On
the 13th May 2007, I asked these questions of Minister of Finance
Michael Cullen;
Regards
minister Cullen,
I
am requesting for as long as records have been kept, an annual
breakdown
of the number of trust funds that have been investigated as to their
legitimacy, the number
of funds that were found to be shams, and the number of individuals
who were prosecuted
for setting up trusts as shams?
Also,
to your knowledge Sir, is it correct to say that under the system
referred to as "money creation"
that the very rich and powerful privately owned banks that are
stakeholders in the collective
privately owned institutes US Federal Reserve and the Bank of
England, have been entrusted
with the ability to create money out of fresh air as bits on a
computer, then lend it to governments
and commercial banks as interest bearing debt, as long-term loans
known as Bonds,
which have the interest payable on this counterfeit principle secured
against the future taxes
of the nation?
yours
Iain
Parker
May
2007;
Regards
MR Cullen,
I
am still awaiting your explanation of the international monetary
lending system, especially confirmation that our Govt Bonds are
long-term loans from the private stakeholders of the US federal
reserve and the Bank of England, who have the ability to create the
principal of these loans out of nothing, that is the money is neither
created by labour, productivity or is convertible to tangible assets?
Thank
you
Iain
Parker
I
then received a reply from Michael Cullen 19 June 2007;
Dear
Iain Parker
In
your email of 13 May 2007 you asked whether privately owned banks in
the UK and US have the ability to create money in the form of bonds
issued to their governments.
As
I have no responsibility for any institutions in the UK or US I am
unable to comment on the process of creating bonds in those
countries. However, I am able to explain the situation that applies
in New Zealand.
In
New Zealand, our central bank, the Reserve Bank, is wholly owned by
the crown. Its institutional direction is explicitly set through the
Reserve Bank of New Zealand Act 1989(the Act), and for monetary
policy in an ancillary agreement between myself and the Governor of
the Reserve Bank, known as the Policy Targets Agreement. The act
has limited the governments ability to finance expenditure through
credit creation; in the past , governments borrowed from the
Reserve Bank to finance a portion of their deficit. (This way of
financing government expenditure persisted until a Labour government
was elected in 1984).
In
effect, this meant that the government printed money to pay for its
expenditure instead of raising taxes or borrowing from the private
sector. While this method of financing can be used to pay for
infrastructure or social services like health, ultimately the process
tends to be inflationary. This type of borrowing was one of the main
factors behind New Zealand's very high rates of inflation in the
1970's.
As
a result, the Act sets out that the primary purpose of the Bank is to
ensure stability in the general level of prices. More specifically,
the Policy Targets Agreement states that the Reserve Bank Governor
must keep inflation within a band of 1-3 percent over the medium
term. The main tool the Governor has to keep inflation within this
band is the Official Cash Rate (OCR).
Issuing
of bonds is an accepted method of financing investment. Regardless of
where a bond originates,
it is essentially a certificate of indebtedness. The New Zealand
government, through the Debt Management Office, maintains a programme
of bond issuance to finance its investment programme. There are no
requirements on the Reserve Bank to purchase these bonds, although it
may from time to time when necessary to meet its objectives. The
financial reporting requirements of the Public Finance Act provides
for the public disclosure of all financial transactions between the
government, the Reserve Bank and the wider economy, and ensures that
I and the Reserve Bank are accountable for the outcomes.
I
trust this has helped to answer your question.
Yours
sincerely
Hon
Dr Michael Cullen
Minister
of Finance
-
I would like to add a foot note here. Michael Cullen states above -
"The financial reporting requirements
of the Public Finance Act provides for the public disclosure of all
financial transactions
between the government, the Reserve Bank and the wider economy, and
ensures that
I and the Reserve Bank are accountable for the outcomes". - yet
if you read the State Sector
Act 1988 then go to the website of the New Zealand Securities
Commission, you will discover
that the CEO of the Securities Commission has almost autonomous power
to issue exemptions
to multinational corporations that circumvent our protecting
financial regulations, including a disclosure exemption to the New
Zealand Debt Management Office that makes a mockery of the above
statement. At the time of printing, if you go to internet web address
-
http://www.seccom.govt.nz/notices/summaries/2004/
- then scrolled down to find - Securities Act
(Crown Wholesale Debt Securities) Exemption Notice 2004 -
This
exemption prevents the NZDMO from having to openly disclose that a
bunch of privately owned
foreign central banks have a monopoly on the issuance and on selling
of our Government Bonds.
