing neutral advice, information and insight to the general public. There is a ready made audience of those who are already ‘hooked’ and gaining awareness of the enormity of what is currently playing out. In short this site is already acting as a source of education in finance and economics for many (myself include) and perhaps it could play a bigger role (Bernard?). Perhaps a series of articles succinctly outlining the issues, which remain as permanent links, get updated as things evolve or for clarity. Perhaps a Q&A set up under each one evolving into pre written FAQ’s as the gaps in peoples knowledge become apparent. Interest.co.nz has evolved over time, and this could be a consistent extension of its function. (Not sure how ANZ would take it though!)
I guess a two pronged attack is required – public education and buy-in, and political business education/lobbying.
Cheers…
November 27th, 2009 at 4:10 am
“Knowledge without integrity is a dangerous and dreadful thing, integrity without knowledge is useless and weak”
Samual Jackson, 1795
Sorry my fellow commoners I have little time to participate in coming days, my realsector duties on the hamster wheel have overtaken.
November 27th, 2009 at 8:01 am
Iain,
Exactly, great quote… hence the value of this site to people of integrity with a desire for understanding of what is, to most commoners, esoteric knowledge.
S-L,
That’s why it would be a great shame (loss of audience and influence) to take the discussion to a less public place. Following the discussion is an incremental course of education for many – regardless of background.
It is a unique opportunity to learn at the economic coal face, and more people with more knowledge (and further disseminating it) may be useful when the revolution comes!
cheers…
November 27th, 2009 at 8:47 am
Goff gives us ETS and then votes against it. He moves on to re-open the Orewa debate and incite racial divisions for populist capital. How can any rational debate about something as important as the economy be accomplished between National and Labour when one side shows the political maturity of a gnat? National was given a mandate to lead, they ought to get on with the job.
November 27th, 2009 at 9:08 am
Doug : As I remember , National’s mandate was to change nothing much . Steady as she goes . Hence we still have WFF / LAQC’s / ACC -all encompassing . The electorate was just desperate to be rid of Helen , Michael , Goffy & King . Jelly Key is doing exactly what he campaigned on………Nothing !
November 27th, 2009 at 9:22 am
Nothing will change politically unless something changes publicly and that can only happen with awareness and education. Ultimately we get the government we deserve.
So what is the best means by which to inform the public?
November 27th, 2009 at 9:42 am
Iain, Martin, raf…Andrews, Kate, Rodger…Selwyn,..Alan, Ross…Bernard……et…al….all valid contributors….
My typing is too slow, though I like this public place to point out the inequalities and vested interests that pervade NZ in an attempt to foment Change.
Discussion is slowed down consequently. I and you also have to SEEK what weI want because it all flashes past and there is so little time and so many threads.
That is the main reason I would take this off-line. I spend way too much time here.
Time well spent initially, but it cannot go on without RESULT. (sorry to shout).
The discussion and the resolutions tend to go around in circles somewhat, however educational and pointed and the links valid.
The groundswell for Change is here. I see it more daily.
I use a RANT as my method of communication. Wally is funny, etc… Some are way too serious, but with the right intent to educate. It is a serious matter after all.
We are all different, but it appears we all may want realistic Change.
There are now so many with the right intent and direction.
There are also many with vested interests, however everyone has often a valid point of view as to WHY they do things, even in an unhealthy way for NZ.
But I also think we need some level headed discussion as to what is required next.
A PLAN….I used to call it.
It may be a branch of this site, Bernard.
If no firm action is planned then we may be better educated, but floundering, because still divided we are weakened.
For instance, I have no idea how many people really agree with those rants or opinions, though they may be my reasoned and pointed opinions of Changes required.
Likewise for everyone else.
I tend to be-LABOUR the point, though Labour is not all wrong, National not all RIGHT…..ACT …, but GREEN I am not…….etc……..so here I go again.
I have no affiliations to ANY party. I personally THINK they are all wrong in so many ways, hence why we have pandering and vote buying to achieve their objectives, NOT New Zealand’s. It is not just monetary, but Social change
I started making a list of what Changes I thought NZ needed and the list just grew and grew. There is a need to prioritise and promote ANY Changes in a reasoned and practical manner.
What vehicle do you use to try to implement those prioritised Changes?.
The only reason I suggested a NEW POLITICAL PARTY, is the vested interests are well entrenched in those already existing, as are the pressure group factions, behind the scenes.
Personally I think we may be informing those we seek Changes about, so forewarned is fore armed and that I do not THINK is practical either, if everything is always done on-line.
I either have more input, or I come to a FULL STOP and work around the problems myself, which I have always done in my fashion.
So suggestions please. I am all ears and eyes. The fingers have problems.
Bernard has had way too many click throughs from me. The joints are seizing.
Them KEYS are the problem as maybe the solution…time will tell.
Time to piss or get off the pot as the saying goes.
Capitals intended…..but not necessary. I think you get my drift by now…
Also the FULL STOPS.
I have to stop shouting, if no one listens.
November 27th, 2009 at 10:55 am
Aye Roger, point given. I, for one, want less debate and some action. LAQC and WFF both need to be ‘deep-sixed’. Bollard and his team need to go, too. I would like to see a new Governor follow Fischer’s lead in Israel and begin to bump up the OCR to shake the carry traders loose.
November 27th, 2009 at 11:25 am
It is indeed about changing the system, not just how the current system is used. Basic analysis, even without much knowledge, leads to the conclusion that outcomes asscociated with the current system will not be significantly different no matter how much we tinker with how it’s used – policy. So debate about changing the system most certainly needs to be in the sunlight. Useful monetary reform will not happen if system change is ignored. Anyway, Bryan Gould has a useful piece in The Herald today:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10611929
BG has a crack at the TINA’s and calculates that to close the onshore equivalent GDP gap with Auz by 2025 that, “we would have to increase our output by nearly 50 per cent to match Australian levels. And that an average New Zealand family is actually $80,000 a year worse off than their Australian counterparts.”
However as if that isn’t enough of a challenge, he cites NZ’s well embedded TINA thinking as the real challenge in closing the gap:
“It is perfectly clear where we are heading – back to an obsession with inflation above all else, a total reliance on interest rates to regulate the macro-economy, and the destructive impact of an overvalued exchange rate on our productive economy.
We seem to be sleep-walking towards a complete rerun of all our mistakes and failures. The authorities shrug their shoulders. There is, we are told, nothing they can do.”
And his proposal for closing the gap may interest Phil Goff now Labour have abandoned the cross party concensus on monetary policy:
“Everything we do should be focused on improving the competitiveness and profitability of our productive economy.
That means that policy targets should be set in terms of competitiveness rather than inflation, and that interest and exchange rates should be allowed to do their proper job of striking a balance between the interests of lenders and borrowers (in the case of interest rates) and clearing our current account while achieving a satisfactory rate of growth (in the case of exchange rates).
