tag:blogger.com,1999:blog-50373301974670328482024-03-13T00:46:01.587-07:00Public Credit or BustPublic Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.comBlogger104125tag:blogger.com,1999:blog-5037330197467032848.post-64011469559858900652019-04-29T14:25:00.001-07:002019-04-29T15:02:50.318-07:00RBNZ Review of Capital Adequacy submission of Iain Parker May 2019<br /><br />RBNZ Review of Capital Adequacy submission of Iain Parker<br /><br /><br /><br />1) In opening, I refer the committee to Former Vice President of the World Bank and Nobel prize-winning economist Joseph Stiglitz who published this document January of 2018;<br /><br /><br /><br />MACRO-ECONOMIC MANAGEMENT IN AN ELECTRONIC CREDIT/FINANCIAL SYSTEM<br /><br /><br /><br />https://www8.gsb.columbia.edu/faculty/jstiglitz/sites/jstiglitz/files/Macro-Economic%20Management%20NBER.pdf?fbclid=IwAR2R-B9teE59jy1IFq1c0kLxlN_XXvLRO3qk8BzqcdHEcIAab5d22wDqbpQ<br /><br /><br /><br />in which he said;<br /><br /><br /><br />“In a modern economy, banks don’t intermediate between “savers” and “investors,” as claimed in the standard textbook models. Banks effectively create credit out of thin air, backed by general confidence in government, including its ability and willingness to bail out the banks, which is based in part on its power to tax and borrow.”<br /><br /><br /><br />“While the modern financial system based on fiat money doesn’t suffer from the vagaries of gold discoveries, it has sometimes suffered from something else: volatility in the creation of money and credit by the banking system, giving rise to the booms and busts that have characterized the capitalist system.”<br /><br /><br /><br />“Much macro-economic instability is associated with instability in credit creation and in the fraction allocated to newly produced goods and services. The paper also explains how, in an open economy, in a system of electronic money, credit auctions combined with trade chits might enable the control of net exports, again enhancing macro-stability. Finally, we explain how under a system of electronic money, the rents that are currently associated with credit creation and that arise from bank franchises—that constitute a form of appropriation of the returns from trust in the government and its ability and willingness to bail-out banks in the event of a crisis or bank run— could be appropriated by the government to a greater degree than at present.”<br /><br /><br /><br />End quote<br /><br /><br /><br />This document by Joseph Stiglitz is a very recent paper that supports my long-held well-documented views on the cause and fix of money system funding structure instability.<br /><br /><br /><br />2) My submission questions the efficacy of this RBNZ capital adequacy review, along with that of the Open Bank Resolution bail-in plan already on the law books, as a guard against the societal chaos of an old fashioned run on a bank, due to its lack of acknowledgment that the present credit liquidity facilities of New Zealand financial infrastructure is far from old fashioned.<br /><br /><br /><br />This process has ignored the model that has come to dominate banking in the money system funding structures of the Western world in modern times.<br /><br /><br /><br />Which has evolved into a hierarchal chain of institutions who refinance with each other at a cheaper rate of interest than that which they then on-lend.<br /><br /><br /><br />With those at the top bestowed with the extraordinary privilege of credit creation with only those lower down, normally at the domestic rather than cross border or government lending level, actually intermediating loans of customers savings of currency originated by the higher up credit creation.<br /><br /><br /><br />The basis of the model is no longer one of what was referred to as a fractional reserve anchor model but has evolved into one of prudential reserve accrual accounting given the official name of Dynamic Stochastic General Equilibrium, in which all potential physical and human resource capital is valued by actuarial accountants (Valuers) then used as the collateral for the base credit of money.<br /><br /><br /><br />If more base credit is issued than the sustainable natural resource collateral to redeem the base credit (Long-term Equilibrium) physically exists, inflation, asset bubbles, and societal wealth inequality follow.<br /><br /><br /><br />The base credit becomes counterfeit beyond the fundamentals of money as a system to the advantage of those doing the counterfeiting and the detriment of humanity and the biosphere upon which it depends.<br /><br /><br /><br />The more members a money system has the more complex becomes the accountancy of the senior most balance sheet of currency originating base credit versus long-term sustainable natural resource equilibrium and currency stability.<br /><br /><br /><br />The monitoring of Equilibrium of the present system that has become interconnected throughout the Western world has been appointed to a small group of accountancy firms and financial rating agencies.<br /><br /><br /><br />This balance is even primary to another long-running debate of the ethics of interest being charged upon all base credit no matter if it is being used by a government to develop the resources it has at hand for the greater common good of its citizenship, such as the bare, non-consumer choice, essentials of life or large strategic infrastructure of the economy.<br /><br /><br /><br />I believe most people, including most academics, would be surprised to know it is presently large privately owned institutions that have been bestowed the extraordinary privilege of computer entry base credit, that sit one layer above most Western governments in the discount interest chain, including New Zealand, as evidenced in this document from the RBNZ Nov 2015 Financial Stability Report;<br /><br /><br /><br />Implications of global liquidity developments for New Zealand<br /><br /><br /><br />http://www.rbnz.govt.nz/financial-stability/financial-stability-report/fsr2015-11/implications-of-global-liquidity-developments-for-new-zealand<br /><br /><br /><br />"There are three key channels through which New Zealand could be affected by declining market liquidity: the impact on New Zealand banks’ funding markets; the impact on short-term interest rates and monetary policy implementation; and the impact on the New Zealand government bond market.<br /><br /><br /><br />New Zealand banks fund a significant proportion of their balance sheets by accessing offshore wholesale debt markets. They do this by borrowing in foreign currency, then ‘swapping’ this back into NZD. Conditions in global financial markets are therefore an important determinant of New Zealand bank funding. New Zealand banks tend to focus on the primary market (new issues) rather than the secondary market for debt. Hence, funding liquidity is of more immediate importance than market liquidity. Funding liquidity refers to the ability of the banks to raise debt as required at a reasonable cost. Reserve Bank discussions with bank treasurers suggest that funding liquidity conditions have deteriorated somewhat in 2015, owing largely to greater market volatility caused by events such as the Greek crisis mid-year and recent turbulence tied to China.<br /><br /><br /><br />New Zealand banks typically use market makers to help facilitate the foreign currency swap leg involved in borrowing from offshore. Market makers take the other side of the transaction with New Zealand banks (providing NZD in exchange for foreign currency that the banks have raised), while charging a spread. This spread has widened as costs have increased for the institutions providing these market making services for the reasons described above. Overall, the cost increases have been manageable thus far, but this highlights the flow-on effects of changes in market liquidity to New Zealand entities seeking offshore funding."<br /><br /><br /><br />end<br /><br /><br /><br />The privately owned institutions are touted as receiving fair remuneration for their expertise in keeping the money system in long-term equilibrium and cover their business costs.<br /><br /><br /><br />The private bank owners claim governments cannot be trusted to administer the base credit of money.<br /><br /><br /><br />New Zealand predominately borrows the base credit of our money from Western institutions for ease of convertibility into Western currencies that some companies stipulate they will only accept as payment for goods and services along with assurances of the protection of wider Western financial regulatory protection agencies.<br /><br /><br /><br />This is represented in a contract between governments and the privately owned financial institutions referred to in New Zealand as the Policy Target Agreement, promising that they as their part of the deal will deliver stable inflation and price stability.<br /><br /><br /><br />In New Zealand, it amounts to a public-private partnership of which the major intersections of that partnership happen within the State Services Commission and the New Zealand Debt Management Office, a private institution that operates under the umbrella of New Zealand Treasury.<br /><br /><br /><br />I contend the average farm or residential property price versus average income from the normal course of business ratio has made it clear the private banking sector has not delivered its part of the contract. <br /><br /><br /><br />Assisted by the fact that the land portion of property was removed from the consumer price index in 1999. <br /><br /><br /><br />Which has, in turn, made a mockery of the Interest Rate Inflation Targeting regime as admitted by many such as former IMF Cheif Economist Olivier Blanchard when referring to the failure of the great moderation.<br /><br /><br /><br />3) Most of the foreign institutions from which the base credit of New Zealand money is borrowed have been fined hundreds of billions of dollars for counterfeit credit based frauds they committed causing the 2008 global financial crisis, with barely any of the perpetrators being jailed.<br /><br /><br /><br />Most of the major accountancy houses and rating agencies were heavily fined for having been taking bribes in return for giving covering legitimacy to what former FBI forensic accountant William B Black termed Accountancy Control Frauds.<br /><br /><br /><br />Which is when the owners and executives of market listed companies use fraud to falsify profits to gain from stock price related remuneration packages. Selling out and departing with their proceeds of crime before the fraud becomes obvious leaving the accountability with the nonhuman entity company shell.<br /><br /><br /><br />In this regard, the massive increase in corporate debt bonds within New Zealand then being used for share buybacks rather than productive investment just screams out with very concerning residual current account balance problems with accountancy control fraud tendencies?<br /><br /><br /><br />Back in the 1980s William B Black prosecuted and jailed many hundreds within the private banking sector for committing the same crimes many essentially got away with 2008.<br /><br /><br /><br />William B Black says the 2008 GFC related fines amounted to a pittance of the proceeds of crime the perpetrators gained and the chances of it happening again is more 'when than if' as the necessary meaningful reform of the system has not happened.<br /><br /><br /><br />With that in mind I contend this investigation of safeguards needs to extend far beyond capital adequacy requirements, tenure of share ownership or concerns of old fashioned runs on banks, into an examination of the creditworthiness of credit entering our economy and the origins of the purchasing power of private equity funds now roaming the globe seeking rent seeking hard assets, to ensure they have not been criminally gained.<br /><br /><br /><br />The latest review of this process released by the RBNZ making mention of contingency credit lines being used as collateral for loans and preference share deals, along with a recent decision to not go ahead with the full privatisation of our nations electronic settlement system in the national interest, gives me hope the RBNZ has already begun to broaden its thinking on these matters;<br /><br /><br /><br />Capital Review Paper 4: How much capital is enough?<br /><br /><br /><br />https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Policy-development/Banks/Review-capital-adequacy-framework-for-registered-banks/Capital-Review-Consultation-How-much-capital-is-enough.pdf?revision=2d386b12-1159-483e-9b53-34ecfebed91a&la=en<br /><br /><br /><br />4) In recent decades I contend there has been a terrible level of odious, destabilising, wealth inequality inducing, predatory lending of counterfeit credit within the money system funding structures of the world, of which the victims deserve compensatory debt relief that has not been forthcoming and the measures being mentioned in this review will not deliver, let alone protect them from into the future.<br /><br /><br /><br />I refer the committee back to the January 2018 published Joseph Stiglitz document in full with which I opened and suggest they investigate thoroughly the recent money system funding structure reforms implemented by Japan, with which we still trade and accept their currency, as written about often by the impeccably credentialed Adair Turner, in a hope they may continue to broaden their thinking even further in the face of empirical evidence of the highest credibility.<br /><br /><br /><br />Yours sincerely<br /><br />Iain Parker<br /><br />Concerned citizenPublic Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-59409237566944257922019-02-02T22:48:00.001-08:002019-02-02T22:50:22.069-08:00Reserve Bank Act Review Submission of Iain Parker<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Reserve Bank Act Review Submission of Iain Parker<br /><br />The opening terms of reference prior to the phase 1 government external expert panel consultations;<br /><br />Scope of the Review <br />To ensure the Act continues to support the operation of the Reserve Bank, the Review will consider the following: <br />- The institutional arrangements for prudential regulation and supervision <br />- Objectives, objective setting processes, and alignment with government policy and risk appetite <br />- Statutory functions and powers <br />- Role clarity for the Minister of Finance, the Board, and the Governor, including the allocation and coordination of powers, functions and tools <br />- Accountabilities <br />- The strengths of current legislation, including its flexibility <br />- The balance between primary, secondary, and tertiary legislation, including in respect of setting policy <br />- Coordination across government, including pre-existing forums such as the Council of Financial Regulators <br />- Alignment with the domestic regulatory management system - Procedural approaches, fairness, and safeguards - International experience and best practice. <br /><br /><br />A successful regulatory regime is one that has the following characteristics <br />- The Act’s purpose and the Reserve Bank’s objectives are clear <br />- The roles and responsibilities of key participants, including the Minister, the Board, and the Governor, are defined in statute and are clear and coherent <br />- The regime engenders trust and confidence in New Zealand financial markets <br />- The regime is enduring <br />- The regime provides sufficient flexibility to adapt and evolve in response to market developments <br />- The regime engenders trust and confidence in decision-making processes <br />- Powers available to the Reserve Bank are sufficient to achieve its objectives<br />- There is clarity as to how the regime interacts with other regulatory regimes and government policy as whole <br />- The regime is clear about the role of government and the scope of the Reserve Bank’s operational independence. <br />End<br /><br /><br />By the end of phase 1 the all-encompassing terms of reference had been reduced to this;<br /><br /><br />The key decisions that have been made by Cabinet under phase 1 are:<br />- To include supporting maximum sustainable employment alongside price stability as an objective of monetary policy in the Act.<br />- To require that monetary policy decisions be made by a Monetary Policy Committee (MPC) of 5-7 members that includes a minority of external members.<br />- The MPC will take decisions by consensus where possible, but publish records of meetings that outline differences when they exist and the balance of votes where consensus is not reached<br />- Members of the MPC will be appointed by the Minister of Finance following a nomination of the Reserve Bank Board, with the Reserve Bank Governor and Deputy Chief Executive being members by virtue of their positions in the Bank. The Governor will be the chair of the MPC.<br />- The Reserve Bank will retain operational independence.<br />End<br /><br /><br />1 - This review was promoted as an exercise investigating if the present checks and balances in regards to the stability, soundness and fiscal responsibility of our nations financial infrastructure are sufficient.<br /><br /><br />2 - For over a decade I have had a passionate interest in the fundamentals of money as a system and the history of money systems. <br />I have spent thousands of hours reading thousands of on the record official documents from many governments and global regulatory institutions in regards of credit liquidity facilities at the wholesale level, financial system infrastructure and the outcomes for their citizenships.<br /><br /><br />3 - I have taken the time to read every submission and the internal government department/expert panel communications of phase 1 & 2 of the Reserve Bank Act Review process set up essentially to investigate if the checks & balances of the financial infrastructure of New Zealand ensure equitable stable outcomes for its citizenship, need reforming or remain status quo. <br /><br /><br />4 – I contend that this process is a very expensive facile exercise for the reasons detailed here on in;<br /><br /><br />5 – The review is investigating the worthiness of expanding the consultation group that announces the Official Cash Rate (OCR)<br />This to me is an exercise in futility given it is on the record common knowledge among both state and private financial infrastructure executives, that as it stands within our entirely foreign borrowed base credit, decentralised central banking money system, the OCR follows the Overseas Funding Cost Rate rather than in any way truly influencing it.<br /><br /><br />I include below several quotes from prominent institutions and people that make this absolutely clear;<br /><br /><br />This RBNZ paper:<br /><br /><br />http://www.rbnz.govt.nz/financial-stability/financial-stability-report/fsr2015-11/implications-of-global-liquidity-developments-for-new-zealand<br /><br /><br />Titled - Implications of global liquidity developments for New Zealand - from the Nov 2015 Financial Stability Report;<br /><br /><br />"There are three key channels through which New Zealand could be affected by declining market liquidity: the impact on New Zealand banks’ funding markets; the impact on short-term interest rates and monetary policy implementation; and the impact on the New Zealand government bond market.<br /><br /><br />New Zealand banks fund a significant proportion of their balance sheets by accessing offshore wholesale debt markets. They do this by borrowing in foreign currency, then ‘swapping’ this back into NZD. Conditions in global financial markets are therefore an important determinant of New Zealand bank funding. New Zealand banks tend to focus on the primary market (new issues) rather than the secondary market for debt. Hence, funding liquidity is of more immediate importance than market liquidity. Funding liquidity refers to the ability of the banks to raise debt as required at a reasonable cost. Reserve Bank discussions with bank treasurers suggest that funding liquidity conditions have deteriorated somewhat in 2015, owing largely to greater market volatility caused by events such as the Greek crisis mid-year and recent turbulence tied to China.<br /><br /><br />New Zealand banks typically use market makers to help facilitate the foreign currency swap leg involved in borrowing from offshore. Market makers take the other side of the transaction with New Zealand banks (providing NZD in exchange for foreign currency that the banks have raised), while charging a spread. This spread has widened as costs have increased for the institutions providing these market making services for the reasons described above. Overall, the cost increases have been manageable thus far, but this highlights the flow-on effects of changes in market liquidity to New Zealand entities seeking offshore funding."<br />end <br /><br /><br />Former New Zealand Prime Minister and former international investment banker John Key said 17 November 2012;<br />https://www.youtube.com/watch?v=5Nc6aoQGmLk <br />“Our (Govt) debt to GDP levels by then will top at just under 30 percent. In other words we'll be relatively lowly indebted compared to countries like America and Europe, but I put it to you we are a small open economy, we have high levels of private sector debt, We, Mum and Dad, have borrowed that debt effectively from foreigners because their local bank has sourced that from foreigners.”<br />end quote<br /><br /><br />Bernard Hickey(BH) - Grant Robertson(GR) interview 23 March 2016<br />https://www.youtube.com/watch?v=253QChyCREI<br />GR - "There are problems in our monetary policy and we do need to look at it"<br />BH - "What would a policy targets agreement under a Labour Government, you would be, if you were Finance Minister you would be the one signing the agreement."<br />GR - " Yeah, and look we have got to sit down and talk that through with the Reserve Bank Governor. I am still a supporter of an independent monetary policy. I think, I think that the Government can help create the settings, but in the end we are, we are well served by the independence of the Reserve Bank, so it will be a genuine conversation.<br />I have said often before that it is possible for the Reserve Bank to have a mandate beyond just controlling inflation.<br />I think if it had, had a mandate around employment we wouldn't have seen the rates go up when they did, we might have seen them come down a little bit quicker.<br />I have been clear before that I would like to see something like an employment based or an overall health of the economy based target included within the PTA.<br />On inflation itself, this is where we have to sit down and have a genuine conversation with a range of experts involved about what s the future of inflation.<br />Its a big topic and I know the Reserve Bank Governor is concerned about it himself.<br />So, you know, there will be some change. I could see a broadening of the criteria and we do have to look at how we, how inflation is measured and what it means in the economy."<br />BH - " So the Reserve Bank could cut interest rates, do what it wants and then the banks might not pass it on, so, what,"<br />GR - " Yeah well"<br />BH - "what do you think the banks should do about it. Because they haven't passed on, they haven't passed on all the official cash rate cut. "<br />GR - "No they have not. Although they were very quick to cut savings rates. So clearly on that side of the ledger they responded quickly. Look that is, you know, it was the Reserve Bank Governor who said very clearly at the Parliamentary Select Committee I was at, that he expected the rate to be passed on, it wasn't.<br />I understand that there has been an increase in the cost of borrowing overseas for banks, but I also don't think that increase legitimises not passing on the cut and it does start to neuter the value of monetary policy.<br />That's a conversation for me as Finance Minister to have with the Reserve Bank Governor as well, is does he have the tools in his tool box that makes him comfortable that, that the value of him setting an official cash rate is still there and we will have that conversation.<br />That's not, that's not to say that we would determine those rates, but it is to say that we need some pretty serious conversations with the banks about what they are doing."<br />BH - "Would Labour go as far as to looking to regulate retail interest rates."<br />GR - " Agh I am reluctant to say that. I think that what we would do is to talk to the bank, the Reserve Bank Governor about the tools that he has. I mean the, the overall relationship between the trading banks and the Reserve Bank is one that's, you know, has a number of different levers within it and I think that's probably the place to go looking for whether or not, you know, you can assure New Zealander's they should, they'll get the value that they should from an OCR cut, but that is the primary relationship, the Governor to the trading banks.<br />The government is there to set the rules, not be involved in the middle of that."<br />End of interview.<br /><br /><br />6 – So lets now move onto the musings of including for improvement the maximising of employment as a dual mandate alongside the present primary mandate of price stability;<br /><br /><br />It is also on the record common knowledge among state and private financial infrastructure executives that the methodology presently being used for official statistics to judge a person employed or not employed is seriously flawed.<br />The flaw is that a person in the survey period need only have been employed for one hour of paid employment or have swapped a minuscule amount of work for a minuscule amount of barter goods to be deemed employed. Despite it being very clear and evident this amount of employment would in no way ensure a person of dignified access to the bare essentials of life.<br />It is very questionable what improvement in regards the greater common good this measure would bring as long as this flawed methodology remains in place.<br /><br /><br />Labour force categories used in the Household Labour Force Survey <br />http://archive.stats.govt.nz/browse_for_stats/income-and-work/employment_and_unemployment/Labour-force-categories-in-HLFS.aspx<br /><br /><br />People employed<br />Definition<br />All people in the working-age population who, during the reference week:<br />- worked for one hour or more for pay or profit in the context of an employee/employer relationship or self-employment<br />- worked without pay for one hour or more in work that contributed directly to a farm, business, or professional practice operation owned or operated by a relative<br />- had a job but were not at work due to: their own illness or injury, personal or family responsibilities, bad weather or mechanical breakdown, direct involvement in an industrial dispute, or leave or holiday.<br /><br /><br />7 - This is an opportune time to also examine the soundness of the present primary mandate of price stability as determined by what is known as the Consumer Price Index (CPI) within an overarching Interest Rate Inflation Targeting model. The CPI is a list of various goods and services of which the cost of them is monitored and the averaged change of cost up or down is said to represent the changing cost of living.<br />It is on the record common knowledge among state and private financial infrastructure executives that this measure is presently seriously flawed due to the cost of housing not be accurately represented due to the land portion of property being removed from the CPI list back in 1999;<br /><br /><br />Joseph Stiglitz, Ex Vice President of the World Bank and Nobel Price winner for economics wrote of the shortcomings of Interest Rate Inflation Tageting in a 2008 article;<br />The answer came in the form of “inflation targeting,” which says that whenever price growth exceeds a target level, interest rates should be raised. This crude recipe is based on little economic theory or empirical evidence; there is no reason to expect that regardless of the source of inflation, the best response is to increase interest rates. One hopes that most countries will have the good sense not to implement inflation targeting; my sympathies go to the unfortunate citizens of those that do. (Among the list of those who have officially adopted inflation targeting in one form or another are: Israel, the Czech Republic, Poland, Brazil, Chile, Colombia, South Africa, Thailand, Korea, Mexico, Hungary, Peru, the Philippines, Slovakia, Indonesia, Romania, New Zealand, Canada, the United Kingdom, Sweden, Australia, Iceland, and Norway.)<br />End <br /><br /><br />20 February 2012 Deirdre Kent put this Official Information Act question to the New Zealand Minister of Statistics;<br /><br /><br />Despite the fact that section prices tripled in fifteen years to 2007, land is not now included in the Consumer Price Index. This means that the official measure of inflation is unreliable as it is far lower than the actual figure.<br /><br /><br />and received this reply;<br /><br /><br />Today I received a letter back from the Minister of Statistics, Hon Maurice Williamson. I had heard that land went out of the CPI but couldn’t remember when or why so I sent in an Official Information request. The Minister dates the letter 14 Mar 2012 and says <br />Dear Ms Kent<br />Thank you for your letter of 20 February regarding the exclusion of the price of land from the Consumers Price Index (CPI) basket of goods.<br />I am advised by Statistics New Zealand that land (i.e. residential section) was included in the CPI until the June 1999 quarter. Following a review of the CPI in 1997 land was excluded, taking effect from the September 1999 quarter.<br />The 1997 review by an external advisory committee confirmed the CPI’s main purpose as being informing monetary policy setting, and that the CPI should be focussed on the concept of acquisition. The reason given for excluding land from the CPI from 1999 was that it was considered to represent the investment component of home ownership (with dwellings representing the shelter component).<br />The September 1999 quarter CPI information release explained it as follows: A dwelling provides shelter over a long period of time. Over time land is not consumed and so can be considered to represent the investment component of home ownership. As investment expenses are outside the scope of the CPI the rebased CPI excludes expenditure on residential sections.<br />Information on the sale of land is available from QV (www.qv.co.nz) and the Real Estate Insititute of New Zealand (www.reinz.co.nz).<br />I trust this information meets your needs and thank you again for taking the time to write.<br />Yours sincerely<br />Hon Maurice Williamson<br />Minister of Statistics. <br />End<br /><br /><br />A speech by Governor Reserve Bank Of New Zealand Dr Alan Bollard and Enzo Cassino, delivered by Dr John McDermott to the Sim Kee Boon Institute Conference on Financial Economics Singapore, 5 May 2011 <br />http://www.rbnz.govt.nz/speeches/4389919.pdf <br />Overall, there has also been a recognition that credit growth over the past decade was excessive and a potential risk to financial stability given the build-up in leverage and rising asset prices that accompanied it. We are continuing to build our understanding of money and credit at the RBNZ, and its inter-relationship with both sectoral financial decision making and potential risks for the banking sector.<br />End<br /><br /><br />Signs suggest inflation cycle is bottoming out 19 October 2016 <br />https://www.odt.co.nz/business/signs-suggest-inflation-cycle-bottoming-out<br />Labour finance spokesman Grant Robertson said low inflation piled pressure on the Reserve Bank and the Government.<br />Low inflation would be welcomed by many but the data painted a troubling picture of the New Zealand economy.<br />The CPI only counted new builds in terms of housing costs. Those rose 2% annually and 6.2% for the quarter. Factoring in rises in rents and the spiraling cost of purchasing existing homes, the cost of housing for most New Zealanders was rising far in excess of inflation, he said.<br />''This is a huge problem for most New Zealanders who have seen their wages barely rise in recent years,'' he said.<br />End<br /><br /><br />8 – Now I would like to turn to the question of fiscal responsibility and fuduciary duty.<br />Given the unsoundness of much of the methodology used to measure the success of the present money system funding structures that I contend already render the proposed changes an exercise of futility, of great concern is the refusal to take a closer look at the fact that we belong to a club of nations whose base credit supply of their money systems is presently entirely borrowed from external of state institutions who type the credit they lend out into their account at the time of lending rather than relending anyone's savings that have been deposited with them and how it impacts our society.<br /><br /><br />The motives for this have to be questioned given that these surely most interesting of facts are documented in many of the reference sources from which the government expert advisory panel have included information but never mentioned the primary base credit creation issue and again it is common knowledge among the executives of state and private financial institutions;<br /><br /><br />Mr. Alan R Holmes was Senior Vice President, Federal Reserve Bank of New York. Worked for 33 years at the Federal Reserve Bank of New York, where from 1965 to 1979 he was manager of the Federal Reserve System Open Market Account. In that position, he was responsible for the creation of money in the United States and nations to which they made loans.<br /><br /><br />1969 speech – Operational Constraints On Stabilization of Money Supply<br />http://bostonfed.org/economic/conf/conf1/conf1i.pdf<br />"The idea of a regular injection of reserves-in some approaches at least-also suffers from a naive assumption that the banking system only expands loans after the System (or market factors) have put reserves in the banking system.In the real world, banks extend credit, creating deposits in the process, and look for the reserves later. The question then becomes one of whether and how the Federal Reserve will accommodate the demand for reserves. In the very short run, the Federal Reserve has little or no choice about accommodating that demand; over time, its influence can obviously be felt. In any given statement week, the reserves required to be maintained by the banking system are predetermined by the level of deposits existing two weeks earlier."<br />End<br /><br /><br />What should the future form of our money be?<br />Speech by Deputy Governor Jon Nicolaisen at the Norwegian Academy of Science and Letters, 25 April 2017.<br />https://www.norges-bank.no/en/Published/Speeches/2017/2017-04-25-dnva/<br /><br /><br />How is money created?<br />So how do banks create money? The answer to that question comes as quite a surprise to most people.<br />When you borrow from a bank, the bank credits your bank account. The deposit – the money – is created by the bank the moment it issues the loan. The bank does not transfer the money from someone else’s bank account or from a vault full of money. The money lent to you by the bank has been created by the bank itself – out of nothing: fiat – let it become.<br />The money created by the bank does not disappear when it leaves your account. If you use it to make a payment, it is just transferred to the recipient’s account. The money is only removed from circulation when someone uses their deposits to repay a bank, as when we make a loan repayment.The money supply is therefore only reduced when banks’ claims on the rest of the economy decrease.<br />Banks also fund lending by raising loans themselves instead of creating money in the form of deposits. In order to reduce risk, banks also use other forms of investment in addition to lending. Nevertheless, the money supply is growing at almost at the same pace as total bank credit.<br />To sum up: banks create money out of nothing and withdraw it when loans are repaid. Growth in total bank credit is normally matched by growth in the money supply.<br />End<br /><br /><br />Money – Born of Credit? <br />Christopher Kent <br />Assistant Governor (Financial Markets) Reserve Bank Australia 19 September 2018 <br />https://www.rba.gov.au/speeches/2018/sp-ag-2018-09-19.html<br />How Is Money ‘Created’?<br />In summary, changes in the stock of broad money are the result of a myriad of decisions, including those of banks, their borrowers, creditors and shareholders. And these decisions take place within the framework of a range of regulatory and institutional arrangements. It is worth noting that the Reserve Bank does not target a particular level or growth rate of money (although it has done so under a previous monetary policy regime). Instead, the Reserve Bank has some influence on the money stock via the effect of its interest rate target for the overnight cash rate on other interest rates in the economy. These in turn affect the cost of borrowing and economic conditions more generally. Ultimately, borrowing and lending decisions – and thus the creation of money – are constrained by the need for prudent banking behaviour, the budget constraints of borrowers and the profitability of lenders.<br />One final word on the creation of money is that as fun as it is to teach students about traditional money multipliers, I don't find them to be a very helpful way of thinking about the process. In Australia, simple regulatory regimes – which had earlier required banks to hold a minimum share of their deposits as reserves with the Reserve Bank – have been replaced with modern prudential regulation and market discipline. Again, the demand for and supply of credit is the real driver of money. That point can be reinforced by examining the behaviour of credit and money over time.<br />End<br /><br /><br />Banking in New Zealand Fourth Edition - published by the New Zealand Bankers Association in 2006 <br />Chapter 4 - The Creation of Money and Credit<br />https://issuu.com/iainparkerpubliccreditorbust/docs/nzba_banking_in_new_zealand_fourth_?fbclid=IwAR1UxdCgMQgo5AIRjbMb7aTg_EXND2Zw4exHRWw8CXtM3j9OdgAsAa3TrpM<br />THE CREATION OF MONEY AND CREDIT<br />what Actually Happens in reality, although the process outlined in the previous sections could occur, cash balances in bank vaults no longer act as a constraint on bank lending in the way that they might have up until the latter part of the 20th century....... <br />in such an environment, there is still scope for a bank to expand its lending and create credit, but it is dependent on there being net inflows of funds into the banking system as a whole. These inflows of funds may come from depositors from outside New Zealand (and we have seen significant inflows of funds from such sources in recent years), or from the government making net deposits of funds into the banking system (through its fiscal policy, as outlined below).<br />We also have a situation where, since 1985, New Zealand banks have not had any specific reserve requirements applied to their deposit liabilities. This means that, in theory, banks could keep on creating credit and expanding their loan portfolios indefinitely. in such an environment, it is the cost of credit, based upon the costs that banks have to pay to raise the deposits, that becomes the constraint on the quantity of credit that is created. <br />end <br /><br /><br />Excerpts from book - CRISIS - by New Zealand Reserve Bank Governor - Alan Bollard - published September 2010. <br /><br /><br />Preface - I have also tried to be scrupulous to ensure that I have written nothing on New Zealand that could not have been made public under the Official Information Act; indeed, much of the official policy is already in the public arena. This means at times the book is less revealing than it might otherwise be. We hope its no less insightful and interesting.<br /><br /><br />*Pg 19-20 - “Banking practices differ around the world, but we ensure ours meet international standards. These are set by a somewhat shadowy group called the Basel Committee on Banking Supervision. Comprised of representatives of large countries( not including New Zealand ), the group meets in Switzerland at the Bank of International Settlements (BIS).” <br /><br /><br />*pg 157 - Another governance worry related to the power and competence, or lack thereof, on the part of banks chief risk officers and risk committees. These officers assess the possible outcomes from any deal and decide whether the risks are acceptable under the banks mandated policies. We were now hearing about cases where risks had been miscalculated, procedures bypassed and officers overruled, all in the race for higher earnings. <br /><br /><br />*pg 183 - “In self-interest, banks may encourage New Zealander’s to take on more debt than is good for them individually or deliver more external liability than is good for the country.” <br />End<br /><br /><br />Iain Rennie government external consultant to this process;<br /><br /><br />Between 15 and 24 March 2017 discussions were held with representatives from the Bank for International Settlements and various overseas central banks to obtain their views on, and experiences with, different central bank decision-making models and governance. The representatives were: • Bank for International Settlements – David Archer (Head of Central Banking Studies) • Reserve Bank of Australia – Anthony Dickman (Secretary) • Bank of England – John Footman (Secretary) • Bank of Israel – Daniel Hahiashvili (Chief of Staff to the Governor); Yoav Soffer (Spokesperson and Head of Economic Information); Esther Schwartz (Secretary of the Monetary Committee) • Bank of Canada – Stephen Poloz (Governor) Summary of discussions The representatives from the central banks discussed the decision-making and governance models employed at each of their respective central banks. The following key points were also raised in the discussions: • International trends Given the depth of powers of central banks, and more recognition about the ability to get things wrong, there is political discomfort internationally with the limitations on holding central banks to account. Countries are struggling with financial policy. There is a trend towards interagency financial stability councils with unclear powers. There is recognition within central banks that there is an issue that needs to be dealt with, but generally speaking action on this has been limited. <br />End<br /><br /><br />Prasanna Gai University of Auckland excerpt of submission to this process;<br /><br /><br />The costs of financial system failure thus far exceed the private costs to the managers, creditors, and shareholders of the failing entities. This is a consequence of negative externalities – the private benefits of the socially destructive behaviour exceed the private costs. In financial systems, these externalities take two broad forms. First, the actions of a financial firm can directly influence the choices that other firms make.6 And second, the actions of a financial firm can influence the constraints facing other firms through their effect on prices. Such “pecuniary” externalities can also arise in efficient markets and are not of themselves distortionary. But when there are other constraints and distortions present, the effect of one agent’s actions on other agents in the system via prices can matter. <br /><br /><br />The endogeneity of risk means that macroprudential regulation avoids an important fallacy of composition – the financial system is not made safe by simply making sure that each and every financial balance sheet is sound. What may look stable at the level of an individual institution can be fragile and unstable at the system level due to the interconnections of financial institutions. For example, Beale et al. (2011) demonstrate how, in an inter-linked and procyclical system, the homogeneity of risk management practices can be collectively disastrous. <br /><br /><br />In the I(ntermediation)-theory of money, Brunnermeier and Sannikov (2016) argue that the presence of financial frictions means that price stability and financial stability are so intimately intertwined that it is impossible to make a distinction. The close connection arises because the health of the financial intermediation sector determines the degree of inside money creation and the price of risk in the economy. <br /><br /><br />Central banks must, thus, be acutely aware of aggregate and sector-specific credit growth and other monetary aggregates, since a narrow focus on current interest rates can be misleading.3 <br />End<br /><br /><br />10 – Very relevant to this process I would like to take the opportunity to applaud those within government, who in recent times have realised the national security value of keeping at hand a state-owned electronic payment, transfer and settlement system, that presently is resided within the RBNZ/Kiwi Bank/ Post Office structures, to guard against private interests gaining a monopoly of these most important of facilities. <br />Facilities that if ever become entirely external of state-owned without a ready state alternative, would leave our society wide open to criminal exploitation that would be very hard to hold to account. As a number of nations found out the hard way post the 2008 GFC.<br />I was very proud to be the only individual submitter outside of the privately owned financial service sector institutions to put forward a submission during the “public consultation” period (that bizarrely called for submissions from only industry participants) and the only one that was pointing out the negatives of privitisation of the facilities.<br />I am encouraged that Government has not only decided to keep a ready alternative means of money distribution internal of the state, but has also set about strengthening the legislation in regards the obligations of the parts of the facilities that are privately owned.<br /><br /><br />11 - When you fully comprehend the fundamentals of money as a system of human & natural resource capital value, base credit underwritten economic enablement, you soon realise that no government has ever needed to be revenue constrained to any lesser extent than the territory it governs is constrained by physical resources available to it.<br /><br /><br />Any government has had at hand the means to develop the physical resources within its territory for internal use, or in readiness to trade with societies external of it, any goods surplus to their own requirements for goods that would further increase the standard of living of its citizens.<br /><br /><br />No government has ever needed to external borrow to develop the commonwealth resources within its own territory. If it has been doing so it has suffered a conjob at great external extortion expense to the citizens it represents.<br /><br /><br />Money system pyramid frauds orchestrated by shysters (a person who uses unscrupulous, fraudulent, or deceptive methods in business.) have been noted as regular occurrences since humans started recording written history. <br /><br /><br />But very bizarrely an intergenerational class of associated people are still able to suppress the knowledge of this most important of issues and get away with doing it with seeming impunity.<br /><br /><br />12 – Several nations have grown tired of institutions external of the state being entrusted with the extraordinary privilege of custodianship of the base credit of societies money only for them to repeatedly cook the credit books in very destabilising ways out of short-term self-interest and have made meaningful money system funding structure reforms that have reinstated a state institution at the top of the wholesale base credit tree to be administered as a public trust in the public interest.<br />This includes Japan. The third largest economy in the world with who New Zealand has just signed into the CPTPP trade agreement and are still accepting their currency as payments.<br /><br /><br />Adair Turner 20 Sept 2018<br />Japan's Successful Economic Model<br />"As for government debt and unsustainable fiscal deficits, doom-mongers who warn of an inevitable crisis if belt tightening is not soon imposed are likely to be disappointed. Japan’s gross government debt may be 236% of GDP, but after netting out government-owned financial assets, the International Monetary Fund estimates net debt at a much lower 152%.<br />Moreover, the Bank of Japan owns government bonds worth 90% of GDP, and ultimately returns to the government as dividends all the money it receives from the government as interest on the bonds it holds. Deducting both public financial assets and all the debts the Japanese government and people effectively owe to themselves, the debt level is only about 60% percent of GDP and not rising. This level of debt could be sustainable even if fiscal deficits remain high for many years.<br />To see why, suppose a country had gross government debt of 250% of GDP, net debt of 150%, and central bank bond holdings of 100% of GDP, leaving net debt of 50%. Then suppose that inflation and real growth were steady at 1% each, so that nominal GDP grows at 2%. With bond yields at 2% (versus 0.1% in Japan today), those debt ratios would remain stable even if the government ran a primary deficit of 4% of GDP, and a total deficit of 5%, year after year.<br />That is roughly what Japan is doing now. Far from reacting in horror at this clearly unsustainable behavior, bond buyers around the world still line up to buy government bonds in return for yields that are little more than zero."<br />End<br /><br /><br />Bank of Japan Monetary Policy <br />https://www.boj.or.jp/en/mopo/outline/qqe.htm/<br /><br /><br />13 – The IMF are now saying that more progressive monetary policy reform is justified.<br />I agree with them;<br />Winds of Change: The Case for New Digital Currency<br />By Christine Lagarde, IMF Managing Director <br />Singapore Fintech Festival<br />November 14, 2018<br />https://www.imf.org/en/News/Articles/2018/11/13/sp111418-winds-of-change-the-case-for-new-digital-currency<br />Let me now turn to my second issue: the role of the state—of central banks—in this new monetary landscape.<br />Some suggest the state should back down.<br />Providers of e-money argue that they are less risky than banks, because they do not lend money. Instead, they hold client funds in custodian accounts, and simply settle payments within their networks.<br />For their part, cryptocurrencies seek to anchor trust in technology. So long as they are transparent—and if you are tech savvy—you might trust their services.<br />Still, I am not entirely convinced. Proper regulation of these entities will remain a pillar of trust.<br />Should we go further? Beyond regulation, should the state remain an active player in the market for money? Should it fill the void left by the retreat of cash?<br />Let me be more specific: should central banks issue a new digital form of money? A state-backed token, or perhaps an account held directly at the central bank, available to people and firms for retail payments? True, your deposits in commercial banks are already digital. But a digital currency would be a liability of the state, like cash today, not of a private firm.<br />This is not science fiction. Various central banks around the world are seriously considering these ideas, including Canada, China, Sweden, and Uruguay. They are embracing change and new thinking—as indeed is the IMF.<br />Today, we are releasing a new paper [1] on the pros and cons of central bank digital currency—or “digital currency” for short. It focuses on domestic, not cross-border effects of digital currency. The paper is available on the IMF website.<br />I believe we should consider the possibility to issue digital currency. There may be a role for the state to supply money to the digital economy.<br />This currency could satisfy public policy goals, such as (i) financial inclusion, and (ii) security and consumer protection; and to provide what the private sector cannot: (iii) privacy in payments.<br />End<br /><br /><br />Please expand the terms of reference to include the soundness of the decentralised central bank entirely external of state base credit model.<br /><br /><br />Yours sincerely<br />Iain Parker<br />13/1/2019</span>Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-63125855992525654462017-08-22T00:39:00.001-07:002017-10-14T00:35:03.920-07:00Quantitative Easing vs Qualitative Easing.<div style="background-color: white; color: #1d2129; font-family: Helvetica, Arial, sans-serif; font-size: 14px; margin-bottom: 6px;">
Quantitative Easing vs Qualitative Easing.</div>
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There are presently three different so-called 'pump priming' monetary policy initiatives, that are confusingly being referred to by many as all being the same thing. But more accurately two of them favour the private banking sector over society, and one society over the banking sector.<br />
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1 - Printing bank credit reserves 1st example that favours banking sector over mainstreet;<br />
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Boosting bank credit reserves to replace what senior most owners and executives have stripped from the institution via remuneration packages with reported levels of profit justification that are creative accountancy, fraudulent counterfeit credit based cover-ups.<br />
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Creative accountancy fraud that leaves the institution itself insolvent and in need of assistance.<br />
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This does not work to pump prime the economy of course because no increased purchasing power reaches already debt saturated main street without it being via loans from the banks. Which when society is already debt saturated and been given no relief from the counterfeit credit already existing in the system, it is like pushing a piece of string.</div>
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2 - Printing bank credit reserves 2nd example that favours banking sector over main street;<br />
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Boosting banks credit reserves for them to purchase real assets from debt-encumbered companies or even countries. The benefit said to be by the bankers, injecting cash into cash-strapped sectors in an attempt to get the economy flowing again. They say they will sell the 'real assets' back to the market once the economy is flowing again.<br />
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Again given that there is no relief of the already existing levels of counterfeit credit based demands, and much of the cash changing hands comes straight back to the banks as payments, it is again like pushing a piece of string.<br />
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What it essentially does is allow the senior most vested interests to use counterfeit credit in a predatory way to gain ownership of the real assets of the society, so as they can then rent them back to society.</div>
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3 - Printing state institution mutual public credit reserves to be spent, rather than lent, into circulation that favours mainstreet over the senior most owners and executives of the banking sector;<br />
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Presently many societies of the world via contracts organised by their leaders, have entrusted institutions external of the state to administer the nation's currency originating 'pump priming' credit mechanism at the heart of their money system funding structures.<br />
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That, for a fee covering their cost of business and fair remuneration for their expertise of keeping everything in endgame loan repayment equilibrium, they will contractually administer the system in a fair way that will enhance the well-being of all of the society.<br />
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But many societies are starting to realise that the senior most owners and executives of these institutions external of the state have been committing grand-scale, predatory lending of counterfeit credit, control fraud.<br />
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They have been cooking the credit books in pursuit of short-sighted personal kings ransoms, rather than the long-term well-being of as many of society as possible.<br />
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The only way to now to fill the gap that has developed between the needs of mainstream and the lack of being able to access those needs due to interest payment demands upon a massive amount of already existing counterfeit credit, at least if society still wishes to retain a central currency, is by giving relief from those fraudulent claims by using another way to pump prime the economy in a way that bridges the poverty among plenty gap.<br />
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That way is via society, via their government, rescinding the contract of the institutions external of the state that has them at the top of the currency originating credit tree and occupying that space themselves.<br />
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Rather than first externally lending its purchasing power from external sources to then spend, it simply credits its own account with the value of its own credit, as is any nations sovereign right, then sets about doing what is necessary to give relief from the private banking sector counterfeit credit levels, by essentially doing the first two methods described above in this article, but to benefit society as a public trust and not institutions external of the state.<br />
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I would describe the 3rd of these processes as Qualitative Easing, rather than Quantitative Easing.</div>
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Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com1tag:blogger.com,1999:blog-5037330197467032848.post-8348725947167716682017-08-02T15:25:00.002-07:002017-12-30T15:38:57.838-08:002017 Ideal Money System Funding Structure Reform Advisory Panel<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">If you conclude that these people have merit, please bring the information they possess, to the attention of as many people within the political and media public protection agencies of your nation, as you can.<br /><br />These money system funding structure reformists are senior most international level Bankers – Academics – Regulators, and Me, who have integrity and are using their knowledge trying to prevent the breakdown of civilised society.<br /><br />These people are not the path of least resistance, ego-preserving apologists for what they have played a part in, they are proven advocates for true reform of the presently failed money system funding structures of the world.<br /><br />As the world seems to be reversing </span><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">away from learned behaviours of common decency, </span><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">into a selfish slave master minded, feudal commercial pyramid fraud ideology. </span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br /></span><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Before parents consider allowing their children being sent off to kill each other en masse in wars. Please take the time to read these peoples findings and suggestions for a more socially stable and environmentally sustainable, money system funding structure.<br /><br />David C Korten<br /><br />Dr. David C. Korten worked for more than thirty-five years in preeminent business, academic, and international development institutions. Served for five and a half years as a faculty member of the Harvard University Graduate School of Business, where he taught in Harvard’s middle management, MBA, and doctoral programs. Asia regional adviser on development management to the U.S. Agency for International Development before he turned away from the establishment to work exclusively with public interest citizen-action groups.<br /><br />Short summary of his findings in this video;<br /><br /><a href="https://www.youtube.com/watch?v=gTKE_mpEUu0" target="_blank">https://www.youtube.com/watch?v=gTKE_mpEUu0</a><br /><br />More detailed written summary here;<br /><br /><a href="http://www.yesmagazine.org/pdf/liberateamericadownload.pdf" target="_blank">http://www.yesmagazine.org/pdf/liberateamericadownload.pdf</a><br /><br />Adair Turner<br /><br />Present -2015- Senior Fellow of the Institute For New Economic Thinking.<br /><br />Prior to September 2008 Lord Turner was a non-executive Director at Standard Chartered Bank, United British Media and Siemens; from 2000-2006 he was Vice-Chairman of Merrill Lynch Europe, and from 1995-99, Director General of the Confederation of British Industry. He was with McKinsey & Co. from 1982 to 1995, building McKinsey’s practice in Eastern Europe and Russia as a Director. He was previously Chair of the Overseas Development Institute (2007-10).<br /><br />Lord Turner studied History and Economics at Gonville and Caius College, Cambridge from 1974-78.<br /><br />The Case for Monetary Finance – An Essentially. Political Issue<br />Video<br /><a href="https://www.youtube.com/watch?v=7pZzrdpHMZs" target="_blank">https://www.youtube.com/watch?v=7pZzrdpHMZs</a><br /><br />Transcript<br /><a href="http://www.imf.org/external/np/res/seminars/2015/arc/pdf/adair.pdf" target="_blank">http://www.imf.org/external/np/res/seminars/2015/arc/pdf/adair.pdf</a><br /><br />The Truth About Banking: Former Top Regulator Speaks Out<br /><a href="http://www.theepochtimes.com/n3/1895986-the-truth-about-banking-former-top-regulator-speaks-out/2/" target="_blank">http://www.theepochtimes.com/n3/1895986-the-truth-about-banking-former-top-regulator-speaks-out/2/</a><br /><br />Adair Turner's book challenges the belief that private credit is essential to growth and fiat money is inevitably dangerous. The author argues that debt needs to be taxed as a form of economic pollution because most credit is not needed for economic growth and just drives real estate booms and busts and leads to financial crisis and depression. The author also debunks the big myth about fiat money—the erroneous notion that printing money will lead to harmful inflation. He believes that policy makers need to monetize government debt and finance fiscal deficits with central-bank money to overcome the mess that is created by past policy errors.<br /><br /><a href="http://live.worldbank.org/between-debt-devil" target="_blank">http://live.worldbank.org/between-debt-devil</a><br /><br />John Fullerton<br /><br />Former JP Morgan Managing Director says entirely compounding interest attached money system has out grown boundaries of the biosphere and is mathematically unsustainable!<br /><br />About John Fullerton;<br /><br />During an 18-year career at JP Morgan, John managed multiple capital markets and derivatives businesses around the globe, and finally ran the venture investment activity of Lab Morgan as Chief Investment Officer. He was JP Morgan’s representative on the Long Term Capital Oversight Committee in 1997-98. John is currently a director of the New Economics Institute, Investors’ Circle, New Day Farms, Inc., and an Advisor to Natural Systems Utilities. He is a participant/author of the UNEP Green Economy Report. John earned a BA in Economics at the University of Michigan, and an MBA at the Stern School of New York University’s in the Executive MBA Program.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />Video interview here;<br /><a href="https://www.youtube.com/watch?v=bnbxRW8FnT8" target="_blank">https://www.youtube.com/watch?v=bnbxRW8FnT8</a><br /><br />Transcript here;<br /><br />“ I learned that a lot of what we practiced in finance through no ill intent, this is unrelated to the financial crisis, and the ethical challenges of the financial system, but that the system itself is designed to propel growth in the economic system with no regard to the physical boundaries of the planet and with little regard to the social criteria, social constraints of human well being and so it struck me that a lot of the symptoms that we talk about such as climate change obviously being on top of everyone’s agenda, but ecosystem degradation, soil degradation, biodiversity loss. All of these issues are symptoms of an economic system that is essentially bumping into the boundaries of the biosphere, and if you think about finance and even our money system, which is built on a money system which is created through expanding money that has interest associated, so as the money supply grows the requirement to service money grows at a compound rate. That forces at a systemic level the economy to continue growing which if the economy is related to material throughput eventually creates this conflict with the boundaries of the biosphere. So its been a very profound realisation and what I have discovered is that there are an increasing amount of people thinking about this question, but its very much outside the halls of conventional economics and very much new economic thinking.”<br /><br />The Road To Regenerative Capitalism<br /><a href="https://www.youtube.com/watch?v=nHnYZ4_qQIM" target="_blank">https://www.youtube.com/watch?v=nHnYZ4_qQIM</a><br /><br />Michael Hudson<br /><br />Michael Hudson is a former balance-of-payments economist for Chase Manhattan Bank and Arthur Andersen, and economic futurist for the Hudson Institute (no relation).<br /><br />Born in 1939, Chicago, Illinois, USA is research professor of Economics at University of Missouri, Kansas City (UMKC). He is also a Wall Street analyst and consultant as well as president of The Institute for the Study of Long-term Economic Trends (ISLET) and a founding member of International Scholars Conference on Ancient Near Eastern Economies (ISCANEE).<br /><br />Economic advisor to the U.S., Canadian, Mexican and Latvian governments, to the United Nations Institute for Training and Research (UNITAR), and he is president of the Institute for the Study of Long-term Economic Trends (ISLET).<br /><br /><a href="http://www.nakedcapitalism.com/2012/04/michael-hudson.html" target="_blank">http://www.nakedcapitalism.com/2012/04/michael-hudson.html </a><br /><br />[9.00] Back in the 1960s, I ( Michael Hudson )was Chase Manhattan Bank’s balance of payments analyst, and my job was to focus on the Latin American countries: Argentina, Brazil, and Chile, and my job was to calculate how much of a balance of payments surplus they could generate, and the idea of the bank marketing department was the entire economic surplus could be used to pay debt service to the seven major Americam banks.<br /><br />[9:40] And pretty quickly we found out that there wasn’t any surplus to pay the banks, and there was an international department that got very upset because he said “Look, I get promoted for making loans, and the real estate guys are making all the loans, you’re telling us they can’t afford to repay!” And he took it up to David Rockefeller, we went across the street to the Federal Reserve bank, and the Federal Reserve bank said “It’s in America’s interest to make these loans to Latin America. Mr. Hudson, according to your calculations, Britain can’t afford to replay any more.” “That’s right. I don’t see any way in which it can get the money to repay the debt.” And the Federal Reserve man said “Ah! But did you take into account the fact that the US Treasury is always going to lend Britain the money to pay? We will never let it go down.” I said, “Well, that’s a deus ex machina from outside the system. Yes, you can lend them the money to repay.”<br /><br />Transcript of interview with Michael Hudson former Chase Manhattan Global Bank Balance of Payments Analyst - How Financial Parasites and Debt Bondage Destroy the Global Economy.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><a href="http://michael-hudson.com/2015/10/rewriting-economic-thought/" target="_blank">http://michael-hudson.com/2015/10/rewriting-economic-thought/</a></span><br />
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<span data-offset-key="5eind-0-0" style="font-family: inherit;"><span style="font-size: large;">Steve Keen was formerly an associate professor of economics at University of Western Sydney, until he applied for voluntary redundancy in 2013, due to the closure of the economics program at the university.[2] In autumn 2014 he became a professor and Head of the School of Economics, History and Politics at Kingston University in London. He is also a Fellow at the Centre for Policy Development.
