Opinion: Bernard Hickey says a second term Key-led govt (and voters) now face an economic hangover as Europe implodes

Damn, that was my next question too.  There were no good options IMO.  You could vote for, a punch in the face, a punch in the guts or a kick in the nuts.  So don't complain when you get a punch in the face 'cause you could've voted for a kick in the nuts.  I voted for NZF because I would be more likely to get a surprise attack, then something obvious.

Sorry, Iain, didn't mean to insult you.

I agree that the banking system is unsustainable, and must be replaced. This is primarily for environmental reasons, a system which only functions in an expanding state, is disfunctional.

I just don't think that there has been any underlying banking conspiracy. The people responsible have been acting in self interest and genuinely believe their perspective is the only legitimate one. There are pleanty of people here, every day, who genuinely believe that the Labour government policy caused the recession, that tax cuts and austerity will take the country out of recession. The PM is not party to any knowledge which makes the reality more clear to him.

Real, significant changes in the world happen on the back of public opinion. They are not down to political 'leadership' from the front. Political parties almost never bring new ideas to the parliament, there needs to be an underlying believe that the ideas are constructive.

A realistic explanation of monetary policy and it's effect on the economy needs to be spread as widely as possible. That includes in my opinion the clear fact that private banks have a big influence on monetary policy, e.g that money has effectively been privatised. Only when people understand this, will the reforms be possible.

I don't think a conspiracy theory view can really be the main-stream view, so even if it is true I don't think that it is a highly constructive way to spread the message. I do appreciate your research, into NZ political influence and corruption by (frequently foreign) financiers.

Was interesting to witness the fawning of the TV3 media. Outside JK's mansion the presenter gushed over its 'latest value' of $10 mill. (she was later rewarded with a giant choc strawberry delivered from the mansion). Infact all the houses in the street were valued in the millions and it's not even the most sought after street. One of the panellists concured - 'yes this is an aspirational country'.

This is the problem in a nutshell. No wonder an astonishing percentage of the popn voted National. They seem to share this delusion of ill-deserved wealth and will vote for anyone who promises to prop up the delusion, come hell or high water. Evidently they would happily see the assets of their country, built up of many decades, as a necessary cost to retaining the wealth illusion.

They won't be so short-sighted when a giant choc strawberry is inserted firmly up their collective rectum. It's imminent.

"I agree Stephen. Lain's conspiracy theory version is a bit over the top in my opinion, the financial system functions on pervasive self interest of course. "

Actually I concur with Iain, but will accept you're both right. The banking sysem that has come to take such a pervasive role in our lives is a product of an elaborate, premeditated, carefully orchestrated plan, which began in the mid 1970s due to the frustration of many within Big Business interests with the historic bargain between Business and Labour which found expression in the New Deal and Johnson's Great Society. They became concerned about the rise of historically marginalized groups such as the student movement and African American civil rights, which they framed in terms of the "Crisis of governability" (See Samuel Huntington's, Crisis of Democracy). Read the American journalist, Mill Moyers Memorial Speech to John Gardner, former principal architech of Johnson's Great Society and President of Carnegie Corporation of New York.

"See for yourself. Read the literature. Start with A Time for Truth, the call to arms by Richard Nixon’s treasury secretary, William Simon, the Wall Street wheeler-dealer. He argued that “funds generated by business” would have to “rush by multimillions” into right-wing causes in order to uproot the institutions and the “heretical” morality of the New Deal. He called for an “alliance” between right-wing ideologues and “men of action in the capitalist world” to mount a “veritable crusade” against everything brought forth by the long struggle for a progressive America. It would mean, as Business Week noted at the time, “that some people will obviously have to do with less...It will be a bitter pill for many Americans to swallow the idea of doing with less so that big business can have more.” But so be it. " 

http://carnegie.org/publications/carnegie-reporter/single/view/article/item/282/ 

Or going back to 1968, where Treasury Secretary George Ball, advocated the creation of a suprapolitical structure to relieve then existing constraints on the action of multinational corporations, due to what he thought was an imbalance in the scope of national governments and multinational business.

 "He went on to note the problem of governance of the international firm, given the asymmetry between its scope and that of national authorities, and called for the evolution of some sort of supranational political structure. Recognizing that was not likely, he suggested ‘denationalizing’ MNEs as a second best solution, governing world corporations through a treaty-based international companies law administered by an international institution. ""

http://www-management.wharton.upenn.edu/kobrin/Research/Oxford%20rev2%20print.pdf 

 It culminated in a research project carried out by the American thinktank, called the Council on Foreign Relations, which was aimed at determining what political and economic reforms were needed to be carried out that would alleviate the necessity of accomoditing rising demands for change that threatened the current social order. One of the publications was a book entitled, Alternatives to Monetary Order, the purpose of which was to conceptualize the reframing of world monetary arrangements that would best ensure the continuation of the pattern of economic relationships, favourable to the interests of the United States. Its conclusion was, œThe obvious danger in such a regime resides in its potential instability. Some limited loosening is by no means unequivocally undesirable. It can be seen as a rational response to the earlier tendency, which was most manifest in the 1960s, for economic integration to run far ahead of both actual and desired political integration, thereby forcing countries into suboptimal policy choices. A degree of controlled disintegration in the world economy is a legitimate objective for the 1980s and may be the most realistic one for a moderate international economic order. A central normative problem for the international economic order in the years ahead is how to ensure that the dis-integration indeed occurs in a controlled way and does not rather spiral into damaging restrictionism.”

Alternative to Monetary Disorder (Fred Hirsch and Michael Doyle, CFR)

http://ideas.repec.org/a/eee/inecon/v8y1978i3p457-459.html 

I myself was horrifed when I read an excerpt of the above and to confirm it authencity I actually ordered a second hand from Amazon. I assure you it is, shocking though it may be.

 And the mechanism which they used to achieve their purpose was the high interest rate policy of Paul Volcker, Federal Reserve Bank goveror, which he freely admitted below.

Nato/US attacks it's old useless allie Pakastan:  From Reuters

YAKKAGHUND, Pakistan (Reuters) - NATO helicopters and fighter jets attacked two military outposts in northwest Pakistan Saturday, killing as many as 28 troops and plunging U.S.-Pakistan relations deeper into crisis.

Pakistan retaliated by shutting down vital NATO supply routes into Afghanistan, used for sending in nearly half of the alliance's shipments by land. 

http://news.yahoo.com/nato-helicopters-attack-pakistan-post-eight-killed-045844890.html 

Matt in Auck,

This research paper ably explains just why Banking authorities were unable to accurately forecast the turmoil in the world's financial markets that we're still enmeshed in.

This inference is impossible to make from national or OECD forecasters’ models, where balance sheet variables or interest flows are conspicuous by their absence. These CGE models do not include a separate financial sector, ruling out finance-induced recession by design. Money supply and interest rate variables are included in those models, but they are fully determined by real-sector variables such as the output gap. Also, the process of money stock growth or asset market inflation – by bank lending which increases debt levels and elicits return flows of interest – are not modelled. This fits in with a “reflective finance” view; the financial sector, rather than developing its own dynamic, is assumed to adapt to the “real fundamentals”, so that explicitly modelling it is superfluous...So far, however, monetary (and other) policymakers have resisted inclusion of balance sheets and the flow of funds in their models and policy responses. Greenspan famously preferred to “mitigate the fallout when it occurs and, hopefully, ease the transition to the next expansion”.

http://www.voxeu.org/index.php?q=node/4035