Inflation should be constrained by specific measures designed to address inflationary pressures – excessive bank lending on housing and the favourable tax treatment of housing amongst others”
Here’s hoping.
November 27th, 2009 at 11:43 am
Les – you seem to be contradicting yourself – firstly in favour of changing the system and then going on about detail with respect to policy. I think what Raf is saying (and I tend to agree with him) is that policy considerations have to come after system considerations. Hence, Bryan Gould (and I have a lot of respect for him) still hasn’t “crossed the line” beyond talking about monetary policy and he needs to start thinking about the root problem – the monetary system.
What I think needs to be considered is more than merely a challenge to the NZ domestic consensus on monetary policy but rather a challenge to the international consensus on the monetary system.
November 27th, 2009 at 11:43 am
TINA must die. A simple extrapolation of our past performance paints TINA as the position of hopeless despair and a poorer future. If you do not want you had better be doing something to help kill TINA.
November 27th, 2009 at 12:00 pm
Kate – good point. I said it was useful. I maybe should have said it’s useful in moving the discussion toward challenging the TINAs, and in MSM – and if as Bryan says, “Everything we do should be focused on improving the competitiveness and profitability of our productive economy.” – then IMHO, we will inevitably end up having to add system change to his proposal. Which is my view, at present, is utilising public-credit.
I guess I was being lazy Kate, however, what appealed most was the push back against the status quo, and I’m all for that, and the more people on that track, and in MSM, the better in my view, as that will hopefully lead to more prospect of system change, again, in my view at present, simply simple uses of public credit – like a few others are doing on the third planet from the Sun. Oh, that’s right, some of our neighbours, in our world – now.
Cheers, Les.
PS – John, yes, TINAs, they got to go, saying ‘there is no alternative’ is complete bs and is doing NZ no good at all.
November 27th, 2009 at 12:13 pm
The alternatives are not pleasant in the short term. We have to be realistic.
That will not be apparent to those living high on the HOG and in cloud cuckoo land.
I stand by my mantra, they were/are always the problem, not the resolution.
November 27th, 2009 at 12:57 pm
Kate treat us old people with kindness, monetary policy is under pressure to change – great. Discussions around fundamental flaws in our monetary system are going to take a while to get our old heads around but we are on to it – right now it is maybe a bridge too far.
And the idea of moving beyond NZ might also be a deal more than we can chew, maybe if we do end up there we can lead by example – however ineffective that might be.
It is worth remembering that not so long ago discussion around changing monetary policy and CGT was treated by almost all of the community as heresy – and the old boys have done something to open the debate. Bryan’s book ‘Rescuing the NZ Economy’ was a big help in this regard.
http://www.mea.org.nz/documents/638-recommended_reading.pdf
November 27th, 2009 at 1:30 pm
Hi John, I’m not a young person (four mokopuna so far) but thanks for brightening my day in thinking I was
.
And as I said before I hold what Bryan Gould writes in very high regard. And I can bet that he too is thinking to himself that sticking with the Central Banking/IMF controlled debt-based int’l monetary system will never see NZ released from bankrupcy.
But, critical thinking about an alternate monetary system is still a taboo subject in circles of power and influence. Bryan may want to remain in that circle (albeit on the fringes) for a while longer – timing his break (if he is to break) more strategically.
November 27th, 2009 at 3:37 pm
Kate – age isn’t my excuse, was just being lazy, clumsy in my comment, and was going for the record of longest sentence ever in the next one…. doh.
November 27th, 2009 at 5:31 pm
It’s also worth preparing to rebut arguments from mainstream economists. I don’t use mainstream in a judgmental tone but it describes economists trained in the standard framework where the private bank monopoly is a given.
I liked this post from Matt Nolan where he describes some of the commentary on this post as lacking knowledge about the real issues in the economy (my paraphrasing).
He then goes on to say that actually its all about the money supply. I couldn’t agree more.
If he went one more step into the construction of that money supply then we’d be in the same space for debate.
Economists have a habit of talking down to the general population and quoting terms such as “output”, “inflation”, “exogenous” etc.
But for sure if you do talk rubbish they will point it out very quickly and concisely. They are well trained in their field and are not “the enemy”. They will take a lot of convincing in order to change their world view and provide a formidable barrier to money reform.
So if the argument gets tied up in directing outcomes: employment, exchange rates etc then it’s likely that any movement for change will be drowned at birth. I know this well from experience.
As Matt says, it is all about the money supply. I would argue the RB (and all other central banks) have failed dismally in their efforts to control the supply of money, preferring to focus on the icon statistic known as the CPI……
So my message for the weekend is simply: the supply of money. Forget about everything else and pray for a stable money supply…….it’s one message that is not easy to argue against.
November 27th, 2009 at 5:32 pm
Apologies. Here is Matt’s post:
http://www.tvhe.co.nz/2009/11/20/one-thing-to-keep-in-mind/comment-page-1/#comment-22054
November 28th, 2009 at 1:36 pm
raf – noted re. Matt N and the economist fraternity, good points. Interestingly Bill Still and his ideas for monetary reform had good support from Milton Friedman.
Nathan’s Economic Edge does a review of Still’s recently released ‘The Secret of Oz’ doco, with article title -”IT’S NOT WHAT BACKS OUR MONEY, IT’S WHO CONTROLS ITS QUANTITY” (Apologies for capitals, just copied it from the website.)
http://economicedge.blogspot.com/2009/11/secret-of-oz-its-not-what-backs-our.html
more here:
http://economicedge.blogspot.com/2009/11/still-report.html
The blogs comments are worth a read on both articles. In the second Bill Still explains Friedman’s input to his research on the ‘Money Masters’ doco:
“During the editing process of “The MoneyMasters” I called Milton Friedman. He was a prof. at Stanford at the time and he wasn’t hard to get in touch with. I asked him if he’d take a look at an early version of the film and comment. When he called back he slapped me hard: “Boy, if you kill the Fed and don’t fix fractional reserve banking, you’ve done nothing.” So, we scurried around and emphasized ending fractional reserve banking to a much greater degree. This is why I worry about Ron Paul’s approach. He’s got everyone hating the Fed, when the real virus is fractional reserve banking practiced by the commercial banks.”
I went to Amazon to order “The Secret of Oz” and it’s not listed now. Still explains, in his view, why, here:
http://www..youtube.com/user/bstill3#p/u/1/ezAvMhG4E54
Ho hum, who to believe. Anyway, any Int.co bloggers seen it? If so, any comments?
This is worth a squizz too:
http://www.stuff.co.nz/the-press/business/3104854/Tax-sytem-overhaul-a-fine-art
“Tax group member, economist Gareth Morgan says a 30 per cent top personal tax rate in the short term is a “real challenge” at a time when government revenue is under pressure.”