His website contains a mountain of data of the debt situations of many nations, including New Zealand. He is also a mountain of knowledge in regards to why and how the money system funding structures of the present failed economic orthodoxy need reforming.</span></span></div>
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<span data-offset-key="8eo02-0-0" style="font-family: inherit;"><span style="font-size: large;"><a href="http://www.profstevekeen.com/" target="_blank">http://www.profstevekeen.com/</a></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Nomi Prins</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Nomi Prins is a renowned journalist, author and speaker. Her latest book, <em style="border-image-outset: initial; border-image-repeat: initial; border-image-slice: initial; border-image-source: initial; border-image-width: initial; border: 0px; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">All the Presidents’ Bankers: The Hidden Alliances that Drive American Power</em>, is a groundbreaking narrative about the relationships of presidents to key bankers over the past century and how they impacted domestic and foreign policy. Her other books include <em style="border-image-outset: initial; border-image-repeat: initial; border-image-slice: initial; border-image-source: initial; border-image-width: initial; border: 0px; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">It Takes a Pillage: Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street</em>. She is also the author of <em style="border-image-outset: initial; border-image-repeat: initial; border-image-slice: initial; border-image-source: initial; border-image-width: initial; border: 0px; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Other People’s Money: The Corporate Mugging of America</em>, which was chosen as a Best Book of 2004 by The Economist, Barron’s and The Library Journal.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Nomi’s insights comes from having worked as a Managing Director at Goldman Sachs, a Senior Managing Director and head of the international analytics group at Bear Stearns in London, a Senior Strategist at Lehman Brothers, and an analyst at the Chase Manhattan Bank (now JPM Chase) which she joined at age 19. She holds a Bachelors of Science degree in Mathematics from SUNY Purchase, and a Masters of Science degree in Statistics and Operations Research from New York University, where she also completed all coursework for a PhD in Statistics.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">She has appeared on television numerous times: internationally on BBC, RtTV, and nationally on CNN, CNBC, MSNBC, CSPAN, Democracy Now, Fox and PBS. She has been featured on hundreds of radio shows globally including CNNRadio, Marketplace, NPR, BBC, and Canadian Programming. She is featured in numerous documentaries shot by international production companies, alongside prominent thought-leaders, and Nobel Prize winners.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Her writing has been featured in The New York Times, Fortune, Newsday, Mother Jones, The Daily Beast, Newsweek, Truthdig, The Guardian, The Nation, Alternet, NY Daily News, LaVanguardia, and other publications.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Her engaging key-note speeches are thoughtfully tailored, and she has spoken at numerous venues including the Purdue University/Sinai Forum, University of Wisconsin Eau Claire Forum, Ohio State University Law School, Columbia University, Pepperdine Graduate School of Business, Manhattan College, National Consumer Law Center, Environmental Grantmakers Association, NASS Spinal Surgeons Conference, and the Mexican Senate.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">She is a member of Senator Bernie Sanders (I-VT) Federal Reserve Reform Advisory Council, and is listed as one of <a href="http://topwonks.org/?s=nomi+prins" style="border: 0px; color: #fe2712; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; word-wrap: break-word;" target="_blank">America’s TopWonks.</a> She is on the advisory board of the whistle-blowing organization ExposeFacts, and a board member of the animal welfare and wildlife conservation group, Born Free USA. She is currenty a Senior Fellow at the non-partisan public policy think-tank, <a href="http://www.demos.org/" style="border: 0px; color: #fe2712; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; word-wrap: break-word;" target="_blank">Demos</a>.</span></div>
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Nomi Prins Public Banking<br /><a href="https://www.youtube.com/watch?v=msgMAx1dNs0" target="_blank">https://www.youtube.com/watch?v=msgMAx1dNs0</a></span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><span style="background-color: white;"><span style="background-color: #fcfcfc;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #333333;">William White, a former deputy governor of the Bank of Canada, and a former head of the Monetary and Economic Department of the Bank for International </span>Settlements,<span style="color: #333333;"> is Chairman of the Economic and Development Review Committee at the OECD.</span><br />William White website<br /><span style="color: #333333;"><a href="http://www.williamwhite.ca/" target="_blank">http://www.williamwhite.ca/</a></span></span></span></span></span><br />
<span style="background-color: #fcfcfc; color: #333333; font-family: , "helvetica" , "roboto" , "arial" , serif; letter-spacing: 0.5px; text-align: center;"><span style="font-size: large;">Overt Monetary Financing (OMF) and Crisis Management</span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><span style="background-color: white; color: #1d2129;"><a href="https://www.project-syndicate.org/blog/overt-monetary-financing--omf--and-crisis-management" target="_blank">https://www.project-syndicate.org/blog/overt-monetary-financing--omf--and-crisis-management</a><br /><br /><span style="font-family: "arial" , "helvetica" , sans-serif;">Ann Pettifor</span></span><br style="background-color: white; color: #1d2129; font-family: Helvetica, Arial, sans-serif;" /><span style="background-color: white; color: #1d2129; font-family: "helvetica" , "arial" , sans-serif;">Ann Pettifor's work and writing has concentrated on the international financial architecture, the sovereign debts of the poorest countries, and the rise in sovereign, corporate and private debt in OECD economies. Her latest book, Just Money: how society can break the despotic power of finance was published by Commonwealth in 2014. She is well known for h</span><span class="text_exposed_show" style="background-color: white; color: #1d2129; display: inline; font-family: "helvetica" , "arial" , sans-serif;">er leadership of an organisation Jubilee 2000, that placed the debts of the poorest countries on the global political agenda, and brought about both substantial debt cancellation, and radical policy changes, at national and international levels. In 2003 she edited the new economics foundation's ‘The Real World Economic Outlook’ (Palgrave) with a prescient sub-title: ‘the legacy of globalisation: debt and deflation’. In 2006 Palgrave published her book: “The coming first world debt crisis”. In 2008 she co-authored “The Green New Deal” and in 2010 co-authored an essay with Professor Victoria Chick: “The economic consequences of Mr. Osborne.”</span><span style="font-family: "arial" , "helvetica" , sans-serif;">Her website is a wealth of knowledge in regards to the money system funding structure issue;</span><br /><a href="http://www.primeeconomics.org/%C2%A0" style="font-family: arial, helvetica, sans-serif;" target="_blank">http://www.primeeconomics.org/ </a><br /><br /><span style="font-family: "arial" , "helvetica" , sans-serif;">William Black</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">A financial system regulator of the highest knowledge and integrity who knows what needs to be kept an eye on.<br /><br />William Black jailed 1000 odd bankers in the US back in 1980's when they committed the same crimes they did during the 2008 global mass counterfeit credit crisis - for which hardly any of the frauds have been brought to justice.<br /><br />Which is the prime cause of the massive inequality in the world that is now leading to massive civil unrest.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Written here;<br /><br /><a href="http://www.alternet.org/economy/how-elite-economic-hucksters-drive-americas-biggest-fraud-epidemics" target="_blank">http://www.alternet.org/economy/how-elite-economic-hucksters-drive-americas-biggest-fraud-epidemics</a><br /><br /><a href="http://neweconomicperspectives.org/2012/10/the-best-way-to-rob-a-bank-is-still-to-own-one-a-postscript.html" target="_blank">http://neweconomicperspectives.org/2012/10/the-best-way-to-rob-a-bank-is-still-to-own-one-a-postscript.html</a></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Videos here;<br />With transcript<br /><a href="http://www.pbs.org/moyers/journal/04032009/watch.html" target="_blank">http://www.pbs.org/moyers/journal/04032009/watch.html</a><br /><br /><a href="https://www.youtube.com/watch?v=-JBYPcgtnGE" target="_blank">https://www.youtube.com/watch?v=-JBYPcgtnGE</a> </span><br />
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<span style="font-size: large;"><a class="profileLink" data-hovercard="/ajax/hovercard/hovercard.php?id=1752145991724901&extragetparams=%7B%22hc_location%22%3A%22ufi%22%7D" dir="ltr" href="https://www.facebook.com/DiMartinoBooth/?hc_location=ufi" style="color: #365899; font-family: Helvetica, Arial, sans-serif; text-decoration-line: none; white-space: normal;" target="_blank">Danielle DiMartino Booth</a><span style="font-family: "helvetica" , "arial" , sans-serif; white-space: normal;"> has given a modern example top up to my inspiration. After failing in attempting to change the immoral ways of the US Federal Reserve from within for many years she has resigned and now gone independent.</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><span style="font-family: "helvetica" , "arial" , sans-serif; white-space: normal;">She recently (2017) published a book titled Fed Up - An insiders view of why the Federal Reserve is bad for America - which imho is a must read for anyone in state services anywhere in the world.</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><span style="font-family: "helvetica" , "arial" , sans-serif; white-space: normal;">When asked why she continues with her quest after many setbacks - she says because it is just the right thing to do.</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><span style="font-family: "helvetica" , "arial" , sans-serif; white-space: normal;">US Federal Reserve Whistleblower Danielle DiMartino Booth.</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><a class="" dir="ltr" href="https://l.facebook.com/l.php?u=http%3A%2F%2Fdimartinobooth.com%2F&h=ATNRvKJ7ItjIFjgM6cPUeuYgJ-tyuQcsQP6XJwDJ98KEAaFxW_HrqmcY0SO2-W2Zj-7lW5yjk2weDi_GHtSpSNUn0OlkXpCDN8twTr1uymbINyx2rwda7DLLI2CszuxTfE_xdBJ2rWAf9EFP4lGrTFyvPA" rel=" noopener" style="color: #365899; font-family: Helvetica, Arial, sans-serif; text-decoration-line: none; white-space: normal;" target="_blank">http://dimartinobooth.com/</a><span style="font-family: "helvetica" , "arial" , sans-serif; white-space: normal;"> </span></span><br />
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<span style="font-size: large;"><span style="font-family: Helvetica, Arial, sans-serif; white-space: normal;">ABOUT FED UP</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><span style="font-family: Helvetica, Arial, sans-serif; white-space: normal;">A Federal Reserve insider pulls back the curtain on the secretive institution that controls America’s economy</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><span style="font-family: Helvetica, Arial, sans-serif; white-space: normal;">After correctly predicting the housing crash of 2008 and quitting her high-ranking Wall Street job, Danielle DiMartino Booth was surprised to find herself recruited as an analyst at the Federal Reserve Bank of Dallas, one of the regional centers of our complicated and widely misunderstood Federal Reserve System. She was shocked to discover just how much tunnel vision, arrogance, liberal dogma, and abuse of power drove the core policies of the Fed.</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><span style="font-family: Helvetica, Arial, sans-serif; white-space: normal;">DiMartino Booth found a cabal of unelected academics who made decisions without the slightest understanding of the real world, just a slavish devotion to their theoretical models. Over the next nine years, she and her boss, Richard Fisher, tried to speak up about the dangers of Fed policies such as quantitative easing and deeply depressed interest rates. But as she puts it, “In a world rendered unsafe by banks that were too big to fail, we came to understand that the Fed was simply too big to fight.”</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><span style="font-family: Helvetica, Arial, sans-serif; white-space: normal;">Now DiMartino Booth explains what really happened to our economy after the fateful date of December 8, 2008, when the Federal Open Market Committee approved a grand and unprecedented experiment: lowering interest rates to zero and flooding America with easy money. As she feared, millions of individuals, small businesses, and major corporations made rational choices that didn’t line up with the Fed’s “wealth effect” models. The result: eight years and counting of a sluggish “recovery” that barely feels like a recovery at all.</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><span style="font-family: Helvetica, Arial, sans-serif; white-space: normal;">While easy money has kept Wall Street and the wealthy afloat and thriving, Main Street isn’t doing so well. Nearly half of men eighteen to thirty-four live with their parents, the highest level since the end of the Great Depression. Incomes are barely increasing for anyone not in the top ten percent of earners. And for those approaching or already in retirement, extremely low interest rates have caused their savings to stagnate. Millions have been left vulnerable and afraid.</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><span style="font-family: Helvetica, Arial, sans-serif; white-space: normal;">Perhaps worst of all, when the next financial crisis arrives, the Fed will have no tools left for managing the panic that ensues. And then what?</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><span style="font-family: Helvetica, Arial, sans-serif; white-space: normal;">DiMartino Booth pulls no punches in this exposé of the officials who run the Fed and the toxic culture they created. She blends her firsthand experiences with what she’s learned from dozens of high-powered market players, reams of financial data, and Fed documents such as transcripts of FOMC meetings.</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /><span style="font-family: Helvetica, Arial, sans-serif; white-space: normal;">Whether you’ve been suspicious of the Fed for decades or barely know anything about it, as DiMartino Booth writes, “Every American must understand this extraordinarily powerful institution and how it affects his or her everyday life, and fight back.”</span><br style="font-family: Helvetica, Arial, sans-serif; white-space: normal;" /></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Iain Parker<br /><br />There are also my own articles in regards the impact of criminal banking sector activity upon New Zealand - helped very much by having discovered and followed the works of the above-linked banking insiders turned reform advocates for over a decade now;<br /><br />Universal Public Credit Public Policy Submission</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">To whom it may concern,<br />Attempting to form public policy for equal economic opportunity of all citizens without a full knowledge of the function of money as invented and intended - that this submission details - is doing so by looking at 1/3 of a many piece puzzle forced together in frustrated confusion - thinking its complete - when 2/3 of the picture needed in the middle to make clear sense of it all - is in-fact one large piece that has been hidden by a self-serving few to steal from wider society under false pretenses.<br /><br /><a href="http://publiccreditorbust.blogspot.co.nz/2013/04/universal-public-credit-public-policy.html" target="_blank">http://publiccreditorbust.blogspot.co.nz/2013/04/universal-public-credit-public-policy.html</a><br /><br />The New Zealand Money System De-Fib Documentary - Giving a jolt to the heart of an ailing democracy.<br /><a href="https://www.youtube.com/watch?v=sqOG-b1pJRw" target="_blank">https://www.youtube.com/watch?v=sqOG-b1pJRw </a><br /><br />A global economy based more upon thieving & killing of many for the profits of a few - than sharing & caring for the greater common good of humanity within boundaries of sustainable resources - I contest is a cancerous tumor threatening the survival of the progress of learned behaviours of common decency over self-destructive animal instincts - is in great need of the checks and balances detailed in this article linked below for the very same reasons evidenced in these articles linked below;</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br /><span style="background-color: #f9f7f5; color: #444444; font-family: "arial" , "helvetica" , sans-serif;">Social Credit with Demurrage</span></span><br />
<span style="color: #444444; font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><span style="background-color: #f9f7f5;"><a href="https://realcurrencies.wordpress.com/2013/05/18/social-credit-with-demurrage/" target="_blank">https://realcurrencies.wordpress.com/2013/05/18/social-credit-with-demurrage/</a></span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br /></span> <span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><a href="https://www.dailykos.com/stories/2015/1/14/1357742/-Re-conceptualizing-Money-for-a-21st-Century-Society" style="background: rgb(255, 255, 255); box-shadow: none; box-sizing: border-box; color: #ea7106; cursor: pointer; letter-spacing: 0.125px; outline-offset: -2px; outline: none !important; text-decoration-line: none;" target="_blank"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="box-sizing: border-box; white-space: nowrap;">Re-conceptualizing</span> Money for a 21st Century Society</span></a><br /><a href="http://www.dailykos.com/story/2015/01/15/1357742/-Re-conceptualizing-Money-for-a-21st-Century-Society" style="font-family: arial, helvetica, sans-serif;" target="_blank">http://www.dailykos.com/story/2015/01/15/1357742/-Re-conceptualizing-Money-for-a-21st-Century-Society</a></span></div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-88608026890276828592017-06-05T04:00:00.002-07:002017-06-05T04:04:19.190-07:00The Mandrake Mechanism (Counterfeiting of credit)<h1 class="western">
<span style="color: #004080;"><span style="font-family: "times new roman";"><u>The
Creature from Jekyll Island</u></span></span></h1>
<h5 align="CENTER" class="western">
<span style="color: #004080;"><span style="font-family: "times new roman";">by
G. Edward Griffin</span></span></h5>
<h2 align="CENTER" class="western">
<span style="color: #004080;"><span style="font-family: "times new roman";">Chapter 10</span></span></h2>
<h1 align="CENTER" class="western">
<span style="color: black;"> <span style="color: red;"><span style="font-family: "times new roman";"><u><b>What
is the Mandrake Mechanism?</b></u></span></span></span></h1>
<h3 align="CENTER" class="western">
<span style="color: red;"><span style="font-family: "times new roman";">It's the most
important financial lesson of your life!</span></span></h3>
<blockquote style="margin-left: 0cm; margin-right: 0cm;">
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;"><u><b>THE
MANDRAKE MECHANISM</b></u><b> . . . </b>What is it? It is
the method by which the Federal Reserve creates money out of nothing;
the concept of usury as the payment of interest on pretended loans;
the true cause of the hidden tax called inflation; the way in which
the Fed creates boom-bust cycles.</span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;">In the 1940s,
there was a comic strip character called Mandrake the Magician. His
specialty was creating things out of nothing and, when appropriate,
to make them disappear back into that same void. It is fitting,
therefore, that the process to be described in this section should be
named in his honor.<br /><br />In the previous chapters, we
examined the technique developed by the political and monetary
scientists to create money out of nothing for the purpose of lending.
This is not an entirely accurate description because it implies that
money is created first and then waits for someone to borrow it.<br /><br />On
the other hand, textbooks on banking often state that money is
created out of debt. This also is misleading because it implies that
debt exists first and then is converted into money. In truth, money
is not created until the instant it is borrowed. It is the act of
borrowing which causes it to spring into existence. And,
incidentally, it is the act of paying off the debt that causes it to
vanish. There is no short phrase that perfectly describes that
process. So, until one is invented along the way, we shall continue
using the phrase "create money out of nothing" and
occasionally add "for the purpose of lending" where
necessary to further clarify the meaning.<br /><br />So, let us now
. . . see just how far this money/debt-creation process has been
carried -- and how it works.<br /><br />The first fact that needs
to be considered is that our money today has no gold or silver behind
it whatsoever. The fraction is not 54% nor 15%. It is 0%. It has
traveled the path of all previous fractional money in history and
already has degenerated into pure fiat money. The fact that most of
it is in the form of checkbook balances rather than paper currency is
a mere technicality; and the fact that bankers speak about "reserve
ratios" is eyewash. The so-called reserves to which they refer
are, in fact, Treasury bonds and other certificates of debt.<br /><br />Our
money is "pure fiat" through and through.</span></span></span></blockquote>
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<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;">The second
fact that needs to be clearly understood is that, in spite of the
technical jargon and seemingly complicated procedures, the actual
mechanism by which the Federal Reserve creates money is quite simple.
They do it exactly the same way the goldsmiths of old did except, of
course, the goldsmiths were limited by the need to hold some precious
metals in reserve, whereas the Fed has no such restriction.<br /><br />The
Federal Reserve is candid.<br /><br />The Federal Reserve itself is
amazingly frank about this process.<br /><br />A booklet published
by the Federal Reserve Bank of New York tells us:</span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;"><b>"Currency
cannot be redeemed, or exchanged, for Treasury gold or any other
asset used as backing. The question of just what assets 'back'
Federal Reserve notes has little but bookkeeping
significance." </b><br />Elsewhere in the same
publication we are told: "Banks are creating money based on a
borrower's promise to pay (the IOU) . . . Banks create money by
'monetizing' the private debts of businesses and individuals."<br /><br />In
a booklet entitled Modern Money Mechanics, the Federal Reserve Bank
of Chicago says:<br /><br /><b>In the United States neither paper
currency nor deposits have value as commodities. Intrinsically, a
dollar bill is just a piece of paper. Deposits are merely book
entries. Coins do have some intrinsic value as metal, but generally
far less than their face amount.</b><br /><br />What, then, makes
these instruments -- checks, paper money, and coins -- acceptable at
face value in payment of all debts and for other monetary uses?
Mainly, it is the confidence people have that they will be able to
exchange such money for other financial assets and real goods and
services whenever they choose to do so. This partly is a matter of
law; currency has been designated "legal tender" by the
government -- that is, it must be accepted.<br /><br />In the fine
print of a footnote in a bulletin of the Federal Reserve Bank of St.
Louis, we find this surprisingly candid explanation:<br /><br /><b>Modern
monetary systems have a fiat base -- literally money by decree --
with depository institutions, acting as fiduciaries, creating
obligations against themselves with the fiat base acting in part as
reserves. The decree appears on the currency notes: "This note
is legal tender for all debts, public and private." </b><br />While
no individual could refuse to accept such money for debt repayment,
exchange contracts could easily be composed to thwart its use in
everyday commerce. However, a forceful explanation as to why money is
accepted is that the federal government requires it as payment for
tax liabilities. Anticipation of the need to clear this debt creates
a demand for the pure fiat dollars.<br /><br /><span style="color: red;"><u><b>Money
would vanish without debt.</b></u></span><br /><br />It is difficult for
Americans to come to grips with the fact that their total
money-supply is backed by nothing but debt, and it is even more mind
boggling to visualize that, if everyone paid back all that was
borrowed, <u>there would be no money left in existence</u>.<br /><br />That's
right, there would not be one penny in circulation -- all coins and
all paper currency would be returned to bank vaults -- and there
would be not one dollar in any one's checking account. In short, all
money would disappear.<br /><br />Marriner Eccles was the Governor
of the Federal Reserve System in 1941. On September 30 of that year,
Eccles was asked to give testimony before the House Committee on
Banking and Currency. The purpose of the hearing was to obtain
information regarding the role of the Federal Reserve in creating
conditions that led to the depression of the 1930s.<br /><br />Congressman
Wright Patman, who was Chairman of that committee, asked how the Fed
got the money to purchase two billion dollars worth of government
bonds in 1933.</span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;">This is the
exchange that followed.<br /><br /><b>Eccles: </b>We created
it.<br /><b>Patman: </b>Out of what?<br /><b>Eccles: </b>Out
of the right to issue credit money.<br /><b>Patman: </b>And
there is nothing behind it, is there, except our government's
credit?<br /><b>Eccles: </b>That is what our money system
is. If there were no debts in our money system, there wouldn't be any
money.<br /><br />It must be realized that, while money may
represent an asset to selected individuals, when it is considered as
an aggregate of the total money supply, it is not an asset at all. A
man who borrows $1,000 may think that he has increased his financial
position by that amount but he has not. His $1,000 cash asset is
offset by his $1,000 loan liability, and his net position is zero.
Bank accounts are exactly the same on a larger scale. Add up all the
bank accounts in the nation, and it would be easy to assume that all
that money represents a gigantic pool of assets which support the
economy. Yet, every bit of this money is owed by someone. Some will
owe nothing. Others will owe many times what they possess. All added
together, the national balance is zero. What we think is money is but
a grand illusion. <b>The reality is debt</b>.<br /><br />Robert
Hemphill was the Credit Manager of the Federal Reserve Bank in
Atlanta. In the foreword to a book by Irving Fisher, entitled 100%
Money, Hemphill said this:<br /><br /><b>If all the bank loans were
paid, no one could have a bank deposit, and there would not be a
dollar of coin or currency in circulation. This is a staggering
thought. We are completely dependent on the commercial banks. Someone
has to borrow every dollar we have in circulation, cash, or credit.
If the banks create ample synthetic money we are prosperous; if not,
we starve. We are absolutely without a permanent money system. When
one gets a complete grasp of the picture, the tragic absurdity of our
hopeless situation is almost incredible -- but there it is. </b></span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;">With the
knowledge that money in America is based on debt, it should not come
as a surprise to learn that the Federal Reserve System is not the
least interested in seeing a reduction in debt in this country,
regardless of public utterances to the contrary.</span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;">Here is the
bottom line from the System's own publications. The Federal Reserve
Bank of Philadelphia says:</span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;"><b>"A
large and growing number of analysts, on the other hand, now regard
the national debt as something useful, if not an actual blessing . .
. [They believe] the national debt need not be reduced at all." </b><br />The
Federal Reserve Bank of Chicago adds:</span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;"><b>"Debt
-- public and private -- is here to stay. It plays an essential role
in economic processes . . . What is required is not the abolition of
debt, but its prudent use and intelligent management."</b><br /><br /><u><b>What's
wrong with a little debt?</b></u><b> </b><br />There is a kind
of fascinating appeal to this theory. It gives those who expound it
an aura of intellectualism, the appearance of being able to grasp a
complex economic principle that is beyond the comprehension of mere
mortals. And, for the less academically minded, it offers the comfort
of at least sounding moderate. After all, what's wrong with a little
debt, prudently used and intelligently managed? The answer is
nothing, provided the debt is based on an honest transaction. There
is plenty wrong with it if it is "based upon fraud".<br /><br />An
honest transaction is one in which a borrower pays an agreed upon sum
in return for the temporary use of a lender's asset. That asset could
be anything of tangible value. If it were an automobile, for example,
then the borrower would pay "rent." If it is money, then
the rent is called "interest." Either way, the concept is
the same.<br /><br />When we go to a lender -- either a bank or a
private party -- and receive a loan of money, we are willing to pay
interest on the loan in recognition of the fact that the money we are
borrowing is an asset which we want to use. It seems only fair to pay
a rental fee for that asset to the person who owns it. It is not easy
to acquire an automobile, and it is not easy to acquire money -- real
money, that is. If the money we are borrowing was earned by someone's
labor and talent, they are fully entitled to receive interest on it.
But what are we to think of money that is created by the mere stroke
of a pen or the click of a computer key? Why should anyone collect a
rental fee on that?<br /><br />When banks place credits into your
checking account, they are merely pretending to lend you money. In
reality, they have nothing to lend. Even the money that non-indebted
depositors have placed with them was originally created out of
nothing in response to someone else's loan. So what entitles the
banks to collect rent on nothing? It is immaterial that men
everywhere are forced by law to accept these nothing certificates in
exchange for real goods and services. We are talking here, not about
what is legal, but what is moral. As Thomas Jefferson observed at the
time of his protracted battle against central banking in the United
States, <b>"No one has a natural right to the trade of
money lender, but he who has money to lend."</b><br /><br /><u><b>Third
reason to abolish the system.</b></u><b> </b><br />Centuries
ago, usury was defined as any interest charged for a loan. Modern
usage has redefined it as excessive interest. Certainly, any amount
of interest charged for a pretended loan is excessive. The
dictionary, therefore, needs a new definition.</span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;"><b>Usury: The
charging of any interest on a loan of fiat money. </b><br />Let
us, therefore, look at debt and interest in this light. Thomas Edison
summed up the immorality of the system when he said:</span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;"><b>People who
will not turn a shovel of dirt on the project [Muscle Shoals] nor
contribute a pound of materials will collect more money . . . than
will the people who will supply all the materials and do all the
work. </b><br />Is that an exaggeration? Let us consider the
purchase of a $100,000 home in which $30,000 represents the cost of
the land, architect's fee, sales commissions, building permits, and
that sort of thing and $70,000 is the cost of labor and building
materials. If the home buyer puts up $30,000 as a down payment, then
$70,000 must be borrowed. If the loan is issued at 11% over a 30-year
period, the amount of interest paid will be $167,806. That means the
amount paid to those who loan the money is about 2 1/2 times greater
than paid to those who provide all the labor and all the materials.
It is true that this figure represents the time-value of that money
over thirty years and easily could be justified on the basis that a
lender deserves to be compensated for surrendering the use of his
capital for half a lifetime. But that assumes the lender actually had
something to surrender, that he had earned the capital, saved it, and
then loaned it for construction of someone else's house. What are we
to think, however, about a lender who did nothing to earn the money,
had not saved it, and, in fact, simply created it out of thin
air?<br /><br /><u><b>What is the time-value of nothing?</b></u><b> </b><br />As
we have already shown, every dollar that exists today, either in the
form of currency, checkbook money, or even credit card money -- in
other words, our entire money supply -- exists only because it was
borrowed by someone; perhaps not you, but someone.<br /><br /><b>That
means all the American dollars in the entire world are earning daily
and compounding interest for the banks which created them. </b>A
portion of every business venture, every investment, every profit,
every transaction which involves money -- and that even includes
losses and the payment of taxes -- a portion of all that is earmarked
as payment to a bank.<br /><br />And what did the banks do to earn
this perpetually flowing river of wealth? Did they lend out their own
capital obtained through investment of stockholders? Did they lend
out the hard-earned savings of their depositors? No, neither of these
were their major source of income. They simply waved the magic wand
called fiat money.<br /><br />The flow of such unearned wealth
under the guise of interest can only be viewed as usury of the
highest magnitude. Even if there were no other reasons to abolish the
Fed, the fact that it is the supreme instrument of usury would be
more than sufficient by itself.</span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;"><u><b>Who
creates the money to pay the interest?</b></u><b> </b><br />One
of the most perplexing questions associated with this process is
"Where does the money come from to pay the interest?" If
you borrow $10,000 from a bank at 9%, you owe $10,900. But the bank
only manufactures $10,000 for the loan. It would seem, therefore,
that there is no way that you -- and all others with similar loans --
can possibly pay off your indebtedness. The amount of money put into
circulation just isn't enough to cover the total debt, including
interest. This has led some to the conclusion that it is necessary
for you to borrow the $900 for interest, and that, in turn, leads to
still more interest. The assumption is that, the more we borrow, the
more we have to borrow, and that debt based on fiat money is a never
ending spiral leading inexorably to more and more debt.<br /><br />This
is a partial truth. It is true that there is not enough money created
to include the interest, but it is a fallacy that the only way to pay
it back is to borrow still more. The assumption fails to take into
account the exchange value of labor. Let us assume that you pay back
your $10,000 loan at the rate of approximately $900 per month and
that about $80 of that represents interest. You realize you are hard
pressed to make your payments so you decide to take on a part-time
job.<br /><br />The bank, on the other hand, is now making $80
profit each month on your loan. Since this amount is classified as
"interest," it is not extinguished as is the larger portion
which is a return of the loan itself. So this remains as spendable
money in the account of the bank. The decision then is made to have
the bank's floors waxed once a week. You respond to the ad in the
paper and are hired at $80 per month to do the job. The result is
that you earn the money to pay the interest on your loan, and -- this
is the point -- the money you receive is the same money which you
previously had paid. As long as you perform labor for the bank each
month, the same dollars go into the bank as interest, then out of the
revolving door as your wages, and then back into the bank as loan
repayment.<br /><br />It is not necessary that you work directly
for the bank. No matter where you earn the money, its origin was a
bank and its ultimate destination is a bank. The loop through which
it travels can be large or small, but the fact remains all interest
is paid eventually by human effort. And the significance of that fact
is even more startling than the assumption that not enough money is
created to pay back the interest. It is that the total of this human
effort ultimately is for the benefit of those who create fiat
money.<br /><br /><u>It is a form of modern serfdom in which the
great mass of society works as indentured servants to a ruling class
of financial nobility.</u><u><b>Understanding the
Illusion . . .</b></u><b> </b><br />That's really all one
needs to know about the operation of the banking cartel under the
protection of the Federal Reserve. But it would be a shame to stop
here without taking a look at the actual cogs, mirrors, and pulleys
that make the magical mechanism work. It is a truly fascinating
engine of mystery and deception.<br /><br />Let us, therefore, turn
our attention to the actual process by which the magicians create the
illusion of modern money. First we shall stand back for a general
view to see the overall action.<br /><br />Then we shall move in
closer and examine each component in detail.<br /><br /><u><b>The
Mandrake Mechanism: An Overview</b></u><b> </b><br />The
entire function of this machine is to convert debt into money. It's
just that simple. First, the Fed takes all the government bonds which
the public does not buy and writes a check to Congress in exchange
for them. (It acquires other debt obligations as well, but government
bonds comprise most of its inventory.) There is no money to back up
this check. These fiat dollars are created on the spot for that
purpose. By calling those bonds "reserves," the Fed then
uses them as the base for creating nine (9) additional dollars for
every dollar created for the bonds themselves. The money created for
the bonds is spent by the government, whereas the money created on
top of those bonds is the source of all the bank loans made to the
nation's businesses and individuals. The result of this process is
the same as creating money on a printing press, but the illusion is
based on an accounting trick rather than a printing trick.<br /><br />The
bottom line is that Congress and the banking cartel have entered into
a partnership in which the cartel has the privilege of collecting
interest on money which it creates out of nothing, a perpetual
override on every American dollar that exists in the
world.<br /><br />Congress, on the other hand, has access
to <u>unlimited funding without having to tell the voters their
taxes are being raised through the process of inflation</u>. If you
understand this paragraph, you understand the Federal Reserve
System.<br /><br />Now for a more detailed view. There are three
general ways in which the Federal Reserve creates fiat money out of
debt.<br /><br />One is by making loans to the member banks through
what is called the Discount Window.<br /><br />The second is by
purchasing Treasury bonds and other certificates of debt through what
is called the Open Market Committee.<br /><br />The third is by
changing the so-called reserve ratio that member banks are required
to hold. Each method is merely a different path to the same
objective: taking IOUs and converting them into spendable
money.<br /><br /><u><b>THE DISCOUNT WINDOW</b></u><b> </b><br />The
Discount Window is merely bankers' language for the loan window. When
banks run short of money, the Federal Reserve stands ready as the
"bankers' bank" to lend it. There are many reasons for them
to need loans. Since they hold "reserves" of only about one
or two per cent of their deposits in vault cash and eight or nine per
cent in securities, their operating margin is extremely thin. It is
common for them to experience temporary negative balances caused by
unusual customer demand for cash or unusually large clusters of
checks all clearing through other banks at the same time. Sometimes
they make bad loans and, when these former "assets" are
removed from their books, their "reserves" are also
decreased and may, in fact, become negative. Finally, there is the
profit motive. When banks borrow from the Federal Reserve at one
interest rate and lend it out at a higher rate, there is an obvious
advantage. But that is merely the beginning.</span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;">When a bank
borrows a dollar from the Fed, it becomes a one-dollar
reserve.<br /><br />Since the banks are required to keep reserves
of only about ten per cent, they actually can loan up to nine dollars
for each dollar borrowed.<br /><br />Let's take a look at the math.
Assume the bank receives $1 million from the Fed at a rate of 8%. The
total annual cost, therefore, is $80,000 (.08 X $1,000,000). The bank
treats the loan as a cash deposit, which means it becomes the basis
for manufacturing an additional $9 million to be lent to its
customers. If we assume that it lends that money at 11% interest, its
gross return would be $990,000 (.11 X $9,000,000). Subtract from this
the bank's cost of $80,000 plus an appropriate share of its overhead,
and we have a net return of about $900,000. In other words, the bank
borrows a million and can almost double it in one year. That's
leverage! But don't forget the source of that leverage: the
manufacture of another $9 million which is added to the nation's
money supply.<br /><br /><u><b>THE OPEN MARKET OPERATION</b></u><b> </b><br />The
most important method used by the Federal Reserve for the creation of
fiat money is the purchase and sale of securities on the open market.
But, before jumping into this, a word of warning. Don't expect what
follows to make any sense. Just be prepared to know that this is how
they do it.<br /><br />The trick lies in the use of words and
phrases which have technical meanings quite different from what they
imply to the average citizen. So keep your eye on the words. They are
not meant to explain but to deceive. In spite of first appearances,
the process is not complicated. It is just absurd.</span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;"><u><b>THE
MANDRAKE MECHANISM: A DETAILED VIEW</b></u><b> </b><br />Start
with . . .<br /><br /><u><b>GOVERNMENT DEBT</b></u><b> </b><br />The
federal government adds ink to a piece of paper, creates impressive
designs around the edges, and calls it a bond or Treasury note. It is
merely a promise to pay a specified sum at a specified interest on a
specified date. As we shall see in the following steps, this debt
eventually becomes the foundation for almost the entire nation's
money supply. In reality, the government has created cash, but it
doesn't yet look like cash. To convert these IOUs into paper bills
and checkbook money is the function of the Federal Reserve System. To
bring about that transformation, the bond is given to the Fed where
it is then classified as a . . .<br /><br /><u><b>SECURITIES
ASSET</b></u><b> </b><br />An instrument of government debt is
considered an asset because it is assumed the government will keep
its promise to pay. This is based upon its ability to obtain whatever
money it needs through taxation. Thus, the strength of this asset is
the power to take back that which it gives. So the Federal Reserve
now has an "asset" which can be used to offset a liability.
It then creates this liability by adding ink to yet another piece of
paper and exchanging that with the government in return for the
asset. That second piece of paper is a . . .<br /><br /><u><b>FEDERAL
RESERVE CHECK</b></u><b> </b><br />There is no money in any
account to cover this check. Anyone else doing that would be sent to
prison. It is legal for the Fed, however, because Congress wants the
money, and this is the easiest way to get it. (To raise taxes would
be political suicide; to depend on the public to buy all the bonds
would not be realistic, especially if interest rates are set
artificially low; and to print very large quantities of currency
would be obvious and controversial.) This way, the process is
mysteriously wrapped up in the banking system. The end result,
however, is the same as turning on government printing presses and
simply manufacturing fiat money (money created by the order of
government with nothing of tangible value backing it) to pay
government expenses. Yet, in accounting terms, the books are said to
be "balanced" because the liability of the money is offset
by the "asset" of the IOU. The Federal Reserve check
received by the government then is endorsed and sent back to one of
the Federal Reserve banks where it now becomes a . . .<br /><br /><u><b>GOVERNMENT
DEPOSIT</b></u><b> </b><br />Once the Federal Reserve check
has been deposited into the government's account, it is used to pay
government expenses and, thus, is transformed into many . .
