Saturday, 11 January 2014

The money question as a whole - that politicians don't want asked.

The money question as a whole;

Economics is the study of the distribution of finite resources in a manner that leads to certainty and stability. The study of societies senior most balance sheet – which is its credit contract with nature.

Currency is the lifeblood of any modern economy – thus it is important to understand the role of credit and currency in the money system of an economy.

When you hear talk of right – left or centre of politics – that refers to the spectrum of ideas of how a money system should work to best bring certainty and stabilty to an economy.

Capitalism – the right of the spectrum - is the idea of individual private profit motive ownership - of every aspect of the economy – both necessity of life provision and luxuries of life provision – including credit accountancy and currency issue.

Communism – the left of the spectrum - is the idea of state ownership as a
co-operative on behalf of individual citizen members - of every aspect of the economy – both necessities of life provision and luxury of life provision – including credit accountancy and currency issue.

Centrism – middle of the spectrum – is the debated territory of a mix of the above to bring certainty and stability to an economy.

There is now a majority global consensus among economists – aside from a few minority pockets of tyranical slave-mindedness - that Capitalism and Communism - implemented in their full description - ultimately slide into caste class pyramid scams - that are offensive to individual human nature - that seeks dignified freedom of choice – thus lead to uncertainty and instabilty – thus the answer sits somewhere in the middle by cherry picking the best of the two ideas where they have been practiced thus far and discarding that – that causes uncertainty and instability.

Given the economy is essentially the body - of which - within it - money is a circulatory arterial system - that circulates currency - as the lifeblood of the economy – to understand how best to keep the economic body healthy – you must first understand the role of credit and currency in a money system to understand if yours is presently long-term healthy or not.

So in regards to New Zealand today lets explore these questions;
How does New Zealand's money system – as it is now - and predominantly has been – actually work?

Who currently does the credit accountancy of New Zealand's money system?

What circulates as currency in our money system and from who does our currency currently come?

Under what terms and conditions does it come?

Under these terms and conditions – as they currently stand – can economic growth ever cover the interest bearing debt you are forced to take on to attempt to achieve the economic growth?

Wednesday, 1 January 2014

Nitty Gritty - questions of UBI - Negative Interest Inflation Free Money System - Land Tax/Lease System

Lets get down to the nitty gritty - The question of UBI - Negative Interest Inflation Free Money System - Land Tax/lease System;

A question for Universal Basic Income or National Dividend advocates - given that most are also advocates for reform of the current entirely interest bearing – entirely private loan based money system we presently suffer – I ask - if the foreign debt that currently circulates as currency in our money system was able to be expelled by installing state accountancy of credit and currency issue and equal economic opportunity fairness prevailed - at cost price only - does the UBI you advocate have a sinking lid.

That is - does it drop away to no free grants of sovereign currency without contributing to the up keep of community or will it be continued free grants of sovereign dollars without a work or responsibility test?

I offer as research for the question (link below) - in my opinion - one of the most viable papers I have yet seen of how such a transition to the above new money system idea might be done and for the record I favour the sinking lid concept this plan contains – as I believe working in the up keep of your society gives you a sense of ownership and self esteem – contributing to unity

I would rather see the most of any UBI or National Dividend system delivered by way of the base essential of life hard services delivered at true cost price only - without additional mark up of white collar criminal middlemen. In order that most vulnerable in society - children - are ensured they get their fair share before parents can choose hand it over to those selling the vices of life before giving their children their fair share;

Once we have the ability to domestically balance our own economy - due to no longer being foreign debt deficit driven and - only need to trade - via barter or bi-lateral currency exchange deals - what is truly surplus to domestic requirements - for what we cant produce ourselves - what is your view of Professor Margrit Kennedy's - sadly very recently deceased – two bank account public money system idea? – every dollar of sovereign currency issued would have a date of issue attached to it – bank accounts would consist of one current spending account upon which a small weekly negative rate of interest will be charged if currency remains hoarded in it and - a second savings account into which you will move currency you don't presently need for consumption - which you will not be charged or receive any interest upon – if at the end of every financial year a large amount of the oldest year of issued currency remains hoarded in the savings accounts – this would be retired from circulation in a process called demurage.

'What the hell' I hear you scream – but - the holder of this currency excess to their immediate consumption can authorise the bank to loan out the currency as interest free loans for viable loan projects – which - until repaid - would avoid both the current consumption account negative interest rate and the hoarded currency demurage – this means that currency that real economic activity no longer needs or can support gets retired from circulation – which keeps the system balanced within the boundaries of sustainable natural resource capital - which is overall the ultimate reserve of all economic activity.