IMO it’d be less of a problem if, amonst other taxation changes well debated on this site:
1) we reduced size of the public sector, and,
2) we started issuing our own interest free public-credit to pay off the national debt – debt that is costing us $250mio pw. Or, very, very roughly leaving each of us effectively debt burdened with 250/4 = $62.5 pw.
(Question, anyone know what proportion of the tax take goes on this $250mio pw debt servicing?)
If this issue, and the impact on the level of taxation we have to suffer in NZ doesn’t motivate us to understand the private creation of interest bearing debt-money and the benefits of, AGAIN, utiising public-credit, what will?
Cheers, Les.
November 28th, 2009 at 3:57 pm
Les
I ordered ‘The secret of Oz’ a couple of weeks ago,you can have it after me if you wish
Andrew
November 28th, 2009 at 4:23 pm
Andrew – that’s very kind of you, thanks. I’m going to email Bill Still to see if he will send me a copy of that, plus ‘The Money Masters’ and Paul Grignon’s two dvds, as a job lot.
If when you’ve watched soz and are happy to send it on, please contact me via:
http://www.mea.org.nz/contact.aspx?subject=Enquiry
MEA staff will flick the message on and we’ll go from there, IF, I’m not close enough to receiving a copy of my own.
Thanks again, Les.
November 29th, 2009 at 11:29 am
Hi Public Credit Advocates,
I am currently in the early stages of reading John A Lees memoirs written by him in 1963, he is fast rising up my list of most respected historical contributers to the humanist cause of common decency. It is amazing how one doesn’t stand a show of gaining an understanding of overall trends and situations until one has red the memoirs of all the participants eccompassing the entire length of the issue from their own mouths.
In the decade leading up to their election victory in 1935 John A Lee had led a caucus vote victory over the protestation of Savage, Fraser, Nash to have Labour adopt public credit as one of their core policies. Lee was given free reign and sent all round the country building huge support leading up to the victory, writing many of Savages speeches. Lee won his electorate with one of the largest majorities ever gained in NZ history. After the election victory had been gained and Savage elected the agent of change in times of depression, Savage, Fraser, Nash sought their revenge for the earlier Lee led caucus defeat and tried to put motions in place that would allow them to not have to elect Lee to cabinet. Lee states they used public credit as a populist platform to get elected on, but had very little intention of acting on it physically. Anytime our public credit facilities were ever invoked came very much down to the dogged perserverence of one John A Lee and a smattering of Social Creditors. Lee saw Social Creditors as public credit allies, but to religious like in their pursuit. Lee also saw fundamentalist Socialists as being to zealot religious like in their cause.
Lee discribed himself as “never a fundamentalist. I wanted measures of socialisation for their human value, not to fit human beings into a new socialist traction straight jacket”
I have to go right now and finish putting a new cylinder head back in my vehicle, If I have time I will tonight come back and give you an insight into the wonderful info this book contains.
When Labour nationalised the bank of NZ in 1936 they made one big mistake, they never removed the power of credit creation off domestic deposit taking institutions!
November 29th, 2009 at 12:32 pm
Raf, Iain, all
Re: “It’s also worth preparing to rebut arguments from mainstream economists…”
What on earth IS the argument FOR the subjugation of our sovereign rights to –
“the power of credit creation [of] domestic deposit taking institutions”? (and trans-national debt issuers)
Why do mainstream pollies worldwide, continually shy away from Public Credit? Is through lack of guts to go it alone (with only Guernsey and North Dakota for company), or fear of what retaliation the private banksters may mete out in response to us ‘pulling aside the curtain’? or that it is just less risk to self interest to maintain the status quo through each electoral cycle? – (you can’t blame me, I didn’t do anything!)
Like the ETS, it just seems like so much economic self-flagellation.
Cheers…
November 29th, 2009 at 1:18 pm
Martin H – in one of the vid streams I’ve watched recently I came across, The Golden Rule, that is, who ever holds the gold, makes the rules! Maybe this applies with debt, as much as gold, and thence banks and governments, ours included?
November 29th, 2009 at 2:34 pm
Hey LES , I have a theory , a ” bull-shit ” indicator , that what-ever is being spruiked on RadioLive ( A.K.A. Radio Pathetic ) currently , is already in bubble territory . This theory kept me out of Auckland apartment investments , just prior to that bubble bursting . It also kept me well away from Money Managers . And now gold . The adverts are starting . The ” seminars ” will follow in quick pursuit . Caveat emptor : Not all that glitters is …..
November 29th, 2009 at 2:53 pm
Why would they SELL GOLD…..Wouldn’t they keep it.
Wakey Wakey.
November 29th, 2009 at 3:01 pm
Canada who used public credit between 1938-75 would be the largest democracy of note to have done so. I recently found this article outling how they were eventually infiltrated and brought to heal, sold down the river by their own who chose personal prosperity over the national interest of all, sound familiar?
“By 1929, bankers, brokers, and corporate leadership ran the economic systems into collapse. In Canada, part of the solution was the nationalization of our Bank of Canada. The nationalized Bank of Canada did not materialize without work, struggle and deep political debate.
In Canada one such political person was Gerry G. McGeer. During 30 years of political life, he was a BC Liberal, a member of the BC Provincial Legislative Assembly, a Member of Parliament, a Senator. He was Mayor of Vancouver City in 1935 and 1936. In 1936 McGeer published a book called Conquest of Poverty, or Money, Humanity and Christianity.
Gerry McGeer — Trailblazer
In the preface of his book he wrote:
“Ever since the passage of the English Bank Act of 1844, the creation, issuance, and the regulation of the circulation of the current medium of exchange, though being duties that constitute the most conspicuous and sacred responsibilities of government, have been in large measure delegated in blind faith and absolute confidence to bankers and financiers.
“Necessity now compels all to recognize that the creation and issuance of the medium of exchange, the monetization of public credit, the circulation of the medium of exchange, and the general supervision of the monetary system must be restored to government.”
McGeer’s insight into the debt-based monetary system of the ’20s and ’30s and his persistent fight to change it was rewarded when the government of MacKenzie King in 1938 nationalized the Bank of Canada, returning to government the control of the creation of the nations’ currency and credit.1
The legislated mandate of the nationalized Bank of Canada states:
“It is desirable to establish a central bank in Canada to regulate credit and currency in the best interest of the economic life of the nation to control and protect the external value of the national monetary unit, and to mitigate by its influence fluctuations in the general level of production, trade, prices, and employment, so far as may be possible within the scope of monetary action, and generally to promote the economic and financial welfare of Canada.”