.<br /><br /><u><b>GOVERNMENT CHECKS</b></u><b> </b><br />These
checks become the means by which the first wave of fiat money floods
into the economy. Recipients now deposit them into their own bank
accounts where they become . . .<br /><br /><u><b>COMMERCIAL BANK
DEPOSITS</b></u><b> </b><br />Commercial bank deposits
immediately take on a split personality.<br /><br />On the one
hand, they are liabilities to the bank because they are owed back to
the depositors. But, as long as they remain in the bank, they also
are considered as assets because they are on hand. Once again, the
books are balanced: the assets offset the liabilities. But the
process does not stop there. Through the magic of fractional-reserve
banking, the deposits are made to serve an additional and more
lucrative purpose. To accomplish this, the on-hand deposits now
become reclassified in the books and called . . .<br /><br /><u><b>BANK
RESERVES</b></u><b> </b><br /><br />Reserves for what? Are these for
paying off depositors should they want to close out of their
accounts? No. That's the lowly function they served when they were
classified as mere assets. Now that they have been given the name of
"reserves," they become the magic wand to materialize even
larger amounts of fiat money. This is where the real action is: at
the level of the commercial banks. Here's how it works. The banks are
permitted by the Fed to hold as little as 10% of their deposits in
"reserve." That means, if they receive deposits of $1
million from the first wave of fiat money created by the Fed, they
have $900,000 more than they are required to keep on hand ($1 million
less 10% reserve). In bankers' language, that $900,000 is called . .
. </span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;"><u><b>EXCESS
RESERVES</b></u><b> </b><br />The word "excess" is a
tip off that these so-called reserves have a special destiny. Now
that they have been transmuted into an “excess,” they are
considered as available for lending. And so in due course these
excess reserves are converted into . . .<br /><br /><u><b>BANK
LOANS</b></u><b> </b><br />But wait a minute. How can this
money be loaned out when it is owned by the original depositors who
are still free to write checks and spend it any time they wish? The
answer is that, when the new loans are made, they are not made with
the same money at all. They are made with brand new money created out
of thin air for that purpose. The nation's money supply simply
increases by ninety per cent of the bank's deposits. Furthermore,
this new money is far more interesting to the banks than the old. The
old money, which they received from depositors, requires them to pay
out interest or perform services for the privilege of using it. But,
with the new money, the banks collect interest, instead, which is not
too bad considering it cost them nothing to make. Nor is that the end
of the process. When this second wave of fiat money moves into the
economy, it comes right back into the banking system, just as the
first wave did, in the form of . . .<br /><br /><u><b>MORE
COMMERCIAL BANK DEPOSITS</b></u><b> </b><br />The process now
repeats but with slightly smaller numbers each time around. What was
a "loan" on Friday comes back into the bank as a "deposit"
on Monday. The deposit then is reclassified as a "reserve"
and ninety per cent of that becomes an "excess" reserve
which, once again, is available for a new "loan." Thus, the
$1 million of first wave fiat money gives birth to $900,000 in the
second wave, and that gives birth to $810,000 in the third wave
($900,000 less 10% reserve). It takes about twenty-eight times
through the revolving door of deposits becoming loans becoming
deposits becoming more loans until the process plays itself out to
the maximum effect, which is . . .<br /><br /><u><b>BANK FIAT MONEY
= UP TO 9 TIMES GOVERNMENT DEBT</b></u><b><br /></b><br />The amount of
fiat money created by the banking cartel is approximately nine times
the amount of the original government debt which made the entire
process possible. When the original debt itself is added to that
figure, we finally have . . .<br /><br /><u><b>TOTAL FIAT MONEY =
UP TO 10 TIMES GOVERNMENT</b></u><br /><br />The total amount of
fiat money created by the Federal Reserve and the commercial banks
together is approximately ten times the amount of the underlying
government debt. To the degree that this newly created money floods
into the economy in excess of goods and services, it causes the
purchasing power of all money, both old and new, to decline. Prices
go up because the relative value of the money has gone down. The
result is the same as if that purchasing power had been taken from us
in taxes. The reality of this process, therefore, is that it is a . .
.<br /><br /><span style="color: red;"><u><b>HIDDEN TAX = UP TO 10
TIMES THE NATIONAL DEBT</b></u></span><br /><br />Without realizing it,
Americans have paid over the years, in addition to their federal
income taxes and excise taxes, a completely hidden tax equal to many
times the national debt! And that still is not the end of the
process. Since our money supply is purely an arbitrary entity with
nothing behind it except debt, its quantity can go down as well as
up. When people are going deeper into debt, the nation's money supply
expands and prices go up, but when they pay off their debts and
refuse to renew, the money supply contracts and prices tumble. That
is exactly what happens in times of economic or political
uncertainty. This alternation between period of expansion and
contraction of the money supply is the underlying cause of . .
.<br /><br /><u><b>BOOMS, BUSTS, AND DEPRESSIONS</b></u><b> </b><br />Who
benefits from all of this? Certainly not the average citizen.<br /><br />The
only beneficiaries are the political scientists in Congress who enjoy
the effect of unlimited revenue to perpetuate their power, and the
monetary scientists within the banking cartel called the Federal
Reserve System who have been able to harness the American people,
without their knowing it, to the yoke of modern feudalism.<br /><br /><u><b>RESERVE
RATIOS</b></u><b> </b><br />The previous figures are based on
a "reserve" ratio of 10% (a money-expansion ratio of
10-to-1). It must be remembered, however, that this is purely
arbitrary. Since the money is fiat with no previous-metal backing,
there is no real limitation except what the politicians and money
managers decide is expedient for the moment. Altering this ratio is
the third way in which the Federal Reserve can influence the nation's
supply of money. The numbers, therefore, must be considered as
transient.<br /><br />At any time there is a "need" for
more money, the ratio can be increased to 20-to-1 or 50-to-1, or the
pretense of a reserve can be dropped altogether. There is virtually
no limit to the amount of fiat money that can be manufactured under
the present system.<br /><br /><u><b>NATIONAL DEBT NOT NECESSARY
FOR INFLATION</b></u><b> </b><br />Because the Federal Reserve
can be counted on to "monetize" (convert into money)
virtually any amount of government debt, and because this process of
expanding the money supply is the primary cause of inflation, it is
tempting to jump to the conclusion that federal debt and inflation
are but two aspects of the same phenomenon. This, however, is not
necessarily true. It is quite possible to have either one without the
other.<br /><br />The banking cartel holds a monopoly in the
manufacture of money. Consequently, money is created only when IOUs
are "monetized" by the Fed or by commercial banks. When
private individuals, corporations, or institutions purchase
government bonds, they must use money they have previously earned and
saved. In other words, no new money is created, because they are
using funds that are already in existence. Therefore, the sale of
government bonds to the banking system is inflationary, but when sold
to the private sector, it is not. That is the primary reason the
United States avoided massive inflation during the 1980s when the
federal government was going into debt at a greater rate than ever
before in its history. By keeping interest rates high, these bonds
became attractive to private investors, including those in other
countries. Very little new money was created, because most of the
bonds were purchased with American dollars already in existence.
This, of course, was a temporary fix at best.<br /><br />Today,
those bonds are continually maturing and are being replaced by still
more bonds to include the original debt plus accumulated interest.
Eventually this process must come to an end and, when it does, the
Fed will have no choice but to literally buy back all the debt of the
'80s -- that is, to replace all of the formerly invested private
money with newly manufactured fiat money -- plus a great deal more to
cover the interest. Then we will understand the meaning of
inflation.<br /><br />On the other side of the coin, the Federal
Reserve has the option of manufacturing money even if the federal
government does not go deeper into debt. For example, the huge
expansion of the money supply leading up to the stock market crash in
1929 occurred at a time when the national debt was being paid off. In
every year from 1920 through 1930, federal revenue exceeded expenses,
and there were relatively few government bonds being offered. The
massive inflation of the money supply was made possible by converting
commercial bank loans into "reserves" at the Fed's discount
window and by the Fed's purchase of banker's acceptances, which are
commercial contracts for the purchase of goods.<br /><br />Now the
options are even greater. The Monetary Control Act of 1980 has made
it possible for the Creature to monetize virtually any debt
instrument, including IOUs from foreign governments. The apparent
purpose of this legislation is to make it possible to bail out those
governments which are having trouble paying the interest on their
loans from American banks. When the Fed creates fiat American dollars
to give foreign governments in exchange for their worthless bonds,
the money path is slightly longer and more twisted, but the effect is
similar to the purchase of U.S. Treasury Bonds. The newly created
dollars go to the foreign governments, then to the American banks
where they become cash reserves. Finally, they flow back into the U.S
money pool (multiplied by nine) in the form of additional loans. The
cost of the operation once again is born by the American citizen
through the loss of purchasing power. Expansion of the money supply,
therefore, and the inflation that follows, no longer even require
federal deficits. As long as someone is willing to borrow American
dollars, the cartel will have the option of creating those dollars
specifically to purchase their bonds and, by so doing, continue to
expand the money supply.<br /><br />We must not forget, however,
that one of the reasons the Fed was created in the first place was to
make it possible for Congress to spend without the public knowing it
was being taxed. Americans have shown an amazing indifference to this
fleecing, explained undoubtedly by their lack of understanding of how
the Mandrake Mechanism works. Consequently, at the present time, this
cozy contract between the banking cartel and the politicians is in
little danger of being altered. As a practical matter, therefore,
even though the Fed may also create fiat money in exchange for
commercial debt and for bonds of foreign governments, its major
concern likely will be to continue supplying Congress.<br /><br />The
implications of this fact are mind boggling. Since our money supply,
at present at least, is tied to the national debt, to pay off that
debt would cause money to disappear. Even to seriously reduce it
would cripple the economy. Therefore, as long as the Federal Reserve
exists, America will be, must be, in debt. </span></span></span></blockquote>
<blockquote>
<span style="color: black;"><span style="font-family: "verdana";"><span style="font-size: large;">The purchase
of bonds from other governments is accelerating in the present
political climate of internationalism. Our own money supply
increasingly is based upon their debt as well as ours, and they, too,
will not be allowed to pay it off even if they are able.<br /><br /><u><b>EXPANSION
LEADS TO CONTRACTION</b></u><b> </b><br />While it is true
that the Mandrake Mechanism is responsible for the expansion of the
money supply, the process also works in reverse. Just as money is
created when the Federal Reserve purchases bonds or other debt
instruments, it is extinguished by the sale of those same items. When
they are sold, the money is given back to the System and disappears
into the inkwell or computer chip from which it came. Then, the same
secondary ripple effect that created money through the commercial
banking system causes it to be withdrawn from the economy.
Furthermore, even if the Federal Reserve does not deliberately
contract the money supply, the same result can and often does occur
when the public decides to resist the availability of credit and
reduce its debt. A man can only be tempted to borrow, he cannot be
forced to do so.<br /><br />There are many psychological factors
involved in a decision to go into debt that can offset the easy
availability of money and a low interest rate: A downturn in the
economy, the threat of civil disorder, the fear of pending war, an
uncertain political climate, to name just a few. Even though the Fed
may try to pump money into the economy by making it abundantly
available, the public can thwart that move simply by saying no, thank
you. When this happens, the old debts that are being paid off are not
replaced by new ones to take their place, and the entire amount of
consumer and business debt will shrink. That means the money supply
also will shrink, because, in modern America, debt is money. And it
is this very expansion and contraction of the monetary pool -- a
phenomenon that could not occur if based upon the laws of supply and
demand -- that is at the very core of practically every boom and bust
that has plagued mankind throughout history.<br /><br />In
conclusion, it can be said that modern money is a grand illusion
conjured by the magicians of finance in politics. We are living in an
age of fiat money, and it is sobering to realize that every previous
nation in history that has adopted such money eventually was
economically destroyed by it. Furthermore, there is nothing in our
present monetary structure that offers any assurances that we may be
exempted from that morbid roll call.<br />Correction. There is
one. It is still within the power of Congress to abolish the Federal
Reserve System.<br /><br /><u><b>SUMMARY</b></u><b> </b><br />The
American dollar has no intrinsic value. It is a classic example of
fiat money with no limit to the quantity that can be produced. Its
primary value lies in the willingness of people to accept it and, to
that end, legal tender laws require them to do so.<br /><br />It is
true that our money is created out of nothing, but it is more
accurate to say that it is based upon debt. In one sense, therefore,
our money is created out of less than nothing. The entire money
supply would vanish into the bank vaults and computer chips if all
debts were repaid.<br /><br />Under the present System, therefore,
our leaders cannot allow a serious reduction in either the national
or consumer debt. Charging interest on pretended loans is usury, and
that has become institutionalized under the Federal Reserve
System.<br /><br />The Mandrake Mechanism by which the Fed converts
debt into money may seem complicated at first, but it is simple if
one remembers that the process is not intended to be logical but to
confuse and deceive. The end product of the Mechanism is artificial
expansion of the money supply, which is the root cause of the hidden
tax called inflation.<br /><br />This expansion then leads to
contraction and, together, they produce the destructive boom-bust
cycle that has plagued mankind throughout history wherever fiat money
has existed.</span></span></span></blockquote>
<span style="font-size: large;"><br /></span>
<div style="margin-bottom: 0cm;">
<br /></div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-29327458799452979332017-06-02T02:28:00.003-07:002017-06-02T02:30:37.455-07:00Steve Keen Says Don Brash Misleading New Zealand How Banking Really Works 28 May 2017 <div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;">28 May
2017 Radio New Zealand interview by Wallace Chapman, with world
renowned Prof of Economics, Steve Keen, re money system funding
structure fundamentals and the New Zealand economy;</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;">Full interview audio can be listened to here;</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;"><a href="http://www.radionz.co.nz/national/programmes/sunday/audio/201845436/steve-keen-the-coming-crash" target="_blank">http://www.radionz.co.nz/national/programmes/sunday/audio/201845436/steve-keen-the-coming-crash</a></span></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;">(Transcript
done & added by Iain Parker is in brackets)</span><br />
<span style="font-family: "arial" , sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;">He says
it’s all about debt – specifically private debt.</span></div>
“<span style="font-family: "arial" , sans-serif;">We’re focussing on the wrong
topic. We’re so focussed on government debt, what actually caused
the crisis was run away private debt.”</span><br />
<span style="font-family: "arial" , sans-serif;">And he says there are a number of
‘debt zombies’ in the world economy - New Zealand among them.</span><br />
<span style="font-family: "arial" , sans-serif;">He calls New Zealand ‘Schrodinger’s
Zombie’.</span><br />
<span style="font-family: "arial" , sans-serif;">The walking dead have already had a
financial crisis, he says, and have been experiencing weak growth,
while 'zombie-to-be' countries avoided the 2008/2009 crisis by
borrowing their way through it.</span><br />
<span style="font-family: "arial" , sans-serif;">Now they have a bigger debt burden
to deal with when the next crisis hits, he says.</span><br />
“<span style="font-family: "arial" , sans-serif;">New Zealand sits in both camps.
It had 190 percent of debt to GDP back in 2009, it bottomed out at
about 170 percent then went back up to 180 percent of GDP. Most of
that’s in the household sector so that’s driven the housing
bubble in New Zealand, which of course the authorities normally deny,
but it’s clearly there although in my opinion starting to turn
right now.</span><br />
“<span style="font-family: "arial" , sans-serif;">So you guys have had two bites
of the zombie cherry.”</span><br />
<span style="font-family: "arial" , sans-serif;">He says there is no doubt the
bubble will burst.</span><br />
<br />
<span style="font-family: "arial" , sans-serif;">Start;<br />(WC – Just on a
personal anecdote, listen to this steve, I can always recall, this is
a New Zealand, back in, just before the global financial crisis, so
early 2007, I was on a bus, and I saw this massive billboard, and I
was looking around, for, to buy a little apartment or something at
the time, you know had some savings, but it was a big billboard, and
it said it was an advertisement for a bank, and said no more weird
flatmates, 100 percent home loans.</span><br />
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;">Ive
always remembered that, never forgotten it, and I thought to myself,
how can that be, how can I call a bank and they can give me 100
percent deposit. I thought that was extraordinary, I thought then how
sustainable is that.</span></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;">SK -
Youre right, it was unsustainable, and this is the other part of the
logic which I cover a little bit in the book, as you are aware as
well that banks create money by lending, people think they lend
money, Ive actually imported a new term after I wrote the book,
rather than saying banks lend, if you and I, you know, if you wanted
to buy, I wanted to buy some New Zealand jewelery off you and you
lend me the money to buy it, then that is actual lending. </span>
</div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;">Youve
got to put aside money youve saved to give it to me, I then buy it,
you cant spend it while youve given it to me, then Ive got to pay you
back and its a bit like a seesaw.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;">If you
lend money to me, my spending power goes up, your goes down, but
overall the agregate doesnt change, and thats the model that
mainstream economists have a lending as well, so they ignore the
financial sector on that basis. If they are right, theyd be justified
in ignoring it as well, but what banks actually do, is they originate
money and debts. Im calling it bank originated debt or bombs, and
when you get a bombed in an economy, the banks are creating the money
literally out of double entry book keeping,literally out of nothing.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;">And,
when they do it that gives them a claim on real resources. So theyre
quite happy when the bubbles going on, to provide that hundred
percent finance, Ive even seen evidence of 120 percent.<br /><br />WC –
Wow<br /><br />SK – And, because they end up owning assets by double
entry bookkeeping.</span></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;">WC –
Wow, my goodness. None of us are going to be reassuring to the local
audience here to the New Zealand, to the local audience.</span></div>
<div style="margin-bottom: 0cm;">
<br /></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , sans-serif;">SK -
Particularly to Don Brash I might add, because I saw hes been in
newspapers deriding people who are talking about banks originating
money, and hes dead wrong. This is one of these classic things, even
central bank governors dont understand, some of them, how money and
banks operate.</span></div>
<span style="font-family: "arial" , sans-serif;">Thankfully some of them are waking
up to it and that includes Bundesbank of all things, which
contradicts, quite flatly contradicts Don brash on this particular
point.)</span><br />
<span style="font-family: "arial" , sans-serif;">End</span><br />
<span style="font-family: "arial" , sans-serif;"><br /></span>
“<span style="font-family: "arial" , sans-serif;">The bubble will burst in the
next one to two years - there’s been a real acceleration in house
prices since 2012, they’ve increased by about 60 percent. But what
I’m seeing now is the motivating force for rising house prices is
rising mortgage credit. The wind in that bubble is starting to run
out.”</span><br />
<span style="font-family: "arial" , sans-serif;">So what would he do if he was New
Zealand’s finance minister?</span><br />
“<span style="font-family: "arial" , sans-serif;">Because I’ve diagnosed the
problem as being private debt, I’d work out ways to get private
debt down. We’ve got two money factories in any capitalist economy:
one, the private banks who create money by creating debt and, the
other, the government which creates money by spending more than it
gets back in taxes, which it’s quite capable of doing because it
owns its own bank.</span><br />
“<span style="font-family: "arial" , sans-serif;">And we accept that bank’s
money for anything we have to purchase.”</span><br />
<span style="font-family: "arial" , sans-serif;">He wants to see the government
create money and transfer it to individuals to pay back debt.</span><br />
“<span style="font-family: "arial" , sans-serif;">I’d be making a transfer to
every private bank account but on condition that those who were in
debt had to pay their debt down, whereas those who weren’t in debt
got a cash injection - which you might say they’ve got to buy
shares with it if you wanted to control the inflationary impact.</span><br />
<br />
“<span style="font-family: "arial" , sans-serif;">That would replace too much
debt-based money with more fiat-based money and enable you to get out
of the accounting trap you get into when the private sector has more
debt than it can repay.”</span>Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-60095576002821577742017-01-02T20:29:00.003-08:002022-07-18T03:56:25.487-07:00The undeniable truth of New Zealand colonial era money system funding structure it still suffers.<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">The Reserve Bank (RBNZ) is starting to more openly tell the truth of the nations colonial era money system funding structures that we still suffer. <br /><br />Which means they are beginning to feel an increase in wider public knowledge and how it will look if they keeps hiding behind lies.<br /><br />This paper: <br /><br /><a href="https://www.rbnz.govt.nz/-/media/project/sites/rbnz/files/publications/financial-stability-reports/fsr-nov2015.pdf" target="_blank">http://www.rbnz.govt.nz/financial-stability/financial-stability-report/fsr2015-11/implications-of-global-liquidity-developments-for-new-zealand</a><br /><br />Titled - Implications of global liquidity developments for New Zealand - from the Nov 2015 Financial Stability Report, is the closest to the whole truth I have yet seen from the establishment, in regards to the fact that every unit of NZ credit or currency (not just significant proportion as it says) can be traced back to originating somewhere in the NZ economy as a loan of interest bearing credit owed to a non NZ Government, foreign lending institution, and that the OCR follows external influence, not leads;<br /><br />"There are three key channels through which New Zealand could be affected by declining market liquidity: the impact on New Zealand banks’ funding markets; the impact on short-term interest rates and monetary policy implementation; and the impact on the New Zealand government bond market.<br /><br />New Zealand banks fund a significant proportion of their balance sheets by accessing offshore wholesale debt markets. They do this by borrowing in foreign currency, then ‘swapping’ this back into NZD. Conditions in global financial markets are therefore an important determinant of New Zealand bank funding. New Zealand banks tend to focus on the primary market (new issues) rather than the secondary market for debt. Hence, funding liquidity is of more immediate importance than market liquidity. Funding liquidity refers to the ability of the banks to raise debt as required at a reasonable cost. Reserve Bank discussions with bank treasurers suggest that funding liquidity conditions have deteriorated somewhat in 2015, owing largely to greater market volatility caused by events such as the Greek crisis mid-year and recent turbulence tied to China.<br /><br />New Zealand banks typically use market makers to help facilitate the foreign currency swap leg involved in borrowing from offshore. Market makers take the other side of the transaction with New Zealand banks (providing NZD in exchange for foreign currency that the banks have raised), while charging a spread. This spread has widened as costs have increased for the institutions providing these market making services for the reasons described above. Overall, the cost increases have been manageable thus far, but this highlights the flow-on effects of changes in market liquidity to New Zealand entities seeking offshore funding."<br />end<br /><br />Now please consider the above, in relation to (below) how these Primary Wholesale Credit Institutions admit that they fund themselves and what that means for us;<br /><br />To learn how a rogue few within the banking sector, have turned criminal, in using the 1980's deregulation of banking, as an opportunity to commit control frauds, that steal the wealth of wider society into their own personal trust accounts, please read on;<br /><br />Although it is clear that over cooked unwise immigration and foreign criminals looking to launder their proceeds of crime into New Zealand assets, has had a detrimental impact upon the economy, when you know the truth of banking, you know that the criminal rogues within banking have had the greatest detrimental impact of all.<br /><br />The rogues have used the extraordinary privileges of banking that are little known by wider society, to rob society blind. By pursuing personal gains from commission and bonus based wage structures, share holder dividends and buy backs, that are tied to bank profits.</span><br />
<div>
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />They have cooked the credit books and loaned society massive amounts beyond fundamental normal course of business basis, than they knew there was ever the physical means to clear.<br /><br />Now as the penalty compound interest charges upon the massive amounts of private and government debt, that is counterfeit credit based, that is now priced into everything, it is sucking the lifeblood out of the economy.(Debt deflation)<br /><br />Counterfeit credit based purchasing power has also inflated the cost of land based assets beyond any fundamental normal course of business basis (Debt inflation) It is removing dignified access to them, for those left behind, attempting to make ends meet within the normal course of business real economy. <br /><br />The Truth about Banks<br /><br />IMF FINANCE & DEVELOPMENT, March 2016, Vol. 53, No. 1<br /><br />http://www.imf.org/external/pubs/ft/fandd/2016/03/kumhof.htm<br /><br />To summarize, our work builds on the fundamental fact that banks are not intermediaries of real loanable funds, as is generally assumed in the mainstream neoclassical macroeconomics literature. Rather, they are providers of financing, through the creation of new monetary purchasing power for their borrowers. Understanding this distinction has important implications for a host of practical questions......<br /><br />Practical implication<br /><br />Many policy prescriptions aim to encourage physical investment by promoting saving, which is believed to finance investment. The problem with this idea is that saving does not finance investment, financing and money creation do. Bank financing of investment projects does not require prior saving, but the creation of new purchasing power so that investors can buy new plants and equipment. Once purchases have been made and sellers (or those farther down the chain of transactions) deposit the money, they become savers in the national accounts statistics, but this saving is an accounting consequence—not an economic cause—of lending and investment. To argue otherwise is to confuse the respective macroeconomic roles of real resources (saving) and debt-based money (financing).<br /><br />The Bank of England is one of the senior most international financial institutions in the world. This from its March 2014 quarterly bulletin;<br />http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf<br /><br />• This article explains how the majority of money in the modern economy is created by commercial banks making loans.<br /><br />• Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits.<br /><br />• Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.<br />end<br /><br />Banking in New Zealand Fourth Edition - published by the New Zealand Bankers Association in 2006 - makes it very clear that presently every dollar of currency circulating in New Zealand's money system originates as an interest bearing loan of credit owed to a private owned lending institution. That supplies brand new credit and currency that did not already exist. Domestic banks act as a middleman organiser for larger foreign banks. There is no third party, ultimately only the lender and the banking institutions that sit at the end of the wholesale credit supply discount chain.<br /><br />Chapter 4 - The Creation of Money and Credit - is especially enlightening;<br /><br />https://issuu.com/iainparkerpubliccreditorbust/docs/nzba_banking_in_new_zealand_fourth_<br /><br />THE CREATION OF MONEY AND CREDIT<br /><br />what Actually Happens in reality, although the process outlined in the previous sections could occur, cash balances in bank vaults no longer act as a constraint on bank lending in the way that they might have up until the latter part of the 20th century....... <br />in such an environment, there is still scope for a bank to expand its lending and create credit, but it is dependent on there being net inflows of funds into the banking system as a whole. These inflows of funds may come from depositors from outside new Zealand (and we have seen significant inflows of funds from such sources in recent years), or from the government making net deposits of funds into the banking system (through its fiscal policy, as outlined below).<br /><br />We also have a situation where, since 1985, new Zealand banks have not had any specific reserve requirements applied to their deposit liabilities. This means that, in theory, banks could keep on creating credit and expanding their loan portfolios indefinitely. in such an environment, it is the cost of credit, based upon the costs that banks have to pay to raise the deposits, that becomes the constraint on the quantity of credit that is created. <br />end<br /><br />Back in 2010, Alan Bollard, the former New Zealand Reserve Bank Governor stated as plain as day in a book that he wrote, that some within the banking sector had used their position within banks to commit control frauds against New Zealand society. Yet only superficial band aids were ever applied and the scams have marched on regardless;<br /><br />Dr Alan Bollard Governor of the Reserve Bank of New Zealand 2002 - 2012.<br /><br />Excerpts from a book Alan Bollard published 1 Sept 2010;<br /><br />Crisis: One Central Bank Governor and the Global Financial Collapse<br /><br />Pg 20<br />Banking practices differ around the world, but we ensure ours meet international standards. These are set by a somewhat shadowy group called the Basel Committee on Banking Supervision. Comprised of representatives of large countries( not including New Zealand ), the group meets in Switzerland at the Bank of International Settlements (BIS). <br /><br />Pg 96<br />The Bank of International Settlements is an important institution, acting as a sort of central bank for central banks. Set up in 1930, originally to facilitate German World War 1 reparations, it has a checkered history but today offers modern banking services and provides a forum for central bankers.<br /><br />Pg 183<br />“In self-interest, banks may encourage New Zealanders to take on more debt than is good for them individually or deliver more external liability than is good for the country.”<br /><br />Pg 157<br />“Another governance worry related to the power and competence, or lack thereof, on the part of banks chief risk officers and risk committees. These officers assess the possible outcomes from any deal and decide whether the risks are acceptable under the banks mandated policies. We were now hearing about cases where risks had been miscalculated, procedures bypassed and officers overruled, all in the race for higher earnings.”</span></div>
<div>
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Pg 165<br />“In the case of some of the agricultural defaults, we felt that certain banks had been over-optimistic and under-analytical in their lending, and we moved to tighten some of the relevant capital requirements for the future.”<br />end</span></div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com1tag:blogger.com,1999:blog-5037330197467032848.post-21696255964896798902016-07-31T12:10:00.001-07:002017-02-05T23:17:56.551-08:00Understanding the rigging and wrecking of a money system is simple.<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Understanding the rigging and wrecking of a money system is simple.</span></div>
<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">A giving of something (Goods or work services) for nothing expected in return, is a gift.</span></div>
<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">A swap trade of things on the spot, at the same time, is a barter trade. </span><span style="font-family: "arial" , "helvetica" , sans-serif;">It normally involves a haggle over value (Who gets how much for what). It is clunky due the double coincidence of wants. The need to find a trader that wants what you have and haves what you want, before a swap trade can happen. It makes producing perishables for trade very risky.</span></div>
<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">A swap trade of things with a part not being provided on the spot, with an agreement that the other part will be provided by the other party at a later time, is a contract of credit. It normally involves a haggle over value </span><span style="font-family: "arial" , "helvetica" , sans-serif;">(Who gets how much for what)</span><span style="font-family: "arial" , "helvetica" , sans-serif;"> and an assessment that the later payment party can be trusted and has the sustainable natural resource ability to complete their end of the deal (Creditworthiness).</span></div>
<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">A record of the outstanding IOU part of a contract of credit, can be done in various ways. In the heads of the traders. On coins, paper or tokens was predominant in old times. In modern times written on paper or in a computer has become predominant. Anything but that in the heads of traders are physical representations of credit.</span></div>
<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">When credit becomes involved, the swap trade has evolved from a barter trade into a money system funding structure for trade.</span></div>
<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">If a money system grows beyond two traders and the physical representation of the outstanding IOU parts of credit become transferable among traders, they evolve into currency.</span></div>
<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">It smooths the double coincidence of wants, as traders can exchange goods for currency they can then wait to redeem (purchasing power) at a later time, with more choice.</span></div>
<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">It makes the production and trade of perishables less risky.<br /><br />It makes large mismatches of credit value able to be smoothed by way of repayment via a greater number of installments than the full value.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">A money system funding structure hub acts as a match making focal point of credit for traders who have things surplus to their own needs that are seeking other traders in the same situation.</span><br />
<div style="line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">It is essentially an old fashioned trading post with a modern innovation of a money system to make things easier.</span></div>
</div>
<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">As the number of parties within a money system grows, in order to keep it honest and as useful as possible, a credit clearinghouse administration is required. To ensure that something real was provided into the money system in the first instance and that the sustainable physical means exists to cover the IOU portion for every unit of currency in existence.</span></div>
<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">That every unit of currency is extinguished from circulation when it is finally redeemed for the outstanding owed value of the credit contract it represents.</span></div>
<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Things get out of whack if the administration fails to keep the system honest or the administration itself becomes dishonest.</span></div>
<div style="background-color: white; color: #1d2129; line-height: 19.32px; margin-bottom: 6px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">No matter who is administering the system, private - state or religion, if anyone is able to sneak currency into the system, of which the first part of the credit deal was never provided to the money system or obtain credit without any intent or means to complete their part of the deal (Counterfeit Credit), then successfully pass it off as legitimate purchasing or lending power, they will illegitimately monopolise the the real wealth of the system by fraud and eventually destroy value and faith in the system.</span></div>
<div style="background-color: white; color: #1d2129; display: inline; line-height: 19.32px; margin-top: 6px;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">At present the money systems within, or involving groups of nations, are so far removed from the base fundamentals of money, counterfeit of credit so prevalent, that the level of inequality is evolving into violent struggle between honest participants frustrated at why ends do not meet for them, and the counterfeiters trying to keep control of and divert attention away from the imperialist pyramid control fraud they have built.</span></div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-6102465817299665002016-04-08T02:07:00.000-07:002016-04-08T02:07:04.651-07:00Iain Parker TPPA Submission to New Zealand Parliament Select Committee - sent 9 March 2016<div style="margin-bottom: 0cm;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Full
submission as sent;</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Submission
to Foreign Affairs, Defence and Trade Select Committee from Iain
Parker in regards to International treaty examination of the
Trans-Pacific Partnership Agreement (TPPA)</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">I
would like to register my evidence supported allegation that the TPPA
will not deliver the path to overcoming New Zealand's ongoing chronic
historical current account deficit that proponents of it are
claiming.</span></span></span></div>
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<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">I
would like to speak to the committee.</span></span></span></div>
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<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">TPPA
does not address or even mention the greatest unworthy-unwarranted
tariff any society can suffer.</span></span></span></div>
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<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Tariff</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">A
tax imposed on goods and services. Tariffs are used to restrict
trade, as they increase the price of goods and services, making them
more expensive to consumers.</span></span></span></div>
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<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">The
TPPA does not address or even mention the tariff of the entire
currency in circulation or savings within a societies money system
being originated as a loan of interest charged credit owed to lenders
outside of that society.</span></span></span></div>
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<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">This
is the on the record from official documents admitted case in New
Zealand and many other societies - that adds much
unworthy-unwarranted cost to the day to day living of citizens within
those societies and acts as a barrier to fair trade.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">These
societies have been conned into thinking they need to take the
natural resources they possess to an outsider pawn broker to fund
development within them - when they most certainly - if they fully
understood the fundamentals of money as a system - never needed to.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Money
is a system in which credit and currency play very distinct roles
within a money system.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">If
a swap of labour or goods is able to be done immediately on the spot
without any part of the deal requiring to be recorded or remembered
(credit) as needing to be completed at a time in the future - the
realm of money system has not been entered.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">If
a contract of credit is agreed to for part of a swap of goods or
services needed to be completed at a time in the future you enter the
realms of a money system. </span></span></span>
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">When
the contract of credit is recorded it is a promissory note. </span></span></span>
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">When
more than two peoples enter a money system and start accepting
promissory notes as transferable IOU's among members of the money
system you have 'currency'.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">At
that point you need to introduce a 'clearing house of credit' role
within the money system to keep an eye out that there is a
fundamental basis to all credit and currency within the money system.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Because
if anyone is able to turn up with currency with no fundamental credit
basis (counterfeit credit) and con the other members of the money
system into accepting it as legitimate purchasing or lending power -
the counterfeiters will eventually enslave the other members of the
money system via systemic mercantile imbalance (pyramid fraud)</span></span><span style="font-family: Tahoma;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">
</span></span></span><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">that
if left unimpeded then puts unsustainable pressure in people and the
environment (Ponzi Pyramid Fraud).</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">I
contest that there is a mountain of credible evidence from on the
record official documents that confirm that the present colonial era
money system funding structures that New Zealand still suffers are a
ponzi pyramid fraud being orchestrated by criminals that lurk within
international high finance and that the economic executive among the
political & media social protection agencies of New Zealand
society are turning a collective blind eye to the on the record
documented facts. </span></span></span>
</div>
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<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">So
without any further ado - in order to prevent the committee passing
me over as a conspiracy theorist of no credible substance I present
as my first - so to speak - 'expert witness' ;</span></span></span></div>
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<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Exibit
1</span></span></span></div>
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<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Here
are the details of an email conversation between the Bill English New
Zealand Minister of Finance Office and a New Zealand citizen in
regards to an article about money system funding structures they had
read in a newspaper.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">The
discussed article can be read in full at the bottom of the email
conversation transcript.</span></span></span></div>
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<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">From:
Anita Schurmann </span></span></span>
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Sent:
Thursday, 4 June 2015 6:03 a.m.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">To:
bill.english@national.org.nz</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Subject:
Money Creation</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Dear
Bill English</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">As
you are the minister of finance I recommend that you read this
article which recently appeared in the Otaki Mail.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">http://otakimail.co.nz/outside-the-box-challenging-convent…/
</span></span></span>
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">I
expect you are aware that banks are allowed to create money from
nothing and lend it out at interest. In the past most people in NZ
were unaware or didn’t believe that banks did this. However, as
more and more people now understand and are realizing that this is
going on, I believe it is time to change legislation to stop this
unlawful behaviour. Money should be created for public good to
facilitate trade, and should not be under the control of private
corporations to make a profit. As you are probably aware this current
monetary system is the main reason why the world economy is in such
crisis. It is time to change the system for the good of all people.
If New Zealand takes the lead in this are the rest of the world will
most likely follow, as people throughout the world have had enough of
the corporate controlled system that is destroying our world and our
communities. Please let me know when you intend to change the law so
creation of money is under the control of the democratically elected
government rather than private companies.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Yours
sincerely </span></span></span>
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Anita
Schurmann</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Office
of Hon Bill English </span></span></span>
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">14
July 2015</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Dear
Anita Schurmann thank you for your email 4 June 2015 in which you
raised concerns about the the Government allowing banks to create
money on their own through the system of fractional reserve banking.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">The
system discussed in the article you refer to, is one that has been
considered at times as the role of financial institutions has
evolved. Irving Fisher suggested a possible structure and approach to
your suggestion in the Chicago Plan, eighty years ago, and there are
some theoretical advantages that may result from a system set up in
this way, including better control of business cycle fluctuations.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">However,
the transition to such a system would be hugely coomplex and is
inherently fraught with great risks. We would wnt increased certainty
and evidence regarding the benefits before change could even be
considered, and the luck of such a system in any developed market
economies makes such evidence hard to obtain.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Equally,
the current monetary system allows for the provision of credit, which
serves a very important function in allowing people to smooth their
consumption over time and allowing firms to invest in productive
capital.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Finally,
it is not entirely clear whether it would be possible to move to the
system outlined in the 'Chicago Plan' without an intensive global
shift in monetary regimes. If New Zealand were to be a first mover,
it is unclear what the effects would be for trade and the exchange
rate in a small, open economy.</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Yours
sincerely </span></span></span>
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Hon
Bill English</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Minister
of Finance</span></span></span></div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<br />
</div>
<div align="LEFT" style="line-height: 0.48cm; margin-bottom: 0cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Here
is the article in full that is being discussed in the email exchange;</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Outside
the Box — challenging conventional thinking and offering new
perspectives about our world</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Let’s
Change our Money-as-Debt Problem</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">By
Amanda Vickers June 2015</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">You’d
think that the most important aspect of a sovereign nation would be
for its Government to have sole rights to issue its country’s money
supply. But not so: this function has been appropriated primarily by
privately owned banks. “Whenever a bank makes a loan, it
simultaneously creates a matching deposit in the borrower’s bank
account, thereby creating new money.” — Bank of England Quarterly
Bulletin (Q1, 2014)*</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Our
nation’s money comes in to existence through debt. As more money
enters the economy, the more debt we have (Government or private).
Counter-intuitively, what benefits the individual does not benefit
the nation as a whole. In fact, if we all repaid all our loans, there
would be 98% less money left in the economy because, as it turns out,
only ~2% of our nation’s money supply is issued by the RBNZ — as
notes and coins.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">So
there you have it. Banks create our nation’s money supply when
credit is drawn (monetized), destroy money when loans are repaid, and
profit immensely from the interest charged on the loans. Most bank
profit is obtained from the difference between interest we pay for
these loans (created credit) and the interest they pay out for the
corresponding deposits. The four big banks in NZ were making record
profits in 2014, with ~4.3 billion dollars heading offshore to
Australia and beyond. This is hard-earned New Zealander’s money
leaving our real economy, and being transferred to the private
banking sector.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Sovereign
money advocates term this concept “economic rent” and claim that
private banks, seeking to maximise profits, shouldn’t be “renting”
money to Government, businesses and citizens of a free, sovereign
country. This growing money supply and these growing debts are also
secured by NZ’s assets, resources and labour force (you).</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">If
we had a Government issued money supply requiring banks to have 100%
reserves for money they lend, we would see dramatic improvements in
our economy. We could have both less debt and enough money to thrive.
The International Movement for Monetary Reform proposes just this and
has gathered a huge following since the 2008 global financial crisis.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">This
“sovereign-money” proposal proved itself when it was modeled by
the International Monetary Fund**. Their analysis showed that the
benefits of 100% reserve banking would be: dramatically reduced
public and private (net) debt levels (because money creation no
longer requires simultaneous debt creation), better control of
business cycle fluctuations, complete elimination of bank runs,
output gains of 10% and that inflation can drop to zero without
posing problems for the conduct of monetary policy.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">It
is great the IMF analysis has concluded something that also seems
intuitive and logical. Sovereign money advocates extrapolate further
that the outcome would also be far reaching throughout our economy
and our lives. They say it could also improve: the inequality gap,
child poverty, housing bubble control, student debt, state asset
sales, job security, local businesses performance (due to the 10%
higher output gains), budgets for local community projects and
facilities, health care and education.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">It’s
not a bad outcome for one law change: 100% reserve banking. The irony
is that the law would change to how most people think it actually
works now — where our Government issues the nation’s money
supply. It simply requires updating the 1844 Bank Charter Act, which
forbade banks from printing notes. If only they’d included
something to prevent ledger balance accounting tricks, creating
credit — which they have done to this very day!</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">One
obstacle is the general lack of understanding about how the monetary
system really works by both the public and many politicians. There is
also a fair amount of inertia and political resistance to the reform.
The change is a big one, so is therefore daring and challenging. Some
politicians fear sovereign money because it may affect NZ’s
Standard and Poor’s (S&Ps) credit rating. S&Ps may mistrust
the Government thinking they would simply issue too much money too
easily, causing an inflationary crisis, creating a currency
devaluation, which would in turn affect trade.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Realising
the importance of “why” we should address a problem, motivates
people to find the “how”. Money reform advocates found it was not
rocket science. Their solution could work in much the same way that
the RBNZ independently oversees monetary policy now. A democratic,
transparent and accountable body (Monetary Policy Committee) could
independently separate the function of money issuance from money
spending. They would be tasked with the role private banks have now:
creating and destroying the nation’s money supply. This could be
done exactly as needed — debt free — within inflationary limits.
Our government would also have greater control over where and how our
money is spent, and would be able to steer the economy with greater
precision.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Here’s
a thought: if this scenario was already the status quo, and it was
now proposed to turn our nations’ money supply over to commercial
corporations (banks), whose mandate it is to maximise profit, as
debt-based money, there would be pandemonium on the streets!</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Money
is an abstract concept — designed by humans to serve humanity’s
needs. Let’s make it do this well. It is not a law of nature to
have a debt-backed money system: it can be redesigned. The present
design is not working well, and as Albert Einstein said, “insanity
is doing the same thing over and over again and expecting a different
result”.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Please
support politicians embracing sovereign money and share this
information — an excellent source of further material is Positive
Money NZ (www.positivemoney.org.nz), the NZ chapter of the
International Movement for Monetary Reform
(www.internationalmoneyreform.org).</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">*(“The
reality of how money is created today differs from the description
found in some economics textbooks. Money creation in practice differs
from some popular misconceptions — banks do not act simply as
intermediaries, lending out deposits that savers place with them, and
nor do they ‘multiply up’ central bank money to create new loans
and deposits.” — Bank of England. However, the result is similar:
when making loans, new money enters the economy, whichever method one
has been taught)</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">End
of exibit 1</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">So
I would hope I may now have gained your attention?</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">If
you already knew of the shortcomings of the colonial era money system
funding structures that we still suffer in our nation and that there
exists viable alternatives worthy of consideration – yet go on to
support a contractual agreement that entrenches deeper into law the
clear and evident pyramid fraud aspects of the nations colonial era
money system funding structures that we still suffer – your motives
have to be questioned.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">If
you do not fully understand the impact upon society of the present
colonial money system funding structures that we still suffer – but
are thinking of voting to sign New Zealand into TPPA based upon some
blind faith ransom demand response to threats of economic isolation
from the post World War 2 'club of nations' to whom we belong –
please examine the following very thoroughly.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Iain
Parker's Ideal Alternative Economic Advisory Panel</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">In
2015 as the world seems to be reversing back into a
selfish-slave-minded-feudal-commercial-pyramid-fraud-ideology away
from learned behaviours of common decency. </span></span></span>
</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Before
parents consider allowing their children being sent off to kill each
other en masse – please take the time to read the findings and
suggested more
civilised-environmentally-sustainable-money-system-funding-structure-reforms
of these senior most international level Bankers – Academics –
Regulators – who have integrity and are using their knowledge
trying to prevent the breakdown of civilised society.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">These
people are not path of least resistance - ego preserving apologists
for what they have played a part in - they are proven advocates for
true reform of the presently failed money system funding structures
of the world.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">David
C Korten</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Dr.
David C. Korten worked for more than thirty-five years in preeminent
business, academic, and international development institutions.
Served for five and a half years as a faculty member of the Harvard
University Graduate School of Business, where he taught in Harvard’s
middle management, MBA, and doctoral programs. Asia regional adviser
on development management to the U.S. Agency for International
Development before he turned away from the establishment to work
exclusively with public interest citizen-action groups.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Short
summary of his findings in this video;</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="https://www.youtube.com/watch?v=gTKE_mpEUu0" target="_blank">https://www.youtube.com/watch?v=gTKE_mpEUu0</a></span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">More
detailed written summary here;</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="http://www.yesmagazine.org/pdf/liberateamericadownload.pdf" target="_blank">http://www.yesmagazine.org/pdf/liberateamericadownload.pdf</a></span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Adair
Turner </span></span></span>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Present
-2015- Senior Fellow of the Institute For New Economic Thinking.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Prior
to September 2008 Lord Turner was a non-executive Director at
Standard Chartered Bank, United British Media and Siemens; from
2000-2006 he was Vice-Chairman of Merrill Lynch Europe, and from
1995-99, Director General of the Confederation of British Industry.
He was with McKinsey & Co. from 1982 to 1995, building McKinsey’s
practice in Eastern Europe and Russia as a Director. He was
previously Chair of the Overseas Development Institute (2007-10).</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Lord
Turner studied History and Economics at Gonville and Caius College,
Cambridge from 1974-78.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">The
Case for Monetary Finance – An Essentially. Political Issue</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Video</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="https://www.youtube.com/watch?v=7pZzrdpHMZs" target="_blank">https://www.youtube.com/watch?v=7pZzrdpHMZs</a></span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Transcript</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="http://www.imf.org/external/np/res/seminars/2015/arc/pdf/adair.pdf" target="_blank">http://www.imf.org/external/np/res/seminars/2015/arc/pdf/adair.pdf</a></span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">The
Truth About Banking: Former Top Regulator Speaks Out</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="http://www.theepochtimes.com/n3/1895986-the-truth-about-banking-former-top-regulator-speaks-out/2/" target="_blank">http://www.theepochtimes.com/n3/1895986-the-truth-about-banking-former-top-regulator-speaks-out/2/</a></span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Adair
Turner's book challenges the belief that private credit is essential
to growth and fiat money is inevitably dangerous. The author argues
that debt needs to be taxed as a form of economic pollution because
most credit is not needed for economic growth and just drives real
estate booms and busts and leads to financial crisis and depression.