I
sent this email to Minister of Finance Michael Cullen 4 September
2007 ;
Regards
Dr Cullen,
1)
I am seeking any information now eligible for release, regarding the
secret Memorandums of understanding, or Structural adjustment
programs imposed upon us by the IMF/World Bank during the
restructuring of our(NZ) nations debts or what was essentially
liquidation, in 1961 and 1984?
2)
To your knowledge, the money used by registered bond traders, who are
the only ones eligible to purchase the larger blocks of our govt
bonds, all of whom are the private stakeholders of what is referred
to as the "Central banking system", to your knowledge does
this so called "Power money" have any net tangible backing,
or is it merely created as digital bits on a computer, then loaned
into the system as interest bearing debt, only given its value by the
promised repayment out of the future taxes of the nation.?
Yours
sincerely
Iain
Parker
I
received this reply from the Acting Minister of F inance Trevor
Mellard 2 October 2007 ;
Dear
Iain Parker
Thank
you for your letter which was received on 5 September 2007 concerning
an Official Information
Act request. You requested:
1)
I am seeking any information now eligible for release, regarding the
secret Memorandums of understanding, or Structural adjustment
programs imposed upon us by the IMF/World Bank during the
restructuring of our(NZ) nations debts or what was essentially
liquidation, in 1961 and 1984?
2)
To your knowledge, the money used by registered bond traders, who are
the only ones eligible to purchase the larger blocks of our govt
bonds, all of whom are the private stakeholders of what is referred
to as the "Central banking system", to your knowledge does
this so called "Power money" have any net tangible backing,
or is it merely created as digital bits on a computer, then loaned
into the system as interest bearing debt, only given its value by the
promised repayment out of the future taxes of the nation.?
New
Zealand joined the IMF and the World Bank in 1961. There was no
financial crisis in New Zealand at the time and New Zealand did not
restructure its debt as a result of joining. There are no secret
memoranda of understanding and no structural adjustment programmes
were imposed on New Zealand. All the documents related to the
decision to join the two institutions are publicly available from
Archives New Zealand.
In
June 1984, New Zealand drew down its Reserve Tranche at the IMF. The
Reserve Tranche is essentially a countries foreign currency deposit
with the IMF and can be drawn on at any time for balance of payments
reasons without requiring approval from the IMF board. There is no
conditionality attached to such a drawing and so no structural
adjustment programme was imposed. Once again, all relevant documents
are publicly available at Archives New Zealand.
Accordingly,
I have decided to refuse your request under section 18(d) of the
Official Information Act
1982 - that the information you requested is or will soon be publicly
available.
In
response to your second question, registered
bidders in New Zealand government Bond tenders purchase
New Zealand government bonds using cash which
they get from their shareholders, from profits on their operations or
from borrowing against future income.
Please note that bidders may purchase bonds on
their own behalf or on behalf of other investors. The bonds are
issued on behalf of the Crown by the New Zealand Debt Management
Office (NZDMO). The Reserve Bank conducts the
bond tenders as agent for the NZDMO. When
the bonds mature, the Crown repays them with funding from a variety
of sources, such as its cash surplus, revenue from taxation and other
sources or by undertaking new borrowing. Interest on the bonds is
paid from the same sources.
This
fully covers the information you requested.
Yours
sincerely
Hon
Trevor Mellard
Acting
Minister of Finance.
On
the 5 October 2007 I sent this reply to Trevor Mellard;
Regards
Hon Trevor Mallard,
could
you please advise me, as to whether you researched and provided this
answer yourself, thus are prepared to stake your present and future
political reputation on it, or was it provided by one of the many
State Sector advisers at your disposal. If the latter is the case,
could you please provide me with the name and department of the
author.
Thank
you
Iain
Parker
I
then received on 10 October 2007 this reply from Michael Cullen;
Dear
Mr Parker
I
have received your email regarding the answer to your Official
Information Act Request which was signed out by the Hon Trevor
Mellard in my absence.
I
am satisfied with the contents of the reply that you received from my
acting minister. This request was dealt with under the standard
procedures for replying to requests under the Act.
In
this case, the draft reply was prepared on my behalf by Andrew
Turner, Head of Portfolio Management at the Treasury.
Yours
sincerely
Hon
Dr Michael Cullen
Minister
of Finance
No comments:
Post a Comment