This mandate was followed from 1938 until the mid 1970s, Canada’s best financial years in the interest of the citizens in financing our infrastructure, housing, and all our proud social programs. In the mid 70s, a change of policy took place which gradually gave back the control and creation of credit to the private banks.
It was the Conservative governments of Brian Mulroney that initiated the erosion of the legislative mandate of our Bank of Canada in a number of ways, and successive Liberal governments continued the abuse. The powerful mandate still remains, but government practice refuses to honour it. ”
http://www.sustecweb.co.uk/past/sustec13-1/How%20the%20Debt-based%20Monetary%20System.htm
The world came so close in the 1930s to taking on public credit as “worldwide best practice”, the battle is now on to see if this current crisis will see the bankster consolidate their commercial pyramid scam with increased powers or the public creditors will be strong enough to rise back to prominense.
From page 53 of John A Lee’s 1963 -Simple On A Soap Box -
“The time had arrived for a challenge. I became very active and lobbied every Labour MP I ensured a big caucus attendance. We would move, as an alternative, that credits be advanced by the Government owned Reserve Bank so that we could invest our materials and idle man-power surplus in socially owned construction. We could see no reason at the moment for borrowing at a rate of interest. Surely the time had arrived for an issue of credit. Australian Labour was talking ‘issue’; in Britain tracts on money reform were flowing from Labour pens. In a world of plenty the dispossessed had no money. Even Roosevelt, later, talked our language. We thought the moment had come for the people to claim the rights of issue of their own bank. The goods existed, why not create credits?
Caucus, when it met, divided in a bitter debate in which Savage organised the advocates of borrowing and I the faction in favour of the State issue of credit. Caucus was adjourned four times. I think every insisted on speaking. At the third meeting Harry Holland, then leader of the party, espoused our cause. I saw MPs taking their coats off to one and other in that caucus, so bitter did the conflict become. The Savage-Parry-Nash-Fraser-McCombs resolution went down to a humiliating defeat, only Fred Jones of Dunedin South supporting the resolution. Nearly thirty Labour MPs voted for credit issue including Harry Holland himself. We moved accordingly in Parliament.”
John A Lee went on to oversee the use of public credit to begin the State Housing Project. I had always given Savage great respect for his part, It would now appear the party figurehead was actually dragged kicking and screaming into something he did not have his heart in by a popular figure of the people within the party machinery.
Go to page 57-9 of below book summary to read more of John A Lee influence:
http://publiccreditorbust.blog.com/2009/10/05/excerpts-from-walter-nash-by-keith-sinclair-1976/
I like this John A Lee character, he was like a Jim Anderton, only he had big balls and plenty of fortitude, would never of succumbed to be the lilly livered quiverer that Anderton is today. Public Creditors of to day should use this mans courage and perserverance as inspiration.
Walter Nash only finally fully committed to the cause of public credit when the opportunity had been lost:
page 54 of Lee’s book:
“In July 1962 the leader of the Labour Party, the Rt Hon W Nash, made a lengthy statement in which he said: “Consistent with the needs of a sound economy, the state should create and use credit at the cost of issue for purposes of approved capital development. We are satisfied that the use of the Reserve Bank Credit, within the limits set out, is not only justified, but has already contributed much towards the Nation’s economic well-being.”
The economic well-being Nash spoke of would have been the State Housing Project, Hydro Power Schemes and Diary Marketing Board which were founded with public credit.
No wonder one of Don Brash’s favourite sayings is “we must not keep looking back”.
Jim Bolger when recently asked if there was anything he would have changed had he had his time over said he wished he had read the – Ascent Of Money – maybe then he might have been able to avoid what he forecast in 1996
” There’s been much debate in the political arena on the issue of economic sovereignty. All New Zealanders want to know that their sovereignty is secure and this will certainly be reinforced by the knowledge that government net foreign debt is forecast to be nil at the end of the 1996/97 year, so we will no longer be beholden to the gnomes of Zurich and elsewhere…………Put bluntly, the risk is that the recent very successful economic performance will collapse if irresponsible coalitions seek to outbid each other to see who can spend the surplus first and force New Zealand back down the dreary path of debt, higher interest costs and loss of sovereignty to international bankers once more”
Just stopped for a cup of tea, now back to work on that b*%$#y car.
November 29th, 2009 at 3:41 pm
Les,
If this really is the nub of the matter, if it is real or perceived leverage that the banksters have over us that is the source of political resistance to public credit, then IMO, this needs to be assessed and addressed if a push towards a new monetary paradigm is to be successful.
cheers…
November 29th, 2009 at 4:20 pm
What an opportunity missed by the Bolger government.
It seems that issuance of public credit was gaining momentum in a number of countries from the ’30’s to ’60’s, only to be stifled from the ’70’s on.
As in Canada and NZ, so in England – “The proportion of publicly created money in circulation, has fallen from 20 % of the money supply in 1964 to 3% today.”
http://www.forumforstablecurrencies.org.uk/documents/Summary-of-EDM-messages.pdf
What is the logic for choosing debt based money over public credit?
How is it possible to rebut what is not spoken of?
cheers…
November 29th, 2009 at 5:00 pm
There are several layers of resistance:
- Fear of government management of money always referenced with the word “inflation”.
- Loss of power as many involved currently in the money game will not be needed.
- Loss of money as the banks will be worth a lot less as they become savings and loans institutions.
The first one is easy to deal with once you know your stuff.
The third one is just a withdrawal of the taxpayer subsidy to the banks. A study by Huber and Robertson back in 2000 showed the subsidy in the UK to be worth about GBP20bln which was equivalent to 12% off income tax at the time.
http://p2pfoundation.net/Creating_New_Money
The second one is the tricky bit. Where money and power are joined at the hip, there is strong resistance to change. One only has to look at Goldman Sachs and the US Treasury. One would hope that this is not the case in NZ given our greater transparency.
It’s a matter of keeping any proposal very simple and very straightforward. It’s worked before and can work again.
November 29th, 2009 at 5:18 pm
Anyone read Rod Oram in this Sunday’s Sunday Star Times? Not a bad summary of the situation, or the government’s present stance on everything important to do with the present economic situation.
Monetary policy, fiscal policy and the general malaise we are in including the lack of good value added export growth, the tax system and the Reserve Bank Act are all covered in the article. Where’s he been up ’til now? Maybe the tipping point isn’t too far away when another economist shows that he really does get most of it, and more importantly is prepared to say something that is clearly quite critical on the National Party position over most of the things it isn’t doing or is actually resisting doing.
I don’t want to just harp on about CGT because although I personally support it due mainly to the fact that a tax system without it is simply inequitable, but Oram talks about the usual governing party’s resistance to it over many years. I’ve asked many times on these blogs but still can’t see what is the political risk in having it. Is there really some political risk to it? Especilally now that Labour has said they would be happy to have it.