The author also debunks the big myth about fiat money—the erroneous
notion that printing money will lead to harmful inflation. He
believes that policy makers need to monetize government debt and
finance fiscal deficits with central-bank money to overcome the mess
that is created by past policy errors.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="http://live.worldbank.org/between-debt-devil" target="_blank">http://live.worldbank.org/between-debt-devil</a></span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">John
Fullerton</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Former
JP Morgan Managing Director says entirely compounding interest
attached money system has out grown boundaries of the biosphere and
is mathematically unsustainable!</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">About
John Fullerton;</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">During
an 18-year career at JP Morgan, John managed multiple capital markets
and derivatives businesses around the globe, and finally ran the
venture investment activity of Lab Morgan as Chief Investment
Officer. He was JP Morgan’s representative on the Long Term Capital
Oversight Committee in 1997-98. John is currently a director of the
New Economics Institute, Investors’ Circle, New Day Farms, Inc.,
and an Advisor to Natural Systems Utilities. He is a
participant/author of the UNEP Green Economy Report. John earned a BA
in Economics at the University of Michigan, and an MBA at the Stern
School of New York University’s in the Executive MBA Program.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Video
interview here; </span></span></span>
</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="https://www.youtube.com/watch?v=bnbxRW8FnT8" target="_blank">https://www.youtube.com/watch?v=bnbxRW8FnT8</a></span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Transcript
here;</span></span></span></div>
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<span style="color: #141823;">“ <span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">I
learned that a lot of what we practiced in finance through no ill
intent, this is unrelated to the financial crisis, and the ethical
challenges of the financial system, but that the system itself is
designed to propel growth in the economic system with no regard to
the physical boundaries of the planet and with little regard to the
social criteria, social constraints of human well being and so it
struck me that a lot of the symptoms that we talk about such as
climate change obviously being on top of everyone’s agenda, but
ecosystem degradation, soil degradation, biodiversity loss. All of
these issues are symptoms of an economic system that is essentially
bumping into the boundaries of the biosphere, and if you think about
finance and even our money system, which is built on a money system
which is created through expanding money that has interest
associated, so as the money supply grows the requirement to service
money grows at a compound rate. That forces at a systemic level the
economy to continue growing which if the economy is related to
material throughput eventually creates this conflict with the
boundaries of the biosphere. So its been a very profound realisation
and what I have discovered is that there are an increasing amount of
people thinking about this question, but its very much outside the
halls of conventional economics and very much new economic thinking.”</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">The
Road To Regenerative Capitalism</span></span></span></div>
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<a href="https://www.youtube.com/watch?v=nHnYZ4_qQIM" target="_blank">https://www.youtube.com/watch?v=nHnYZ4_qQIM</a></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Michael
Hudson</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Michael
Hudson is a former balance-of-payments economist for Chase Manhattan
Bank and Arthur Andersen, and economic futurist for the Hudson
Institute (no relation).</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Born
in 1939, Chicago, Illinois, USA is research professor of Economics at
University of Missouri, Kansas City (UMKC). He is also a Wall Street
analyst and consultant as well as president of The Institute for the
Study of Long-term Economic Trends (ISLET) and a founding member of
International Scholars Conference on Ancient Near Eastern Economies
(ISCANEE).</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Economic
advisor to the U.S., Canadian, Mexican and Latvian governments, to
the United Nations Institute for Training and Research (UNITAR), and
he is president of the Institute for the Study of Long-term Economic
Trends (ISLET).</span></span></span></div>
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<a href="http://www.nakedcapitalism.com/2012/04/michael-hudson.html" target="_blank">http://www.nakedcapitalism.com/2012/04/michael-hudson.html</a></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">[9.00]
Back in the 1960s, I ( Michael Hudson )was Chase Manhattan Bank’s
balance of payments analyst, and my job was to focus on the Latin
American countries: Argentina, Brazil, and Chile, and my job was to
calculate how much of a balance of payments surplus they could
generate, and the idea of the bank marketing department was the
entire economic surplus could be used to pay debt service to the
seven major Americam banks.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">[9:40]
And pretty quickly we found out that there wasn’t any surplus to
pay the banks, and there was an international department that got
very upset because he said “Look, I get promoted for making loans,
and the real estate guys are making all the loans, you’re telling
us they can’t afford to repay!” And he took it up to David
Rockefeller, we went across the street to the Federal Reserve bank,
and the Federal Reserve bank said “It’s in America’s interest
to make these loans to Latin America. Mr. Hudson, according to your
calculations, Britain can’t afford to replay any more.” “That’s
right. I don’t see any way in which it can get the money to repay
the debt.” And the Federal Reserve man said “Ah! But did you take
into account the fact that the US Treasury is always going to lend
Britain the money to pay? We will never let it go down.” I said,
“Well, that’s a deus ex machina from outside the system. Yes, you
can lend them the money to repay.”</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Transcript
of interview with Michael Hudson former Chase Manhattan Global Bank
Balance of Payments Analyst - How Financial Parasites and Debt
Bondage Destroy the Global Economy.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="http://michael-hudson.com/2015/10/rewriting-economic-thought/" target="_blank">http://michael-hudson.com/2015/10/rewriting-economic-thought/</a></span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">William
Black</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">A
financial system regulator of the highest knowledge and integrity who
knows what needs to be kept an eye on.</span></span></span></div>
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<br />
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">William
Black jailed 1000 odd bankers in the US back in 1980's when they
committed the same crimes they did during the 2008 global mass
counterfeit credit crisis - for which hardly any of the frauds have
been brought to justice.</span></span></span></div>
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</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Which
is the prime cause of the massive inequality in the world that is now
leading to massive civil unrest.</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Transcript
here;</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="http://neweconomicperspectives.org/2012/10/the-best-way-to-rob-a-bank-is-still-to-own-one-a-postscript.html" target="_blank">http://neweconomicperspectives.org/2012/10/the-best-way-to-rob-a-bank-is-still-to-own-one-a-postscript.html</a></span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Videos
here;</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="http://www.pbs.org/moyers/journal/04032009/watch.html" target="_blank">http://www.pbs.org/moyers/journal/04032009/watch.html</a></span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="https://www.youtube.com/watch?v=-JBYPcgtnGE" target="_blank">https://www.youtube.com/watch?v=-JBYPcgtnGE</a></span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Iain
Parker</span></span></span></div>
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<br />
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">There
are also my own articles in regards the impact of criminal banking
sector activity upon New Zealand - helped very much by having
discovered and followed the works of the above linked banking
insiders turned reform advocates for over a decade now;</span></span></span></div>
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</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Universal
Public Credit Public Policy Submission</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">To
whom it may concern,</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Attempting
to form public policy for equal economic opportunity of all citizens
without a full knowledge of the function of money as invented and
intended - that this submission details - is doing so by looking at
1/3 of a many piece puzzle forced together in frustrated confusion -
thinking its complete - when 2/3 of the picture needed in the middle
to make clear sense of it all - is in-fact one large piece that has
been hidden by a self serving few to steal from wider society under
false pretenses.</span></span></span></div>
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</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="http://publiccreditorbust.blogspot.co.nz/2013/04/universal-public-credit-public-policy.html" target="_blank">http://publiccreditorbust.blogspot.co.nz/2013/04/universal-public-credit-public-policy.html</a></span></span></span></div>
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</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">The
New Zealand Money System De-Fib Documentary - Giving a jolt to the
heart of an ailing democracy.</span></span></span></div>
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<a href="https://www.youtube.com/watch?v=sqOG-b1pJRw" target="_blank">https://www.youtube.com/watch?v=sqOG-b1pJRw</a></div>
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<br />
</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">A
global economy based more upon thieving & killing of many for the
profits of a few - than sharing & caring for the greater common
good of humanity within boundaries of sustainable resources - I
contest is a cancerous tumor threatening the survival of the progress
of learned behaviours of common decency over self destructive animal
instincts - is in great need of the checks and balances detailed in
this article linked below for the very same reasons evidenced in the
article;</span></span></span></div>
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<br />
</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="http://www.dailykos.com/story/2015/01/15/1357742/-Re-conceptualizing-Money-for-a-21st-Century-Society" target="_blank">http://www.dailykos.com/story/2015/01/15/1357742/-Re-conceptualizing-Money-for-a-21st-Century-Society</a></span></span></span></div>
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<br />
</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Please
Committee - Once taking in the evidence from 'expert witnesses' of
the highest order above - please then read the summaries of the
financial regulation related chapters of TPPA written by the US Trade
Representatives displayed below – then please explain to the people
of New Zealand just how – under such terms and conditions of
colonial era money system funding structure that we still suffer –
that growth can ever exceed the cost of debt that we are forced to
take on to try and achieve the growth? If you can not – you should
not be voting for the TPPA and I contest it is clear and evident the
contract contains financial system Trojan horses from which further
financial parasites will emerge;</span></span></span></div>
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</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">US
Trade Representatives TPPA Website</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="https://medium.com/the-trans-pacific-partnership" target="_blank">https://medium.com/the-trans-pacific-partnership</a></span></span></span></div>
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<br />
</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Chapter
2</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="https://medium.com/the-trans-pacific-partnership/national-treatment-and-market-access-for-goods-741f0639c2de#.it88tqhuj" target="_blank">https://medium.com/the-trans-pacific-partnership/national-treatment-and-market-access-for-goods-741f0639c2de#.it88tqhuj</a></span></span></span></div>
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<br />
</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Chapter
9</span></span></span></div>
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<a href="https://medium.com/the-trans-pacific-partnership/investment-c76dbd892f3a#.k457ty9ff" target="_blank">https://medium.com/the-trans-pacific-partnership/investment-c76dbd892f3a#.k457ty9ff</a></div>
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<br />
</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Chapter
11</span></span></span></div>
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<a href="https://medium.com/the-trans-pacific-partnership/financial-services-b92dd3022b64#.csua86nlf" target="_blank">https://medium.com/the-trans-pacific-partnership/financial-services-b92dd3022b64#.csua86nlf</a></div>
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<br />
</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Chapter
17</span></span></span></div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;"><a href="https://medium.com/the-trans-pacific-partnership/state-owned-enterprises-and-designated-monopolies-bfddb20cb3b3#.5ngxom86r" target="_blank">https://medium.com/the-trans-pacific-partnership/state-owned-enterprises-and-designated-monopolies-bfddb20cb3b3#.5ngxom86r</a></span></span></span></div>
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<br />
</div>
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Thank
You</span></span></span></div>
<br />
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<span style="color: #141823;"><span style="font-family: helvetica, arial, sans-serif;"><span style="font-size: 10pt;">Iain
Parker</span></span></span></div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-82375475510349255872015-11-29T01:19:00.001-08:002017-08-02T15:21:21.579-07:00Iain Parker's Ideal 2015 Alternative Economic Advisory Panel<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">If you conclude that these people have merit, please bring the information they possess, to the attention of as many people within the political and media public protection agencies of your nation, as you can.<br /><br />These money system funding structure reformists are senior most international level Bankers – Academics – Regulators, who have integrity and are using their knowledge trying to prevent the breakdown of civilised society.<br /><br />These people are not path of least resistance, ego preserving apologists for what they have played a part in, they are proven advocates for true reform of the presently failed money system funding structures of the world.<br /><br />As the world seems to be reversing </span><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">away from learned behaviours of common decency, </span><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">into a selfish slave master minded, feudal commercial pyramid fraud ideology. </span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Before parents consider allowing their children being sent off to kill each other en masse in wars. Please take the time to read these peoples findings and suggestions for a more socially stable and environmentally sustainable, money system funding structure.<br /><br />David C Korten<br /><br />Dr. David C. Korten worked for more than thirty-five years in preeminent business, academic, and international development institutions. Served for five and a half years as a faculty member of the Harvard University Graduate School of Business, where he taught in Harvard’s middle management, MBA, and doctoral programs. Asia regional adviser on development management to the U.S. Agency for International Development before he turned away from the establishment to work exclusively with public interest citizen-action groups.<br /><br />Short summary of his findings in this video;<br /><br /><a href="https://www.youtube.com/watch?v=gTKE_mpEUu0" target="_blank">https://www.youtube.com/watch?v=gTKE_mpEUu0</a><br /><br />More detailed written summary here;<br /><br /><a href="http://www.yesmagazine.org/pdf/liberateamericadownload.pdf" target="_blank">http://www.yesmagazine.org/pdf/liberateamericadownload.pdf</a><br /><br />Adair Turner <br /><br />Present -2015- Senior Fellow of the Institute For New Economic Thinking.<br /><br />Prior to September 2008 Lord Turner was a non-executive Director at Standard Chartered Bank, United British Media and Siemens; from 2000-2006 he was Vice-Chairman of Merrill Lynch Europe, and from 1995-99, Director General of the Confederation of British Industry. He was with McKinsey & Co. from 1982 to 1995, building McKinsey’s practice in Eastern Europe and Russia as a Director. He was previously Chair of the Overseas Development Institute (2007-10).<br /><br />Lord Turner studied History and Economics at Gonville and Caius College, Cambridge from 1974-78.<br /><br />The Case for Monetary Finance – An Essentially. Political Issue<br />Video<br /><a href="https://www.youtube.com/watch?v=7pZzrdpHMZs" target="_blank">https://www.youtube.com/watch?v=7pZzrdpHMZs</a><br /><br />Transcript<br /><a href="http://www.imf.org/external/np/res/seminars/2015/arc/pdf/adair.pdf" target="_blank">http://www.imf.org/external/np/res/seminars/2015/arc/pdf/adair.pdf</a><br /><br />The Truth About Banking: Former Top Regulator Speaks Out<br /><a href="http://www.theepochtimes.com/n3/1895986-the-truth-about-banking-former-top-regulator-speaks-out/2/" target="_blank">http://www.theepochtimes.com/n3/1895986-the-truth-about-banking-former-top-regulator-speaks-out/2/</a><br /><br />Adair Turner's book challenges the belief that private credit is essential to growth and fiat money is inevitably dangerous. The author argues that debt needs to be taxed as a form of economic pollution because most credit is not needed for economic growth and just drives real estate booms and busts and leads to financial crisis and depression. The author also debunks the big myth about fiat money—the erroneous notion that printing money will lead to harmful inflation. He believes that policy makers need to monetize government debt and finance fiscal deficits with central-bank money to overcome the mess that is created by past policy errors.<br /><br /><a href="http://live.worldbank.org/between-debt-devil" target="_blank">http://live.worldbank.org/between-debt-devil</a><br /><br />John Fullerton<br /><br />Former JP Morgan Managing Director says entirely compounding interest attached money system has out grown boundaries of the biosphere and is mathematically unsustainable!<br /><br />About John Fullerton;<br /><br />During an 18-year career at JP Morgan, John managed multiple capital markets and derivatives businesses around the globe, and finally ran the venture investment activity of Lab Morgan as Chief Investment Officer. He was JP Morgan’s representative on the Long Term Capital Oversight Committee in 1997-98. John is currently a director of the New Economics Institute, Investors’ Circle, New Day Farms, Inc., and an Advisor to Natural Systems Utilities. He is a participant/author of the UNEP Green Economy Report. John earned a BA in Economics at the University of Michigan, and an MBA at the Stern School of New York University’s in the Executive MBA Program.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />Video interview here; <br /><a href="https://www.youtube.com/watch?v=bnbxRW8FnT8" target="_blank">https://www.youtube.com/watch?v=bnbxRW8FnT8</a><br /><br />Transcript here;<br /><br />“ I learned that a lot of what we practiced in finance through no ill intent, this is unrelated to the financial crisis, and the ethical challenges of the financial system, but that the system itself is designed to propel growth in the economic system with no regard to the physical boundaries of the planet and with little regard to the social criteria, social constraints of human well being and so it struck me that a lot of the symptoms that we talk about such as climate change obviously being on top of everyone’s agenda, but ecosystem degradation, soil degradation, biodiversity loss. All of these issues are symptoms of an economic system that is essentially bumping into the boundaries of the biosphere, and if you think about finance and even our money system, which is built on a money system which is created through expanding money that has interest associated, so as the money supply grows the requirement to service money grows at a compound rate. That forces at a systemic level the economy to continue growing which if the economy is related to material throughput eventually creates this conflict with the boundaries of the biosphere. So its been a very profound realisation and what I have discovered is that there are an increasing amount of people thinking about this question, but its very much outside the halls of conventional economics and very much new economic thinking.”<br /><br />The Road To Regenerative Capitalism<br /><a href="https://www.youtube.com/watch?v=nHnYZ4_qQIM" target="_blank">https://www.youtube.com/watch?v=nHnYZ4_qQIM</a> <br /><br />Michael Hudson<br /><br />Michael Hudson is a former balance-of-payments economist for Chase Manhattan Bank and Arthur Andersen, and economic futurist for the Hudson Institute (no relation).<br /><br />Born in 1939, Chicago, Illinois, USA is research professor of Economics at University of Missouri, Kansas City (UMKC). He is also a Wall Street analyst and consultant as well as president of The Institute for the Study of Long-term Economic Trends (ISLET) and a founding member of International Scholars Conference on Ancient Near Eastern Economies (ISCANEE).<br /><br />Economic advisor to the U.S., Canadian, Mexican and Latvian governments, to the United Nations Institute for Training and Research (UNITAR), and he is president of the Institute for the Study of Long-term Economic Trends (ISLET).<br /><br /><a href="http://www.nakedcapitalism.com/2012/04/michael-hudson.html" target="_blank">http://www.nakedcapitalism.com/2012/04/michael-hudson.html </a><br /><br />[9.00] Back in the 1960s, I ( Michael Hudson )was Chase Manhattan Bank’s balance of payments analyst, and my job was to focus on the Latin American countries: Argentina, Brazil, and Chile, and my job was to calculate how much of a balance of payments surplus they could generate, and the idea of the bank marketing department was the entire economic surplus could be used to pay debt service to the seven major Americam banks.<br /><br />[9:40] And pretty quickly we found out that there wasn’t any surplus to pay the banks, and there was an international department that got very upset because he said “Look, I get promoted for making loans, and the real estate guys are making all the loans, you’re telling us they can’t afford to repay!” And he took it up to David Rockefeller, we went across the street to the Federal Reserve bank, and the Federal Reserve bank said “It’s in America’s interest to make these loans to Latin America. Mr. Hudson, according to your calculations, Britain can’t afford to replay any more.” “That’s right. I don’t see any way in which it can get the money to repay the debt.” And the Federal Reserve man said “Ah! But did you take into account the fact that the US Treasury is always going to lend Britain the money to pay? We will never let it go down.” I said, “Well, that’s a deus ex machina from outside the system. Yes, you can lend them the money to repay.”<br /><br />Transcript of interview with Michael Hudson former Chase Manhattan Global Bank Balance of Payments Analyst - How Financial Parasites and Debt Bondage Destroy the Global Economy.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><a href="http://michael-hudson.com/2015/10/rewriting-economic-thought/" target="_blank">http://michael-hudson.com/2015/10/rewriting-economic-thought/</a></span><br />
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<span data-offset-key="5eind-0-0" style="font-family: inherit;"><span style="font-size: large;">Steve Keen was formerly an associate professor of economics at University of Western Sydney, until he applied for voluntary redundancy in 2013, due to the closure of the economics program at the university.[2] In autumn 2014 he became a professor and Head of the School of Economics, History and Politics at Kingston University in London. He is also a Fellow at the Centre for Policy Development.
His website contains a mountain of data of the debt situations of many nations, including New Zealand. He is also a mountain of knowledge in regards to why and how the money system funding structures of the present failed economic orthodoxy need reforming.</span></span></div>
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<span data-offset-key="8eo02-0-0" style="font-family: inherit;"><span style="font-size: large;"><a href="http://www.profstevekeen.com/" target="_blank">http://www.profstevekeen.com/</a></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Nomi Prins</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Nomi Prins is a renowned journalist, author and speaker. Her latest book, <em style="border-image-outset: initial; border-image-repeat: initial; border-image-slice: initial; border-image-source: initial; border-image-width: initial; border: 0px; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">All the Presidents’ Bankers: The Hidden Alliances that Drive American Power</em>, is a groundbreaking narrative about the relationships of presidents to key bankers over the past century and how they impacted domestic and foreign policy. Her other books include <em style="border-image-outset: initial; border-image-repeat: initial; border-image-slice: initial; border-image-source: initial; border-image-width: initial; border: 0px; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">It Takes a Pillage: Behind the Bonuses, Bailouts, and Backroom Deals from Washington to Wall Street</em>. She is also the author of <em style="border-image-outset: initial; border-image-repeat: initial; border-image-slice: initial; border-image-source: initial; border-image-width: initial; border: 0px; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Other People’s Money: The Corporate Mugging of America</em>, which was chosen as a Best Book of 2004 by The Economist, Barron’s and The Library Journal.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Nomi’s insights comes from having worked as a Managing Director at Goldman Sachs, a Senior Managing Director and head of the international analytics group at Bear Stearns in London, a Senior Strategist at Lehman Brothers, and an analyst at the Chase Manhattan Bank (now JPM Chase) which she joined at age 19. She holds a Bachelors of Science degree in Mathematics from SUNY Purchase, and a Masters of Science degree in Statistics and Operations Research from New York University, where she also completed all coursework for a PhD in Statistics.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">She has appeared on television numerous times: internationally on BBC, RtTV, and nationally on CNN, CNBC, MSNBC, CSPAN, Democracy Now, Fox and PBS. She has been featured on hundreds of radio shows globally including CNNRadio, Marketplace, NPR, BBC, and Canadian Programming. She is featured in numerous documentaries shot by international production companies, alongside prominent thought-leaders, and Nobel Prize winners.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Her writing has been featured in The New York Times, Fortune, Newsday, Mother Jones, The Daily Beast, Newsweek, Truthdig, The Guardian, The Nation, Alternet, NY Daily News, LaVanguardia, and other publications.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Her engaging key-note speeches are thoughtfully tailored, and she has spoken at numerous venues including the Purdue University/Sinai Forum, University of Wisconsin Eau Claire Forum, Ohio State University Law School, Columbia University, Pepperdine Graduate School of Business, Manhattan College, National Consumer Law Center, Environmental Grantmakers Association, NASS Spinal Surgeons Conference, and the Mexican Senate.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">She is a member of Senator Bernie Sanders (I-VT) Federal Reserve Reform Advisory Council, and is listed as one of <a href="http://topwonks.org/?s=nomi+prins" style="border-image-outset: initial; border-image-repeat: initial; border-image-slice: initial; border-image-source: initial; border-image-width: initial; border: 0px; color: #fe2712; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; word-wrap: break-word;" target="_blank">America’s TopWonks.</a> She is on the advisory board of the whistle-blowing organization ExposeFacts, and a board member of the animal welfare and wildlife conservation group, Born Free USA. She is currenty a Senior Fellow at the non-partisan public policy think-tank, <a href="http://www.demos.org/" style="border-image-outset: initial; border-image-repeat: initial; border-image-slice: initial; border-image-source: initial; border-image-width: initial; border: 0px; color: #fe2712; font-style: inherit; font-weight: inherit; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline; word-wrap: break-word;" target="_blank">Demos</a>.</span></div>
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Nomi Prins Public Banking<br /><a href="https://www.youtube.com/watch?v=msgMAx1dNs0" target="_blank">https://www.youtube.com/watch?v=msgMAx1dNs0</a></span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><span style="background-color: white; color: #1d2129; font-family: Helvetica, Arial, sans-serif;">Ann Pettifor</span><br style="background-color: white; color: #1d2129; font-family: Helvetica, Arial, sans-serif;" /><span style="background-color: white; color: #1d2129; font-family: Helvetica, Arial, sans-serif;">Ann Pettifor's work and writing has concentrated on the international financial architecture, the sovereign debts of the poorest countries, and the rise in sovereign, corporate and private debt in OECD economies. Her latest book, Just Money: how society can break the despotic power of finance was published by Commonwealth in 2014. She is well known for h</span><span class="text_exposed_show" style="background-color: white; color: #1d2129; display: inline; font-family: Helvetica, Arial, sans-serif;">er leadership of an organisation Jubilee 2000, that placed the debts of the poorest countries on the global political agenda, and brought about both substantial debt cancellation, and radical policy changes, at national and international levels. In 2003 she edited the new economics foundation's ‘The Real World Economic Outlook’ (Palgrave) with a prescient sub-title: ‘the legacy of globalisation: debt and deflation’. In 2006 Palgrave published her book: “The coming first world debt crisis”. In 2008 she co-authored “The Green New Deal” and in 2010 co-authored an essay with Professor Victoria Chick: “The economic consequences of Mr. Osborne.”</span>Her website is a wealth of knowledge in regards to the money system funding structure issue;<br /><a href="http://www.primeeconomics.org/%C2%A0" target="_blank">http://www.primeeconomics.org/ </a><br /><br />William Black</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">A financial system regulator of the highest knowledge and integrity who knows what needs to be kept an eye on.<br /><br />William Black jailed 1000 odd bankers in the US back in 1980's when they committed the same crimes they did during the 2008 global mass counterfeit credit crisis - for which hardly any of the frauds have been brought to justice.<br /><br />Which is the prime cause of the massive inequality in the world that is now leading to massive civil unrest.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Written here;<br /><br /><a href="http://www.alternet.org/economy/how-elite-economic-hucksters-drive-americas-biggest-fraud-epidemics" target="_blank">http://www.alternet.org/economy/how-elite-economic-hucksters-drive-americas-biggest-fraud-epidemics</a><br /><br /><a href="http://neweconomicperspectives.org/2012/10/the-best-way-to-rob-a-bank-is-still-to-own-one-a-postscript.html" target="_blank">http://neweconomicperspectives.org/2012/10/the-best-way-to-rob-a-bank-is-still-to-own-one-a-postscript.html</a></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Videos here;<br />With transcript<br /><a href="http://www.pbs.org/moyers/journal/04032009/watch.html" target="_blank">http://www.pbs.org/moyers/journal/04032009/watch.html</a><br /><br /><a href="https://www.youtube.com/watch?v=-JBYPcgtnGE" target="_blank">https://www.youtube.com/watch?v=-JBYPcgtnGE</a><br /><br />Iain Parker<br /><br />There are also my own articles in regards the impact of criminal banking sector activity upon New Zealand - helped very much by having discovered and followed the works of the above linked banking insiders turned reform advocates for over a decade now;<br /><br />Universal Public Credit Public Policy Submission</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">To whom it may concern,<br />Attempting to form public policy for equal economic opportunity of all citizens without a full knowledge of the function of money as invented and intended - that this submission details - is doing so by looking at 1/3 of a many piece puzzle forced together in frustrated confusion - thinking its complete - when 2/3 of the picture needed in the middle to make clear sense of it all - is in-fact one large piece that has been hidden by a self serving few to steal from wider society under false pretenses.<br /><br /><a href="http://publiccreditorbust.blogspot.co.nz/2013/04/universal-public-credit-public-policy.html" target="_blank">http://publiccreditorbust.blogspot.co.nz/2013/04/universal-public-credit-public-policy.html</a><br /><br />The New Zealand Money System De-Fib Documentary - Giving a jolt to the heart of an ailing democracy.<br /><a href="https://www.youtube.com/watch?v=sqOG-b1pJRw" target="_blank">https://www.youtube.com/watch?v=sqOG-b1pJRw </a><br /><br />A global economy based more upon thieving & killing of many for the profits of a few - than sharing & caring for the greater common good of humanity within boundaries of sustainable resources - I contest is a cancerous tumor threatening the survival of the progress of learned behaviours of common decency over self destructive animal instincts - is in great need of the checks and balances detailed in this article linked below for the very same reasons evidenced in these articles lnked below;</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br /><span style="background-color: #f9f7f5; color: #444444; font-family: Arial, Helvetica, sans-serif;">Social Credit with Demurrage</span></span><br />
<span style="color: #444444; font-family: Arial, Helvetica, sans-serif; font-size: large;"><span style="background-color: #f9f7f5;"><a href="https://realcurrencies.wordpress.com/2013/05/18/social-credit-with-demurrage/" target="_blank">https://realcurrencies.wordpress.com/2013/05/18/social-credit-with-demurrage/</a></span></span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><a href="https://www.dailykos.com/stories/2015/1/14/1357742/-Re-conceptualizing-Money-for-a-21st-Century-Society" style="background: rgb(255, 255, 255); box-shadow: none; box-sizing: border-box; color: #ea7106; cursor: pointer; letter-spacing: 0.125px; outline-offset: -2px; outline: none !important; text-decoration-line: none;"><span style="font-family: Arial, Helvetica, sans-serif;"><span style="box-sizing: border-box; white-space: nowrap;">Re-conceptualizing</span> Money for a 21st Century Society</span></a><br /><a href="http://www.dailykos.com/story/2015/01/15/1357742/-Re-conceptualizing-Money-for-a-21st-Century-Society" style="font-family: arial, helvetica, sans-serif;" target="_blank">http://www.dailykos.com/story/2015/01/15/1357742/-Re-conceptualizing-Money-for-a-21st-Century-Society</a></span></div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com1tag:blogger.com,1999:blog-5037330197467032848.post-85953415947342674302015-07-11T02:22:00.001-07:002015-07-11T02:26:25.599-07:00Leave them the power to write credit with only the flick of a pen and they write enough for themselves to make debt slaves of you again.<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: medium;">Any government in the
world facing the impossible funding puzzle, that is the result of
having the interest bearing loans of credit, of privately owned
institutions, that are owned by a largest shareholding few, being the
way in which your entire central currency is originated – please
take note of the warnings from two people who once were at the
highest levels of this private banking sector pyramid fraud, before
attempting to warn the world of it, once they comprehended that if it
remained unimpeded, it would end up a threat to the progress of
civilisation itself;</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;">Sir
Josiah Stamp </span></span><strong><span style="color: #222222;"><span style="font-size: medium;"><span style="font-weight: normal;">President
of the Bank of England</span></span></span></strong><span style="color: #222222;"><span style="font-size: medium;">,
in an 1920's informal talk to 150 University of Texas students said;</span></span></span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;">
“</span><strong><span style="color: #222222;"><span style="font-size: medium;"><span style="font-weight: normal;">Banking
was conceived in iniquity, and was born in sin. The Bankers own the
Earth. </span></span></span></strong><span style="color: #222222;"><span style="font-size: medium;">Take
it away from them, but leave them the power to create deposits, and
with the flick of the pen, </span></span><strong><span style="color: #222222;"><span style="font-size: medium;"><span style="font-weight: normal;">they
will create enough deposits, to buy it back again. </span></span></span></strong><span style="color: #222222;"><span style="font-size: medium;">However,
take it away from them, and all the great fortunes like mine will
disappear, and they ought to disappear, for this would be a happier
and better world to live in. </span></span><strong><span style="color: #222222;"><span style="font-size: medium;"><span style="font-weight: normal;">But
if you wish to remain the slaves of Bankers, and pay the cost of your
own slavery, let them continue to create deposits.</span></span></span></strong><span style="color: #222222;"><span style="font-size: medium;">”</span></span><span style="font-size: medium;">
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<span style="color: #222222;"><span style="font-family: Arial, Helvetica, sans-serif; font-size: 16pt;">Former
Governor of Bank of England says banking fraud is threat to
civilisation.</span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;">This
document is not that long and it contains perhaps no greater insight
of the international private banking pyramid scam crime ring from
perhaps no higher authority.</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">Former
Governor of the Bank of England - Vincent C Vickers - ran the loan
book for a global elite for a decade before coming out against it
until the day he died.</span></span></span></div>
<div dir="LTR" id="post-body-8717450623965242223">
<div style="line-height: 140%; orphans: 1;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br />The
document titled - Economic Tribulation - he wrote in 1939 outlines
how the senior elements of private banking had made record profits
from the finance, military, industrial complex of World War 1 and
the dangers to humanity if it were to continue.</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">Full
document here;</span></span><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #888888;"><span style="text-decoration: none;"><span style="font-size: medium;"><a href="http://userpage.fu-berlin.de/roehrigw/vickers/" target="_blank">http://userpage.fu-berlin.de/roehrigw/vickers/</a></span></span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="font-size: medium;"><span style="color: #888888;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">A taste of who the author was and its contents below;</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">Published
1941 - How many lives could have been saved if the warnings and
solutions of this man had got the attention they deserved?</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">VINCENT
CARTWRIGHT VICKERS</span></span><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">He
was a Deputy Lieutenant of the City of London, a director of
Vickers, Limited, for twenty-two years, and a director of the London
Assurance from which he resigned in January 1939. In 1910 he was
made a governor of the Bank of England, and resigned this
appointment in 1919. Later, he became President of the Economic
Reform Club and Institute.</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">I
therefore decided to take the unprecedented course of offering to my
readers my own qualifications for putting down before the British
people the very precarious condition of our monetary system as it
exists in this country to-day; that this our money system forms the
most important part of our, economic system, and that the nation’s
economic system forms part of our social system.......</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">Let
us acknowledge the truth. Humanity is not suffering from unavoidable
circumstances over which it has no control, but from the results of
deliberate and dishonest actions of its own creation and invention.
Fundamental laws, originally designed for the common welfare of the
individuals of a community, have been broken – community laws
which were never intended to permit the individual to grow fat upon
the poverty of others; nor to permit him, in pursuit of his own
personal profit, to base his standard of honesty upon his own
flexible conscience, consoling himself with gratitude that he is
within the law. Nevertheless, just as man has brought, upon himself,
or has permitted, this world tribulation, so can he play his part in
undoing the harm that has been done......</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">But
how is this possible? How can the ordinary individual change the
world? Shall the man in the street become an expert economist, or a
banker, or a cabinet minister and control the press and public
opinion? How otherwise can he assist in the regulation of mankind?
What is meant by ‘lack of economic equilibrium’, ‘sound
finance’, ‘stability of foreign exchanges’, ‘currency
restrictions’, ‘the creation of credit’, ‘the inverted
pyramid of credit’, and a host of other such phrases? They smell
of long study, special technical ability, and great learning.
Surely, then, it is commonly felt, it is better that ordinary
individuals should leave economics to the economists, finance to the
bankers, and national policy to the politicians? But, alas, that is
exactly what we have for too long been doing. Look at the result!
The experts have hopelessly failed. What is needed is a little less
economics and a little more common sense.........</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">Although
it is the money system which is to be accused of dishonesty, those
who use and depend upon a dishonest system, knowing that system to
be dishonest, cannot themselves be regarded as honest men. Moreover,
it may be that the present system, which international finance has
forced our democratic government to adopt, uphold, and protect by
every possible means, has undermined the character of the people and
forced them to alter their definition of the word honesty so that it
may be made to comply more nearly with modern practice.........</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">No
greater threat to humanity and the progress of civilisation can be
conceived than the general spread of the Hitler regime of brute
force. To crush out that regime for all time even if it stood alone
as our sole war aim, would seem enough in itself without the
necessity of searching for other objectives. Although we recognise
how serious and how immense is the task that we have undertaken, the
vast majority of us gain added strength from the knowledge that
righteousness and justice are on our side. </span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span></span>
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;">The nation has reached a
state of preparedness, both mentally and physically, both for
offence and defence, which will render the sacrifices and hardships
and swift calamities that we must inevitably endure powerless to
divert it from the set course which it has determined to pursue to
the end. Yet even then, even when this first great objective shall
have been gained, our labours will by no means be over. There is
still a long way to go before we can begin to contemplate that
promised land of peace and justice for mankind which no destructive
war can ever of itself attain, and there remains vital work of
preparation and reconstruction at home which cannot be neglected or
delayed.</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">Unless
we can contrive to design and establish an improved and reformed
financial system, which is the first essential towards a new and
better economy in our own country, no satisfactory outcome of the
war is possible; for where there is still widespread injustice and
discontent there can be no ending to that war, unless it be a tangle
of internal revolts and revolutions. How can we presume to hold up
our own social System as a pattern for other nations to follow,
whilst it breeds selfishness, unrest, and dishonest competition
amongst our own people, and whilst it is dominated by a decadent
financial system in which we possess an ever-diminishing confidence
and which is not even under the unbiased control or management of
Government chosen by the will of the people? How can we hold out to
the German people or to the world, the promise of justice under a
new and better economic system that will eliminate poverty,
malnutrition, and unemployment, whilst no such system exists, and
whilst our own system is still permeated with these same evils?</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">On
the other hand it is unthinkable that we should pretend to ourselves
that we can, first of all, and by the successes of our arms, create
in Germany an economic vacuum and, having done so, compel her to
adopt a money lending system of international finance, designed for
the benefit of international financiers who will become more and
more anxious to preserve their monopoly and their immunity from
governmental control. Are we now fighting to uphold freedom and
democracy, or are we fighting to uphold and strengthen the
dictatorship of international finance?</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">THE
DIRECTION OF FUTURE POLICY</span></span><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">State
control and State issue of currency and credit through a central
organisation managed and controlled by the State......</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">Stabilisation
of the wholesale price level of commodities. That is to say, a fixed
and constant internal purchasing power of money; so that a pound
will buy tomorrow what it bought yesterday; an honest pound, not a
fluctuating pound. And this can be done by so issuing and regulating
the volume of available credit and currency that it shall at all
times be adequate to permit of the purchasing power of the consumer
being equated with the volume of production; not by limiting the
purchasing power, but by firstly increasing purchasing power more in
proportion to the productive capacity of industry.........</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">Any
additional supply of money should be issued as a clear asset to the
State; so that money will be spent into existence, and not lent into
existence..........</span></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: medium;"><br /></span></span><span style="color: #222222;"><span style="font-size: medium;">The
abolition of the Debt System where all credit is created by the
banks and hired out at interest to the country...... </span></span>
</span></div>
</div>
<div align="LEFT" style="line-height: 0.56cm; margin-bottom: 0cm; orphans: 1;">
<span style="font-size: medium;"><span style="color: #141823; font-family: Arial, Helvetica, sans-serif;"><br /></span></span></div>
<div align="LEFT" style="line-height: 0.56cm; margin-bottom: 0cm; orphans: 1;">
<span style="font-size: medium;"><span style="color: #141823; font-family: Arial, Helvetica, sans-serif;">At
the Mercy of Debt Merchants by Alfred Pearson 1969</span></span></div>
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<div align="LEFT" style="line-height: 0.56cm; margin-bottom: 0cm; orphans: 1;">
<span style="font-size: medium;"><span style="font-family: Arial, Helvetica, sans-serif;"><br /><span style="color: #141823;">“</span><span style="color: #141823;">It
is one of the paradoxes of civilization that money is the one thing
that is needed, and used, by more people than anything else, while it
is at the same time, the least understood by them. There is no object
more desperately sought for every minute of a person’s life. Man
will labor until aching muscles prevent sleep, he will put his life
at stake, and he will steal and commit murder in order to acquire it.
How strange that he evinces such little interest in understanding
what money is, how it is created, and who controls the amount in
circulation……. </span></span></span><br />
<span style="font-size: medium;"><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #141823;"><br /></span></span></span>
<span style="font-size: medium;"><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #141823;">History reveals a constant struggle by
governments, and their citizens, to limit the power wielded by
private bankers. So powerful have the bankers been, and so beholden
have governments been to the bankers, that at no time has any major
nation been successful in setting up an honest and adequate money
system that was solely under the jurisdiction of the sovereign
people.</span></span></span><br />
<span style="font-size: medium;"><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #141823;"><br />Unfortunately, it has always been the ignorance of the
people and the supine indifference of their representatives and
government that have permitted a minority to usurp the issuance and
control of money–a function that belongs exclusively and absolutely
to the people through their government.”</span></span> </span>
</div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com1tag:blogger.com,1999:blog-5037330197467032848.post-47349871767410263712015-06-12T00:29:00.001-07:002016-10-24T00:42:27.469-07:00New Zealand Labour Party money system reform history and back down.<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">New Zealand Labour Party when first
elected in 1935 implemented a real house price vs average income bubble solution of issuing sovereign
public credit, to build state housing at cost price only, without the
impost of private owners of banks interest charges, that can, and
should be done again today, for the very same reasons.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">But the New Zealand Labour Party of
today in the main have not a clue of the party's very founding ideals
of money system reform, that is chronicled below;</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">Michael Joseph Savage in his 1920
maiden speech to parliament;</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">“The Government should create a state
bank , and use the public credit for the public good as an
alternative to borrowing overseas”
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">1933 manifesto wanted the state "to
be sole authority for the issue of credit and currency" and in
1935 MP John A Lee wrote "The Labour Party affirmed that the
government should have the sole right over the issue and control of
new credit"</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">Man to Man by Tom Skinner 1981 –
Michael Savage explained the State housing scheme to Tom Skinner of
the (New Zealand) Federation of Labour as such;</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">Pg 45 – “I was with Joe on one
occasion when he began chatting about the ramifications of the
Governments State Housing Scheme. He told me … how the construction
of those houses created assets in a productive way. The Government
created the money through the Reserve Bank at a moderate rate of
interest to cover the contract price, which paid for materials,
tradesmen’s wages, the purchase and development of the land and all
the other essentials required to finish the house. On completion the
house was transferred from the Housing Division of the public works
department to the State Advances Corporation – in effect from one
department to another. The corporation was the renting agency
responsible for selecting the tenants, collecting rents and
maintaining the house and the property.