Please consider in the case of a fully reformed honest Fully Functioning Public Credit Money System - your necessity of life public utilities could be provided as a public service for free – if you work harder than the next person you will still gain more purchasing power - you will still want for nothing within the boundaries and balances of sustainable resources and population and – the honours system would change based on the tracking of which entrepenuers had the most demurage - to honour those entrepenuers that truly do create a trickle down effect for their community – instead of as presently happens – those getting knighted that hoard the first lent foreign private interest bearing debt that currently circulates as currency in our money system – then send it back out as second lent interest bearing debt – which turns the system into a systemic pyramid scam.

Margrit Kennedy wrote a great book in 1995 that rekindled the negative interest rate upon hoarded currency idea promoted by Silvio Gessel, Irving Fisher and Frederick Soddy before her;

To me the crossing Margrit Kennedy's Inflation Free Money System idea - with Sustento Institute Sovereign Money Dialysis Transition idea - we would end up with a national currency for projects of national significance and necessities of life - but local currencies - at users own risk of course - could once again operate as they use to prior to Reserve Bank of New Zealand Act 1934 - without being deemed against the national interest – literally.

If the above were to ever become implemented government policy - and given what the contemporary capitalist system has become – in putting blind ideological emphasis upon individual property rights – while completely neglecting birthright communal property rights – I throw into the mix the land lease idea that Deirdre Kent is presently think tanking (link below) in an attempt at making the ends meet in the circulatory nature of a money system if it is to remain healthy and stable; (slides here)

Press Release: Deirdre Kent
Housing Bubble solved only by new currency paying for land
Wednesday, 11 September 2013,

To solve Auckland’s housing crisis we have to gradually take land out of the market so that nobody benefits from buying or selling land,” according to Deirdre Kent, a spokesperson for the New Economics Party. “Only when it is recognised that land is a gift of nature and nobody really owns land just the same as nobody owns water.”
“Land of homeowners can be paid for by Treasury with newly created Tax Credits. Homeowners who opt for this must then pay an ongoing fee or land rental to Government. Revenue should be shared by local and central government, and no more rates would be due on that land. The Tax Credits would be good for paying tax or student loans.”
“You can’t stabilise land values by changing loan to value ratios or by any of the other proposed schemes. A Capital Gains Tax is either too weak to have any effect or so strong that nobody sells their property. It is also complicated and expensive to administer. Leaving out the family home means homeowners capture all the windfall from rising land values, when that gain really belongs to the whole society.”
Our scheme is for homeowners that opt in negotiate with government to pay a land rental that is lower, (say by 10%), than their rates plus what they are paying to the bank in interest for their land.
As more and more opt in in the scheme will gradually take land out of the market place. It is similar to leasehold land but because the lease is linked to a land rental index it varies very little over time as it is adjusted annually. The land rent will only change when there is major infrastructure built or the restrictions on land use change. So it will also solve the landbanking problem where people profit from holding land off the market.
“We are not recommending land tax, but an ongoing land rental. That would require annual valuations of land and inevitably would result in disputes. And people don’t trust land taxes because they have to rise as land values drop”, she said.

I ponder instead of offering people tax or rate credits to buy the land portion of their property - that the seller can then only use for paying future lease/rent at rates negligibly cheaper than prior debt encumbrances - what about if the govt using sovereign issued dollars offered to buy the entire property from debt encumbered mortgagees or those seeking to free up capital in the case of residential & commercial buildings(assists earthquake strengthening stalemate and leaky homes) and - when it comes to businesses the offer extends to land and plant or just land with seller keeping portable plant if they so wish - the sovereign dollars can then only be used for consumption or business investment within New Zealand or to pay off foreign debt - with the land lease fee being paid to the NZ govt then being massively less than their prior foreign debt price factored encumbrances - no rates to pay and full utilities provided as a public service by the govt - once the properties are purchased back - essentially from foreign owned private banks who currently hold the mortgage titles - they should be locked in a sovereign managed primary land base entity - never to be sold into individual private ownership again - only ever leased.

This is swimming against the tide of the current generally worldwide accepted orthodoxy of global private capital liberalization and individual property rights over communal property rights - but with the recent clear failings of that orthodoxy - I would hope that some individual property and business owners might be able to see that done correctly - managing assets on behalf of your fellow citizens via your elected government - in a system in which your fellow citizens can afford to enjoy your goods and services - instead of privately owned foreign banking institutions with their undoubted systemic pyramid scamming aspects - can be a viable - enjoyable and far less stressful alternative?