If there isn’t a political risk then what is the real reason for the Nat’s stubborn resistance to it?
November 29th, 2009 at 5:40 pm
Perhaps because traditionally National Party support has been from the rural community . And what rewards a farmer after years of toil ; not whacking great annual profits from primary produce ; a monster tax-free capital gain on sale or subdivision of the land . Think these guys will embrace a CGT ?
November 29th, 2009 at 6:03 pm
O.K. Roger thanks, that’s a start. But – then why Labour’s resistance also? And also – How many votes was that exactly? Especially compared to the numbers of people not farming? I think there has been recent comment from some farm commentators about the effects of CGT on the farming industry also, and not all of it was negative. On it’s own this isn’t enough for someone wanting to get voted in to power.
Anyone else with more ideas?
November 29th, 2009 at 6:53 pm
Raf,
Ahhh, clarity thank you. There may also be political risk through significant withdrawal of public services by the banks, I suspect (Huber and Robertson). Although a transition starting with infrastructure funding seems reasonable.
“The second one is the tricky bit. Where money and power are joined at the hip, there is strong resistance to change. One only has to look at Goldman Sachs and the US Treasury. One would hope that this is not the case in NZ …” I would hope so too, although I think Iain may have a less optimistic view. (?Iain)
Although as you say, “It’s worked before and can work again” I am sure that any success with instituting Public Credit in the current environment would be very keenly watched by others being similarly strangled, and perhaps international alliances (Aus?) could be formed to enable the momentum to gather pace and mass.
Could this be a template for a ‘think/do tank’ that could be scaled/adapted to work in NZ? An offshoot of interest.co.nz perhaps Bernard, or other ideas anyone?
http://www.neweconomics.org/about
From the Huber and Robertson study (great resource on public credit issues):
“There is nothing more difficult to execute, nor more dubious of
success, nor more dangerous to administer, than to introduce a new
order of things; for he who introduces it has all those who profit from
the old order as his enemies, and he has only lukewarm allies in all
those who might profit from the new. This lukewarmness partly stems
from fear of their adversaries,.. and partly from the scepticism of men,
who do not truly believe in new things unless they have actually had
personal experience of them.”
Machiavelli, The Prince, 1532
http://www.neweconomics.org/sites/neweconomics.org/files/Creating_New_Money.pdf
cheers…
November 29th, 2009 at 10:05 pm
Strewth, we are growing arms, and legs. Will read again from my last comment and sling in more, maybe, a bit later. Just a quickie then – Martin H, raf – “the tricky bit” – it’s called market share – no one likes losing it, simple. As you say raf, “It’s a matter of keeping any proposal very simple and very straightforward. It’s worked before and can work again.” Plus, they can’t be crushed clumsily or we are all f’….d. Good to see Iain pull up yet more evidence of past successes, in CANADA this time. Iain – Auz had crack too I believe from the Ellen Brown, Bill Still’s sites, but can’t now find the ref; do you know owt? Brian W – it’s not about political risk, that is bs, it’s about parliamentarians on both sides being SPIs. Search two threads on this site with key word ‘LAQC’ that were posted last week. We might be a sovereaign nation, but thinik what kind of things go on in cities, regions, county’s of comparable size in larger countries? Let’s get real. Cheers, Les.
November 29th, 2009 at 10:19 pm
Oh no you’re not , Les , no ” arms and legs ” for you . CGT is a crock ! There is fertile ground for steering us away from residential property ” investment ” , without going down this alley . Behave yourself Rudd , or I’ll get W.Kunz to explain Green Light Industry to you , one more time ……………..Ahhhhhhhh , knew that’d scupper your CGT fervour !
November 29th, 2009 at 10:42 pm
Roger – it’s Green Light Infantry, one less time. Cheers, Les.
(PS – it seems I’m never going to win you over about CGT, so we could have evn lower taxation across the boards – oh well – abolish ‘intent rule’ instead then? )
November 29th, 2009 at 10:59 pm
In reply to Martin H,
New Zealand is perceived to be the most transparent corrupt free democracy, I put it to you the majority of sheoples of NZ are so financially illiterate and politically disinterested that the scamming banksters no-longer evan bother to attempt to hide their connections. Take for instance what is perhaps the most obvious case in the country at present, Rob Camerons relationship with the Rothschilds global banking empire, considering Cameron has been made chair of or is on almost every National Government appointed taskforce.
The Rothschilds have been the wealthiest of the private central banker Primary Bond Dealers for a longtime now, yet they are so discreet many people think they are a thing of myth, but half an hour on google will show you plenty different:
http://www.independent.co.uk/news/uk/this-britain/the-rothschild-story-a-golden-era-ends-for-a-secretive-dynasty-756388.html
http://www.med.govt.nz/templates/Page____8857.aspx
http://www.bankingtimes.co.uk/14122007-abn-amro-rothschild-deal-comes-to-an-end/
So after ABN AMRO seizes being Rothchilds junior partner in NZ, up steps one Rob Cameron to replace them, much like junior partners in law firms, and surprise, surprise if he doesn’t start pushing for more deregulation and more issuing of national and local government bonds:
http://publiccreditorbust.blog.com/2009/03/18/have-the-keys-to-the-hen-house-been-given-to-the-foxes/
It is that bloody obvious that I will call anyone who continues to ignore it either a Monetarist Puppet(Muppet) or as thich as a fence post, a strainer at that.
November 29th, 2009 at 11:27 pm
Les,
Re Auz issuance of public credit, they funded WW1 with public credit issued by the then public owned Commonwealth Bank:
http://publiccreditorbust.blog.com/2008/11/01/debt-driven-globalism/
http://www.financialreform.info/f_r_money_trick_extract.pdf
http://www.bankers.asn.au/Default.aspx?ArticleID=619
and last but not least in testiment to my hero John A Lee:
“Keith Sinclair and Erik Olssen, in their biographies of Walter Nash (prime minister, 1957-60) and John A. Lee, a radical Labour MP and novel. focussed attention on the painful clash between Labour Prime Minister, M.,. Savage, and the articulate Lee. The latter’s <> was a brilliant, if tendentious, expose of intra-party feuding.[3] Olssen sees Lee as a genuine socialist, while Sinclair considers him more a Douglas Credit crank, tilting vainly against the common sense economic conservatism of Savage and his prime ministerial successors, Peter Fraser and Walter Nash. The debate is important as it was the views of the politically marginal Lee, expelled from the party in 1940, which seemed to Australian Labor to epitomise New Zealand achievement. Ironically, the ideological influence of New Zealand in the late 1930s was the antithesis of its influence in the late 1980s.