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">The philosophy was that as the money
was created for productive purposes no loss could occur if it were
not repaid from one department to another. Meanwhile, during
construction, tradesmen had been paid wages which had been spent and
absorbed into the economy. But it was solid money backed by the
creation of assets. People had been kept fully employed while the
government built homes for the people.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">Tom Skinner;</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">“While Joe spoke I began suddenly to
grasp the Labour philosophy related to the creation of credit. It set
me off thinking about money and what it meant to the economy. The
Government, figuratively speaking, could rub a state house debt out
of the books because a building stood in its place. But money created
by the banks in order to gain profits in the form of interest was the
other side of the coin. It was unproductive, inflationary creation of
money if unmatched by equivalent goods and services…..”</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">“I have read and believe that
monetary mismanagement is the greatest evil of our time. It breeds
injustice, increased costs and, as the root cause of inflation, it
diminishes the value of our money. Governments should carry out their
pre-election promises and take the necessary steps to reform the
monetary system. It can be done only by making the State the sole
authority for the issue of currency and credit….. unfortunately, in
this area politicians seem to be abysmally ignorant of elementary
financial and economic truths.”</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">From The Cradle To The Grave – A
biography of Michael Joseph Savage (First New Zealand Labour Party
Prime Minister 1935-1940) by Barry Gustafson 1986;
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">Pg 198-9</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">The National Opposition (1936) was
astonished by the use of Reserve Bank credit for housing, which
disregarded traditional principles of budget finance. Forbes (George
Forbes ex Prime Minister 1930-5 Great Depression era) admitted
confidentially to Stewart (William Downie Stewart Jnr – Finance
Advisor);</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">“This places them in a unique
position, the houses after erection carry no interest on capital
cost, and for instance a thousand pound house can be let for 5s per
week and be a financial success. The millennium seems to have arrived
and it makes one wonder why we had to struggle in the bog, when there
was such an easy way out of our troubles, houses, after being built
with the highest paid workers in the world, at the lowest cost heard
of, makes our policy of orthodox finance seem almost prehistoric.”</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">1954 Labour Party manifesto stated
"Labour will take immediate and effective to ensure that the
state will become the sole authority for the issuance of credit and
currency. The public credit will be used to the fullest extent
compatible with the public good"</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">In July 1962 the leader of the Labour
Party, the Rt. Hon. W. Nash, made a lengthy statement in which he
said;</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">“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 Reserve Bank Credit, within the limits set out is not only
justified, but has already contributed much towards the Nation’s
economic well-being.”</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">Thus, 27 years too late, Nash accepted
the policy on which Labour was elected in 1935.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">1964 Labour Party manifesto stated
"Labour believes that measures taken before credit is issued are
more effective than restrictions afterwards."</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">Former New Zealand Labour Party
Minister of Finance Minister of Finance - 10 December 1999 > 19
November 2008 - Michael Cullen - said this in 2012;</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">'Govt wouldn't let the big banks fall
over'</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">And in terms of the big banks, he says
there has always been "a degree of pretence" around the
idea the government didn't stand behind them.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<div style="margin-bottom: 0cm;">
<span style="font-family: Arial, Helvetica, sans-serif;">"If they were systemically
important in reality the government couldn't afford to let them fall
over. But no Minister of Finance is ever going to say that as
Minister of Finance. It's only when they're old and clapped out and
out of a job that they can actually say that."</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">Yet New
Zealand Labour still put Michael Cullen up on a pedestal and New Zealand
National Party appoint him to run government departments in
preparation for privitisation, go figure?<br /></span><br />
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">I
have spent many hours, over many years, discussing with Andrew Little
the crazy colonial era shortcomings of the money system funding
structures of New Zealand that we still suffer. Of which his personal
views are perhaps best summed up in a conversation by text we had
that occurred after several scheduled phone calls had not taken
place, I asked of Andrew Little this;</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">Iain
Parker text sent 14-05-2013 7.23pm<br />"Hey A<br />I get it, your
to busy to touch base because the issue of the issuance of our money
supply has finally erupted into a full blown political brawl down
there in the halls of power."</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">Andrew
Little replied 14-5-2013 7.26pm<br />Hi Iain, no ! I wish ! I get your
messages between meetings & then forget to get back to you. Am
just about to head back to the house now. Can I call tomorrow
evening? Have time between 7.30 & 8.</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">And
this from Andrew to Iain Parker 18-1-2013 7.38pm after I had
expressed my frustration at the lack of progress in taking the ball
up on the money system funding structures of the nation issue;</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">"Fair
point. We still have a long way to go to unshackle govt from being
dominated by finance sector interests."</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">Iain
Parker texts sent;<br />2 - 4- 2015 9.37am<br />Hi Andrew<br />Do you
respect my efforts enough to let me know if the merits, or otherwise,
of present money NZ money system funding channel at the wholesale
credit level, are being discussed anywhere, by any elected members,
or hired help of NZ public service in a meaningful way?</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">2
- 4 - 2015 4.03pm<br />Please Andrew,<br />A simple yes or no will tell
me most all I need to know in regards too the very straight forward
question I asked today re money policy debate.</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">Andrew
Little reply;<br />2 - 4 – 2015 10.12pm<br />Hi Iain, yes, this
question is discussed but not by everyone and not everyday.</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">Iain
Parker sent text 2 - 4 - 2016 10.27pm<br />How would you rate
progress?<br />poor,<br />Reasonable,<br />Exciting.</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">How
many talking?</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">Once
a week, once a month or once a year.</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">3
- 4 - 2016 10.39am<br />Please Andrew, tell me straight.<br />How would
you rate progress?</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">Poor,<br />Reasonable,<br />Exciting.<br />-
How many talking?<br />- Once a week, once a month or once a year?</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">8
- 4 - 2015<br />Hi Andrew<br />I know you are busy - but it is a
very simple set of questions.</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">End
of text quotes</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">No
answer to those particular questions was ever given via text - how
ever we did discuss the questions during the phone call organised in
these texts below;</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">Iain
Parker sent texts;<br />8-7-2016 10.01am<br />Hi Andrew<br />Have you
time today for a chat?</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">Andrew
replied 8-7-2016 11.08am<br />Am in Somoa today.<br />Back tomorrow. Will
have some spare time around 4pm. Can call<br />then.</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">End
of text quotes.</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">In
the phone conversation organised above Andrew told me that the level
of discussion being had within the halls of power of New Zealand
Parliament could not be described as meaningful and in fact the level
of knowledge of the deeper money system funding structure issue are
so low it is almost impossible to push the issue.<br />In the
conversation I made the comment that essentially the bankers who
control our economy are essentially setting the terms of reference of
what can or can not be openly discussed within New Zealand Parliament
- to which he said "thats a good way of describing it"</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">For
which you will have to take my word is exactly what he said.</span></span></div>
<div style="line-height: 0.5cm; margin-bottom: 0.16cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">I
have a lot of sympathy for the pressure that pushing the money system
funding structure issue would bring to bare upon Andrew - but at the
same time I don't know that I can ever forgive him for in the end
choosing the path of least resistance as so many before him - given
what he knows the ever growing inequality it means for so many of us.</span></span></div>
<br />
<div style="line-height: 0.5cm; margin-bottom: 0cm; margin-top: 0.16cm; orphans: 1;">
<span style="color: #141823;"><span style="font-family: Arial, Helvetica, sans-serif;">If
as many as possible can tell any member of the New Zealand Labour
Party that Andrew Little needs to keep taking note of the evidence
that Iain Parker presented him of the shortcomings of the present
money system funding structures of our nation - as he did unto
recently - instead of now acting as though Iain Parker does not exist
and he knows nothing of it - may boost his confidence to push the
issue harder.</span></span></div>
</div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com1tag:blogger.com,1999:blog-5037330197467032848.post-75037397532107293932015-04-09T02:35:00.000-07:002016-05-21T20:44:53.315-07:00Who is the wholesaler or retailer of credit is the key to equality.<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;">Making the case for a Peoples Public Credit Money System Funding Structure.<br /><br />As long as any government of any nation structures its money system funding structure as only a retailer of wholesale credit originated by an entity outside of its own economy, those governments will always be subservient to foreign lender rule and surrendering the majority of its citizens into ever increasing debt servitude.</span><br />
<span style="font-size: large;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">Despite what the foreign privately owned central bank handlers of the New Zealand financial system keep telling us, super cities are not economic drivers of nations, they are in fact unsustainable sink wells creating increased demand for their loans of interest charged credit.</span></span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhPV1h3hTKIlKFUQxFQv2YDPfHADrnM3jJlIkfvSr6fluiXmnXK8N3Olaud0bAnSfmNQgcI1RZz8Yh3lwN7TpXRMSogQr_p1A43wRzA4MASE9Vpgi4RRlf-S25DR99Q72cyImGXaZX9Nggp/s1600/Little+fishes+making+big+fish..jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><span style="font-size: large;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhPV1h3hTKIlKFUQxFQv2YDPfHADrnM3jJlIkfvSr6fluiXmnXK8N3Olaud0bAnSfmNQgcI1RZz8Yh3lwN7TpXRMSogQr_p1A43wRzA4MASE9Vpgi4RRlf-S25DR99Q72cyImGXaZX9Nggp/s1600/Little+fishes+making+big+fish..jpg" /></span></a></div>
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />Below is my policy suggestion to break the cycle of decline of the regions in cases where there is a clear socially viable project, for which exists the natural resources to do it, for which exists the people seeking to gain some units of purchasing power currency in exchange for their services of building it, but it is said it can not happen, for the want of there being enough profit for some foreign entities credit to enable it to happen.<br /><br /> A solution that would address the ever increasing monopoly of the New Zealand economy by corporations using very questionable comparative advantages and who are much more interested, literally, in short-term profits, than alleviating the ongoing chronic balance of debt repayments crisis New Zealand, as a whole, been suffering since 1833;<br /><br /> - Need not nationalise all of banking<br /><br /> - Only the wholesale credit banking level.<br /><br /> When a nations currency origination credit mechanism is not borrowed from an outside entity, not owed to any other entity, it can be the mutual cooperative, economic enabler, that money as a system was invented and intended to be.<br /><br /> Originated free of interest charges at the wholesale currency origination credit mechanism level, with principle only then needing to be repaid.<br /><br /> Imagine the increased prosperity that the citizens and businesses of our economy could enjoy, with the massive additional cost of foreign entity interest and bankruptcy receivership's, that are presently factored into our day to day cost of commerce - being gone.<br /><br /> A state bank, held in public trust, can give interest free loans to state development agencies, to build the base essential of life infrastructure of society, which once the principle has been repaid, then remains as assets held in public trust, to be, from then on, supplied as public service, at cost price only to the citizenship.<br /><br /> This will be a form of national dividend, in the form of services, rather than currency, as a reward for any citizen that does no physical or property damage to any other citizen and contributes to the upkeep of civil society.<br /><br /> Forget about passing ever increasing debt onto future generations. That would be a gift I would much prefer to be recorded in history as having being part of giving.<br /><br /> Private banks and private citizens can then do deals of already existing central currency at what ever fee rate structures they so desire, but at their own risk based upon genuine supply and demand competition.<br /><br />The state bank entity, held in public trust, will always own and control the payment, transfer, settlement system software of the nation, funded by the peoples public credit.<br /><br />The first step I would take in any reform package would be to do what Malaysia did during the 1990's Asian financial crisis that helped them survive better than most - that being stating that from an announced point in time any currency that has been converted into your currency can not be converted back out for a set period of time.<br /><br /> This reduces the amount of foreign debt originated credit currency coming in and prevents the chaos that can be caused by it being able poor out in large quantities - while your money system funding structure reform is sorted out.<br /><br />I contest that these other protections against inequitable economic opportunity need to happen in combination at the same time;<br /><br /> All citizens presently being driven to despair by the level of interest payments upon private bank loans, that have land as part of collateral security, can have those loans paid out by the state bank, with the land then being locked into public trust, to never be able to be individually privately owned ever again, only ever leased or managed on behalf of the public trust, as many other nations do already.<br /><br /> All central and local government debt will be paid off by the state bank, owned in public trust, with all land that was collateral security for those loans being locked into the public trust, to never be put up as collateral for private bank loans ever again.<br /><br /> Primary productive land base, once locked up in a public trust development agency, such as Landcorp, renamed Land Mutual Cooperative or the like, that agency could become the generator of much employment via noxious weed control programs or noxious animal control programs, via more environmentally friendly old fashioned methods.<br /><br /> This could not only boost employment and the economy, at cost price only, but reduce the need for expensive toxic products being used upon our primary productive land base.<br /><br /> Without the private bank interest repayment imperative controlling our every economic action, the produced goods from the national mutual cooperative development agencies, can then be better distributed to ensure they benefit as many as possible, internally balancing the economy within our own nation, before we trade with the outside world, goods or services that are truly only surplus to the needs of our own society.<br /><br /> Without the foreign entity interest repayment debt imperative, we are free to barter trade or trade for foreign currencies on a far more mutually cooperative basis.<br /><br /> After all, once you comprehend that presently it is the value of our very own natural resource collateral that the foreign lending entities get to type into their accounts and then give back to us as interest bearing loans, to then circulate as our currency, sovereign peoples public credit, issued free of interest, by a state bank, held in public trust, makes perfect common sense, does it not?<br /><br /> The structures above, will also alleviate the ability of the foreign lending entities, as a whole, cooking the credit books, in pursuit of profits by the senior owners and executives of those entities, by issuing more interest bearing credit to society than actually physically exists enough income producing assets to service the level of interest payments they demand.<br /><br />Secondly - Here below are details of what I contest needs fixing within the present money system funding structures of New Zealand and why. Also the new constitutional stabilisers needed to keep the reformed Peoples Public Credit Money System Funding Structure balanced and honest. Plus the names of other eminently credible economic experts any future government would benefit a great deal from giving them a hearing; <br /><br />Mass counterfeiting of credit by the global banking system is starting (Feb 2016) to crash the global economy again. <br /><br />The seemingly impossible funding puzzle that is afflicting much of the world is a very simple equation really;<br /><br />This -<br />Interest wealth transferring mechanism. <br /><a href="https://www.youtube.com/watch?v=TAzNRLf_acI">https://www.youtube.com/watch?v=TAzNRLf_acI</a><br /><br />or this -<br /><br />State Bank Control of Credit at the Wholesale Level.<br /><a href="https://www.youtube.com/watch?v=d0Q9bGGJJsg">https://www.youtube.com/watch?v=d0Q9bGGJJsg</a><br /><br />is the question !<br /><br />The answer imho must include the constitutional checks and balances outlined within this article;<br /><br />Re-conceptualizing Money for a 21st Century Society <br /><a href="http://www.dailykos.com/story/2015/01/15/1357742/-Re-conceptualizing-Money-for-a-21st-Century-Society">http://www.dailykos.com/story/2015/01/15/1357742/-Re-conceptualizing-Money-for-a-21st-Century-Society </a><br /><br />Stabilisation <br />A new, complementary Treasury-issued currency (perhaps call it “Citizen Dollars”) issued as credit rather than debt. In other words, such currency would not be a loan that has to be repaid with interest.</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />Since Citizen Dollars are issued as credit and do not need to be repaid, they would become inflationary if there were not a means for them to flow in and out of the system. Following the money-as-energy metaphor, energy becomes depleted (“used up”) after doing work. If it did not, the planet would rapidly burn up. Similarly, money that is not actively doing work needs to be drawn out of the system in order for its utility not to be diluted by inflation.<br />A natural way to do this, without resorting to taxation, is to place a small periodic negative interest charge (“demurrage”) on money that is currently dormant in accounts. This discourages hoarding and encourages money to continue to circulate and do work. For example, a one-percent per month charge on held cash would render it valueless in about 10 years. (If this sounds objectionable, compare this annualized 12% charge to current income tax rates.)</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />Note that credit-based currency is a fundamentally different entity than debt-based money. Accordingly, the principles that guide the use of one cannot directly be applied to the use of the other - any more than the rules of baseball can be used to direct a football game. Several mind-shifts about the nature and use of money are required. Citizen Dollars:<br />• …are not a loan and don’t need to be repaid<br />• …are not subject to taxation (it would be absurd to give with one hand and take with the other)<br />• …are a government-supplied utility (like roads and bridges) to be used not owned (This is actually true for all money. Losing sight of that is largely responsible for our current economic mess)<br />• …long-term saving of Citizen Dollars is a vice to be avoided, not a virtue to be rewarded (money needs to circulate and do work, not be unproductively hoarded)<br />• …do not have durable, permanent value like gold or silver but rather have a lifespan and an expiration date<br />Furthermore, many of the dynamics of debt-based money do not apply:<br />• Being issued as credit, Citizen Dollars do not require the income taxation otherwise necessary to pay interest on debt.<br />• Citizen Dollars are not “welfare”. It is simply taking privileges currently given only to the central banking system and now granting them directly to the citizens.<br />• Citizen Dollars are not “free money for doing nothing”. It is based on the premise that whatever citizens do, they contribute in some way to the whole system. The Treasury then takes on the function of a not-for-profit venture capital firm that “hires” the citizenry as part-time investor agents.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />The “part-time” aspect of the above statement is significant. While one might eek out a bare existence on Citizen Dollars, most people will want to be engaged in productive activities that offer challenge and interest and enable a higher standard of living.<br />Features and Benefits</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />Several social and economic features are immediately obvious: no taxation to repay debt and interest, more robust economic activity at all business levels, no absolute destitution with attendant problems like homelessness and crime - therefore no need for many government aid programs.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />Rather than killing incentive and innovation, the economic security and freedom offered by Citizen Dollars would unleash a flood of new creative, productive endeavor. The current all-or-nothing risk nature of new ventures would be mitigated, encouraging new creative efforts. Moreover, the current economy primarily values the production of “stuff”. Other important aspects of society - teachers, childcare, social work, emergency response, artists, writers, musicians, nature conservancy - are always struggling for support. Such people, like the stay-at-home mom, bear economic costs but are often not compensated for the value they add to society. These could now be accommodated, while reducing the chronic begging for support from public and private sources.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />Moreover, many people are presently tied to jobs they hate, but are afraid to leave for fear of destitution. Released from the fear of falling into an abyss, workers could be free to find work that is more reflective of their true talents and interests.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />Beyond this, how many social ills, personal to international, are driven by chronic deprivation or fear of the same? (The maxim: “There’s nothing more dangerous than a man with nothing to lose.”) The economic foundation of security and dignity provided by Citizen Dollars would have primary benefits and secondary ripple effects that may be difficult to overstate.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />Distribution;<br />Distribution of a national dividend of hard public services funded at cost price only by </span><span style="font-family: arial, helvetica, sans-serif; font-size: large;">Peoples Public Credit, means </span><span style="font-family: arial, helvetica, sans-serif; font-size: large;">that the most vulnerable of society - the children - are taken care of before greed or poor choices can come into play.</span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />The cycle of decline of the regions can be brken in cases where there is a clear socially viable project, for which exists the natural resources to do it, for which exists the people seeking to gain some units of purchasing power currency in exchange for their services of building it, but it is said it can not happen, for the want of there being enough profit for some foreign lending entity to enable it to happen.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: large;"><br />A solution that would address the ever increasing monopoly of the New Zealand economy by corporations using very questionable comparative advantages, when compared to the citizens and businesses of honest enterprise within the nation, much more interested, literally, in the profits of foreign lending entities, than alleviating the ongoing chronic balance of debt repayments crisis New Zealand, as a whole, has suffered since 1833.<br /><br />I contest The assistance of these great people from the highest level of finance academia - regulation and banking should be sought;<br /><br />Alternative Economic Advisory Panel <br /><a href="http://publiccreditorbust.blogspot.co.nz/2015/11/iain-parkers-ideal-2015-alternative.html">http://publiccreditorbust.blogspot.co.nz/2015/11/iain-parkers-ideal-2015-alternative.html</a><br /><br />I had a dream.......................................<br /><br />The Reserve Bank of New Zealand ( RBNZ ) will be tasked with complete and sole responsibility issuing our nations electronic money supply in addition to the role it already plays with our notes and coins. Banking corporations will no longer be able to create credit ( which is monetised at draw down ) but will function solely as intermediaries in the lending process. The RBNZ will be solely responsible issuing New Zealand's money supply, free of the impost of interest charges at the wholesale credit level, as a sovereign, New Zealand owned, non-commercial, non-profit entity, in a democratic, transparent and accountable manner.</span></div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-87174506239652422232015-02-20T01:42:00.002-08:002019-05-05T08:31:20.914-07:00Former Governor of Bank of England says banking fraud is threat to civilisation.<span style="font-family: "times" , "times new roman" , serif; font-size: large;">This document is not that long and it contains perhaps no greater insight into the international private banking pyramid scam from perhaps no higher authority.</span><br />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">Former Governor of the Bank of England - Vincent C Vickers - ran the loan book for a global elite for a decade before coming out against it until the day he died.</span><span style="font-family: "times" , "times new roman" , serif; font-size: large;"><br />The document titled - Economic Tribulation - he wrote in 1939 outlines how the senior elements of private banking had made record profits from the finance, military, industrial complex of World War 1 and the dangers to humanity if it were to continue.</span><br />
<br style="font-family: Times, 'Times New Roman', serif; font-size: x-large;" />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">full document here;</span><br />
<a href="http://userpage.fu-berlin.de/roehrigw/vickers/" style="font-family: Times, 'Times New Roman', serif; font-size: x-large;" target="_blank">http://userpage.fu-berlin.de/roehrigw/vickers/</a><br />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;"><br /></span>
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">Excerpts below;</span><br />
<br style="font-family: Times, 'Times New Roman', serif; font-size: x-large;" />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">Published 1941 - How many lives could have been saved if the warnings and solutions of this man had got the attention they deserved?</span><br />
<br style="font-family: Times, 'Times New Roman', serif; font-size: x-large;" />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">VINCENT CARTWRIGHT VICKERS</span><br />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">He was a Deputy Lieutenant of the City of London, a director of Vickers, Limited, for twenty-two years, and a director of the London Assurance from which he resigned in January 1939. In 1910 he was made a governor of the Bank of England, and resigned this appointment in 1919. Later, he became President of the Economic Reform Club and Institute.</span><br />
<br style="font-family: Times, 'Times New Roman', serif; font-size: x-large;" />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">I therefore decided to take the unprecedented course of offering to my readers my own qualifications for putting down before the British people the very precarious condition of our monetary system as it exists in this country to-day; that this our money system forms the most important part of our, economic system, and that the nation’s economic system forms part of our social system.......</span><br />
<br style="font-family: Times, 'Times New Roman', serif; font-size: x-large;" />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">Let us acknowledge the truth. Humanity is not suffering from unavoidable circumstances over which it has no control but from the results of deliberate and dishonest actions of its own creation and invention. Fundamental laws, originally designed for the common welfare of the individuals of a community, have been broken – community laws which were never intended to permit the individual to grow fat upon the poverty of others; nor to permit him, in pursuit of his own personal profit, to base his standard of honesty upon his own flexible conscience, consoling himself with gratitude that he is within the law. Nevertheless, just as man has brought, upon himself, or has permitted, this world tribulation, so can he play his part in undoing the harm that has been done......</span><br />
<br style="font-family: Times, 'Times New Roman', serif; font-size: x-large;" />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">But how is this possible? How can the ordinary individual change the world? Shall the man in the street become an expert economist, or a banker, or a cabinet minister and control the press and public opinion? How otherwise can he assist in the regulation of mankind? What is meant by ‘lack of economic equilibrium’, ‘sound finance’, ‘stability of foreign exchanges’, ‘currency restrictions’, ‘the creation of credit’, ‘the inverted pyramid of credit’, and a host of other such phrases? They smell of long study, special technical ability, and great learning. Surely, then, it is commonly felt, it is better that ordinary individuals should leave economics to the economists, finance to the bankers, and national policy to the politicians? But, alas, that is exactly what we have for too long been doing. Look at the result! The experts have hopelessly failed. What is needed is a little less economics and a little more common sense.........</span><br />
<br style="font-family: Times, 'Times New Roman', serif; font-size: x-large;" />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">Although it is the money system which is to be accused of dishonesty, those who use and depend upon a dishonest system, knowing that system to be dishonest, cannot themselves be regarded as honest men. Moreover, it may be that the present system, which international finance has forced our democratic government to adopt, uphold, and protect by every possible means, has undermined the character of the people and forced them to alter their definition of the word honesty so that it may be made to comply more nearly with modern practice.........</span><br />
<br style="font-family: Times, 'Times New Roman', serif; font-size: x-large;" />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">No greater threat to humanity and the progress of civilisation can be conceived than the general spread of the Hitler regime of brute force. To crush out that regime for all time even if it stood alone as our sole war aim, would seem enough in itself without the necessity of searching for other objectives. Although we recognise how serious and how immense is the task that we have undertaken, the vast majority of us gain added strength from the knowledge that righteousness and justice are on our side. The nation has reached a state of preparedness, both mentally and physically, both for offence and defence, which will render the sacrifices and hardships and swift calamities that we must inevitably endure powerless to divert it from the set course which it has determined to pursue to the end. Yet even then, even when this first great objective shall have been gained, our labours will by no means be over. There is still a long way to go before we can begin to contemplate that promised land of peace and justice for mankind which no destructive war can ever of itself attain, and there remains vital work of preparation and reconstruction at home which cannot be neglected or delayed.</span><br />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">Unless we can contrive to design and establish an improved and reformed financial system, which is the first essential towards a new and better economy in our own country, no satisfactory outcome of the war is possible; for where there is still widespread injustice and discontent there can be no ending to that war, unless it be a tangle of internal revolts and revolutions. How can we presume to hold up our own social System as a pattern for other nations to follow, whilst it breeds selfishness, unrest, and dishonest competition amongst our own people, and whilst it is dominated by a decadent financial system in which we possess an ever-diminishing confidence and which is not even under the unbiased control or management of Government chosen by the will of the people? How can we hold out to the German people or to the world, the promise of justice under a new and better economic system that will eliminate poverty, malnutrition, and unemployment, whilst no such system exists, and whilst our own system is still permeated with these same evils?</span><br />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">On the other hand it is unthinkable that we should pretend to ourselves that we can, first of all, and by the successes of our arms, create in Germany an economic vacuum and, having done so, compel her to adopt a money lending system of international finance, designed for the benefit of international financiers who will become more and more anxious to preserve their monopoly and their immunity from governmental control. Are we now fighting to uphold freedom and democracy, or are we fighting to uphold and strengthen the dictatorship of international finance?</span><br />
<br style="font-family: Times, 'Times New Roman', serif; font-size: x-large;" />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">THE DIRECTION OF FUTURE POLICY</span><br />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">State control and State issue of currency and credit through a central organisation managed and controlled by the State......</span><br />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">Stabilisation of the wholesale price level of commodities. That is to say, a fixed and constant internal purchasing power of money; so that a pound will buy tomorrow what it bought yesterday; an honest pound, not a fluctuating pound. And this can be done by so issuing and regulating the volume of available credit and currency that it shall at all times be adequate to permit of the purchasing power of the consumer being equated with the volume of production; not by limiting the purchasing power, but by firstly increasing purchasing power more in proportion to the productive capacity of industry.........</span><br />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">Any additional supply of money should be issued as a clear asset to the State; so that money will be spent into existence, and not lent into existence..........</span><br />
<span style="font-family: "times" , "times new roman" , serif; font-size: large;">The abolition of the Debt System where all credit is created by the banks and hired out at interest to the country...... </span>Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-12042791161464886692015-01-31T23:13:00.000-08:002015-01-31T23:13:18.703-08:002015 Greek Syriza struggle with criminal bankers same as 1936 New Zealand Labour Party.<div align="LEFT" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>NEW
ZEALAND IS A COLONY UNDER RULE OF A PRIVATE BANKING MAFIA - EXPLAINED
BY FORMER NEW ZEALAND LABOUR PARTY LEADER - WALTER NASH.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Excerpts
From Walter Nash by Keith Sinclair 1976</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Index
Of Most Relevant Credit Reform Reference-</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
125 - Were Nashs' conservative views influenced by central banker
threats of economic sanction?</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
135/6/7 - Keeping the colony of New Zealand in its place.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
157 - Public Credit used for state housing project.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
169 - Hamilton makes reference to Newfoundland in 1933 becoming the
first nation to be invaded by economic sanction.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
170/1 We decide to not become the next Newfoundland!</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
172 - World War II saved us from the same fate as Newfoundland.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
174 - The test of time has proven the Keith Sinclairs opinions of
John A Lee to be very misguided.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
180/1 - The blackmail begins, </span><span style="color: black;"><span style="font-size: medium;"><b>Nash
protested against point 1 (4) that it was astonishing: 'You are
taking charge of our country. Surely we have rights.' </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>..............This
must have been one of the strongest threats used by a British
minister against New Zealand.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
186 - British media describes terms of loans as "Blackmailing."
Attempt to use your own money backed by your own resources, you face
the Central Bankers sanctions.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
189 - How World War II saved New Zealand economy.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
209 - Money can always be found for war, but not for peace.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
226 - The economic cost of war.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
235 - The physical cost of war.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
241 - War over, victors meet at Bretton Woods to plan future of
world. New Zealand appointed financial advisor from Bank Of England.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
243 - New Zealand had deep suspicion of IMF. Time has proven them
right as the benefits stated have turned out to be quite the opposite.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
248 - New Zealand signs for its supposed independence in 1947</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
252 - Nash objects to policies suggested by America </span></span><span style="color: black;"><span style="font-size: medium;"><b>"</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>
it has the appearance of serving the expansionist aims of economic
imperialisms."</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
272/3 - British financiers blackmailed New Zealand prior to the war,
yet after the war we sell them discounted product and give up our
trade advantage to assist the "Mother Country" out of its
debt crisis.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
288 - New Zealand economy saved by war again(Korean war wool boom)
anyone in the world protesting the current international financial
system labelled communist and National Party ram through draconian laws.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
294 - 1954 Labour Party policy state to control banking and credit,
to introduce Pay As You Earn tax system.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
305 - Balance of Payment Crisis in every election year between 1946 -
57.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
342 - Fight for Economic Nationalism and be labelled a Communist by
the banking empire, nothing has changed today!</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
351 - 58,000 New Zealanders signed a petition against joining the
IMF, were they wrong or were they right?</span></span></span></div>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
75<br />Although the local LRC had told him that in his electorate
there was little interest in land policy could not resist
expatiating on his favourite themes, land tenure and land
transfers. </span></span><span style="color: black;"><span style="font-size: medium;"><b>He
explained the iniquities of insurance companies and the power
wielded by banks. He covered in detail the history of the Bank of
New Zealand, which Seddon had saved from liquidation in the 1890s.
In 1925 Nash wrote a pamphlet on this subject, Financial Power in
New Zealand. The Case for a State Bank, thought that a State Bank,
with an agricultural credits department, was a first priority, so
that the Associated Banks should not continue to exercise their
politically irresponsible control of credit for the benefit of
shareholders.</b></span></span></span></div>
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<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-75-
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
95 -</span></span><span style="color: black;"><span style="font-size: medium;"><b>The
policy was explained in Holland's Address-in-Reply speech in
September 1932, was published by the Clarté Book Shop as a
pamphlet, The Way out of the Labyrinth.</b></span></span><span style="color: black;"><span style="font-size: medium;">
He said that currency reform alone could not end unemployment, but
must play a part in a scheme of social and industrial
reconstruction. He quoted Keynes and other economists to argue
that increased purchasing power, not deflation, was what was
needed.</span></span><span style="color: black;"><span style="font-size: medium;"><b>
Though he thought the issue of bank notes, based on the volume of
goods and services, could be increased, he was not advocating
inflation, but state control of credit........ </b></span></span><span style="color: black;"><span style="font-size: medium;"><b>The
main change in Labour policy was the emphasis on credit and
banking. This was not altogether new. The party had since 1916
advocated setting up a state bank to reduce the cost of credit
and--still an aim in 1931--to control the issue of bank notes.</b></span></span><span style="color: black;"><span style="font-size: medium;">
The historian of the Reserve Bank has pointed out the irrelevance
of the latter aim in New Zealand, where bank notes were only a
small part of credit. </span></span><span style="color: black;"><span style="font-size: medium;"><b>Nash
had, however, come closer to the idea of a central bank in his
pamphlet, Financial Power in New Zealand, in 1925,</b></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><b>when
he argued that it should control the level of credit in the
community ...........Labour's new policy went much further in
stressing public control of credit. Credit reform had now moved
alongside a humanitarian welfare programme to form the twin
centres of Labour policy. The socialists of 1913 had become an
anti-bank party. Instead of attacking capitalism they were
attacking, and intended to reform, its financial structure. And
the aim was to cheapen and extend credit within the capitalist
system. </b></span></span></span>
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<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-95-
</span></span></span>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
97/8 -</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Some
of the phrases in the party's 1931 election manifest echo the note
of Nash's --or Savage's--sentimental optimism, sounded even in
'the worst conditions: 'We have wonderful natural resources'. </span></span><span style="color: black;"><span style="font-size: medium;"><b>But
the emphatic stress on credit, again, obviously derived from the
credit reformers, such as the president of the party, H. G. R.
Mason. asserted, 'The flow of credit ...has been blocked'; the
Labour Party 'proposes to use the nation's credit for
reconstruction purposes'; 'Credit is the first essential'. A
central bank would be established to control credit resources.
However, there was a credit antidote in the same bottle. The
manifesto twice asserted that the necessary extra credit could be
raised under existing banking laws. This enabled Labour speakers
not enamoured of daring finance to proclaim, as Fraser did, that
there would be no departure from sound finance, 'no rash
inflation, no repudiation', equally, it permitted candidates to
stress credit to their liking.</b></span></span><span style="color: black;"><span style="font-size: medium;">
In Wellington, on 4 November, Holland made an attempt to rival
Ward's successful £70 million loan proposal of 1928 was not
announcing party policy, and it seems that his political grip was
weakening. The state would intervene to provide funds for
development. Pending the setting up of a Reserve Bank, and under
existing banking laws, Labour would raise £25 million in three
years, partly by relaxing the laws regulating bank note issue,
partly by 'employing methods somewhat similar to those adopted
during the war'. He did not make it clear whether there was to be
an internal loan or whether the government would borrow direct
from the banks, but in either case credit would be increased.</span></span></span></div>
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<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-98-
</span></span></span>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">PG
101 -</span></span></span></div>
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">In
1930 B. C. Ashwin, of Treasury, had observed that New Zealand
sterling funds, earned by exports, were being used for Australia's
benefit-and 'unfairly to the people of this Dominion'. Most of the
banks were 'foreign', both owned and directed, and there was much
hostility to them. A Bank of England official, Sir Otto Niemeyer,
who was invited to New Zealand to discuss its exchange problems,
suggested that a central bank should be set up to regulate the
monetary system. The need for such a bank had been discussed in
the nineteen-twenties and its creation had been advocated by the
Labour Party. The Coalition government did not, however, implement
this recommendation until Coates became Minister of Finance in
1933. He then set up the Reserve Bank, extending its objective to
a more general one, 'that the economic welfare of the Dominion may
be promoted and maintained', response to these measures was mixed.
It thought that the Reserve Bank should be state-owned and
directed, not partly owned by private shareholders. </span></span></span>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">PG
103/4 - </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>'The
popes are in retreat', Lee wrote to his wife; it was 'a complete
victory for the free money advocates'; there would be 'some sore
sad hearts for a few days', far as Savage was concerned, the
soreness lasted to his death. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">In
a debate next day, though caucus had agreed that members could
mention the loan proposal, Nash did not speak 'cut of
consideration for the views of the other members'. Holland moved
that bank credit should be used for industrial development, while
Savage spoke of the need for peace credits, like those in war,
formulation sufficiently vague to support the caucus majority,
while sticking to his guns. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">There
was a widespread acceptance, except among the politically and
economically most conservative, that what was needed to alleviate
the depression were some inflationary measures to stimulate the
economy. But in what form should the stimulus be administered?
Coates had tried devaluation. Within the Labour Party there was a
widening difference of opinion. Fraser and Nash agreed that there
was need for expansion. The latter spoke of a shortage of
'spending power', they believed that inflationary measures should
be carefully controlled. They could not swallow the Social Credit
doctrine that there was a permanent shortage because of a
congenital defect in the monetary system. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Nash
was strongly opposed to extensive 'credit creation', fresh
currency issues, and unrestrained inflation. He thought bank
advances could be much extended--the banks' lending policies were
very conservative. He inclined to think that much of the necessary
credit could be obtained from local institutions such as the Post
Office Savings Bank, State Advances, and the state insurance
office. Basically he believed that economic development should be
paid for mainly from taxation and loans, which should be raised
locally and not overseas. He believed in balancing the budget,
with which Holland agreed (although they favoured inflationary
measures in other areas, such as guaranteed prices). On such
points his views could be, and were, called conservative by the
currency reformers, or by anyone who thought Social Credit was
left wing. But he sometimes spoke in terms very like theirs. In
1934, for instance, he advocated the nationalization of all banks
and said that credit must be controlled in the interests of the
community as a whole. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Nash
had a much clearer and more realistic conception of how the
economy in practice worked than did his critics. </span></span><span style="color: black;"><span style="font-size: medium;"><b>'Our
income is conditioned by the return we get for the produce we send
overseas', he said flatly to the 1934 Monetary Committee, was not
the only factor, as he realized.</b></span></span><span style="color: black;"><span style="font-size: medium;">
Nevertheless, New Zealand was exceptionally dependent on exports
of meat, dairy produce, and wool, almost all to the British
market..............</span></span><span style="color: black;"><span style="font-size: medium;"><b>
In 1932 the Social Credit Movement held its first national meeting
and set up a national organization to spread the gospel, rebuff
and ridicule, its persistence ever since is significant in the
context of New Zealand politics. It has offered plenty for
nothing. It has been the country's Aladdin's Lamp, golden-egged
goose, state lottery, and 'cargo cult'. </b></span></span></span>
</div>
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">The
Labour leaders were of course perfectly conscious of Social
Credit's growing appeal. Mason wrote to the assistant secretary,
Dave Wilson, in 1933 that the movement was going through Auckland
like a plague. They would have to convince its adherents that
Labour would give Shylock short shrift, too, stressed the need to
placate or attract them, </span></span><span style="color: black;"><span style="font-size: medium;"><b>Labour
Party member said that 'Douglasism' was an 'avalanche'. He thought
Labour should add the word 'Social' to its credit policy
statement. Creditors, with no political party of their own,
pressed the Labour party from within and without. One of the
Labour credit reformers, W. E. Barnard, wrote to James Thom in
1932 that five of the branches near Napier wanted Labour to adopt
a Social Credit policy. When Douglas visited New Zealand in 1934
Barnard thought the party should welcome him, but the Executive
rejected the idea, the leaders were as conciliatory as possible.
Nash wrote to one devotee that Douglas had made 'a splendid
contribution towards the reconstruction of our Monetary system',
but he could not quite accept his proposed method of 'putting the
matter in order'. 1933 a Social Creditor was allowed to address
the Labour conference. 1932 Nash, Savage, and Jordan held a
meeting with the members of the ( Social Credit) Auckland branch
of the Farmers' Union. The chairman was Colonel S. J. E. Closey,
leader of the Social</b></span></span><span style="color: black;"><span style="font-size: medium;"><u>
</u></span></span><span style="color: black;"><span style="font-size: medium;"><b>Credit
Movement. They passed resolutions on the need for public control
of the financial system, and increased payments to farmers and
workers and unemployed. loose, unofficial alliance was formed,
which lasted until about 1936. This gave Labour an extra
organization, with touring lecturers spreading a gospel rather
like Labour's. </b></span></span></span>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
111<br />The 1935 election, which was one of the most exciting in
the country's history, rivalled by those of 1890 and 1949, and one
of the most momentous in its results, was held on 27 November.
Excitement is difficult to recapture. The feeling arose from the
depression: the depression was the issue. Such an election is the
civil war of a democracy, no less decisive in its results for
leaving the losers their heads.........Nash wrote two of the
principal pieces of Labour propaganda. The main one was the
election 'manifesto'. He sent the first draft to Joe Savage on 3
November: 'It's been a devil of a job writing it and you should
watch out with Fraser and the others [on the Publicity Committee]
that every word will help.' (The party had no paid ad-men, PR men,
or other synthetic image-builders in those days: it had to roll
its own publicity.) Although </span></span></span>
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<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-111-
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
112<br />Nash was the author, he thought it too long for a leaflet,
</span></span><span style="color: black;"><span style="font-size: medium;">certainly
the four large pages of dense prose were not easy reading, while
contrasting favourably in this respect with more modern specimens
of Labour electoral prose. Interested voters presumably contented
themselves with the summaries in newspaper headings and in
speeches. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">The
main points were guaranteed prices, a statutory minimum wage, a
national health and superannuation scheme, and greater educational
opportunities. </span></span><span style="color: black;"><span style="font-size: medium;"><b>State
control of credit was stressed 'to control the flow of credit, the
general price level, and the regulation of foreign exchange
operations'. The Reserve Bank would be nationalized. Reciprocal
trade agreements were to form the basis of guaranteed prices.
Foreign policy would aim at promoting international cooperation
and the League. </b></span></span></span>
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<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">In
Nash's mind the main points in the 'manifesto' were joined
together in a coherent policy arising from the Christian and
humanitarian doctrines he had believed in since he was a young
man. The 'first charge'--still his favourite phrase--on the
community was to be the care of the worker, the old, the young,
the sick. A statutory minimum wage, increased child allowances,
pensions for the needy, and a national health scheme would
redistribute wealth so that everyone would be cared for. People
who served would receive an equitable share of what was produced.
</span></span><span style="color: black;"><span style="font-size: medium;"><b>He
agreed with the credit reformers that the ills of society lay in
maldistribution, not in production. </b></span></span></span>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">PG
123 XI Minister of Finance 1936</span></span><b><span style="color: black;"><span style="font-size: medium;">
</span></span></b></span>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>Nash's
position, as Minister of Finance, was not easy--trapped between
the election rhetoric of Savage, Lee, or Langstone and the
judgement of moderate men, like himself, that the British, the
voters, and the economy would only stand so much printing.
</b></span></span><span style="color: black;"><span style="font-size: medium;">Government
by printing press was a relatively novel idea and such examples as
came to mind were not encouraging. Savage had no firm grasp of
economics beyond the need for higher wages and pensions. In any
case, he was always willing to let his rhetorical heart rule his
economic head to the benefit of his political position. More than
once Nash had to make his actions conform, as comfortably as might
be, to his leader's ill-considered pronouncements. ..............</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Just
after the election Savage announced that the government would
restore wage cuts, expand pensions, guarantee farmers' prices, and
revalue the currency. The English Economist commented that
deflationary exchange.................. </span></span></span>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg124<br />Nash
reported on his plan to nationalize the Reserve Bank, which was
closer to Members' hearts than the subtleties of exchange
rates.............. <b>The government's first legislation was the
Reserve Bank Amendment Act. In moving the second reading of the
bill on 3 April, Nash spoke of the</b></span></span></span></div>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
125</span></span><span style="color: black;"><span style="font-size: medium;"><b>controversy
about whether a central bank should be free of political control.
An Associated Banks' bulletin had spoken of the political bias
unavoidable in nationalized banking. Nash argued that this
impugned the integrity of every MP, and asked why 'so delicate a
set of machinery' as the credit and currency machine could be run
by private bankers, but not by the elected men who ran, for
instance, the health and education systems of the community. </b></span></span></span>
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<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">The
state bought out the private shareholding of the bank. The
sanctity of contracts, which Nash acknowledged, ensured that they
received a good price. His aim was 'absolute control of our
monetary system'. The Governor of the bank, Leslie Lefeaux, a
stiff Englishman, who had been a senior officer of the Bank of
England, and had been appointed on the recommendation of its
Governor, Montagu Norman, believed that he had some degree of
independence from government control. Nash now sought to define
the bank's relationship to government: its function was 'to give
effect as far as may be to the monetary policy of the Government
as communicated to it from time to time by the Minister of
Finance', this purpose, and to promote 'the economic and social
welfare of New Zealand', the bank was to 'control credit and
currency' and also all the overseas funds earned by exports. Nash
did not, however, intend to introduce exchange controls at once:
'we have in general such confidence in the men who are worth while
in the Dominion that we do not think they will take any money
away....' He had been warned by a banker that 'Capital is a very
"shy bird" and takes fright and flight very quickly',
and had looked into the possibility of blocking transfers of funds
through the purchase of Australian shares, but for the moment he
was optimistic about business confidence in the government,
government would use credit to enliven the economy, but neither
too much nor too little. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">Coates
asked who was to decide on the dosage, cabinet, or the minister,
or whether the views of the bank would be considered. Nash
defended the principle of a coordination of state and private
interests. But he was not heated. Lee thought that Nash's speech
was too moderate, that he had a 'slight desire to play to the
orthodox whom he can't win rather than to the revolutionary who
would cheer', of course Nash was trying not to alarm business and
banks more than necessary. </span></span></b></span>
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<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">The
government wanted to keep interest rates low. In September Nash
told Lefeaux that he wanted to convert an internal loan and raise
money for State Advances at 3¼ per cent. Lefeaux informed the
Board that in his view the amounts needed could not be raised at
that rate. Nash had appointed an old friend, a Dunedin
cabinetmaker and city councillor, Mark Silverstone, to the Board.
He wrote to Nash that, far from accepting the minister's
direction, the Board was hostile and obstructionist and passed
resolutions endorsing Lefeaux's views. Nash was about to go to
London and Lefeaux argued that a failure to raise the money would
weaken his negotia- </span></span></span>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
126<br />ting position there. Nash gave in to some extent. The State
Advances Loan was made at 3¼ per cent but the conversion at 3½
per cent. </span></span><span style="color: black;"><span style="font-size: medium;"><b>This
caused strife in caucus, which did not like dictation by bankers.
In the event Lefeaux's judgement proved sound. Treasury reported
to Nash that the 3¼ per cent loan was a fiasco. But the episode
was one which led Nash to determine to strengthen the government's
control over the bank. Lefeaux believed that while government
decided policy, the bank should decide how to implement it. As
early as August, however, in instructing the bank to create credit
of £5 million, Nash also specified how this was to be done. </b></span></span></span>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">PG
130 </span></span></span>
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<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>The
third leg of Nash's financial policy was the State Advances
Corporation Bill.</b></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><b>State
advances to settlers--in other words cheap loans to farmers --had
been introduced by the Liberals in 1894. Savage had announced that
he was taking over where Seddon left off in 1906. In this case
Labour returned to somewhere near that position. The Coalition had
replaced the old State Advances Office with a Mortgage
Corporation with private shareholders. The state now bought these
out. The directors were to administer the Corporation under the
minister's direction. One of Nash's aims was to keep interest
rates down. And he hoped that the Corporation would stimulate the
building of houses, up to 5,000 a year. He hoped to stop the
land-agents and land-grabbers from reaping the profits--and
managed to get in a reference to 'usehold' as a desirable tenure
for householders. The Corporation would also administer government
loans to promote industries. </b></span></span></span>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">PG
134</span></span><span style="color: black;"><span style="font-size: medium;"><b>It
is evident that Nash had given a great deal of thought to this
whole subject. His vision of New Zealand, British Commonwealth,
and world trade was, however, one very distasteful to the British
government which was committed, though more notably in theory than
in practice, to a return to freer trade, regulated by market
forces. </b></span></span><span style="color: black;"><span style="font-size: medium;">The
United States government, .............</span></span></span></div>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
135<br />in the person of Cordell Hull, was at that time seeking to
revive world trade by negotiating tariff reductions. In American
or British leaders' eyes, Nash's dream of cooperation appeared
liked a Nazi or Communist nightmare. …............. </span></span></span>
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<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">When
the depression began most governments heard the cry, sauve qui
peut, and adopted various restrictive measures intended to protect
their domestic economy, whatever happened to any other country.
High tariffs, quotas, competitive devaluations, exchange controls,
became the order of the day. There was a great drop in the volume
of world trade.</span></span><span style="color: black;"><span style="font-size: medium;"><b>
New Zealand, which had one of the lowest tariffs in the world, the
highest volume of trade per person, and a minute local market, was
singularly vulnerable and paralysingly dependent on Britain, which
took almost all of its exports --almost all of which were products
of the cow and the sheep. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>Britain's
response was to hope that the Empire trade might prove its
salvation. In 1931 it introduced a protective tariff and, at the
Ottawa conference, accepted the idea of imperial preference which
the Dominions had been advocating for forty-five years and
practising for thirty or so. At Ottawa--by a series of bilateral
agreements--the Dominions gained exemption from the new British 10
per cent duty, while Britain retained and extended her
preferential position in Dominion markets. </b></span></span><span style="color: black;"><span style="font-size: medium;">Tariff
protection against British manufactures was to be given only to
Dominion industries 'reasonably assured of sound opportunities for
success'. Even then, British producers were to be given 'full
opportunities of reasonable competition'. This agreement, which
was the basis of New Zealand's privileged access to the British
market, was generally ignored by New Zealand advocates of currency
reform and rapid industrialization. In regarding the Commonwealth
as an economic unit, the agreement assumed some specialization in
production in the different countries. </span></span></span>
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<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">The
next four years were stormy, for the Empire unit functioned
imperfectly.</span></span><span style="color: black;"><span style="font-size: medium;"><b>
The Dominions could not absorb all Britain's exports, so the
British had to consider foreign points of view, such as those of
Argentina, a chief rival of the Dominions. Moreover, the British
government moved in various and sometimes mysterious ways to
protect British farmers. First there was a threat that the British
would impose quotas on Dominion and foreign supplies of meat.
Then, in 1935, the British proposed to impose a levy on meat
imports to subsidize home industry. As the chief</b></span></span><span style="color: black;"><span style="font-size: medium;"><u>
</u></span></span><span style="color: black;"><span style="font-size: medium;"><b>supplier
of sheep meat New Zealand would have had to pay the largest share
of the subsidy. In 1935 the British government dropped this
proposal temporarily--the levy would not be introduced for at
least three years. The Dominions had to continue to regulate
supplies to the British market instead. At the same time, the
British government introduced subsidies on local milk and cheese. </b></span></span></span>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
136</span></span><span style="color: black;"><span style="font-size: medium;"><b>W.
K. Hancock commented, in 1940, that since, counting invisible
items, Britain had a favourable balance of payments with most
Empire countries, it was naive to suppose that she would accept
Nash's principle of balancing agreements, which would have slashed
her export trade......</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>
</b></span></span><span style="color: black;"><sup><span style="font-size: medium;"><b>9</b></span></sup></span></span></div>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Though
they made speeches about the liberalization of trade, the British
leaders had been as affected as anyone by what Hancock called 'the
economics of siege'. ….....</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Generations
of British politicians and civil servants have left minutes and </b></span></span></span>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
137</span></span><span style="color: black;"><span style="font-size: medium;"><b>memoranda,
now stored in the Public Record Office in London, about the visits
of colonial politicians. Their frame of mind was usually that of
weary, impatient schoolmasters; their tone tart and superior. It
did not alter much if they were dealing with a rough ignoramus or
someone much better read and articulate than most of themselves, a
man like Alfred Deakin of Australia, for instance. Nash suffered
from a treble disability: he represented a Dominion, a small one,
and he was easily 'placed' in a hierarchical society --as a
Midland shopkeeper. If he suffered from moving in higher and
sniffler circles he did not show it; on the other hand, without
being a sycophant, he enjoyed meeting and was impressed by the
great. The fact that he had come at all was irritating to start
with. The British government had informed the New Zealand, before
he left, that it was not its policy to enter into balancing
agreements, except in 'special circumstances' (that is, ones from
which the practical gain to Britain outweighed the loss in
principles), nor to give New Zealand different treatment from the
rest of the Empire. The New Zealand reply had ignored British
views. The Board of Trade thought the first task would be to
persuade Mr Nash 'that we cannot re-cast our general trade policy
to suit New Zealand's convenience'.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>The
British 'establishment's' attitude to the New Zealand government
was hostile. It was also, in some very unsympathetic ways well, or
at least directly, informed. Lefeaux apparently regarded himself
as an agent of the imperial government and the Bank of England.</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>
</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>Lord
Balfour of Burleigh, a banker, visited the Dominion and after a
conversation with Savage wrote that he was an 'honest idealist',
willing to try anything to achieve his aims: 'His attitude
suggests to me that of a small boy in a power station happily
pulling one switch after another to see what happens. One day he
may pull a switch which will fuse the whole of the works'.</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>
</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>Only
Fraser and Nash, of the ministers, at all impressed British
visitors and officials.</b></span></span></span></div>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
156<br />The day after the election Fletcher wrote offering to
assist the government with housing. He was invited to Wellington
to talk with the three leading ministers and he drew up some plans
for building houses in numbers and quickly. The
government--particularly Nash--wanted to buy Fletcher's
organization, as the basis for a government department of housing
construction, and to appoint Fletcher as its director. (In the
same way, the government did purchase the plant, premises, and
stock-in-trade of Picot Brothers, the largest wholesale dealers in
primary produce for the local market, as a beginning for an
internal marketing organization for dairy produce, bacon, eggs,
and honey.)</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">At
first Fletcher would not agree, and various other suggestions were
considered, including his own proposal to build all the houses at
a fixed net profit per house.</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><sup><span style="font-size: medium;">12</span></sup></span><span style="color: black;"><span style="font-size: medium;">But
in 1937 and up until the end of 1938 Fletcher gave serious
consideration to the proposal. He informed Nash that he had valued
the total assets and stocks of his firm (at £130,000) and put
forward proposals that he should become Director in Charge of a
State Building Construction Department. </span></span><span style="color: black;"><span style="font-size: medium;">The
negotiations again came to nothing. Fletcher did, however, build a
very high proportion of the state houses, though not without
difficulties, for at the same time he was advising the government
and public servants on the whole programme, which led to suspicion
among the latter that his advice was in his interests as
contractor.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Fletcher
discovered that, with rising wages and import prices, costs were
increasing rapidly. He found he was going to lose money on every
house, for no escalation clause had been included in his first
contract. In order to keep the project moving the government
guaranteed at the Bank of New Zealand a £200,000 overdraft for
one of his firms. Fletcher was widely criticized for making a
fortune out of state housing, but he said then and later that it
was his least profitable undertaking.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">It
was recognized by the government that, without Fletcher's
experienced advice, and the new skills of his organization, state
housing would have taken much longer to organize. Nash and the
Under-Secretary in charge of housing, John A. Lee, both
acknowledged this debt.</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">Fletcher
became a very big businessman by New Zealand standards, but his
restless energies were not all self-seeking. He had large ideas,
and a genuine interest in state housing. During World War II he
became Commissioner of Defence Construction.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Fletcher's
cooperation was very important to the government. The ministers
knew little about building and less about organizing and
administering a large scale enterprise like state housing. Indeed,
none of their large projects, guaranteed prices, welfare, or
housing, had been planned in detail or costed. In opposition they
had no research staff. This makes their achievements the more
remarkable: the distance between dream and action was so great. </b></span></span></span>
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<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>The
other two people most responsible for state housing were Lee and </b></span></span></span>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
157 </span></span></span>
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<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">Arthur
Tyndall, an engineer, who was Under-Secretary for Mines, whose
appointment was recommended by Fletcher, tackled his task with
energy equal to Fletcher's. By February 1936 he had written a very
long report on overseas public housing and New Zealand's housing
problems. He also wrote a report on defence. Sir Alister McIntosh,
who assisted him, has remarked how few New Zealand ministers have
been capable of writing their own reports........</span></span></b></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><i><b>One
important influence Lee had was to insist that Reserve Bank
credit--£5 million was initially approved--should finance the
scheme. Nash sent him details of Manchester housing. Fletcher, in
England in 1937, looked into brick-making plant. Everyone worked
with enthusiasm. By September 1937 Savage and Semple and Lee and
Nash helped a tram conductor, Mr David McGregor, and his wife to
move into the first state house, in Miramar, in Wellington.</b></i></span></span></span></div>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg159<br /><b>Lee
was by no means the sole source of the friction which intensified
in caucus from 1936 to 1940 but he was, in personality, its focus;
he pressed his opinions and rivalry furthest. In him the conflict
was given dramatic form and literary expression in a series of
pamphlets and books written over the years from 1938 to 1975. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Essentially
the struggle was one by the credit reformers in the party to force
their policies on the leaders. Two of them were in cabinet,
Langstone and Mason. Outside were able men, like Lee and D. G.
McMillan, a general practitioner just elected to parliament. There
were a number of other credit reformers among the new MPs. In 1937
they came to form a fairly stable group of dissidents in caucus.
Since one of their leaders was Lee, and their principal interest
was credit, the government's financial policy and the Minister of
Finance himself were usually in or near the centre of the battle. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>In
1937 one new MP, Jack Lyon, twice moved that the Bank of New
Zealand should be nationalized. This was a step dear to the heart
of the credit reformers, who were repeatedly to return to the
attack, but this time Lyon was fobbed off by Savage. Lee gave
notice of motion that funds for local body loans and conversions,
State Advances loans to settlers and workers 'wherever the
security warrants', for new industries and for all capital
(public) works should be provided by the Reserve Bank.</b></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><b>This
was at a time when, as Under-Secretary in charge of housing, he
was complaining of rising costs and a shortage of skilled workers.
He called cheap loans to local authorities 'Socialist funds for
Socialist Local Bodies'. He also wished to lower or hold existing
interest rates. Instead of borrowing money locally, as Nash was
doing, he wished, in short, to find it at the Reserve Bank. This
was in line with his view, expressed in a pamphlet in 1934, that
'Each penny of bank created credit is stolen from the community.'
In his eyes Labour policy was to be based on credit creation. But
in the eyes of Nash and Fraser, Reserve Bank loans were to be used
as little as possible. </b></span></span><span style="color: black;"><span style="font-size: medium;">Moreover,
it was difficult to hold down interest rates while borrowing on
the local market. This question had been fought in 1936, and a
State Advances issue at 3¼ per cent had been a fiasco. B. C.
Ashwin of the Treasury estimated, in April 1937, that some £20
million would have to be raised in loans--'In fact low interest
rates and heavy borrowing are a contradiction in policy.' </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Lee,
too, was pushed off by Savage. The only point in his financial
proposal to be voted on by caucus was the nationalization of the
Bank of New Zealand. The voting was 14 to 14 and the motion was
lost on the Prime Minister's casting vote. </b></span></span></span>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
169<br />In denouncing the increase of state controls, which was
very marked under the Labour government, National had not struck a
note which the public heard loudly. It has, indeed, rarely shown
signs of fearing the state. Nor, in a period of rising prosperity,
was there much response to Opposition denunciations of rising
taxes. During the budget debate, Hamilton had pressed this line of
attack, but, in fact, Nash had not increased income taxes in 1937
or 1938. </span></span><span style="color: black;"><span style="font-size: medium;"><b>Hamilton
had come nearer to finding the government's Achilles heel when, in
the same debate, he referred to the declining overseas funds, and
referred darkly to the fate of Newfoundland, which had borrowed
and spent too freely, and finished up in 1933 in the hands of a
receiver, in the form of a British Commission, losing its
independence. </b></span></span></span>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
170</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">XIV
The Exchange Crisis 1938-9<b> </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;">
</span><span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>During
the depression New Zealand built up in London a large reserve of
sterling funds, not spent on imports because of a lack of
effective demand among the poor and the hungry. These overseas
assets totalled sterling £38 million in December 1935. They
drained away, especially in 1936. Then, between 30 April and 30
November 1938, they declined from £28.6 million to less than £8
million.</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>
</b></span></span><span style="color: black;"><sup><span style="font-size: medium;"><b>1</b></span></sup></span><span style="color: black;"><span style="font-size: medium;"><b>these
funds, which paid for imports, had been regarded as a key
indicator of the state of the economy, and had long been its
unacknowledged regulator, was a dangerous situation.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>For
most of 1938 the government turned a blind eye towards the London
balances. Savage and Nash denied that there was a flight of
capital or that the sale of foreign exchange was restricted, and
attributed contrary assertions to a lack of patriotism and a
desire to damage the country's credit. But that was being damaged
by figures, not words. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Even
before the election there was great public unease about money. The
country was swept by rumours that the deposits in the Post Office
Savings Bank were not safe. An officer of a trading bank wrote to
Nash in November that they were trying to reassure their clients
and telling them to leave their money in the Savings Bank. There
were heavy withdrawals. Similar fears encouraged a flight of
capital abroad. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">The
transfer of these funds abroad, for instance by purchasing
Australian shares, had attracted Nash's attention in 1936.
Probably this movement was a result of people having left funds in
New Zealand to benefit from Savage's promised revaluation, and
transferring them when it did not eventuate. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">An
economist of the time estimated that the 'panic' export of private
funds accounted for more than half the loss of reserves in 1938.
Whether he was correct it is not possible to say, there certainly
was a large-scale transfer of funds. Bankers and others wrote to
Nash about the requests for capital transfers and the unpatriotic
actions of some of the meat companies, for instance, who were
selling their funds to the highest bidders. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>The
'flight of frightened capital' did not alone explain the economic
crisis. There had been considerable over-importing--import costs
exceeded export receipts by over £3 million in 1938. But, as Nash
explained, New </b></span></span></span>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
171</span></span><span style="color: black;"><span style="font-size: medium;"><b>Zealand
needed about a £12 million surplus to service public debts and
make other payments. The increase in imports had been largely
generated by the government's expansionist policies: for instance
the public works programme created a demand for machinery. It was
not possible (as the credit reformers supposed) to divorce
internal from external expenditure. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">To
conservatives, like Lefeaux of the Reserve Bank, the situation was
quite clear: the country was not living within its income, a
situation which could not continue indefinitely. The government
must refrain from inflationary measures, reduce expenditure to
match income. traditional response to a drop in reserves was for
banks to call up overdrafts, the government to introduce 'cuts',
reducing demand and producing unemployment. This, Nash explained
to an importers' conference in January 1939, the government had
declined to do or to, accept. Instead, it decided to 'meet our
commitments; maintain our living standards' and reduce imports by
introducing exchange controls and import selection. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>There
can be no doubt that this measure, not taken until December 1938,
was belated. 1937 Nash had been collecting information on the
Danish system of controls. He had told caucus in November 1937
that exchange controls would be introduced, had told the British
in 1936-7 that this would be done. He was well aware that funds
were being transferred abroad through 1938. He claimed that the
situation did not become serious until November, but one reason
for the crisis was the lack of earlier restraints. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Why
had the government not acted? There were several reasons, of which
one was probably decisive. Nash had seen exchange controls
primarily as a consequence of a bilateral trade agreement with
Britain. He lost interest when his mission to London failed. The
British strongly opposed the introduction of such controls. They
would probably result in a breach of the Ottawa agreement, which
had promised British exporters the opportunity for reasonable
competition with domestic producers on the New Zealand market.
Regulation or selection might involve an effective prohibition of
certain British exports. Lefeaux was extremely hostile to exchange
controls, and argued against them on many grounds, faithfully
acting as the mouthpiece of British authority. Cannot be said that
Nash yielded to imperial views but he could not ignore them; he
had to give them due weight. For one thing, a large London loan
conversion had to be arranged in 1939. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Probably
the main reason why nothing was done for so long was that it was
election year. To admit that there was a crisis, to introduce
exchange or import restrictions, would have been an admission of
failure and a powerful stimulus to the Opposition. Mark
Silverstone, Nash's agent on the Reserve Bank directorate, had
written to him on 1 June, 'I can see serious trouble coming', but
he did not think Nash should act before the election. That he
postponed action for this reason cannot be proven, but </span></span></span>
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<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
172<br />is very convincing. Certainly that was what John A. Lee
thought. </span></span><span style="color: black;"><span style="font-size: medium;">The
introduction of Social Security had been postponed to win votes;
exchange controls so as not to lose them.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Nash
was frank in explaining the controls as due to the need to
conserve funds. Savage pretended that they were introduced to
'insulate' the Dominion from unfair overseas competition and to
encourage industrial development. This explanation was pressed by
W. B. Sutch. Allan Fisher wrote to Nash, 'Sutch tells me that it
is a mistake to suppose that pressure on London funds is the
complete explanation and that control is intended to be a weapon
of genuine socialist reconstruction with "selective
importing" as the key-note. (A ribald enquirer might ask,
selective by whom? by Sutch? which would no doubt be unfair).'</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Some
Labour MPs, like D. G. McMillan and Lee, as well as Sutch, had for
some time seen import controls as the key to industrial growth.
However, they were not introduced as part of a large economic
strategy, but in an atmosphere of emergency. Ashwin of Treasury
and Wood of Customs advised that it was impossible to reduce
imports to the extent required to balance receipts and
payments--some £10 million to £12 million--without cutting
industrial raw materials and other essential items, endangering
employment and living standards. Other measures such as taxation,
local borrowing, and a reduction of public works would be needed;
a large rise in local costs and prices must somehow be avoided. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">The
months from November 1938 to late 1939 were politically among the
most anxious and tense in Nash's political life. He had met the
fate of all but the luckiest of New Zealand Ministers of Finance.
In a small democracy with a dependent economy, in which the voters
expect glittering promises, the Treasury was the most vulnerable
position where able men and wizards of finance, like Julius Vogel,
Harry Atkinson, J. G. Ward, and Gordon Coates, trying to make the
ends of promises and economics meet, had fallen. To some extent
Nash was lucky. He was saved, not by the whistle, but the war. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">While
he was trying to cope with the internal crisis, and soon with its
consequences in London, he was also at the centre of the biggest
storm the Labour Party has ever experienced. His financial
policies were under fire from almost every direction at once, but
undoubtedly the party criticism was the most wearing. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">The
first caucus after the election, on 3 and 4 November, was the
occasion of a very unpleasant dispute. Nash outlined the financial
problem. McMillan and Anderton moved that a caucus committee,
including four credit reformers and three of the leading
ministers, be set up to investigate the financial crisis and
report back. It was scarcely the time for committees. McMillan
withdrew his motion, apparently after a heated debate, when Fraser
and Nash moved that cabinet should consider exchange controls,
embargoes, or tariffs, in that order of preference. If the former
were feasible, </span></span></span>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
173<br />cabinet would impose them without reference to caucus; if
not, there would be another meeting. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>The
government had not adopted the dissidents' policies. They were now
trying to seize the power to implement them. Already two credit
reformers were in cabinet. They wanted a stronger representation.
In May 1936 Dr McMillan, a new MP, had moved that in future all
cabinet ministers should be elected. Savage had ruled the motion
out of order on the grounds that it was the present system, which
was quite untrue. The issue had smouldered for two and a half
years; now they were trying again. Lee now moved, at the meeting
in November 1938, that cabinet should be elected by a preferential
vote of all caucus members. According to him, Savage threatened to
resign. </b></span></span><span style="color: black;"><span style="font-size: medium;">There
was an emotional debate, and the motion was carried by 26 to 22.
Savage said that he would not feel bound by the resolution, and
would refer the issue to the annual conference, was not
unreasonable, since the method by which cabinet was chosen was as
much a matter for the party as for caucus. In the event, however,
six members of the central executive attended the next caucus, in
early February, to submit the executive's own proposals for
selecting cabinet. </span></span><span style="color: black;"><span style="font-size: medium;"><b>A
joint caucus-executive committee then drew up rules which were
accepted. The leader was to be elected by caucus in the year of
each general election, and could nominate his own cabinet, but its
members had to be approved by a caucus vote. If any names were not
approved, members could recommend others to the leader. He would
then select those he wanted from among the nominations. These
names, too, had to be approved by caucus. It was an unwieldy
attempt to combine leadership with democracy.</b></span></span></span></div>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
174 </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">In
December Lee, Nash's Under-Secretary, launched a powerful attack
on Nash himself. He wrote a long letter to members of the Labour
caucus. Apparently W. J. Lyon, an Auckland MP and one of the
leading Labour credit reformers, intentionally or not, began to
circulate it. It was soon published, possibly by National
supporters, as a pamphlet, A Letter which every New Zealander
should read.</span></span><span style="color: black;"><span style="font-size: medium;"> </span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>The
'Lee Letter' denounced Nash as a conservative blocking the
introduction of radical Labour reforms. It publicized caucus
disputes over pensions and said that Nash's was 'the greatest
opposition to the present Social Security Scheme'. But principally
it attacked his financial policy. Nash had adopted a 'god-like
attitude' and was persisting with financial orthodoxy against
party policy. He was denounced for not introducing exchange
controls earlier, and for not being more daring in his recourse to
Reserve Bank credit. Lee wrote, 'We took over the Reserve Bank to
free Labour development from capitalist debt', and asserted that
they should have used its credit to wipe out most of the public
debt. How London investors could be induced to accept a New
Zealand credit issue was not perhaps clear. Lee suggested that
loans should have been refunded at a much lower interest rate. He
always objected to paying interest to private investors to provide
for national development. He ridiculed 'the inflation bogey'. He
advocated further credit expansion--at a time when New Zealand was
suffering acutely from over-importing because of internal
inflation. Thus the cure for New Zealand's post-election hangover
was to be more of the stimulus that caused it. Someone wrote to
Nash that Lee had seen a man walk steadily after three whiskies
and refused to believe that a whole bottle might have a different
effect. The 1939 conference condemned Lee's action in issuing the
letter as a breach of party loyalty and discipline and passed a
vote of confidence in Nash and in his financial policy. But Lee
continued as Under-Secretary--sharpening up his pen. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Caucus
pressure was one factor which led the government to introduce
exchange and import controls, but not the principal factor. Given
the delay in acting before the election, even if the government
had been willing to adopt deflationary measures, some kind of
exchange controls or quotas had become essential. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>One
of the government's main difficulties was that, to deal with its
extensive policies, it had very limited resources of
administrative skills and other expertise, whether among the
ministers or in the public service.</b></span></span><span style="color: black;"><span style="font-size: medium;">
It had promised much, and could not deal with everything at once,
as caucus seemed to ask. For instance industrial development had
long been a plank in policy, one now especially desirable, to get
men off public works into more productive enterprises. </span></span></span>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
179</span></span><span style="color: black;"><span style="font-size: medium;"><b>….....Apart
from rare loans to Dominions, lending abroad had almost ceased--80
per cent of a new Australian issue was left to the underwriters.
He told Nash it was impossible for the British government to lend
money for New Zealand's defence. Neither a government loan nor a
public issue was possible for the £10 million loan Nash wanted.</b></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><b>He
should concentrate on dealing with the £17 million</b></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><b>conversion.
But he seemed to Phillips to have no programme but wait and see.
Phillips, Inskip, and Norman, Nash got the impression that some
funds might be offered for defence, but nothing more until the New
Zealand government provided for the redemption of the maturing
loan. Norman, suggested that a proportion of New Zealand's export
receipts should be set aside for this purpose. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">Nash
began to receive conflicting or contrary advice from different
authorities, which was confusing, but at least showed that the
'establishment' was not single-minded, which must have been
encouraging. Kershaw of the Bank told him that it might be
possible to get a loan for defence, but the conversion loan could
not be considered until late that year. Inskip told him he should
deal with the conversion first. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>It
must have been a disconcerting experience to find himself regarded
in England much as he regarded John A. Lee in New Zealand. Kershaw
lectured him on the iniquities of Reserve Bank credit and
excessive public works. While giving him little comfort, more
responsible people realized that something would have to be done.
New Zealand was discussed in cabinet on 21 June, said that New
Zealanders were beginning to contrast Britain's willingness to
give loans and credits to the Romanians, and recently to the
Poles, Turks, and Greeks, with her attitude to the Dominion, a
contrast which was not escaping notice in the Press said that Nash
should not leave without some help</b></span></span><span style="color: black;"><span style="font-size: medium;"><u>.</u></span></span><span style="color: black;"><span style="font-size: medium;">
Another point was that Nash was in touch with the Labour
Opposition. Lord Halifax, the Foreign Secretary, said that they
were 'living in what was virtually a state of concealed war' so
that financial aid to the Romanians or Turks was really military,
not commercial. There was an Export Credits Guarantee Department,
which assisted British exports by underwriting private commercial
credits to foreign importers, and could guarantee New Zealand's
payments. Oliver Stanley said, in this connection, that he doubted
whether New Zealand would welcome a grant of an export credit
'under a scheme which implied that she was not credit-worthy'. The
Prime Minister, Chamberlain, said that this point would be met if
Stanley consulted with Inskip, Simon, and Halifax in deciding on
the exact amount of the increased figure for non-commercial
guarantees which parliament should be invited to sanction. Stanley
had presented a memorandum suggesting non-commercial guarantees of
up to £10 million should be raised. The Prime Minister had now
directed that New Zealand should be helped. Cabinet agreed. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>After
a chilly beginning, in which most of the British with whom Nash</b></span></span></span></div>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
180</span></span><span style="color: black;"><span style="font-size: medium;"><b>talked
offered (in the words of the Treasury brief for ministers),
'little or nothing',</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>
</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>negotiations
now entered a second phase in which the British set the most
arduous terms for assistance.The Board of Trade was under strong
pressure from businessmen. The New Zealand High Commissioner's
office had been suggesting that manufacturers should take
advantage of the import regulations by setting up branch factories
in New Zealand. This idea, that British industry should export
itself instead of its products, was Nash's main idea about how
New Zealand could industrialize. He was at the time negotiating
with tobacco and tyre firms. It was a way of getting the capital
and know-how at once. The Federation of British Industries
protested strongly about this and even more at an offer that New
Zealand would lift embargoes on imports from firms willing to
leave the payment in New Zealand. The Federation said this was
'vicious' and called on the government to revise Ottawa. New
Zealand was not merely to pay a stiff price, but to be taught a
lesson.On 22 June Montagu Norman suggested to Nash that he accept
a short-term loan of £16 million repayable at £4 million per
year, and made a specific charge on New Zealand's export receipts,
strongly objected to accepting what was called 'a bond with a
charge', for it would be a public indication of distrust of New
Zealand's credit. He said he could not recommend his government to
accept unless some arrangement could be made to pay for imports
and defence. Next day Inskip committed the British government to
cover New Zealand's defence needs through the Export Credits
Guarantee Department. Zealand had almost always converted its
London loans when they fell due. Norman's demand was unprecedented
and onerous. It was doubtful if New Zealand could pay £4 million
annually. Nash protested vigorously against the 'specific charge'
at a meeting with the British ministers on 29 June, but Simon said
the terms were necessary in Norman's opinion, if the loan were to
attract investors. The ministers were also adamant that they would
not lend direct to the New Zealand government for import payments
and that the Export Credits Guarantee Department must endorse
bills covering individual contracts and provide the money only
when a payment fell due: 'This was the procedure applied in the
case of Russia, Romania and other countries'.</b></span></span><span style="color: black;"><span style="font-size: medium;"><b> I</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>n
the afternoon R. S. Hudson, the Parliamentary Under-Secretary of
State for Overseas Trade, was even tougher. He presented Nash with
a set of demands:1.The New Zealand Government to declare</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>1.
that present import control scheme is temporary and will be
abandoned as soon as financially possible;</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>2.
that uneconomic industries will not be set up, nor will existing
industries be extended to manufacture goods which cannot be made
economically in New Zealand; </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>3.
that protection, whether by quota or duty, will not be afforded to
New Zealand industry in conflict with Ottawa commitments; </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>4.
that some undertaking should be given with regard to the granting
of monopoly of manufacture to individual concerns or to existing
manufacturers to the detriment of other interests in export,
import and manufacturing.</b></span></span></span></div>
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<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Pg
181</span></span><span style="color: black;"><span style="font-size: medium;"><b>2.
The New Zealand Government to agree to take into consultation
representatives of the appropriate United Kingdom trade
association whenever a proposal is under consideration for
establishment or extension of New Zealand manufacturing. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">Nash
protested against point 1 (4) that it was astonishing: 'You are
taking charge of our country. Surely we have rights.' Hudson
replied, 'yes, and we have too.' Hudson said 'You have broken your
promise given at Ottawa'. Nash also protested at the idea of
consulting British businessmen on New Zealand industrialization.
He said it was futile--no manufacturer would advise the exclusion
of his own trade. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Hudson
threatened to apply a 'Clearing and Payments Agreement', a
procedure whereby a proportion of New Zealand's export receipts
defined by the British Government would be paid into a special
account and earmarked for the payment of British exports to New
Zealand specified by the British government. Despite its dislike
of bilateralism, Hudson said, Britain had been forced to negotiate
such agreements with Germany and Italy, specifying what goods they
would take. Nash said Britain already set a limit to New Zealand's
exports to her markets. He did not see what right she had to
control New Zealand's imports. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>This
must have been one of the strongest threats used by a British
minister against New Zealand.</b></span></span><span style="color: black;"><span style="font-size: medium;"><u>
</u></span></span><span style="color: black;"><span style="font-size: medium;">Nash
cabled to Savage that they might agree to give assurances about
'non-economic' industries (and he and the British had discussed
what they might be) and to consultation with the British on new
industries, but that they should not agree to the annual 'specific
charge'</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">surely
a new form of the 'first charge' to him.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Nash's
and New Zealand's cup of humiliation was not yet full. On 5 July
Norman laid down his terms. The only consolation he offered was
that in two years it might be possible to borrow long term to
replace the commitments he now suggested. There would be a
five-year £16 million loan. Every month £266,666 13s. 4d. from
New Zealand's export receipts (£3.2 million per year) was to be
placed in a special account. The Bank of England would publicly
announce monthly the receipt of these payments --the 'specific
charge'! The Reserve Bank was to give 'irrevocable instructions'
to the Bank of England authorizing it to draw any deficit in
monthly instalments from the Reserve Bank's account in London,
then departed to Basle for a week to a meeting of gnomes and
bankers. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">Savage
replied that Hudson's suggestion of a Clearing House procedure was
'intolerable'. Norman's demand that the Bank of England would
announce monthly that New Zealand had paid up was 'unnecessary and
humiliating'. </span></span></b></span>
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<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
182</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Savage
underlined the harshness of the terms by reporting that if anything
like £4 million had to be repaid in 1940, after repaying the £2.5
million lent by the trading banks, interest on government and local
body loans and other remittances, only £35.8 million would be left
for imports, assuming that export receipts were about £55 million,
as in 1939. This would mean a huge reduction of £19 million in
imports, in comparison with the cut of about £8 million to £10
million which the government intended. It would disorganize the
economy and cause much unemployment.........</span></span></span></div>
<div style="margin-bottom: 0in;">
<br />
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
183</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">The
ten days had been very wearing by most people's standards. The
British took the view that the three loans were linked, as well as
being dependent on certain assurances. Consequently negotiations were
very involved. </span></span><span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>The
£5 million for defence orders placed in Great Britain was now
secure, but the British ministers would not fix a total for
commercial credits for New Zealand importers, wishing to leave this
to the Export Credits Advisory Council.</b></span></span><span style="color: black;"><span style="font-size: medium;">
Nash asked for £10 million and on 7 July the Chairman of the Council
agreed to £2 million. Nash said that this was 'no use to him at
all'. He then cancelled his passage home. There were more meetings at
which he demanded £8 million (Savage cabled that at least £5
million was needed). A meeting on 11 July Inskip said that £2
million 'was the limit tonight; it will be the same tomorrow morning
or tomorrow afternoon or next week.' Indicated that he would
compromise at £5 million. Next day the Chairman of the Council,
Inskip, Simon, and Stanley decided to offer £4 million, which Nash
promptly accepted.</span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">At
the same time Nash was engaged in long discussions, involving many
cables and telephone calls to Wellington, on the assurances which New
Zealand might give to the British government and manufacturers about
import controls and New Zealand industries. </span></span><span style="color: black;"><span style="font-size: medium;"><b>There
was much discussion about what an 'uneconomic' industry was. The
British ministers defended their manufacturers vigorously. Oliver
Stanley opposed 'monopolies' in New Zealand, protected by import
prohibitions, but he added 'that if the license is to be confined to
one "we want our people to have the chance to be that one".'
In reference to pressure from manufacturers, he said to Nash, 'we're
both politicians and have our difficulties'.</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>
</b></span></span></span>
</div>
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<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-183-</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
184</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">..........referring
to a 'monopoly'. Eventually London agreed to Wellington's suggestion
that the paragraph should refer to industries which 'required some
measure of restriction of import in order to operate efficiently'. In
the eyes of the British negotiators, this gave a 'wider assurance'
than they had asked for. On 12 July, Oliver Stanley and Nash signed a
memorandum. Though much watered-down, it was still a humiliating
document, which was presently published. In part it read:</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">2.
United Kingdom Ministers recognise that in the circumstances that
existed in New Zealand last December, and still exist, some effective
measure for reducing total imports into New Zealand below their
recent abnormally high levels was, and is, inevitable, and they do
not raise objection in principle to the method which the New Zealand
Government have adopted though they are conscious of the difficulties
it has caused in individual cases. Mr. Nash has undertaken that the
New Zealand Government will examine and do their best to meet the
representations by United Kingdom industries with regard to such
cases. United Kingdom Ministers welcome this assurance. </span></span><span style="color: black;"><span style="font-size: medium;"><b>They
appreciate also the fact, which was confirmed by Mr. Nash, that the
New Zealand Government's intention is to administer the policy as
favourably as possible in relation to United Kingdom interests. </b></span></span><span style="color: black;"><span style="font-size: medium;">They
informed Mr. Nash, however, that they were apprehensive as to the
permanent effects on the United Kingdom export trade of a policy
designed to meet a temporary difficulty in New Zealand. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Nash
acknowledged that the scale of import restrictions was abnormal. New
Zealand would aim at a relaxation to encourage expanding trade with
Britain, </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">4.
Mr. Nash assured United Kingdom Ministers that it was not the
intention of the New Zealand Government to employ the import
licensing policy in order to give protection to New Zealand industry
against imports of United Kingdom goods on a scale which prevented
full opportunity of reasonable competition. He explained that
difficulties arose in cases where the New Zealand Government had
already incurred obligations by taking action to encourage the
establishment of industries which, in the opinion of his Government,
required some measure of restriction of import in order to operate
efficiently. </span></span><span style="color: black;"><span style="font-size: medium;"><b>He
undertook to investigate the matter fully on his return to New
Zealand, and gave an assurance that, pending this investigation of
the position, such protection would not be extended to other
industries. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">5.</span></span><span style="color: black;"><span style="font-size: medium;"><b>
He also agreed on behalf of the New Zealand Government that their
policy of licensing imports would not be used to foster uneconomic
industries, and that, in order to assist them in determining what
goods could be economically produced in New Zealand, they would
invite the views of the United Kingdom industries concerned and would
take such views into account in reaching a decision. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">6.</span></span><span style="color: black;"><span style="font-size: medium;"><b>
In cases where it is proposed to grant a limited number of licences
to manufacture particular kinds of goods, the New Zealand Government
would give United Kingdom interests the opportunity to put forward,
should they so desire, proposals for undertaking such manufacture. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Nash's
troubles were not yet over. On 11 July Norman returned from </span></span></span>
</div>
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<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-184-
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<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
185</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Basle
and met Nash, who had now booked a passage on the Queen Mary on the
13th. Norman spoke to him as though to an erring schoolboy. Nash's
transcript of the opening of this conversation went as follows: </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">MR.
NORMAN at the outset said that two things were perfectly clear: (1)
We cannot finish this if Mr. Nash is leaving tomorrow (2) Unless you
have agreement with your friends in Whitehall--the Board of Trade and
Sir Thomas Inskip--there will be no arrangement. 'We must all stand
together'. He enquired whether Mr. Nash was going away? </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">MR.
NASH: Those are my present plans. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">MR.
NORMAN: From the beginning I have felt you did not want to improve
your credit position. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">MR.
NASH queried this. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">MR.
NORMAN: 'You have been up and down talking figures that damage your
credit. If you had set out to destroy your position you could not
have done it better.' He referred further to the difficulties of
making arrangements. 'Nobody can know what they can do a week hence:
you have only to look at the map of Europe'. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">MR.
NASH said they were agreed that the money to repay the 16 millions
should be met half-yearly; that arrangements should be made for the
Bank of England to draw from Reserve Bank of New Zealand's funds if
necessary. There should be no special charge on exports. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">MR.
NORMAN: What if the money were not there or if the Reserve Bank
account were withdrawn from the Bank of England </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">MR.
NASH: We would give an undertaking that the funds would be there. He
was prepared to recommend legislation to set up an Overseas Debt
Redemption Fund. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">MR.
NASH repeated that the proposed announcements that moneys were being
paid on due date by New Zealand were objectionable. 'It is like the
declaration of a bankrupt's dividend'. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">MR.
NORMAN: I won't say you're bankrupt but you have no credit. Further
discussion whether the giving of priority on a new redemption loan
would infringe the security of existing loans. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">MR.
NORMAN: We still want some charge on the 'funds arising from the sale
of primary products outside the Dominion'. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">MR.
NASH: We are prepared to pay from our own Government funds. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">MR.
NORMAN could not say this evening whether a phrase on those lines
would meet requirements.</span></span><span style="color: black;"><span style="font-size: medium;"><u>
</u></span></span><span style="color: black;"><span style="font-size: medium;"><b>He
mentioned that Mr. Nash was seeing the Dominions Secretary at 9 p.m.
(9.30 p.m. was the hour), and repeated 'We all stand together'. 'You
settle with all before you settle with any.' </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Instead
of a 'first charge' on New Zealand exports, Nash offered to give an
undertaking to repay from government funds. Norman replied that 'an
irrevocable undertaking to supply from a fund that may or may not
exist cannot be very reassuring.' He insisted that a New Zealand
government promise to repay must be backed by an order-in-council or
an act of parliament. An order-in-council was objectionable enough,
and the New Zealand Solicitor-General advised that it would amount to
no more than a solemn declaration. Nash protested that the prospectus
of a loan was in itself a binding contract. But the government had to
comply. On these terms </span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-185-</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
186</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;">
</span><span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>............the
bank dropped its demand for monthly repayments and for a 'specific
charge'. Even so, the loan of £16 million had to be repaid in five
annual instalments. Some British newspapers thought the terms
impossibly onerous; indeed blackmailing. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>There
followed what Nash called an 'annoying delay' by the bank. So far the
'establishment' had twisted Nash's arm, meaning to impel him towards
wiser, in other words more orthodox courses, more in Britain's
interests. Now Norman intervened decisively to help him, just as,
almost certainly unknown to Nash, Chamberlain had done. It would not
do to go too far in publicly punishing an erring Dominion, or
quasi-colony. </b></span></span><span style="color: black;"><span style="font-size: medium;">It
was difficult to induce brokers and financial houses to assist with
the loan. Machtig wrote to Batterbee, 'It is a testimony to the depth
to which New Zealand's credit had fallen in the City that it took the
Governor of the Bank nearly a week before he could secure the
necessary support for floating the proposed loan, and even then, we
are told, he had to "ram it down the bankers' throats".'
</span></span><span style="color: black;"><span style="font-size: medium;"><b>What
Norman did was to force the six banks operating in New Zealand to
take up some £6 million. The Bank of England underwrote the rest.
His biographer, Sir Henry Clay, wrote: One territory incensed the
issuing bankers, which had always met its needs, by talking about
re-funding sinking funds and by pursuing a policy of domestic
inflation which made it very unlikely that it would be able to meet
its external debt service. When its Finance Minister arrived in
London with very large maturities to re-fund, he found his former
friends all disinclined to lend him anything. Norman sympathised with
the issuing bankers; but he could not let an Empire Government face
default. For a week he kept bankers and Ministers in conference,
putting the case of each to the other and extracting concessions from
both, until agreement to float the re-funding issue was--with a large
undisclosed subscription from the Bank--agreed. The Adviser who had
assisted him remarked as they left the last meeting, 'I do not know
how even you stand a strain like this last week's'. 'I could not have
done, ten years ago', the Governor replied. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Norman
also assisted by arranging that the underwriting commission and other
expenses would be below normal. The loan was floated at the very low
rate of 3½ per cent and only some £3.5 million was applied for in
cash or conversions. £12.5 million was left with the banks. The
Times was 'helpful' in encouraging a good atmosphere for the loan. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Nash
at last got away on the</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><i>Queen
Mary</i></span></span><span style="color: black;"><span style="font-size: medium;">'s
next crossing on 2 August. In exceedingly difficult circumstances he
had done fairly well. He had got most of the money he wanted. Beneath
his courtesy he was exceedingly stubborn. Not as aggressive as
Fraser, he was very hard to throw off balance; he kept cool. He was a
good negotiator. Although there was a press campaign against New
Zealand's finances, personally he had a good Press. He was very
attentive in listening to the complaints of manufacturers. His praise
of his government's achievements impressed Labour listeners.</span></span></span></div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-186-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
187</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">.........
If Norman called during the crisis, it must have been on the 12th or
13th of July, at the time of the interview just quoted. Nash was then
booked on the</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><i>Queen
Mary</i></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">and
uncertain whether to leave, as he told Mrs Nash and Savage, while
Norman was urging him to stay on. It was after this that Norman
pressed the banks to assist New Zealand Though these events were, not
surprisingly, a little scrambled in his memory when Nash was an old
man, there is no reason to doubt that something of the sort happened.
Norman did help Nash very considerably--had he gone home without a
loan his political prestige would have suffered severely. What
impressed Nash most, however, was that Norman had called on him, a
borrower. </span></span><span style="color: black;"><span style="font-size: medium;"><b>Just
after he left England, Mr H. V. Hodson, the editor of</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>
</b></span></span><span style="color: black;"><span style="font-size: medium;"><i><b>Round
Table</b></i></span></span><span style="color: black;"><span style="font-size: medium;"><b>,
a journal which tried to be objective about British Commonwealth
affairs, wrote to him:</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>I
find it difficult to comment on the arrangements that you succeeded
in making here. I imagine they will be regarded by many people in New
Zealand as more onerous than might have been expected, and that
ill-will towards a Labour Government on the part of the City of
London may be blamed a good deal, as it has been in the past.</b></span></span><span style="color: black;"><span style="font-size: medium;"><u>
</u></span></span><span style="color: black;"><span style="font-size: medium;">There
must inevitably be suspicion on. the part of investors of money
towards a reformist régime but it is my view that this motive has
been, in the last resort, much less important in placing obstacles in
the path of your obtaining the finance you want than the sheer lack
of investing power of Great Britain today. We have neither the
necessary margin on our balance of payments nor the necessary margin
between savings and investment at home. Indeed, I think we may be in
for a substantial measure of inflation on the latter score within a
short space of time--a development likely to be not unfavourable to
the economy of New Zealand. When there is really little or no money
to lend, the political excuses for not lending it always seem to be
decisive. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>While
crossing the Pacific in the Mariposa, after crossing the USA, Nash
replied: </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>The
London negotiations were conducted in very mixed atmospheres. Some
splendid friends whom it is good to remember, others whom it is well
to forget. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Once
fears in the financial and investing world have been created it is
difficult </b></span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-187-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
188</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>to
remove them. Stressing of advisability or necessity only extends the
fear of the Trustee or ordinary investor--and the more publicity that
was given to the question--the more difficult to obtain rational
thought and reasoned procedure. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Whilst
recognizing the extent of the accommodation provided and without
commenting on terms or other conditions I regret personally that the
opportunity was not seized to be completely generous in every
way--with party politics--and class prejudices completely set aside. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Such
an opportunity to tie up the goodwill of New Zealand whatever its
form of Government may not occur again. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>We
can manage but with many difficulties that could have been avoided
and replaced by memories of generous thought and treatment that would
never have been forgotten. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>However
the United Kingdom has its difficulties and whatever New Zealand can
do in its small way to help the Old Country will be done--even though
the cost may be heavy. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>One
of Nash's reactions to the events in England was that his dislike of
overseas borrowing was greatly reinforced. In a cable to Savage from
London he referred to 'the menace of overseas debt and redemptions'.
This had been an attitude very common in the Labour Party during the
depression, as among the earlier Liberals during the depression of
the eighteen-eighties. When export receipts fell, or import
expenditure rose too high, the interest on and redemption of overseas
loans was a heavy burden which left the government exposed to the
kind of pressures Nash had experienced..... Undoubtedly the events of
mid- 1939--and much more, those of 1941-5 --pushed the New Zealand
government towards independence, towards a lesser reliance on 'the
Old Country'. The British ministers had not proposed to tax the
Dominion, but they had certainly wanted to control its economic
development--in their own interests: an attitude not much different
from those of eighteenth-century mercantilists.</b></span></span><span style="color: black;"><span style="font-size: medium;">
Some people must have thought that Nash was getting his deserts, for
profligate radical government, when he was being pushed around in
London, in the hard, real world. But was this fair? In the light of
later events one might see Chamberlain and Montagu Norman--the
'appeasers'--as living in an unreal world, trying to hold fast to
economic and political views which most governments repudiated.
(During World War II, the Americans suspected Norman of still being
in touch with Schacht. One of Norman's biographers called him a
'sleep-walker', for he persisted in trusting the German authorities
even into 1939.)</span></span></span></div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-188-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
189</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>On
his way back to New Zealand Nash paid another official call of much
greater long-term and symbolic significance than his time in London.
He visited Washington, where he discussed trade with Sumner
Welles.................. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">Nash
enjoyed a little revenge on the British, which must have given him
some quiet, ironical satisfaction. On 4 September the New Zealand
government declared itself at war with Germany. On 5 September Nash
came ashore from the</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><i>Mariposa</i></span></span><span style="color: black;"><span style="font-size: medium;">.