Insular Tasmania proved something of an ideological bridge between New Zealand and the vastly different environment of continental Australia. As argued elsewhere, the eccentric Irish journalist, Edmund Dwyer Gray, was probably the most ardent and consistent Australian propagandist for New Zealand precedents. Treasurer of Tasmania, with a short interlude as premier in 1939, from 1934 till his death in 1945, Gray also controlled the <> newspaper. He used New Zealand as a theoretical model justifying the implementation of a modified Douglas Credit, and a practical example of high social service funding, useful when demanding increased finance from the Australian Grants Commission. Gray was particularly impressed by the New Zealand government’s control over the Reserve Bank, low interest loans for state housing, a higher unemployment benefit, a relatively generous national insurance and health scheme, and better education. He visited New Zealand himself in early 1939, depicting the country as ‘already a Worker’s Paradise’. His successor as premier, Robert Cosgrove, had, as minister for agriculture, already travelled to New Zealand in April 1936 to investigate, inter alia, the new marketing system and the guaranteed price for dairy products. [4]
Gray completely misinterpreted the clash between Savage and Lee. The <> continually quoted Savage as an ardent believer in social credit, Gray assuming that it was only after Savage’s death in February 1940 that the new Fraser-Nash regime adopted ‘prehistoric financial orthodoxy’.[5] Ben Chifley, treasurer in the war-time Australian Labor government, was duly warned against following Nash’s financial policies. In 1944, Tasmanian Labor Senator Richard Darcey, long an advocate of national credit,[6] annoyed Peter Fraser by speaking in New Zealand from the platform of one of the expelled Lee’s ‘Democratic Labour’ candidates.[7]
In early 1939, far from the small-scale politics of Hobart, New South Wales Labor was riven by a bitter conflict between the former premier, Jack Lang, and his ‘Industrial Lab or’ opponents, fighting to oust him from the leadership by forming a popular front with the Communists. All Labor factions appeared determined to appeal to trans-Tasman precedents. They asserted, like their counterparts in Victoria, that New South Wales endured continuing unemployment under the tottering coalition government of Bertram Stevens (United Australia and Country Parties). Meanwhile, a stream of hut workers was lured across the Tasman by the New Zealand government’s extensive state housing scheme. Based on cheap credit from the Reserve Bank, the scheme was initially administered by John A. Lee as a parliamentary under-secretary . ”
http://www.jcu.edu.au/aff/history/articles/davis.htm
earlier I posted this from John A Lee
page 54 of Lee’s book:
“In July 1962 the leader of the Labour Party, the Rt Hon W Nash, made a lengthy statement in which he said: “Consistent with the needs of a sound economy, the state should create and use credit at the cost of issue for purposes of approved capital development. We are satisfied that the use of the Reserve Bank Credit, within the limits set out, is not only justified, but has already contributed much towards the Nation’s economic well-being.”
I forgot to add the lines immediately below that along with above represents another leader who regretted not doing something about the private bankers when they had a chance:
” Thus 27 years to late, Walter accepted the policy on which Labour was elected in 1935.”
Maybe David Cunliffe will become the modern day John A Lee and accept it 74 years later?
November 30th, 2009 at 8:35 am
So the debate has now shifted on this blog at least into the ‘Social Credit’ monetary system and away from CGT and other tax reforms – Why are they separate things? Don’t you still need both? That is the revised central concept of money control, plus equiatble taxation.
I’m not suficiently educated in the money supply thing to have an opiion and don’t have the time right now to do the study, maybe in the holidays I can catch up, but it does appear to me that even if the social credit thing is the best answer there’s no chance of getting anything like that done anytime soon if the other combinations of fiscal responsibility, changes in monetary policy and changes to taxation are a political struggle.
November 30th, 2009 at 9:16 am
Iain,
Thanks for your response, it is the mine of information that I hoped for. I think the sheople will become a lot more financially literate over the coming years as economic reality bites – and the more timely, accessible, black and white explanation, evidence and insight is available to those with the interest but little time to do their own investigations, the better. Sheep are always headed somewhere, usually in the direction of the guy in front. It only takes a few light bulbs to be illuminated at the front of the flock for forward momentum to happen. Many former semi-literates like myself who read these blogs find the comments, links, discussions, debates an incredible educational resource, to the point where some of us may learn enough to (albeit with a degree of naivety) be moved to contribute. Sometimes literacy in other areas may enable insight from fresh perspectives.
Raf,
“Where money and power are joined at the hip, there is strong resistance to change. One only has to look at Goldman Sachs and the US Treasury. One would hope that this is not the case in NZ given our greater transparency.”
- re Iain and Les’s comments, It seems that “the case in NZ” compared with the US may vary in depth, but it is just as smelly.
November 30th, 2009 at 11:02 am
Brian W – “…..even if the social credit thing is the best answer there’s no chance of getting anything like that done anytime soon if the other combinations of fiscal responsibility, changes in monetary policy and changes to taxation are a political struggle.”
You may well be right Brian, anything that negatively impacts on derivation of wealth by inflation of assets, instead of productive use of them, is going to be a struggle, so yep, that would include AGAIN, the use of public credit. Shame really, given it’s a system game-changer, it would help reduce debt, taxes and money supply instability.
Go Rick, Go Francis:
http://www.statusquo.co.uk/
“Down, down…” C’mon, let’s bag those heads.
November 30th, 2009 at 11:09 am
Hi Les,
I’ve just finished watching my copy of ‘The secret of oz’. It’s a fantastic film for anyone that has an interest in economics, history and monetary reform. I enjoyed Bill Still’s ‘Money Masters’ film a few years ago but this latest one is even better.
The solutions at the end are realistic and achievable. I was especially interested to hear about the Bank of North Dakota and it’s ability to issue and create public credit with very little interest bearing debt. This is a workable solution to the current debt ridden mess that most or the states are in.
The solutions seems simple but the problem is a political one as has been discussed already in this thread. The battle with the money changers (bankers) has raged since the Roman era.
November 30th, 2009 at 11:30 am
Upto DEC 08 $39 billion had left this nation in debt servicing rent on our foreign borrowed created credit money supply, as public credit paid down private credit, taxes, fees, levies(inflation tax) currently priced into the system can be reduced in sync, making a far greater impact upon the standard of living of the basically decent majority than any pissing about with GGT, FTT etc
November 30th, 2009 at 1:59 pm
Go Iain. Why not say what you really mean about banksters !
Alastair, where do we find a copy of ‘The secret of oz’. I think i saw that discussed elsewhere but can you remind me.
November 30th, 2009 at 2:03 pm
‘The secret of oz’
http://www.secretofoz.com/index.php?option=com_content&view=article&id=84&Itemid=79
December 6th, 2009 at 10:16 pm
Nice to see that a Universal Basic Income of sorts has surfaced in Gareth Morgan’s proposal. A UBI or GMI is one way of introducing public money into the system.
It’s also interesting to note (for those pondering how to get ideas into the mainstream) that it’s Gareth’s influence that get’s the headlines. This proposal (UBI, Land Tax etc) has been around for ages but shows how important “credibility” is for getting coverage for new ideas.
Now if Gareth can only get the the crux of the problem…..
December 6th, 2009 at 11:56 pm
Raf, I think you will find that Gareth would have no intention of NZ creating public credit for itself to then be spent into circulation debt free, but to borrow the GBI from the private central bankers then spend it into circulation with the usual cancerous tumor of compounding interest attached.
Les, your promotion of a recreation of the “soft loans” of the Finance Development Corporation founded in the mid 1960s, would of course have to have the point of difference to the original in that instead of borrowing the central bankers created credit then issuing loans at or below the cost at which you borrowed, I presume, and hope, you are advocating a government owned development bank that would issue loans at the cost of administration of our own public credit facilities only. When the Labour Government of 1935 used public credit to begin the state housing program, they only did it to shut up John A Lee who was attacking his own party for reneging on their election promises, all the rest of their “social reforms” were funded through the orthodox channels which continued to contribute to the current account deficits that would have seen us put into receivership in 1939 had it not been for the outbreak of WW2, which rapidly increased our food exports. Lee was eventually kicked out of the Labour Party after it fractured into monetary reform camp and orthodox co-operatives. The title of his 1963 book – Simple On A Soap Box – is a dig at those, including Michael Joseph Savage, Peter Fraser, Walter Nash and the union bosses who he accused of once gaining power being as greedy and corrupt as the slaveminded elite, “simple on a soap box” alludes to it being easy to stand on a soap box and talking the talk, but a different story waliking the walk.
The above book I would consider a must read for any Labour Party member seeking to return it to its founding ideals of Public Credit Monetary Reform, for just as it is as required today for the same reasons, I would suggest the very same happenings that so frustrated one John A Lee could well rare their ugly head again also.
December 7th, 2009 at 12:35 am
Little wonder the powers that be are trying to gain the right to censor the internet worldwide, much like the Holy Roman Empire ordering the burning of the books of Martin Luther because they exposed their commercial pyramid scam of tything and manipulated religious related church payments to a hierachy that lived in oppolence while they would take the last coin off those starving in the streets, I have just out of interest punched – monetary reform – into google search, you ought to try it, no wonder the bankers are starting to play hard-ball, it looks like not the “reformation” but the “revelation” might just well be gaining momentum. May for the sake of reason the unfettered access to the open source of information that is the internet long go unhindered.
The information sights available are just becoming more plain understanding and beamed in by the day. I will soon have to go through my favourites list and reduce it even further to the most hard hitting, and when I do this one below will be near the very top, what a wonderful resource and a credit(pun intended) to the administration of it, most all of the concerns of the Public Credit sceptics or accusations of those paid to discredit it are covered here:
http://www.bendyson.com/
December 7th, 2009 at 9:10 am
Iain – Lets hope their campaign for reform is successful.
Latest Update: 6th November
Before the end of 2009, legislation will be introduced into the US Congress proposing a reform to the banking system along the lines of that promoted on this site – in short, to prevent the private creation of money and to start creating money publicly for the benefit of the economy, society and nation.
This is without doubt the greatest ever advance in the campaign for reform of the monetary system.
More here:
http://www.bendyson.com/progress-in-congress-the-american-monetary-financial-security-act/2009/10/
December 7th, 2009 at 11:04 am
Iain – re. you point about DFC/’soft loans’ and, “…. the point of difference to the original in that instead of borrowing the central bankers created credit then issuing loans at or below the cost at which you borrowed, I presume, and hope, you are advocating a government owned development bank that would issue loans at the cost of administration of our own public credit facilities only.”
Thanks for the correction. Yes, eg. via Kiwibank say, acting like BND, like NZMEA’s submission to the Labour banking inquiry. However, that would be only one way we could start using public credit.
Now that all and sundry are not only talking about effective capital, asset taxation, but actually making proposals, I’m hoping NZMEA will take up the next torch on public credit and monetray system reform next year. As Raf points out, credibility helps and then when others see they won’t get pitch-forked maybe they’ll fall-in too and get thinking and talking about it:
http://www.interest.co.nz/ratesblog/index.php/2009/11/20/special-report-why-nz-needs-a-bipartisan-grand-coalition-for-economic-reform-not-tweaks-to-the-rbnz-act/#comment-49180
Cheers, Les.
December 7th, 2009 at 9:36 pm
Iain,
That may be true. However, as with all change, the pace of reform here may be glacial for some but for many it’s still all new. History shows that visionaries may have many books written about them but that’s usually many years after they died in abject poverty
The important point here is that a UBI, as a replacement for the welfare system, has been put on the table by someone with a public following and who is regarded as credible. So the possibility to structure a UBI via public money is just a step away.
None of this is new stuff but what’s new is that it’s being presented openly. As I’ve said before this would not be possible in most other countries. So we should support it and look to build on it through other channels as Les suggests.
December 7th, 2009 at 10:16 pm
Les,
the Green Party need to be taken to task, public credit would be an obvious path to acheive every aspect of social and ecological justice that they claim they stand for, yet when questioned on public credit being spent into circulation debt free to build sustainable energy resources, you get fired back at you the central banker impregnated doctrine that public credit would be inflationary and contribute to the unsustainable over use of finite natural resources, well just ask yourself, what the bloody hell has the private owned debt based monetary system done. The Greens can’t even claim ignorance as they were in the Alliance Party with the Democrats who were the old Social Credit Party who changed their name after the Bob Jones and corporate media ridiculing campaign of 1984, where they labelled them the “funny money people” fools telling everyone that banks create money out of freshair and loan it out at interest, when everyone knows “banks only relend their deposits”?, history now proves who were the liars.. The Social Creditors had ample evidence to the contrary but were never afforded mainstream media opportunities to defend themselves. The Democrats(Social Credit offshoot) were the insticators behind Kiwibank whilst Jim Anderton lost his balls, Democrats were much the same role as John A Lee(public credit advocate) to Michael Joseph Savage, Walter Nash, and Peter Fraser when they lost their balls when elected in 1935.
The answer to all the Green Party inflation and excess use of resources fears have been allayed, if the continue to stall, one would have to wonder of the intent of some of their new wonder boys and gals.
Below is a great article form the great resource that is the very new public credit website of Ben Dyson, this article rebuts the bunkum of debt free based public credit being more inflationary than private debt based credit and the issues around the monetary system having to operate within the boundary of sustainable natural resources:
http://www.bendyson.com/blueprint-for-the-future-how-monetary-reform-can-change-the-world/2009/11/
No more excuses Green Party, the Labour Party have realised they can’t continue to ignore the detrimental impact of the private debt based monetary system without looking like outright liars, to continue your head in the sand stance against the now massive irrefutable evidence can only lead to your loss of all credibility.