On the same day the British government cabled that (according to
arrangements finalized early in 1939) it was prepared to buy New
Zealand's entire exportable surplus of meat. Next day they requested
the entire exports of dairy produce. His 1936-7 search for a bulk
sales agreement had been rewarded. And over the next few months
sterling reserves built up with gratifying speed.</span></span></b></span></div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-189-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
192</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">..............The
proposed nationalization of the Reserve Bank aroused strong party
political feeling. Fraser and Nash--and Savage--did not want to
divide public opinion any further in war-time by pressing an issue as
emotionally charged as the nationalization of trading banks. It could
be thought that, in seeing an overriding need for national unity,
they were as patriotic as the professed or super patriots like Lee
and Barnard, who wrote pamphlets such as</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><i>I
Fight for New Zealand</i></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">and</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><i>The
Speech of a New Zealander</i></span></span><span style="color: black;"><span style="font-size: medium;">.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>When
the question of nationalizing all the banks first came up in caucus,
at the September meeting, Fraser and Nash raised it. The credit
reformers, except on one occasion, pressed to nationalize the Bank of
New Zealand alone. This would not have been difficult, for it was a
New Zealand bank. Indeed, the government already controlled its
policies in a broad sense, both through the Reserve Bank and because
it appointed a majority of its directors. To nationalize the other
banks would be more difficult. Several had their main business in
Australia. All were directed from Australia or Britain. Most of their
shareholders did not live in New Zealand. A caucus committee reported
that it would be difficult to legislate banks out of existence, but
recommended that the Bank of New Zealand, once nationalized, 'might'
be given power to purchase the New Zealand assets of its rivals.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Lee
and the dissidents regarded themselves as a left wing fighting
orthodox, conservative ministers, but it is difficult to see the
dispute in this light. A socialist would have regarded bank
nationalization as part of a programme of state ownership of the
means of production and distribution --as well as of exchange. But
neither the government nor its critics had such a programme. The
dissidents' aim was not socialism but cheap credit. Lee believed that
a trading bank should be taken over to make credit available for
industry. In the eighteen-eighties the State Bank League had
similarly wished to get cheap credit for farmers. But why Lee thought
that to nationalize the Bank of New Zealand was the best way of
providing cheaper credit was and is not obvious. The nationalization
of one bank, though the largest, would not have threatened
capitalism, but to the credit reformers it was an emotional
symbol--one moreover, with which exsocialists could identify. Nash
himself had written his pamphlet attacking the bank in 1925. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">In
October McMillan returned to the attack. He and W. T. Anderton moved
in caucus that the shareholders of the trading banks should be
compelled to sell their shares or New Zealand assets to the Reserve
Bank. </span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-192-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
202</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">British
fleet would arrive. Although the British authorities already realized
that a fleet might</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><i>not</i></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">arrive,
the British Chiefs of Staff had sent a quite misleading paper
asserting that if Japan attacked a fleet would be sent whatever the
situation in Europe.</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">When
Air Marshal Sir Arthur Longmore returned to Britain he told the
Chiefs of Staff that it had been embarrassing --the British
delegation did not want to encourage doubts about the fleet, yet did
not want to discourage New Zealand defence preparations by suggesting
that all was well. In the event they were less than frank.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">The
British now said it might take up to ninety days for a fleet to
arrive and twenty more for supply convoys. Bernard Ashwin of Treasury
expressed doubts whether Singapore could hold out that long. He noted
that the Japanese had experience of coastal landings in China. There
might be a 'gap' between the time Singapore could hold out and the
fleet arrive. Longmore complained that Berendsen and Nash were firing
broadsides at the British. Nash was very pressing and sceptical about
how long the fleet would take if Germany and Italy were at war too.
Major-General P. J. Mackesy said it might be three months--but
fortresses could hold out much longer than expected. Nash asked,
'What do we do then to defend Australia and New Zealand when
Singapore is gone and the fleet that comes after is smashed up?'
Longmore said, 'I think the answer to that is to take to the Waitomo
Caves.' Nash retorted, 'The only place that we can see anything that
is glowing.'</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><sup><span style="font-size: medium;">17</span></sup></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">One
could not call Nash or Fraser or Savage New Zealand nationalists, as
Lee was. New Zealand stood between colony and nation; they were
leaders entirely appropriate at this stage. They thought much,
justifiably, and on the whole wisely, about imperial relations,
whether trade or defence or political. But events were pushing the
southern Dominion towards national independence. Neither an
Australian-born Prime Minister nor his Scottish deputy were likely to
kow-tow to the English. If Nash had nostalgic yearnings, his
experience in 1939 pushed him strongly towards antipodean and 'Kiwi'
rather than Anglo-Saxon attitudes. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">When
declaring war, Savage said of Britain his famous words, 'Where she
goes we go, where she stands we stand'. He did not know for certain
that the British had gone, even if it seemed unlikely that they were
coming. The overwhelming majority of New Zealanders accepted his
sentiment, whether for the love of the motherland or hatred of
murderous dictators. By September the government had reversed its
attitudes and offered an expeditionary force. Plans were discussed by
Fraser with other Commonwealth ministers in London late in the year.
He was more abrupt than Nash--and often had to curb his sarcastic or
satirical tongue..................</span></span></span></div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-202-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
204</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">....................
Nash had become</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><i>less</i></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">prominent
as number two than as number three. He had been closer to Savage than
Fraser was. Perhaps in wartime all but the number one have to
submerge their personalities for the common good. But there was
another relevant factor. The government's problems had changed. The
great legislation was past; the problems of 1940 and 1941 were not
those of the legislator but of the politician, such as relations with
pressure groups, and with the Opposition party and with other
governments. These problems were, in a concentrated form, the sort of
problems at which Fraser excelled. As a creative legislator Nash was
his equal; in matters of political tactics no one in New Zealand was
his equal. He had the kind of flair, instant reflex, instinct almost,
which marks the born politician.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">In
the absence of his chief, the loyal lieutenant did very well. He did
not make any terrible mistakes. He was already, in lesser degree,
used to coping with the innumerable diverse problems which crowd in
on a prime minister's attention. Fraser and he discussed, by cable,
the appointment of a new Chief of the General Staff. Both of them
had, as Nash cabled, 'bias towards New Zealander for post'. Edward
Puttick was appointed. The Governor-General, Sir Cyril Newall, was
reluctant to sign a government recommendation remitting a sentence of
flogging on four prisoners in Mt Eden gaol. He wanted the government
to announce legislation abolishing flogging. Nash was reluctant to
acquiesce in his not accepting advice, but was half inclined to agree
to his terms if the government did oppose flogging. Fraser cabled
back that cabinet should on no account accept the Governor-General's
refusal to act on ministerial advice. However, he too, hesitated.
Perhaps they should not press the point. With an election pending,
their decision might be misunderstood. On this occasion--probably the
last on which a New Zealand Governor-General did not act on
ministerial advice--the cabinet gave in. Rex Mason, the Attorney
General, announced that flogging would be abolished; the
Governor-General then signed. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">One
problem Nash could not solve was the refusal of the medical
profession to accept the proposed medical service. In 1941 Nordmeyer
replaced H. T. Armstrong as Minister of Health and began to harry the
doctors. They were offered a 15s. capitation fee per patient, plus a
mileage allowance, but this was acceptable to few. In desperation
Nash and Nordmeyer took up the idea, several times suggested by the
profession, of a fee for each treatment a doctor gave to a patient.
They met BMA representatives in late August and Nash said 'we will
pretty well have to agree to anything to achieve cooperation'. The
doctors, however, refused the fee-for-service. The government went
ahead and introduced legislation introducing a 5s. fee for each
service. The doctors organized protest meetings and published
advertisements saying that the people's health was in danger. </span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-204-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
209</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">.........Nash's
main job in 1939-41 was to tune up the war economy. This meant that,
as in peacetime, as Minister of Finance he had a say in most
important decisions. New Zealand had not been prepared for war. There
had been a small measure of rearmament; the territorial army had been
enlarged; but the shortage of overseas funds had kept imports for
defence purposes to a minimum. There had been negligible planning
about the use of manpower before the war. Ironically, the
over-importing which produced the exchange crisis proved a godsend.
In particular, heavy earth-moving equipment brought in for Bob
Semple's public works proved invaluable for defence works. Similarly
the introduction of exchange controls and import licensing, not
notably skilful in 1938-9, proved useful practice for wartime
controls and planning. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>It
had long been observed, especially by credit reformers, that there
was always plenty of money for wars. Once again, the question for
Nash was, where is the money coming from? In his budget speeches in
1940 and 1941, in a speech published as a pamphlet in 1940, Nash
replies to the Critics, in his speech to the Stabilization Conference
in 1940, Nash had turned his face sternly against inflationary credit
issues. The government's policy for financing the national effort 'on
the war front and the "home front",' he said in his 1940
financial statement, 'may be concisely stated as tax to the economic
limit for war purposes and borrow for essential productive works and
for any balance of war requirements'. In addressing the Stabilization
Conference he refurbished his sturdy old favourite phrase and told
them that the 'first call' on their resources and energies was now
the war.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Tax
to the limit: he meant it. It was at this time that he began to earn
a reputation as a rapacious taxer. In 1940 he introduced new gift and
death duties and a war tax, the national security tax, of 1s. in the
£1. The aggregate income, social security, and national security
taxes rose to a level that had not been known before. In 1915 a
single taxpayer earning £500 </b></span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-209-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
226</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">......New
Zealand's importance as a food-producing country--and especially of
the desirability 'that a large proportion of the foodstuffs shipped
to Europe and elsewhere for relief purposes should be milk products,
because these are the most nutritive, and can be most easily
assimilated by peoples whose stomachs have been weakened by long
periods of deprivation'. He said that much trade after the war might
be commodity exchange--but he had thought of the idea that the rich
states might buy food from New Zealand to give to the poor nations.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">One
of Nash's constant themes in 1942-3 was the need for the creation of
a United Nations Council, a peace council to parallel the great War
Councils. He wanted an immediate meeting of the United Nations (that
is, at that time, of the Allies against Germany, Italy, and Japan).
Roosevelt had spoken in 1941 of the 'four freedoms'. He and Churchill
had issued the Atlantic Charter later that year. </span></span><span style="color: black;"><span style="font-size: medium;"><b>What
was now needed was a meeting of the 'forty-three free nations' to
define their aims more precisely and fully, and to translate those
aims into terms of specific domestic and international policies.
Moreover, initial decisions about the future organization of the
world must be made in public and not in secret conclave. He
repeatedly urged in speeches that a World Reconstruction and
Developmental Council should be set up at once.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Many
people were very moved by his talk. In November 1942 Bill Parry, a
simple soul, wrote from Wellington, 'Your advocacy Walter, of the
international Council to give an interpretation to the Atlantic
Charter is an inspiration....' He added that Tim Armstrong, who had
just died, had been 'enthused' too. 'Tim said Walter is not going to
have our cause fooled this time, he is going to insist upon the world
being given to understand what it really means'.</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><sup><span style="font-size: medium;">63</span></sup></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>But
what did the Atlantic Charter mean? The right to national
selfdetermination, the right of all people to improved labour
standards, economic advancement, and social security, for instance,
looked differently to British or Americans. Nash pressed his views on
this question on Roosevelt, both at private meetings and at the
Pacific War Council. </b></span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-226-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
230</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">...............Nash
was home for the party conference and for the budget. In 1942 it had
been presented by Fraser and enormously increased taxes. Though Nash
was able to present this year's budget, economic matters were no
longer in his control. Fraser had announced a comprehensive
stabilization policy, to control prices, wages, and costs, in
December 1942. </span></span><span style="color: black;"><span style="font-size: medium;"><b>Stabilization
and war finance were the dominant economic themes of the time, and
Nash summarized these in his financial statement. So far the war had
cost £229 millions--which made his £17 million conversion of 1939
seem a tiny problem.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">The
budget provided extensive increases in pensions for disabled ex servicemen, for war and other widows, and in child allowances.
Payments to hospitals were also increased. The cost of social
security increased to £17 million.</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><sup><span style="font-size: medium;">4</span></sup></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Nash
stayed on in New Zealand for the 1943 general election. He spoke to
nineteen meetings in three weeks. The credit reformers tried to make
a comeback. John A. Lee's breakaway party, Democratic Soldier Labour,
advocated a 'new credit system', especially for industrial
development. He and Barnard ridiculed Fraser and Nash as financial
conservatives. </b></span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-230-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
235</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Nash's
main job in London was to discuss the Dominion's manpower problems.
New Zealand had over-extended itself. It was trying to maintain an
army division in the Middle East, and then Italy, and another in the
Pacific, plus large numbers of men in the navy and air force. </span></span><span style="color: black;"><span style="font-size: medium;"><b>By
September 1942 there were 153,600 men and 3,400 women in the armed
forces. The man were nearly a third of the male labour force.</b></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-235-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
241</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Although
New Zealand had an obvious interest in the regulated expansion of
world trade, international monetary stability, and above all in
cooperative measures to cope with balance of payments deficits, the
Bretton Woods meeting also held a potential threat. Fraser wrote to
Nash in January 1944 that 'there exists a grave danger for New
Zealand' in the preliminary talks between London and Washington on
post-war policy. He feared that Great Britain might accept the idea
of export subsidies, which the USA might want to keep to help its
farmers, while being 'inclined to surrender on questions of
quantitative restriction of imports, bulk purchase, state trading and
imperial preference'. He thought 'it would be a poor reward for our
country's immense war effort to be threatened in any way with
industrial disaster at the hands of our friends.'</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>The
threat was real, for import licensing and exchange controls, such as
New Zealand's, were two of the measures restrictive of trade which
the Americans, led by Cordell Hull, and the British wished to
eliminate. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>The
Americans and British had to make concessions to the Russians during
the preliminary discussions in London. Nash cabled Fraser from there
in March that the trend of thought favoured either private trading or
state trading with government monopolies. It was not clear whether
there would be room for New Zealand's mixed trading system. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Before
the conference began the Australian and New Zealand governments
conferred about their policies during discussions on international
economic collaboration. They agreed that the main over-all aim was
full employment. This objective was a legacy of the depression which
was, at least in New Zealand, to dominate Labour thought for many
years. The two countries wanted to induce others to pursue domestic
policies aimed at the same target. They wanted international economic
cooperation after the war. But--Fraser cabled to Nash--they wanted
the right to retain government control of imports and exports where
necessary in the national interests.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">The
Bretton Woods conference of forty-four states met to discuss the
draft Agreement drawn up during the preliminary discussions. Nash led
the New Zealand delegates. He was accompanied by B. C. Ashwin,
Secretary to the Treasury, E. C. Fussell of the Reserve Bank, Bruce
Turner, and A. G. B. Fisher. The latter had been brought over from
Chatham House in London as an 'expert', to the FAO conference. Cox
and Campbell had him attached to the New Zealand delegation to the
UNRRA conference. When Nash was in London he found that Fisher and
Campbell did an excellent job during the preliminary IMF discussions.
He now had Fisher appointed a temporary Counsellor to the New Zealand
legation. Fisher's understanding of international finance was
outstanding. Turner was to become the senior UN financial official.
With their economists' knowledge of trade and finance and Nash's
politician's knowledge and experience, it was a good team. </span></span></b></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-241-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
242</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Apart
from the main Commissions, the one on the IMF chaired by Harry Dexter
White, Assistant to the Secretary of the Treasury, and the one on the
International Bank chaired by Lord Keynes, there were three
committees. Nash was elected Chairman of the Committee on Nominations
(to the various commissions and committees). During the conference he
was also elected a member of a committee which fixed 'quota'
allocations. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Each
member of the Fund was allotted a 'quota', which determined its
subscription and drawing rights. Both in Committee and in full
Commission Nash pressed for a higher quota for New Zealand. He did
not get his way, but thought nevertheless, since the establishment of
the Fund was of such broad international importance, that New Zealand
should join. The Russian request for a much higher quota was
approved, and Nash was impressed with what he took to be the USSR's
whole-hearted support for the Fund. Nash spoke on various other
matters. For instance, he strongly but unsuccessfully protested
against the requirement that members of the Fund pay a small service
charge on borrowings. He thought this would discourage the use of the
Fund. But his main concern was that the Agreement provided that
members would not impose restrictions on the making of payments and
transfers for current international transactions except during a
transition period after joining, or temporarily against currencies
which the IMF had declared 'scarce'. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">He
cabled the Acting Prime Minister and Minister of External Affairs (
Dan Sullivan, while Fraser was abroad too, from April to July). </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">While
the intention of this provision is not to interfere with a member's
system of exchange control so long as the member is not blocking
payments which it owes (i.e. for current imports) I felt that it was
unsatisfactory in its present form because it is liable to lead to
misunderstanding on the part of the public. I endeavoured to have
embodied in the clause a specific statement that reference to
restrictions was in no way directed at the control of exchange in its
entirety to enable commitments for approved imports and other
approved transactions to be met promptly and fully. But the most I
could get was an assurance from the Chairmen of the Commission
(concurred in by members of the Commission) that there was nothing in
the clause as it stands which in any way conflicts with exchange
control. Under the present draft we can maintain our import licensing
and exchange control procedure subject only to our ensuring that all
exchange required for current transactions is made available. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">According
to the notes he made at this time, he had asked the chairman, Harry
D. White, whether exchange controls were permissible, provided that
exchange was used to pay for all current transactions. White replied
that this was his understanding, and he asked the meeting if there
was any dissent. There was none. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Within
New Zealand there was much suspicion and hostility to the IMF. Nash
was warned not in any way to intimate publicly that if he signed the
final Act he was committed to recommending it to his government; nor
was </b></span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-242-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
243</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">New
Zealand committed to adopting it. Sullivan and Fraser both stated
that there would be no commitments until the government and
parliament had considered the matter. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Nash
felt strongly that New Zealand should join the Fund. Before he left
he wrote to Harry D. White, 'it can easily be the greatest step in
World History with possibilities of removing one of the major causes
of war--if not the major cause.' He was not blind to the possible
menace to his beloved import and exchange controls. There would be
some restrictions on New Zealand. For instance, a member of the IMF
could not permit exchange rates to fluctuate greatly without
permission. But any international system of payments would involve
submitting to rules. As usual, Nash placed international benefits to
the fore. But, like A. G. B. Fisher, he was also quite aware of the
great help the Fund might offer in coping with balance of payments
problems like that in 1939. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Nash
had by now been succeeded as Minister to Washington by Carl
Berendsen. His colleagues wanted him back in time for the 1944
budget. This gave him a very tight schedule. However, Admiral Ernest
J. King arranged for a plane to fly Mrs Nash and himself back home.
They left New York by plane on 20 July and San Francisco on 22 July.
They landed at Honolulu, Canton Island and Fiji, where Nash received
'budget material' flown up from New Zealand. The flight across the
Pacific to Auckland took 33 hours 3 minutes. By 26 July he was in
Wellington for the opening of parliament. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">While
Fraser and Nash were away the credit-men had been playing up in
caucus. On Langstone's motion a caucus committee had considered
nationalizing the Bank of New Zealand. It resolved unanimously that
this should be done though so frightened was caucus of Fraser that it
approved the committee's views only as a recommendation to the Prime
Minister. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Although
Nash had opposed this step in war-time and had said that the banks
were doing a good job, this time both he and the Prime Minister had
to submit to the majority. They remained entirely--and
justifiably-sceptical. Since the government already appointed a
majority of the bank's directors and controlled its actions in
various ways through the Reserve Bank, and since the other banks were
to be left in private ownership, it was not clear what benefits would
flow to the public from nationalization. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">However,
Fraser and Nash could console themselves with the thought that it
might be possible to unite the party over an issue which had long
divided it. At the 1943 party conference Nash had strongly resisted
the demand for nationalization and had been supported by the
majority. Now, at the 1944 conference, he seconded H. E. Combs's
motion to create a state trading bank. His arguments were luke-warm
but he said that, although it would not bring all the advantages
people hoped for, it was in the best interests of the country that
the proposal should receive unanimous support </span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-243-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
248</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">..............
Nevertheless, the New Zealand government, led by an Englishman and a
Scot, was markedly more Commonwealth-minded than the other
Commonwealth governments. There was certainly no invariable and
necessary connection between British birth and British imperial
patriotism.</span></span><span style="color: black;"><span style="font-size: medium;"><u>
</u></span></span><span style="color: black;"><span style="font-size: medium;"><b>And
in Nash's case it might have been expected that his unhappy
experiences in 1939 would have outweighed love of country. But his
reaction was different. He always tried to look charitably upon the
actions of those who opposed him. The behaviour of the upper class
rulers of 1939 did not altogether dismay him; he bore no resentment;
the sins of Oliver Stanley were not visited on Churchill or Attlee.
It should be added that New Zealand was moving in the same direction
as the others, but more slowly. In 1947 New Zealand adopted the
Statute of Westminster which made it in all legal respects a fully
independent state. In 1946 the government began discreetly to drop
using the expression 'Dominion of New Zealand', the word Dominion
being scarcely appropriate to the new post-war Commonwealth. </b></span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-248-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
252</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">.............
The New Zealand amendment provided that states which maintained 'an
effective system of complete control' of foreign trade by methods
other than a complete state monopoly, should receive the recognition
accorded to eastern Europe. Such states were to use all their
overseas receipts for debt repayments and imports...........</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Only
eighteen states were represented at Geneva. On this and other related
amendments Nash received support from the Chileans and Czechs --Jan
Masaryk being not yet defenestrated in Prague. Australia, New
Zealand, Cuba, and Chile pressed hard for more protection for the
underdeveloped countries. A Cuban delegate later said that his
country was 'one of the other bad boys' who dared to raise their
voice against their elder brothers...........</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Leicester
Webb, a journalist and political scientist who had become Director of
Stabilization, replaced Nash on the delegation. </span></span><span style="color: black;"><span style="font-size: medium;"><b>The
Americans now opened up with some heavy traditional artillery. They
moved an amendment directly attacking the New Zealand amendment. One
American delegate said that the New Zealand amendment would destroy
the structure of the Charter and--horror of free trade horrors--make
it possible to protect all domestic industries. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Clair
Wilcox said that the New Zealand amendment was 'a sanctification of
autarchy, an incitement to economic warfare.' Leicester Webb said in
conference that Wilcox had 'descended upon us in wrath rather like an
angel of the Lord'.</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><sup><span style="font-size: medium;">72</span></sup></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Webb
spoke more briefly and boldly than Nash, but without the conciliatory
gestures desirable in view of other New Zealand objectives, not
immediately at stake. Nash, however, was clear enough when speaking
to Webb or Johnsen. </span></span><span style="color: black;"><span style="font-size: medium;"><b>One
American amendment implied more or less free entry for investors.</b></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><b>Nash
cabled from Wellington to the delegation:</b></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">There
can be no question of admitting equality of investment opportunity
and certainly no question of concessions to foreign capital which
will be permitted to exploit New Zealand resources only in
circumstances and under conditions conforming faithfully to our
economic and social policies. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">The
whole of the proposed American amendment is a threat to the economic
and political sovereignty of countries which might be penetrated by
the capital of creditor nations. Moreover read in the light of
Charter's insistence on M.F.N. [Most Favoured Nation: that is, that
any tariff advantage given to one state must be given to all members]
... and proscription of quantitative regulation it has the appearance
of serving the expansionist aims of economic imperialisms. New
Zealand could not in any circumstances subscribe to an article of
such substance.</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span></b></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-252-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
268</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">................It
was fashionable in leftist and credit reform circles after the war to
talk of the government as extreme right wing. But it had made some
moves, not all willingly, to refurbish its image in radical or credit
reform eyes. </span></span><span style="color: black;"><span style="font-size: medium;"><b>The
1946 election manifesto promised the nationalization of the coal
mines-which some owners in any case wanted. In 1945 the child
allowance had been increased to 10s. a week. At that time this was a
significant addition to the income of families. Another such measure
was the nationalization of the Bank of New Zealand which pleased
socialists and credit reformers...............</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Nash's
own publicity, such as a leaflet,</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><i>The
Hutt Electorate</i></span></span><span style="color: black;"><span style="font-size: medium;">,
placed the main emphasis on these fears. </span></span><span style="color: black;"><span style="font-size: medium;"><b>The
voters were told that the choice was between 'the jungle economics of
unrestricted competition advocated by the Nationalists with its
inevitable accompaniment of booms, slumps, insecurity and poverty'
and prosperity with Labour. 'Only under Labour's economic and social
philosophy is there any security against future unemployment.'</b></span></span></span></div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-268-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
272</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">...............
New Zealand's principal trade policy was a form of aid to Britain.
For many years New Zealand sold its dairy produce to Britain at well
below ruling world prices. This was the case even though Britain was
paying New Zealand 'lump sums' to compensate for the fact that the
terms of trade had moved against New Zealand, because she had
successfully held local inflation firmly in check.</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><sup><span style="font-size: medium;">24</span></sup></span></b></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>While
he was in London in 1946 Nash renegotiated the bulk sales agreement
with Great Britain. New Zealand continued voluntarily to sell her
produce at below world rates. In 1947, for instance, the British were
paying 242s. per cwt. f.o.b. for Danish butter and only 175s. for New
Zealand (before the war the advantage of Danish butter had been only
15s. or 16s.). It could reasonably be argued that the world afforded
no comparable market for New Zealand dairy produce--but New Zealand
did not try to develop other markets. The agreement with Britain
allowed for 2½ per cent of New Zealand production to go to other
markets, but this provision was not used. Australian butter, by
contrast, was being sent to Asian markets.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>During
and after the war, as a result of import shortages, New Zealand built
up massive reserves of sterling. The banks' overseas assets increased
from £7 million in early 1939 to £114 million in February 1947.
This was the highest level in New Zealand history. Nash had learnt
one thing very clearly in 1939--he never wished to find himself at
the mercy of the British moneylenders again. Much of the 'lump sum
payments', and other overseas assets were, as has been noted, used to
redeem London debts. The overseas debt was reduced during the war by
£45 million. Nash could reasonably feel that New Zealand's economic
strength had never been greater--and this at the end of a major war.
When in 1948 Nash revalued the New Zealand £ (which had been
devalued in 1933 to NZ £125 = sterling £100) to parity with
sterling, he explained this to the public in terms of help for
Britain. Labour had never liked the devaluation, intended to help
farmers with higher export receipts. It seems likely that Nash and
his colleagues had an emotional commitment to parity--a deep feeling,
as B. C. Ashwin said, that a 'pound is a pound is a pound'. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Nash's
principal advisers opposed revaluation. Ashwin wrote that New Zealand
would lose £20 million annually in export earnings and also lose the
protection afforded to New Zealand industry by the existing exchange
rate. The Department of Industries and Commerce and E. C. Fussell of
the Reserve Bank were also opposed. </b></span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-272-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
273</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">After
the war Britain suffered from a severe US dollar shortage. Even when
Britain achieved an overall balance of payments. there was a dollar
shortage. The sterling countries pooled their dollars, but still
there were not enough.</span></span><span style="color: black;"><span style="font-size: medium;"><b>
In 1947 Attlee asked Fraser if New Zealand could help in various
ways. These included not importing more than current export
earnings-thus keeping up the sterling balances; reducing petrol
consumption; not ordering supplies from dollar sources even if they
were available earlier than those from the sterling area; and, as
before, restricting dollar expenditure in general.</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>
</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>New
Zealand agreed.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>Another
government policy was to continue food rationing in New Zealand so as
to maximize exports to Britain. All these policies meant the
continuation of controls and shortages. The public was growing weary
of them--and of stabilization. These had been accepted in wartime;
but voluntary peacetime restrictions were another matter.</b></span></span><span style="color: black;"><span style="font-size: medium;">
E. C. Fussell wrote to Nash in 1948 that importers believed that
import limitation was 'more to suit the New Zealand Government's
wishes than to help 'Britain'. Such attitudes were very common. </span></span><span style="color: black;"><span style="font-size: medium;"><b>Nash
was winning support abroad but not at home. In July 1949, after he
had attended a meeting of Commonwealth Finance Ministers, at which
Britain's dollar crisis (which soon led to the devaluation of
sterling) was discussed, Stafford Cripps wrote thanking Nash for 'all
your helpfulness during our meetings and for that ready friendship
which you always radiate'.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Resentment
against restrictions and controls and shortages was grist for the
National Party's propaganda mill. It was easy to say that this was
state control, socialism. Nash's and the government's liking for
central control made the accusation credible. The resentment was a
major determinant of the 1949 election. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Another
respect in which the outside world dominated the situation in </span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-273-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
288</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">the
election. The Press, as right-wing and capitalist as any in a
Communist's dream, equated Labour with Communist. When Ben Roberts,
the former Labour Minister of Agriculture, wrote to Nash about the
election results. Nash began to write a reply. 'The Communist bogey
proved terrifying to thousands, yet it was (in the light of
circumstances in New Zealand [where only a tiny minority voted
Communist]) so childish that I could not persuade myself that it
would terrify grown up men & women'--he stopped at that point,
and did not complete the letter, but wrote another four months later.
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>Possibly
Labour's defeat was not entirely due to National aggression. Some of
the Labour pamphlets stressed the danger of a depression--which was
not very real to most people during the great Korean war wool boom.</b></span></span><span style="color: black;"><span style="font-size: medium;">
Labour voters stayed home in droves. There was a very low turn-out.
National won another four seats, tightening its grip. Nash was
indomitable: alone among Labour MPs he gained an increased majority.
He was one of the few remaining Labour leaders who was still a
national figure, not to be brushed aside by abuse, however
repetitive. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>In
May 1951 a British newspaper had reported that New Zealand was in the
grip of a Communist-inspired reign of terror. Its season of hysteria
was not yet over. After the election the government introduced two
repressive pieces of legislation. One, to deal with spying, was the
Official Secrets Act, which passed without debate except that Nash
asked for an assurance that anyone accused could have a jury trial.
The other legislation was the Police Offences Amendment Bill, which
dealt with sedition and subversion.</b></span></span><span style="color: black;"><span style="font-size: medium;">
This time the government had gone too far. There was very widespread
protest in the Press, from churchmen and others. </span></span><span style="color: black;"><span style="font-size: medium;"><b>The
sight of a government which spoke so much about the rule of law and
of extending individual freedom--as Holland did during the 1951
election--curtailing individual liberties was hard to stomach. Some
of the most illiberal features of the Bill were dropped, but as
passed it was bad enough. Like the emergency regulations, the new
legislation placed a heavy burden of proof on the accused. In
addition summary trial without a jury was introduced. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">The
government alleged that the strike had been secretly fomented by
Communists. The aim, it appeared, was to limit New Zealand's war
effort, an assertion for which the evidence appeared to be some
anonymous waterside workers' strike pamphlets. The election, the
ministers said, had given them a mandate to deal with the Communists.
In introducing the Bill the Attorney-General, T. C. Webb, stressed
the need to guard the right of the individual to 'legitimate' freedom
of speech. Nash attacked strongly. He recalled his conviction in
1921, and described it in detail. This involved him running a
gauntlet of National interjections. Holland asked if it were wise to
bring the subject up. Nash said the same thing could happen under
this legislation. It involved a censorship of literature, of opinion.
He quoted the journal</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><i>Round
Table</i></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">that
democracy must fight anti-democratic</span></span></span></div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-288-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
294</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Labour
came out in the 1954 election with a fist-full of promises. The child
allowance would be raised to 15s. a week. The government would make
available 3 per cent loans for housing.</span></span><span style="color: black;"><span style="font-size: medium;"><b>
Effective steps were promised to make the state the sole authority
for the issue of credit and currency. This was an attempt to keep
creditites in the Labour fold, for the Social Credit Political League
was now putting up its own candidates. In July Nash had forced the
pace by announcing that if elected, Labour would introduce PAYE
income taxation. The government then said that PAYE was bound to
come.</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>
</b></span></span><span style="color: black;"><span style="font-size: medium;"><b>Labour
announced during the election that the first £100 of taxation due in
1956 on income earned in the previous year would be cancelled (so
that no one would be paying two years' tax at once).</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Labour
tried to make it a 'cost-of-living' election. Nash always stressed
that whereas National had promised in 1949 to 'make the £ go
further', it now cost 28s. to buy what a £ would buy in 1949. </span></span><span style="color: black;"><span style="font-size: medium;"><b>But,
at least to start with, the contest between the main parties aroused
little interest. Both Nash and Holland commented on this. By
contrast, Social Credit meetings had a revivalist atmosphere.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">The
lack of fervour reflected the fact that Labour and National had
politically drawn closer together so that a failure to tell one from
the other was excusable. There were differences between them over
policy and in the kinds of voters who supported them. But there was
nothing comparable to the ideological gap between the parties in the
nineteen-twenties or even the nineteen-thirties. This was obvious to
almost everyone except, it seemed, the politicians. They continued to
assert that Labour would oppress private enterprise or that National
would oppress the unions. </span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-294-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
205</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">.............They
did not look likely to set anything on fire. Though Nash and
Nordmeyer had once been thought very left wing, none of them had that
reputation now. They had lost the wild money-men of 1935, so that the
ex-credit reformers and ex-socialists in their ranks looked pallid in
comparison with their predecessors. They did not</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><i>intend</i></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">to
set anything alight--they had no great schemes like those of 1935.
Labour had become an alternative administration, differing from
National in support and in emphasis. In the cabinet photographs they
looked a</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><i>respectable</i></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">lot.
The historian J. C. Beaglehole remarked that Nash, 'at the age of 76,
looked the only young man among them. The impression of eternal
youth--or rather eternal splendid maturity--was illusory....'</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>The
responsibilities, as opposed to the joys of power, descended upon
Nash with unwelcome speed. Reality asserted itself over euphoria in
the nightmare guise that Nash knew so well: another balance of
payments crisis. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>There
had been balance of payments problems in each election year since
1946. That meant that the government had permitted an importing spree
in election years--or, in other words, that the public demanded more
goodies than exports would pay for while politicians were unwilling
to act the stem guardian of the public purse just before elections.
1957 was no exception. A day or two after the election, the economist
J. B. Condliffe, an old friend, who was acting as economic consultant
to the Reserve Bank, came to Nash with a sorry tale. The Bank had
been recommending credit restrictions since August. While the
Governor of the Bank, E. C. Fussell, was ill and his deputy, Gilbert
Wilson, not very active, Condliffe and the economic staff discovered
in early October that the worst balance of payments crisis since 1938
was threatening. </b></span></span><span style="color: black;"><span style="font-size: medium;">Condliffe
was forbidden to tell Nash. The Minister of Finance, Jack Watts, was
told of the situation, by Wilson, it seems, in October. Fussell wrote
to him on 6 November, that urgent action was needed. The government
declined to act so near to and during an election campaign.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Only
now, after the election but before Labour took office on 12 December,
did Condliffe publicly refer to the crisis in a talk to Rotary. The
threatening situation had not, however, gone quite unnoticed. In mid-
</span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-305-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
306</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">November
F. P. Walsh, President of the Federation of Labour, accused the Prime
Minister of studiously avoiding any reference to the country's
economic crisis, the over-spending of overseas funds. Holyoake
replied that ruin was not just round the comer but that the national
finances would require careful handling. The Press commented on the
very low overseas reserves, when figures were published later in the
month. But at least one newspaper, and also a cabinet minister, Tom
Shand, used the signs of a crisis as a stick to beat Labour with.
Shand said that there was a clear warning against expensive election
promises. The</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;"><i>Evening
Post</i></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">warned
that 'Labour's reckless bid for office' should not be accepted at the
expense of 'financial stability'.</span></span><span style="color: black;"><span style="font-size: medium;"> </span></span><span style="color: black;"><span style="font-size: medium;">Labour
said very little because an admission of crisis would make its
promises look hollow.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>The
episode was eloquent testimony to the ostrich-like propensities of a
prosperous democracy in an election year. The government could more
or less conceal, the Opposition and public ignore, approaching
unpleasant economic sand-storms. Meanwhile the situation
deteriorated. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">On
the day Labour took office, E. L. Greensmith sent a Treasury report
to Arnold Nordmeyer.</span></span><span style="color: black;"><span style="font-size: medium;"> </span></span><span style="color: black;"><span style="font-size: medium;">Export
prices had fallen sharply while import payments were running at some
£4 million a month above the 1956 level. To ministers who had been
so very promising his advice was bitterly unpalatable. To restore
equilibrium, private imports must be reduced by £30 million. (The
estimated total for 1957, before reduction, was £260 million.) This
was a task painful, and difficult, though not impossible, without
unemployment resulting from shortages of imported raw materials for
industries. As a consequence, it would be essential to reduce
purchasing power to the same extent: extra taxation and a reduction
in government expenditure were essential.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">How
could the government fulfil its promises while decreasing expenditure
and increasing taxes? At a meeting of the Cabinet Committee on
Economic Policy on 20 December, chaired by Nordmeyer and attended by
Skinner, Holloway, and Boord, as well as Greensmith, Fussell, Sutch,
and others, the question was asked in Nash's absence. Nordmeyer said
that New Zealand must live within its income so that overseas
borrowing should not be thought of at present. The Committee agreed
that comprehensive import controls would be the most effective way of
dealing with the problem. ( Nash must have been present in spirit,
with the shades of 1938-9, at this point): </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Subsidiary
matters were discussed as follows: </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">(a)
it was obvious that import control of itself would not restrain
excessive internal demand and that a simultaneous and strongly
disinflationary policy was required to reduce the level of demands
for imports from the prospected £260 million level to the suggested
level of up to £220 million [but hopefully only £200 million]. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Many
relevant problems were discussed: what to do about imports 'on the </span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-306-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
315</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">.............was
both persistent and fearless. Although he was deeply interested in
foreign policy, and much of our talk was occupied by a survey of the
world situation, the main items for serious discussion were naturally
economic.... </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">On
23 January I attended a meeting of the New Zealand Cabinet which
lasted nearly two hours. Apart from the immediate economic
difficulties, on which I assured them that British exporters would
understand the need for temporary import controls, Ministers seemed
chiefly interested in the questions of defence. In particular, they
expressed anxiety about developments in Indonesia and the future of
Malaya. Fortunately for me the Prime Minister conducted the whole
affair off his own bat and filled up the greater part of the time
with his own exposition. In the evening I had another private
conversation with him which lasted until the early hours of the
morning. All this was both useful and informative, if somewhat
repetitive. Nash was fond of talking, and when he found another Prime
Minister ready to listen to the arguments which he thought it right
to expound, he enjoyed to the full 'the rare felicity of uniting, in
the same pursuit, his duty and his inclination'.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Gladstone
and Marx were alike wide of the mark. Macmillan would have done
better had he thought of two friends of his grandfather, Charles
Kingsley and F. D. Maurice. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Nash
told Mallaby that he found it easier to deal with a Conservative than
with a Labour government in Britain</span></span><span style="color: black;"><span style="font-size: medium;">,
</span></span><span style="color: black;"><span style="font-size: medium;">he
was forgetting Oliver Stanley.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">Among
other subjects Nash brought up the question of revising Ottawa. They
agreed to seek some agreement as soon as possible, and before a
Commonwealth economic conference which was to meet in Montreal in
September.</span></span><span style="color: black;"><span style="font-size: medium;"> </span></span><span style="color: black;"><span style="font-size: medium;">Nash
also raised one of New Zealand's recurrent problems, dairy marketing.
Prices had fallen drastically, largely because a number of countries
were 'dumping' subsidized butter. Macmillan was sympathetic and
himself suggested that New Zealand should invoke the new British
antidumping laws.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">A
strong team of officials, led by J. P. D. Johnson, now of the New
Zealand Board of Trade, who had been at Geneva and Havana with Nash,
set off for London in April to discuss revising Ottawa. Jerry
Skinner, the deputy Prime Minister, went to London to discuss the
butter problem. </span></span><span style="color: black;"><span style="font-size: medium;"><b>Both
he and the officials ran into customary difficult negotiations. The
British declined to impose countervailing or anti-dumping duties, but
threatened to do so if offending countries did not voluntarily limit
supplies. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>The
delegation of officials found that the British were agreeable to
reduced tariff preferences, but demanded a tough concession in
return, that the New Zealand government should state, in the revised
trade agreement, that it would not apply quantitative restrictions to
protect local industry against British trade. New Zealand already had
made such an undertaking, in general, under GATT which however,
permitted quantitative restrictions for balance of payments purposes,
and these could be manipulated so as to give some protection to local
industry. </b></span></span><span style="color: black;"><span style="font-size: medium;">The
British also wanted New Zealand to agree that import
restrictions.......... </span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-315-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
323</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">..............In
February 1959 Nash visited one more Asian country, Japan, where he
met the emperor and held trade and political talks with ministers and
businessmen. It was thought by many people that Nash's journeys were
not strictly necessary, </span></span><span style="color: black;"><span style="font-size: medium;">and
amounted to not much more than receptions and tourism. But there was
much more to it. Nash was a very strong and effective spokesman for
his government's--which were substantially his own--policies. Indeed
it may be doubted whether New Zealand has had a more outspoken
representative in international affairs.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">In
1959 there was a crisis in Laos which could possibly have led to a
major war, like the later war in Vietnam, or even to a great power
confrontation. In late 1958 and early 1959 there were accusations
from the Royal Laotian Government of North Vietnamese intrusions, and
counter claims of American military bases in Laos, contrary to the
Geneva agreements. There was frontier fighting between government
forces and the insurgent Pathet Lao. In September 1959 the government
asked the UN for military aid to stop North Vietnamese aggression. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Laos
had been designated, under the protection of SEATO, as a 'protocol'
state, so there was immediate talk of intervention, which Nash
strongly deprecated. In statements in early September he tried to
cool such talk in New Zealand by saying that the situation in Laos
was unclear. In particular, it was not at all certain that there was
outside aggression rather than Laotian rebellion. It was, however,
appropriate for its government to seek UN assistance. The situation
was a dangerous one which might involve New Zealand. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>In
October Nash attended a meeting of the ANZUS Council in Washington,
where he was extremely outspoken against American views. He asked how
long the Laotian government would have lasted without American aid,
and questioned whether it was right to interfere in local politics.
One of the Americans, J. Graham Parsons, an assistant Secretary of
State, said that Laos naturally looked to the USA for aid, since the
USA paid much of its budget. Nash asked if this were a breach of the
Geneva agreement, and the American said the USA was not a signatory. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>There
was a warmer exchange with the Secretary of State, Christian Herter.
Nash said that the USA was trying to maintain the type of government
the USA wanted, not what the Laotians wanted. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Mr
Herter: 'No! We have not selected those who run for office, who form
the government.' </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Mr
[Robert] Murphy [an Under Secretary of State]: 'Mr Prime Minister,
you are suggesting that we are trying to impose a government on the
Laotians.' </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">Mr
Nash: 'No, trying to maintain an existing government.' </span></span></b></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-323-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
330</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">...........In
early May Nash returned from Europe, where he had visited Italy and
been received by the Pope, to London for his third Commonwealth
conference--the others having been in 1937 and 1946. This time there
was Macmillan, Nehru, Diefenbaker, Menzies, Tunku Abdul Rahman,
Nkrumah, Sir Roy Welensky, Eric Louw representing South Africa,
Mohammad Ayub Khan from Pakistan. There was much dining and
royalizing as well as pontificating. Nash's diary (in his own
handwriting) records on 3 May a luncheon at 10 Downing Street, dinner
at Windsor Castle (evening dress and decorations); on 4 May a dinner
at No. 10 and a reception at Buckingham Palace; on 5 May an audience
with the Queen.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">At
the conference, while feeling not at all inferior, he was
overshadowed by Nehru and Macmillan, who did much of the talking on
world affairs and peace. Nehru had recently met Chou En-lai as well
as Russian leaders. Still, Nash told them of his talks with Khrushchev. He was convinced from his talk with the Russian leader
that he did not want war, but he would be willing to take risks, for
instance over West Berlin.</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><sup><span style="font-size: medium;">30</span></sup></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">While
they were discussing the summit conference, to meet in Paris in
mid-May, an American U-2 spy plane was shot down over Russia and its
pilot taken. The summit looked less hopeful now.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;"><b>Other
dark shadows were on the horizon. Nash spoke of New Zealand's great
anxieties if Great Britain drew closer to the EEC. Subsidized EEC
agricultural exports flooding the British market posed a great
threat. (On this trip he visited the six capitals of the EEC
countries and discussed their emerging common agricultural policy.)</b></span></span><span style="color: black;"><span style="font-size: medium;">
</span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-330-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
342</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: medium;">When
he(Sutch) was a member of the New Zealand delegation to the UN in the
late nineteen-forties there were FBI reports that he had contacts
with Communists. After he became Prime Minister, Nash was informed by
the Security Service that the National government had blocked Sutch's
promotion to the head of the Department of Industries and Commerce
because the Americans said that they would regard New Zealand's
security as suspect.</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><sup><span style="font-size: medium;">11</span></sup></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">(The
United States communicated secret information to its ANZUS and SEATO
ally.) Nash, however, appointed Sutch to be permanent head of the
department. He did not discuss with the minister, Holloway, the
objections of the Security Service, nor raise the matter at cabinet. </span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">Nash
knew Sutch very well, and had long experience of his ability,
intelligence, and deviousness. It was a courageous decision. Whether
it was wise may never be known.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">In
the anti-Communist atmosphere of Chamberlain's Great Britain or the
United States during the 'cold war' any pink radical might seem a red
threat. Many people--in New Zealand too--were secretly condemned
often without their knowledge, on slender or suspect evidence,
perhaps mere tittle-tattle collected by anonymous agents.</span></span><span style="color: black;"><span style="font-size: medium;">
</span></span><span style="color: black;"><span style="font-size: medium;">On
the other hand, in Sutch's case, cool and uninvolved enquirers may
wonder whether there was not some fire below so much smoke. Nash was
quite aware of both these points of view and decided to trust his old
adviser. Leading National Party MPs did not conceal that they
regarded Sutch as a Communist.</span></span></b></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">One
other example of Nash overruling the security service may be given. A
European who had in his youth been associated with Marxists wished to
become a naturalized New Zealander. He had lived in New Zealand for
many years and had a New Zealand wife and children. The security
police would not give him a clearance because, they said, he had not
accepted New Zealand ideals. Nash minuted in 1960 that he should be
allowed to naturalize. The file lay on his desk without action,
however, until the election. A backbench Labour MP, Mr R. J. Tizard,
took the file to the Minister of Internal Affairs, W. T. Anderton,
who was the only Minister in Wellington during much of the election
period, because he was not standing, and he signed the necessary
approval. </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Dr
Sutch played a major part in New Zealand politics during the Nash
government. His role was not that of a socialist but of a New Zealand
nationalist--one of the most conspicuous, indeed, up to that time.
His field was that of economic nationalism. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>In
the Labour government's policy from 1958 onwards, import licensing,
the search for new markets, and industrialization went hand in hand.
New industries were to provide import-substitutes. But much more
important in the long run, they were to help New Zealand to outgrow
its colonial economy. </b></span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-342-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
347</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">...........Nash
introduced the Government Service Equal Pay Bill at the end of the
1960 session. He recalled how fifty years ago (in Modem Tailors) he
had found women doing for £2 what men received £4 10s. a week for.