December 7th, 2009 at 10:48 pm
Iain,
Agreed on the Green Party failure to campaign on this issue. Alas, I think they lost their way some time ago.
As I said previously “inflation” is the favoured bogeyman term designed to frighten away any debate.
In fact “manufactured doubt” is a standard policy for many big issues in the time of mass media. this is a good examination of it. when done well it can be hard to battle against as many have found.
http://www.wunderground.com/blog/JeffMasters/comment.html?entrynum=1389
December 7th, 2009 at 11:03 pm
Fractional reserve banking is almost as big a problem as a debt based money system. In some ways issuing public credit would only be fixing half the problem, we have a long way to go.
December 8th, 2009 at 4:38 am
Alastair, in full agreement, this article from Ben Dyson covers the best picked from every public credit system ever used and I believe it is pretty darn close to the sleekest adaption yet?
http://www.bendyson.com/blueprint-for-the-future-how-monetary-reform-can-change-the-world/2009/11/
December 8th, 2009 at 10:18 am
Iain, Raf, Alastair – I’ve not read Ben Dyson in full yet and am unlikely to soon, however, I recall from the last part/s of Bill Still’s ‘Money Masters’ vids on YouTube, he suggested dealing with the inflation problem by gradually cranking up the reserve ratio, in the transition from less private interest bearing bank debt to more public-credit – leading to the situation where indeed “banks only relend their deposits” – full reserve banking. As for the Greens Iain, I’m not surprised, when people are driven by strong ideology* negotiation toward the reasonable is just really hard work, as I’ve come to learn from participating on Int.co. All good though, my ankle is so much better now – thanks Int.co. Cheers, Les.
* eg. Don B’s PWG and:
http://www.interest.co.nz/ratesblog/index.php/2009/12/08/opinion-dear-phil-goff-stop-beating-up-the-rbnz-act-there-are-bigger-problems/
Life’s too short to try reasoning with unpragmatic fundie TINAs who want us to swallow their whole religion, whole – whether they are from the ‘Neo.Lib Temple’, or the ‘Central Planning Cult’. Hey ho.
December 8th, 2009 at 4:44 pm
I’v just started going thru Ben Dysons blog… good stuff.
how about Taking Gareth Morgans ideas for tax reform … and including Ben Dysons ideas….. ( Yes Iain… bens adaptation looks credible and interesting)
How about Using the basis of Gareths tax reform … ( i like his ideas because they reward work and productivity … and reduce PAYE tax with is unfair…. ist 40000 of income is tax free)… broadens the tax base
AND also including the Government spending money into existence. ( as ben Dyson prescribes).
Make this almost tax neutral… so income tax can be low….
Still need to deal with “less Government”.
Iain … if u can synthisize this into policy … and get Gareth in your party…. I’ll vote for you..!!!! and I think many others would
December 8th, 2009 at 6:22 pm
roelof – re. developing GM’s ideas:
http://www.interest.co.nz/ratesblog/index.php/2009/12/01/opinion-gareth-morgan-on-why-a-capital-tax-is-the-key-to-meaningful-reform/#comment-50635
December 9th, 2009 at 10:34 pm
roelof, thankyou for your kind words, but I don’t think I will be joining any political party in the future as I believe the party machinery can become a gag due to international connectivity and the system needs some independent investigative minds to present the facts unimpeded in order that those in political positions may act and blame their actions on someone else in order to circumvent diplomatic pressures.
Politics in NZ, as in anywhere is a very nasty game. I have all but finished John A lee’s 1963 book – Simple On A Soap Box – as you may have observed I have read many, many books by many NZ political figures from many time periods, this book is the one that most rivetted me, I could not wait to the next opportunity to rip into it, it should fair dinkum be made into a movie.
John A Lee, a decorated WW1 soldier, became a follower of the international Labour movements founding ideals of reforming the private central banking network and replacing it with Public Credit, thought that the NZ hierachy of Michael Joseph Savage, Walter Nash, Peter Fraser were also staunch Public Creditors. It was the depression years and the poor commoners were desperate for equal economic opportunity. John A Lee was given free reign as the parties policy and speech writer. When he was finished the common folk of NZ thought he was a god, and MJ Savage often said “they think I’m God”.
Once elected in 1935, the leading trio began to stagnate on the Public Credit and social reforms that had been promised, in no small part due to the threats being received by the private banking network. Most every social reform promise implemented was due to the courage and influence of John A Lee standing up to the top three who voted against all of it. Yet, when the policies were announced the top three got the kudos, especially Savage, which mean’t he could boast even more “they think Im god”. He ended up letting Lee use Public Credit to begin the State Housing Project to shut him up. They developed a hatred of Lee and set about giving MJ Savage dictitorial powers over caucus, who supported Lee, to get rid of him, which they did in the end, by thuggish means that would fit better in a Mafia movie. It is just the most enlightening book re internal and international goings on of the time.
I am proud to say, having not read of John A Lee in-depth before, that we had much in common, and many of the conclusions I have come to today he had come to in the 1930s-40s, including this from page 215
“I did not only want to fight Hitler, who was himself a result of an evil economy, but to fight as well the economic conditions which would continue to sprout Hitlers”
To have Sir Michael Fay and Sir Roger Douglas while one John A Lee goes unremembered is nothing short of discrace and a blight on the history of this nation, what a book, what a man, are you listening Peter Jackson?
December 10th, 2009 at 9:09 pm
I hear what u are saying Iain…. but we live in the age of the internet and the world wide web.
History will show the internet as the Greatest invention of Mankind . (my opinion)
It connects the world, and most importantly gives power to the individual…. Information, and the truth, are quickly disseminated.
That Ben Dyson article is a real starting point …. ( in my opinion )
In my view, it finally leaves behind conspiricy theories and the “funny money” label.
I intend to fully understand what he has presented.
I agree with him that stopping Private institutions from creating credit is as simple as a change in allowed accounting practices…!!!!!!!!
In Oct 2009 M3 money suppy was about 212,000 million.
If it is ok to expand money supply by 4%……… that gives 8,480,000,000
Our Govt budget deficit is $3 billion for the last 4 months.
So if it is prudent to expand the money supply by 4% ( assuming M3 is the proper aggregate to use) then we only have an extra $ 8 billion to play with…. if Govt decided to spend money into existence.
We will still need some profound reforms …. like Gareth Morgans tax reform.
Iain, Have u crunched any numbers..??? Done a shadow budget..???
Debt free money is NOT a free Lunch… It cannot “create wealth”. In fact it is a tax.
BUT why should the Private banks be the beneficiaries of this transfer/tax..???
They shouldn’t….
I will read John Lees book.
Cheers Roelof