(At that time, the union had been demanding equal pay.) He affirmed
his belief that men were not superior--indeed, he thought the
expression 'the better half' was more correct. Equal pay was to be
introduced in the public service, in three stages, by 1964.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><b><span style="color: black;"><span style="font-size: medium;">In
the final term of the 1960 session Nordmeyer introduced a short
Reserve Bank of New Zealand Amendment Bill affirming that it was the
sovereign right of the Crown to control currency and credit. This
measure was less of a genuine reform than a ritualistic propitiatory
gesture to Labour's credit reform past and credit reform supporters. </span></span></b></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">.............A
political scientist has commented that to the Labour leaders the 1958
budget was 'a matter of morality'. To reverse the policies of that
year before the imbalances of the economy had been corrected would be
to cast doubt on the government's original assessment of the problem.
But the terms of trade had begun to improve almost from the time of
that budget. It seems, in the light of after-knowledge, that the
government had over-reacted in 1958--had guessed wrong. But the
economic improvement did not seem to Mr Nordmeyer to justify much
generosity in his 1959 budget. He did, however, reduce income tax, by
two stages, to about the 1957 level. By early 1960 retail turnover
was at a record level; the country was enjoying near boom conditions.
The Minister of Customs, Ray Boord, eased up on import controls. In
the 1960 budget Nordmeyer gave some hand-outs to the voters, but he
was not open-handed. Pensions and benefits were raised; so were state
employees' salaries; duties on petrol and cigarettes and sales tax on
motor vehicles were somewhat reduced. Taxes on beer, petrol, and
cigarettes </span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-347-
</span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">Pg
351</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">XXVII
The Grand Old Man 1960-8 </span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Walter
Nash was an MP to the end of his life, but power had gone. The long
reign of Sir Keith Holyoake had begun and Nash did not live to see it
end. The National government rapidly altered or reversed some of
Labour's policies. In 1961 there was mounting public criticism of the
Nelson cotton mill. Within the National Party caucus some
backbenchers, including Mr R. D. Muldoon, an assertive and loquacious
new MP, attacked the decision of cabinet to honour Labour's
agreement. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Eventually,
when the factory buildings were nearly complete, the government
cancelled the contract and paid £1.4 million compensation. In this
rough game Labour's opposition was weak, ineffectual, indeed almost
irrelevant. Nash found himself in a position, very different from
those he had adopted a generation earlier, of defending overseas
borrowing for development: 'we cannot develop this country as it
should be developed in this decade or generation out of our own
savings or out of our own capital in general. Overseas investment is
imperative....' The attack on the cotton mill would, he claimed,
deter overseas investors.</b></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>During
the major parliamentary battle of 1961 Nash was in a position much
less comfortable, though assumed with apparent ease. The government
decided that New Zealand should become a member of the International
Monetary Fund and the World Bank. This stirred up all sorts of
slumbering prejudices. </b></span></span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;"><b>Nash's
personal feelings were still favourable to the IMF. In 1958 his old
friend A. G. B. Fisher, now a high IMF official, had written saying
that now only the Soviet Bloc, Portugal, Switzerland, Liberia, and
New Zealand remained non-members. He thought New Zealand's opposition
arose from fear of sinister American financial powers. Nash wrote
back agreeing that the opposition was emotional. He thought the time
would come when the advantages would be seen to outweigh the
disadvantages. But the Labour caucus voted against joining and Nash
found himself leading the serried ranks of anti-American leftists,
anti-American funny-money men, Social Creditites and economic
troglodytes in general. He received large numbers of letters opposing
the IMF and supporting his opposition. Fifty-eight thousand people
signed petitions to parliament, organized by the Labour Party,
opposing joining. </b></span></span></span>
</div>
<div align="CENTER" style="margin-bottom: 0in;">
<span style="color: grey;"><span style="font-family: Arial, sans-serif;"><span style="font-size: medium;">-351-</span></span></span></div>
<br />
<div align="LEFT" style="margin-bottom: 0in;">
<br />
</div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-40372147940119623852015-01-27T00:46:00.001-08:002015-01-28T19:57:24.575-08:00Global private banking mafia political assassination of one of New Zealand's greatest heroes. <div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Global private banking mafia political assassination of one of New Zealand's greatest heroes. </span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">It is a disgrace that known white collar criminals have been given knighthoods while John A Lee has largely been written out of neoliberal dominated revised modern New Zealand history.<br /><br />SIMPLE
ON A SOAPBOX</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Written by former New Zealand Labour Government MP - John
A Lee</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Published in 1963</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">A quick
preview of excerpts from a few pages;</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<a href="https://www.blogger.com/null" name="DDE_LINK1"></a>
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: small;"><span lang="en-NZ">From
Pg 215 – “I did not want to only 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.”</span></span></span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">Pg
162 – My reason for telling the truth about the Old Man was not any
wish to be a hero. I have never wanted to be one. Whenever I have
heard young children recite:</span></span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">“For
how can men die better than facing fearful foes,” I have always
mentally interjected, “ In bed, of old age, at peace.” I remember
the day I won my D.C.M. At Messines. The line was held up, men went
to earth. I jumped up. It was the only thing to do. No doubt an odd
one had jumped up before me and had fallen with a gut full of
machine-gun bullets. I jumped up because forward was the only way. As
I jumped up to run I heard a voice, despite the thunder of the guns,
say, “There goes a fellow for the V.C.” an observation that had
not the slightest bearing on my conduct. I would not have risked a
finger for twenty V.C.s. What I did was merely commonsense.</span></span></span></span></span></strong></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">Pg
68 – I am sure that much of Labour’s success is a consequence of
good or bad times. Labour was good for business after Nationalist bad
business. </span></span></span></span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">The
average Labour MP did want to restore purchasing power to the masses
and that was in itself a fruitful idea. But there were no ideas as to
how to change or gradually transform the economic system so that
increased production could spell expanding incomes and greater
leisure and fewer depressions by breaking the cursed cycle of
capitalist inflation-deflation.</span></span></span></span></strong><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">
For half a century Labour in Britain, Australia, and New Zealand had
talked of socialising ‘the system’ but when the moment came for
modest doses of the socialism for which the electorate had granted a
mandate Labour either did not know or where there was knowledge, did
not have the courage to make changes.</span></span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span>
<span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">Pg
77 – A few days later the Prime Minister sent for me again. Nash
had come up with a proposition. “</span></span></span></span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">We
will make you the Under-Secretary in charge of housing. </span></span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">You
will handle housing business as though you were a Minister. You will
present housing to Cabinet, you will deal with housing business in
Parliament. Walter will be your Minister, but he will be going to
England by the time you get started and it will be up to you. We will
introduce legislation the moment Parliament settles down. No one will
get in your way.”</span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222;"><br /></span>
<span style="color: #222222;">“</span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">Will
money be available from the Reserve Bank?” I asked.</span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: #222222;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span>
<span style="font-family: Arial, sans-serif;"><span style="color: #222222;"><span style="font-size: small;"><span lang="en-NZ">This
was a contentious Party issue. With tens of thousands of men on
relief work the Labour Party, Nash and Fraser apart, believed that
the funds of the Reserve Bank should be used for essential capital
works until available men, machinery and materials were being fully
employed. We wanted to undo the politically enforced Banker’s
deflation. Nash wanted to stabalise deflation. We did not want to
create money when men, materials and machinery were being fully
engaged; at that point we believed the cost of works should be met
out of revenue. </span></span></span><span style="color: #222222;"><span style="font-size: small;"><span lang="en-NZ"><b>But
we were not prepared to create debt as long as goods, machinery and
men were idle. That was the moment to use public credit.</b></span></span></span><span style="color: #222222;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222;"><br /></span>
<span style="color: #222222;">“</span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">Money
will be made available from the Reserve Bank.” The Prime Minister
made the promise.</span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span></div>
<div style="margin-bottom: 0in;">
<b><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span></strong></b>
<b><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">Pg
90 – Although the power to underwrite and arrange fresh borrowings
has been availed of rather than the power to make new issues, except
where the issue is an overdraft, such as has been arranged for the
dairy industry account, one definite issue has been arranged for. The
Government has instructed the Reserve Bank to make five million
pounds worth of credit available for housing purposes. These funds
will be drawn upon by the Housing Account of the State Advances
Corporation. All the funds so advanced will be used to create new
assets in the form of houses and a straight out issue of money for
the creation of such assets was considered justifiable. The
instruction to the Reserve Bank, according to the Hon. Mr. Nash’s
statement to Parliament, specifically prohibits the Reserve Bank from
negotiating the sale of any portion of this issue, so that the whole
issue is to be new money upon which the interest earned will belong
in its entirety to the State. And the houses, of course, will belong
to the State.</span></span></span></span></strong></b></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Main
body of excerpts;</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg 20
…..In industrial school I had known a bellyful of
absolutism—absolute obedience, absolute religion eight times a
day, hymns and bible-reading and the English Prayer Book until I knew
half the Bible by heart, hymns by the hundred.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">In that
world of God versus rationalist argument, of evolution versus
creation, socialism and syndicalism versus liberalism or
conservatism, I gained a brand of socialism devoid of religious awe,
that knew no Karl Marx, no pope or Marxian testaments. So later I
always laughed irreverently when a Labour premier and his cabinet
cavorted as though they were political Holy Father and the Twelve
Apostles, as though a policy were a catechism alterable by annual
vote at Labour Conference.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"Comrade,
do you believe in the socialisation of the means of production,
distribution and exchange?"</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Yes, I
did. But what we intended to do socially became, at an early age,
more important to me than any article of faith. Later I was to
discover that there were Labour "fundamentalists" who</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">preached
the full gospel but denounced as a palliative each move towards"
its realisation. My sceptical mill-mates caused me to try to adjust
my philosophy to everyday social needs instead of indulging in dreams
of eternal socialist bliss. How would socialism benefit them, they
wanted to know.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Gradually
I came to point out that machine society could not be divided up,
that the machine age made social unity indispensable. The product of
the machine had to be socially distributed or invested or the system
would be wrecked by under-consumption crises. Opposition in argument
forces the intelligence to shear away mental wool. I never felt that
“in the beginning was Karl Marx and his word was God" and
hence, later, that Stalin was Karl Marx's vicar on earth, or that the
Labour prime minister was infallible. All words to me were open to
challenge, down to the latest phrase introduced into a party
programme by card vote. In those days however, Labour had only
soap-boxers, evangelists. That the Labour hierarchy was an infallible
repository of party doctrine I was not to learn until I reached
manhood.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">New
Zealand was an amazing land. The bulk of the population......</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg
21..... was still composed of immigrant pioneers and social heretics,
the malcontents and the unadapted of Britain. Untrammelled by
tradition and uncontrolled by vested interest we were establishing
old age pensions, socialised railways, votes for women, state
housing, land settlement, state insurance and state money-lending. As
I came politically alive New Zealand was the political forcing house
of the world. "Eight hours' work, eight hours' play, eight
hours' rest and eight bob a day" was the rhyme of dungareed men.
World sociologists were writing about us, coming to see us.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">No
passports were necessary to arrive in New Zealand or to depart.
Shearers followed the golden fleece from North Queensland to New
South Wales to Victoria and then across the Tasman Sea to New
Zealand. Men chased the yellowing harvest of oats and wheat from end
to end of New Zealand as summer moved south. The yellow alluvial gold
had brought a horde of adventurers to this land which was still
frontier, geographically and politically. How political compared to
our citizens of today were many of those frontiersmen!</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg 24
….....I was politically cradled and reared amidst dispute,
nonconformism, the clash of idea and personality. A man had to know
why he held an opinion. The fire was undying then, but now the
undying fire has been banked, damped down, the way to M.P. ship has
become kotow, the cultivation of trade union leaders who wield
multiple votes at party conferences, saying `yes' whenever boss
Labour orders. How did it happen that an `establishment' emerged from
the soap-box Babel ? How did `confusion of tongues' get made over
into rigid conformism? How did the Labour temple oust Labour
principle and purpose? How did the revolutionary soap-box become an
absolutist pulpit?</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">I had
been a man in experience, a child in reading and controversy.
Physically a child of my time I now became a mental.....</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg 25
…... child of my time. I did not become a socialist because I
wanted a job but because for humane reasons I believed socialist
policies were needed in a machine age.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">I never
looked on socialist economic adjustment as likely to produce a new
heaven, dominated by a holy Labour prime minister. I had known enough
of all-powerful authority in industrial school. Jack London, Upton
Sinclair, Voltaire, Robert Blatchford, Rationalist Press reprints and
other fourpenny and sixpenny books and novels made me a heretic in
capitalist society, not a socialist conformist. I was a socialist
full of irreverence. I could laugh at the dirty heels and toes of the
I.W.W. orator while others grew furious. I learned to state a case in
that conflict of will and idea, not by learning a catechism by rote
but by knowing my case and being able to phrase that case.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"Comrade,
do you believe in the socialisation of the means of production,
distribution and </span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">exchange
?"</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">That
question used to be asked with religious zeal by party followers who
never had an inkling of what the first step towards socialisation
should be, and used to be answered by folk who accepted the
fundamentalist socialist catechism without giving a thought to what
action should follow.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">No, I
was never a fundamentalist. I wanted measures of socialisation for
human value, not to fit human beings into a new Socialist tractarian
strait jacket.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">I was
starting to express myself at union and political meetings when war
broke out in 1914. The Labour movement in New Zealand went over to
pacifism.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">In due
course I went to World War One, not full of patriotism but rather of
curiosity. I was no impassioned hero but I emerged without a left arm
and with. the D.C.M., a more determined socialist than ever and
unable to believe that the world would have been better if the Empire
had followed pacifist Labour and had abandoned Europe to the German
war lords.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">In a
British hospital for a year and a half I started to address meetings
of wounded soldiers, to attend `Hands off Russia' meetings in London,
to go to huge Labour gatherings and listen to Saint Snowden and Saint
Ramsay MacDonald.</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg 26 -
Soon I could face the largest audience myself with confidence.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">I
returned to New Zealand from World War One on the Peace Treaty was
signed. I left the ship, walked to the land Trades Hall and joined the
Labour Party before I my first civilian suit. The secretary was Joe
Savage, the Prime Minister. I paid my half-crown and expected to be
directed to some field of activity. No doubt I was expected to become
one of the half-crown shareholders who are never heard of
subsequently.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Determined
to do my part in making the world fit for heroes and pacifists—to
live in I attended an electoral council in uniform. (It took me about
three days to collect my pay and put on `civvies'.) I was vocal and
caught the ear of a candidate.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"Take
my chair next Sunday, Mr. Lee."</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"Where
?"</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"On
the waterfront."</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">So was I
catapulted out of the army onto the soap-box.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">I was at
once a success. I drew big audiences. Some of the was due to a new
voice, a new presence, some to the fact nature has endowed me with a
resonant voice and carrying power and industry has fashioned a
capacity to express myself.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Overnight
I became the official patriot of the Labour Party. The country was
tired of the war government but people suspicious of a Labour Party
which had been far more vocal about the wrongs of the conscientious
objector than zealous in of the rights of the soldier. In that
atmosphere a wounded decorated soldier was a first class Labour
shock-trooper.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"Jack,
stand for Waitemata," Secretary Savage urged me, Waitemata being
the one Auckland electorate in 1919 without a Labour candidate.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"I
have a business to build."</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"There
is no candidate more suitable," they urged.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">I
resisted and became President of the Labour Party in land instead.</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg 27 -
When one of the Auckland seats became vacant a year later the Labour
Party sent Messrs. Savage, Fraser and Parry from Wellington to
persuade me. The Liberal Party was as yet more powerful than Labour
in Parliament. But Labour was coming up, Liberal going down.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"It
is important that we should at least come second and the Liberal
Candidate last. The effect on the next election will be vast."</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"I
do not want a paid parliamentary job. Besides, as a lad I received a
few convictions for minor offences."</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"Even
so," said Savage, "we'll take a risk on your past. We need
you. I'll back you out of my own pocket."</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"If
I stand, i'll win." I had a prophetic moment as I added, "and
some day, when it's too late to do much else, i'll get expelled for
believing in our policy and not in a Labour Boss." (At that
moment expulsions were occurring monthly in the Australian Labour
Party.)</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"Nevertheless,"
said Savage, "you owe it to the movement. You are the only
possible winner." He mentioned some of the other candidates.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"I'll
ask my wife and if she is willing I will go with you. I'll risk my
livelihood."</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">My wife
was very willing. But it was not as simple as that. The moment my hat
was in the ring I started to develop enemies amongst the alternative
candidates.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"Five
minutes in the Party and he is made a candidate. I've been thirty
years on the soap-box and I'm passed over."</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">When I
won a selection ballot which confirmed me as candidate the obstacles
were still not resolved. A pacifist member of the National Executive
protested against my selection because I had been a uniformed minion
of the capitalist class during the war."</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">I stood
at the by-election and failed by a few hundred votes. Later, at my
second attempt in 1922, I was elected.</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg 28 -
There followed a decade as an Opposition member, my parliamentary apprenticeship. Then Labour won New Zealand.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Prime
Minister Savage's arrival in Wellington after the 1935 election was
the arrival of a conqueror. Thousands greeted him at the railway
station. Tens of thousands moved with him along the road to
Parliament House. The hundred thousand unemployed, or half-employed,
the half bankrupt nation, thought.,.. he was the millenium incarnate,
and with reason. The economic ice was breaking. </span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"They
think I am God,"Joe Savage said to me.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"as
you don't think that all will be well old man " I thought
irreverently.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">He had a
splendid press. Until the election the press had done its utmost to
defeat Labour. Once Labour was successful, he was starred as an
outstanding moderate; Godman was promised aid, to help dish the
extreme elements. I was reputed to be an extreme element.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">I had
ghosted his speeches, prepared his press hand-outs and had actually written his Message to New Zealand. I knew that people did not vote
for policies, they voted for human beings they believed likely to
give effect to policies. I thought that in choosing a Prime Minister
we had appointed a democratic chairman of the Labour members in
Parliament; I did not realise that the chairman of caucus would now
become apolitical boss, half votes removed from caucus control
because of his claim to represent the voters. Savage did not accept
any responsibility towards his fellow M.P.s.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Zero
multiplied by zero equals zero in mathematics. But in politics zero
amplified by half-a-million votes is half-a-million times more zero.
My diary of two years earlier had said of Savage:, Honest plodder,
leads by following. Believes socialism can.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">be
installed by borrowing the funds of capitalist finance at five per
cent to buy out private enterprise. The ideal democrat, he advances
with the herd; an ideal leader, he has a sense of
beyond-the-road-bend, a foresight which keeps him ahead of his
followers. If politics develop with leisureliness he will set up
committees to resolve difficulties with sets of categorical
platitudes.</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg 29 -
"Now then" is his battle cry as he spits on his hands to
think. In crisis he will cross his hands on his navel and know
internal chaos until opportunity has gone. A press rumour suggests he
burns the midnight oil. Actually he reads little and beds down at 9
p.m. when he can. He states a case for Labour in mechanistic
terms—"The market can never be bigger than the available
purchasing power." He never makes a case for humanising
production, distribution. He will expand gullet intake to keep pace
with the machine; bellies will be expanded to keep the exits of the
machines free. Whatever is produced must go on being produced even if
the human family needs two bellies: instead of one in order to
consume it. He never gets excited about a clump of gorse on a
headland, or about golden broom spilling down a hill. Achievement of
tangibles is his goal. His entertainment is radio "soap opera."
He shrinks from a woman's hand—with no ability to sin, how could he
ride a whirlwind? His mind is not in tune with the beatings of a
heart but with digestive and bowel functions. He has never been able
to convert the young but he has been able to convince the Tories that
Labour is safe. He may become famous by being dragged at Labour's
heels.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">With my
pen I did more than any man in New Zealand to make him Prime
Minister. He was the Father Christmas symbol I helped to fix in the
mind of the unemployed. And yet, as he chose his cabinet, he had an
idea that I would be a snake in Eden. Later, a high dignitary of the
Roman Catholic Church claimed that he was the force who caused Prime
Minister Savage to queer my pitch. My attitude to the Spanish War, my
book Children of the Poor, made me unpalatable to the Church. I doubt
whether the dignitary did queer my pitch. I think it was just a case
of mutual aid among hierarchs as I was in good standing with the
Auckland Bishop for whom I had much respect and affection.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Never
did a prime minister enjoy so much goodwill as he approached
Parliament. In 1935 when the Tories confessed themselves unable to
find work in a land where half the labour force was unemployed, where
half the farmers and half the businesses were bordering on
bankruptcy, we presented a policy of work for all; decent pensions,
guaranteed farm prices, home- …..</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg 30
…...building, public as against private control of finance. We made
policy but his were the lips which made the pontifical
pronouncements. Prime Minister Savage became the embodiment of the
Party: a semi-deity. The warrior as Chieftain God, described in
Fraser's Golden Bough is characteristic, too, of modern politics. But
thousands of years ago the godman, when he could no longer lead in
battIe was bumped off, whereas modern political godhead persists as
long as the leader has a good political secretary or press, or the
support of those who wield a card vote at Conference. His selection
may be due to a rational act, but the maintenance of his subsequent
position has much of religious devotion about it. </span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Joe
Savage's phrase "Now then" became the battle cry of the
Left, the hope of the helpless. In Hollywood's silent days a magnate
once said that he "could make a star out of a monkey."
There are moments in a nation's life when a politician bereft of
ideas can, by refusing to take a position on any question until he
knows where the majority stands, become a statesman. Also, a leader,
provided he affirms the right principles, can in practice out
manoeuvre or oppose all he affirms.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">My own
part in establishing the political hierarchy was not small. I
addressed as many meetings - and larger ones - as any member of the
Party. I polled the largest majority ever polled in New Zealand. I
wrote every word of the explanation of the Labour policy adopted in
1933 and reaffirmed in 1934, Labour's New Testament as it were. I
controlled the preparation of the Party's Speaker's Notes, and in the
largest city produced 100,000 copies of a paper containing articles
written by but signed by each of the Labour MP's or candidate. I
produced two pamphLets the Party sent to every House in New Zealand
I wrote the Prime Minister's Message to the People of New Zealand. I
gave him most of his third person hand -outs for is victory tour.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Surely I
deserved some of the credit for our success?</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg 34
…..Fraser: and Nash were to run Prime Minister Savage, and
therefore the Labour Government. They would save New Zealand from
irresponsibility, from the Lees, as it were, fundamental to the last
syllable in socialist talk, evasive to the last consonant in
socialist action.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Paddy
Webb was the third member of the `run Savage' trinity. He was Joe
Savage's physical and political counterpart. They had arrived in New
Zealand after working together in their young Australian manhood.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Paddy
Webb was plump and confident, known personally to tens of thousands
of people. He had a genius for geniality. He had been a pioneer
Labour M.P. raising a lonely voice for socialisation of the means of
production, distribution and exchange without really attempting to
understand what that transforming formula meant. He was young, when
elected and Labour was then so unpopular that, to the faithful, a
Labour M.P. became a Labour saint.</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg 35
…........"You had better do a little back-scratching, jack"
a new member warned me as we gathered in, Wellington after the
electoral........</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg
36 …..victory and waited for a caucus meeting of the Labour M.P.s.</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"Bit
late now," I said. In spite of the help I had given the Prime
Minister in the election I had no illusions about his love for me.</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">In
New Zealand and Australia Labour cabinets are appointed by caucus.
Caucus vote interprets conference policy, or is supposed to do so and
in fact does so until it has elected a cabinet, from which point
onwards caucus contains a master group.</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Now,
in 1935, the Labour Prime Minister, elected against a background of
unemployment and leading a party determined to create full employment
and to pay reasonable pensions, to safeguard bankrupt businessmen and
farmers, was New Zealand's dictator and could please himself. He
could dispense with formality. He knew his power, and when a weak man
tastes power things Happen. We were now twice as large a
parliamentary party as before. This increased the Prime Minister's
power, at least until members came to know one another and to realise
what each would fight for (apart from the policy each was publicly
pledged to support).</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">I
knew Savage did not want me. He had not had a word of communication
with me since victory night and I knew he was meeting others.</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">But
he was on top and to the man in the street he appeared to be the
moving spirit. In the struggle for victory a party must present top
man as top man in intellect, in honesty, in courage, and top man
gradually comes to believe that as prime minister he has all the
virtues and wisdom, that he is just and courageous—that is unless
he has within him an ironical streak. But few people able to laugh at
themselves ever become prime ministers.</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">The
conservative press played a wise game. Up until the election it had
tried to defeat Labour; now, wisely, it would subvert Labour by
helping the Prime Minister to defeat his party. He would leak his
ideas to the press and the press would promise him support if he kept
his extremists in check.</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Nevertheless,
I had the nerve to believe I should be in Cabinet, which shows what a
simple country lad I was. I had been sent to key electorates to lift
the tide and at the same time I had spoken at the largest meetings
ever held in New Zealand and polled New......</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg
37 …... Zealand's record majority for a constituency, so that I was
a vote-getter as well as an organiser. I had also written three books
Children of the Poor, The Hunted and Civilian into Soldier.</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Although
in Auckland I had won the Catholic vote, the high Catholic dignitary
told Savage I should not be in Cabinet, which pleased the Prime
Minister, because he had similar ideas. I was as keen to be in
Cabinet as anyone else because I knew there would be a conflict over
policy and that those nearest the heart would exercise most leverage.
Perhaps, being an ordinary human with an average man's egotism, I
thought Cabinet rank was my due. That idea may have been foolish but
it was not sinful.</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Simple
country lads can no more get into cabinets than Lucifer can be
accommodated in heaven. The whole Labour monolith and every other
monolith would collapse if those who resisted brainwashing were put
into a position to thumb their noses at the tribal deity from the
inside. Ridiculous though it was I was too much caught up in Labour
policy to work out the inevitable laws of the political godmanship.</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Fraser,
who was in line for the prime ministerial succession and who opposed
me in caucus on many a policy matter, but who had enough sense to
want to consolidate the Party at the moment of victory, had warned me
a year earlier that if I fought Savage in caucus while we were still
the parliamentary Opposition Savage would pay me out when he had
power.</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">"Years
ago,” Fraser told me, "I prevented Savage from being chosen as
mayoral candidate in Auckland and he withdrew from all activity and
sulked for a couple of years."</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">But
Savage's hostility to me did not seem material. There would be a
caucus vote and he would have to endure me whether he wanted me or
not.</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">And
the simple country lad that was myself dared to send the Prime
Minister a note not calculated to advance my circumstances. I was
sure that Nash as minister of finance would bury party policy and
resist every act of socialisation, that Nash was more orthodox in
financial matters than Philip Snowden had been in I England. I
admired his enormous industry but knew he had no real political
dynamism or tactical sense and I never believed that hard work alone
was enough. Nash could never guess what......</span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
38 …...was around the bend and was content to wallow in mellifluous
platitudes.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"Dear
Joe," I wrote to Mr. Savage (that itself was a mistake he was
now half-a-million votes away from being `Dear Joe'), </span></span>
</div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Dear
Joe,</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Do
not make Walter Nash Minister of Finance. If you do we shall make no
progress. Give him half the administrative portfolios and he will
give a splendid account of himself, but if he has the action
portfolios he will always be counting the figures when we should be
advancing. He will make a great quarter-master general, he will
account for every tin of jam, but if you make him field-marshal he
will be counting the jam whenever opportunity to advance offers, and
the opportunity will go by.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">`Dear
Joe' had made up his mind to lean on Walter Nash and Fraser so my
habit of saying what I thought, with more regard to policy than to
persons, was not calculated to win friends and influence people. But
then I had never heard of Dale Carnegie.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
39 - The Prime Minister met member after member before the first
meeting of caucus was held. His purpose was to get everyone to whom
he promised an appointment to support his desire for a free hand in
making all appointments. With twenty new M.P.s unversed in the habits
of caucus to support them the twelve prospective members of Cabinet
could be sure of a majority in caucus.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">According
to Peter Fraser he and Nash had misgivings.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"If
a Cabinet is announced that does not include Lee there will be
trouble. We'll have to give him some appointment."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Savage
discounted the idea. Nash told him (so Fraser later informed me) that
he was endangering Party unity by leaving me out. I do not know if
this was true. Savage had no position for me; he wanted to put me in
the waste-bin. The result of his sour unfairness, as it turned out,
was to place me in his lap. It was not until later that I learned
what had transpired, not until Peter Fraser, anxious to free himself
of responsibility, talked to me.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Meanwhile
caucus met.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">There
were speeches. Speaker after speaker, especially those who knew they
were favoured for Cabinet rank, stood to assure the Prime Minister
that the election victory had been his personally, that without him
Labour could not have won. I did not engage in flattery of the
Godman. I knew that 100,000 unemployed, bankrupt farmers and
businessmen had made Labour's victory a certainty regardless of who
the leader was. I knew that the Savage personality was a corporate
creation, a propagandist myth, that he was a woolly-minded, weak man
accepted as leader because caucus thought he would do their bidding.
By way of propaganda I had borne more responsibility for the creation
of the myth of the old man's personality than he did himself.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
40 - Joe Savage accepted the flattery amazingly. He had a glutton's
appetite for back patting. Musical honours were accorded to him by
caucus.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">When
the singing and cheers had subsided, business started.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"First.
business" said Joe Savage "is the question of Cabinet."
"Mr. Chairman." Rex Masons solicitor,was on his feet, about
the only time he ever took the lead in caucus.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"Mr
Mason."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">It
was all cut and dried: Caucus did not have a chance, nor was it given
time to consider.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"I
move that the Prime Minister be given a free hand in the selection of
Cabinet. No one did more to win New Zealand." And much more of a
like nature. Caucus listened in silence. The man we had made into a
figurehead was in his heaven; there was nothing we could do. </span></span>
</div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">I
saw that I was undone and outdone.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">All
those who knew they were to be appointed supported Rex Mason. And all
those who believed that caucus should select its own team were
silent. They knew that for the moment they were out-generalled, that
the new M.P.s would support the Mason resolution and repent at
leisure. They knew that in losing power over the selection of Cabinet
we were abandoning control over policy.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"Johnny
boy," I said to myself, "this is where Michael Joseph
Savage pays off his old caucus defeats."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">There
was nothing I could do about it. I realised the importance of having
a footing in Cabinet but to be defeated at the "victory"
caucus, which I surely would be if I moved a resolution to give
caucus the power of selecting cabinet, would not help. With about
twenty new M.P.s ready to toe the line I knew defeat was certain. The
resolution was carried unanimously. "God" was declared
omnipotent, omniscient.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"If
members will stay around for discussion where a messenger can find
them, I'll send for them as the day goes on," said the Prime
Minister. Those who knew they were sure of selection waited around
cheerfully; those who were certain of exclusion awaited the axe.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
41 - And yet I was sent for late in the day. Member after member of
caucus had obeyed the Prime Minister's summons, enough to complete
Cabinet. Was I going to be the only one sent for to be told that he
wasn't invited?</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Peter
Fraser and Walter Nash, Deputy Prime Minister and Minister of
Finance, if Fraser is to be believed, argued over my fate. According
to Peter Fraser, Nash advocated my appointment.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"If
you leave Jack Lee out Caucus will be as strong as Cabinet,"
Peter Fraser told me he had argued, which seemed to me rather a
strange over-valuation of my power. I wonder if he did?</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">The
argument went on but the Old Man was adamant. He urged against me the
opposition of the Roman Catholic dignitary, my convictions for a few
small offences as a youth, the fact that he did not like me. But
Fraser and Nash were wise, if what Fraser told me was the truth. They
wanted me attached in some way to Cabinet, wanted to put me to work.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"But
Cabinet is complete now."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"Bring
down legislation providing for the office of parliamentary
under-secretary. Lee will be of immense value to you. Make him your
parliamentary under-secretary. I could work with him splendidly."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">According
to Fraser, Walter Nash said just that.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">The
Prime Minister wriggled and sweated; the others insisted. 'They
wanted harmony.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"It
will not do not to provide for Jack Lee."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">I
had no idea that an argument of any sort was occurring or had
occurred, until Fraser talked to me a few days later. As I waited I
was convinced I had been excluded. I underestimated my strength.
Exclusion, after having been decided upon, seemed too raw. Savage did
not have the courage of his own vindictiveness.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"The
Prime Minister wants to see you," came the message towards the
end of the day. I hurried to the appointment. This was my first visit
to the Prime Minister since the election night, although he had
relied on me completely before, even authorising me to make
emergency statements in his name if anything untoward occurred during
his tour. He had left me signatures on blank.....</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
42.....paper for the purpose, surely a sign of confidence. I hurried
to his room, entered, shook hands, sat down, waited. The Old Man
paused, fidgeted, his chin gave the quiver it always did when he was
nervous.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"Well,
Jack, you don't know what a task I've been having." That was a
good negative start.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"I
have an idea."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"One
man," said the Prime Minister, "is much like another. And
in New Zealand we have to pay attention to geography and choose men
from various parts of the country."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">I
suppose I nodded.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"I
haven't been able to put you in the Cabinet but I want you to be my
parliamentary under-secretary."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"There
is no such position in New Zealand."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"We'll
create the position. I want you to work with me."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">So
there it was. In his anxiety to get rid of me completely, he had
saddled himself with me completely. How farcical politics can be
behind the cut and thrust of policy and person !</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">The
Old Man seemed to be aware that something had to be done to rectify
what he had left undone.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"I
can assure you I shall share my salary with you in the meantime."
Since ministers' salaries were already supposed to be pooled and
shared with the rank and file that meant nothing. "I'll get you
your office and a secretary and give you certain duties."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"Until
all this is outlined in legislation it means nothing," I
objected.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">The
Old Man's chin was quivering. Certainly I was not going to settle or
be settled for a meaningless phrase.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"I'll
go back to Auckland with the rest of the boys. Forget any appointment
for me until you have provided for the place by legislation."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"No.
I don't want that. I want to announce an appointment as I announce
the cabinet.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"I'm
not interested."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"Look,
you will be in cabinet alongside of me."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"You
mean I'll sit in cabinet and have a voice ?"</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"Yes,"
he said. The Old Man's scheme of exclusion had come</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">undone.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
43 - I knew I would accept that offer even if there were no office,
no emoluments. The reason I wanted to be in cabinet was that it was
there that decisions would be made, there that conflicts over policy
would be resolved.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"Will
you make a statement in caucus to that effect ?" "Yes.
Leave it to me."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"I
will not oppose it in the meanwhile."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"It's
the best I could do."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">But
what he was doing he was doing under pressure. I retreated and
awaited caucus.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Peter
Fraser searched me out and begged me to accept. He said Walter Nash
had spent much time trying to persuade the Prime Minister and had
said that he, Nash, would work with me if I were made the Prime
Minister's under-secretary. "Impossible," I thought. "I'll
be Walter's chief goad."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Fraser
told Dan Sullivan, about to be Minister of Industries and Commerce,
to come and see me and persuade me to accept. because the job would
soon be made an important one.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"I
thought you would be in the first four selected," said Dan
honestly. "You'll soon make yourself indispensable."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"No
chance Dan," I said. "If I am `yes-man' to Joe Savage I'll</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">soon
be his right hand man, I know. He'll want me to prepare his
statements. But that is impossible. There may be a conflict of policy
between Joe and myself. He'll soon want to get rid of his right hand
man. Besides, he doesn't want me."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"No.
But he knows he has to take you. Tell me, Jack, what went wrong? Why
were you not in the first four?"</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"Search
me."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"You'll
accept ?"</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"At
this moment I shall not refuse if Savage says I'll be in cabinet
alongside of him. We shall see."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Mark
Fagan, who was to be leader of the Upper House, came to see me.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"How
did it happen, Jack ? I picked you after the Prime Minister, Peter
Fraser, and Walter Nash." Mark had been asked to use his
persuasions before the caucus meeting. "Take it, Jack, it will
work out. You'll be next on the list."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"We'll
see."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
44 - My friend William Barnard, about to become first Labour Speaker,
came to see me.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"Look,"
he said, believing what he said. "I cannot think of anything
better. With you alongside Joe Savage, Walter Nash will not have the
same influence. You'll do a 'great job. Take it and see how it works
out. You worked with him during the election."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">"Bill,"
I replied, "when you mix petrol and air under pressure and apply
a spark you get an explosion. Joe cannot work with me even if
compelled to pretend he can. But I will not resist in tonight's
caucus. There are a lot of new members who do not know how our group
forced a financial policy on Savage and Nash. I do not want to get
off-side with these new M.P.s. I'll have to wait until an issue
arises and then they will back either Savage or me according to whom
they believe to be right. I'll shut up tonight."</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">At
caucus that night the new cabinet was warmly greeted. Ironically,
many M.P.s stood on their feet and congratulated Savage on appointing
Lee to be his personal assistant, and were loud in praise of my
abilities. I could see the twitching uneasiness of the Old Man at
each mention of my name. To me the whole matter became a grim joke.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Cabinet
was announced to the press. Some newspapers applauded the creation of
a parliamentary under-secretaryship to the Prime Minister. I was
photographed with Cabinet although I was not present when Cabinet was
sworn in and photographed. It was agreed I would attend all Cabinet
committees at which the business of the Prime Minister's Department
was being discussed and that legislative provision to this end would
be made subsequently.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">But
I had no illusions. "I'll go home and come back in a week when
you get settled down," I said to the Prime Minister.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">I
went home to Auckland and wherever I went was congratulated. The
farce had commenced and had to be played out. It was up to me to show
willingness; failure would then be the fault of the Prime Minister.
The Auckland Star for months car- tooned Prime Minister Savage as Don
Quixote and me as Sancho Panza.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
46 - I had fought my way to Parliament as a young man and was for
three parliaments the youngest M.P. By age I belonged to the men who
had seen service in World War One.....</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
47 ........The joiners and careerists came crowding in for positions
even as we paused for the Christmas holidays. James Roberts, Party
chairman, became important indeed. Big in muscle, but feeble in
advocacy of Labour policy, he had been President of the Watersiders'
Federation. In the difficult years he had been a Labour Conference
non-entity; as union after union joined he became Conference boss.
His Alliance of Labour had opposed even motherhood endowment. The
introduction of the system of card votes was not far away, it would
enable this man who had never contested a seat to become for 12 years
the conference pope.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Arthur
Cook had for years seen his union, the New Zealand Workers', carry
resolutions at their annual conference to affiliate with the Labour
Party and yet for years, as its secretary, he had prevented it from
taking such action. He would soon be the paid boss of all the
thousands of men who would be employed in public works by the Labour
Government. He would have a union and a stipend once more. He was
assured that an act of........</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
48 …........parliament would be passed to make trade unionism
compulsory. Later, in return for the complete recognition of his
union, he was to consent to the Labour Government's assuming the
right to veto the choice by his fellows on public works of any man
selected by them as job organiser. Now he agreed to affiliate his
tens of thousands of workers. So yet another man who had done all he
could to impede Labour became a power within the party able to
discipline M.P.s......</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">......Legislation
to compel all workers to join a union was to cause a fearful scramble
for living bodies since each member represented a fee. There was
never in history a gold rush like it. The...</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
49 ….snarling disputes of the body snatchers were to disturb the
Labour Movement for a few years until everyone was registered,
ticketed, regimented. By then unionism would be dead, for it would
exist no loner on its organising power but on its right to enlist the
services of commercial debt-collecting agency for the obligatory
payment of dues.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Overnite,
while we were still unaware of what was happening, the Labour
monolith that was to spell death to the real Labour movement was
being created.Compulsory registered unions would send delegates to
dominate party organisations hitherto largely composed of devoted
enthusiasts. The people who had refused to contribute money or to
help in the long thrust upward would claim the right to rule because
they suddenly paid most of the affiliation fees: suddenly our virile
movement was undermined. The card vote take-over of Labour outdoes
the takeover bids of capitalism. It is one of history's great grabs.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Before
long the card vote would come. Branches of the Labour Party would in
time be denied the right to communicate with one another on matters
of policy except through the National Executive, which could refuse.
Conference would adopt rules forbidding M.P.s or party members to
publish political material without the consent of the National
Executive. Democratic centralism (which is not democratic at all))
would replace the democracy which had made Labour great. Soon we
would have a prime minister who was a party Fuhrer supported in all
decisions by a group of placeholders able to control a movement to
which few of them had given any service.......</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
52 - Maybe it was inevitable that a Savage-Lee conflict should
arise. The Prime Minister represented an old unadventurous,
uimaginative Labour period, whereas I came to political maturity
during World War One and later the great depression. I am sure Savage
always believed that by administration alone, with few changes in
the law Labour could alter the nature of government.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">In
the days when the depression was approaching I had advocated a
socialist bank and government credit issues. While men an mills were
idle in tens of thousands during gluts of unconsumed materials I
deplored the borrow our way out of the depression talk of some of the
old Labour M.P.s and refuted their arguments. It would be time enough
to borrow when goods were in short supply, when mills and factories
were working overtime, I maintained.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Ten
years before any other politician in New Zealand I was a advocating
exchange control and </span></span>
</div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">import
selection which have now become permanent features of our economic
life.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">State
use of the people's credit seemed to me to be the socialist answer to
poverty amidst plenty, the control of social investment by direction
and the granting of government credits. All this is now accepted but
when I first advocated it, it was heretical even in Labour circles.
Nash and Savage were followers of Snowden.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Frank
Langstone, M.P. for Waimarino, and I became the two protagonists of
this policy. Our speeches in Parliament aimed at converting the
parliamentary Labour Party and carrying it with us.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Savage
continued to believe we could borrow our way out of depression. He
resented what Langstone and I were doing and could scarcely be civil
in his fury at our advocacy of unorthodox methods.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
53 - During a budget debate in the depth of the depression Savage,
Nash, Parry and McCombs had tabled a resolution in caucus.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: small;">They wanted the Labour
Opposition in Parliament to move that a certain sum of money be
borrowed on the security of the unemployment fund and used to
alleviate distress.</span></span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">The
time had arrived for a challenge. I became very active and lobbied
every Labour M.P. 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
that 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 rights of issue for their own bank. The goods
existed, why not create credits?</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<a href="https://www.blogger.com/null" name="DDE_LINK"></a><span style="color: black;"><span style="font-family: Arial, sans-serif;">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 member
insisted on speaking. At the third meeting, Harry Holland ,then
Leader of the Party, espoused our cause. I saw M.P.s taking their
coats off to one another 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 M.P.s voted for a credit issue
including Harry Holland himself. We moved accordingly in Parliament.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Out
of that debate had come a new finance policy in which, I am
convinced, Nash never believed. In 1935 the Labour Party affirmed
that the Government should have sole right over the issue and control
of new credit. But in the meantime Holland had died. Savage, the
oldest surviving private and deputy, had become Labour Leader and was
on the road to the prime ministership. He never forgave me the
humiliating defeat I had organised.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Prior
to that caucus Savage used to tell everyone, both publicly.......</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">Pg
54 …..and privately, that I would be one of the first chosen in a
Labour cabinet. After that defeat I knew that only a caucus vote
would compel Savage to accept me. He became unfriendly from that day
on.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: small;">Many apparently woolly
and benevolent folk are capable of sustained malevolence when
crossed. Fraser knew his man when he told me that when he had
prevented Savage from becoming a candidate for the mayoralty of
Auckland Savage had sulked and hated him for years.</span></span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">I
was not concerned about Savage's feeling, nor was Langstone. We were
both concerned with the Party's adopting a progressive policy. We
were to discover that recalcitrant men do not carry out bold and
imaginative programmes.</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<br /></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Arial, sans-serif;">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 Reserve Bank Credit, within the limits
set out is not only justified, but has already contributed much
towards the Nation's economic well-being."</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: black;"><span style="font-size: small;"><span lang="en-NZ">Thus,
27 years too late, Nash accepted the policy on which Labour was
elected in 1935.............</span></span></span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">Pg
58 – Factory production had become unprofitable. I wanted to see
money issued for essential works until production flowed once more. I
did not want to take over factories. I did want us to take over
banking and the issue of credit. I did want us to use our credit to
finance work so long as unemployment existed. </span></span></span></span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">I
objected to New Zealand being made bankrupt because prices had fallen
overseas. </span></span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">We
should maintain our own price level and with it solvency. This
attitude to price was indeed the genesis to our guaranteed price
scheme. Twenty other voices in caucus urged the same thing I did.<br />But
alone, perhaps, I sensed that if we issued internal credits and did
not establish exchange control and import selection our credits would
create demand for imports in excess of our London funds and create a
financial crisis which would bring the Labour Government to its knees
when it set out to renew London loans. To me exchange control and
import selections, so that we could control the flow of credits and
imports and maintain a reserve, was absolutely essential to socialist
financial policy.</span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">Pg
68 – I am sure that much of Labour’s success is a consequence of
good or bad times. Labour was good for business after Nationalist bad
business. </span></span></span></span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">The
average Labour MP did want to restore purchasing power to the masses
and that was in itself a fruitful idea. But there were no ideas as to
how to change or gradually transform the economic system so that
increased production could spell expanding incomes and greater
leisure and fewer depressions by breaking the cursed cycle of
capitalist inflation-deflation. For half a century Labour in Britain,
Australia, and New Zealand had talked of socialising ‘the system’
but when the moment came for modest doses of the socialism for which
the electorate had granted a mandate Labour either did not know or
where there was knowledge, did not have the courage to make changes.</span></span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">Pg
77 – A few days later the Prime Minister sent for me again. Nash
had come up with a proposition. “</span></span></span></span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">We
will make you the Under-Secretary in charge of housing. </span></span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">You
will handle housing business as though you were a Minister. You will
present housing to Cabinet, you will deal with housing business in
Parliament. Walter will be your Minister, but he will be going to
England by the time you get started and it will be up to you. We will
introduce legislation the moment Parliament settles down. No one will
get in your way.”</span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222;">“</span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">Will
money be available from the Reserve Bank?” I asked.</span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: #222222;"><span style="font-size: small;"><span lang="en-NZ">This
was a contentious Party issue. With tens of thousands of men on
relief work the Labour Party, Nash and Fraser apart, believed that
the funds of the Reserve Bank should be used for essential capital
works until available men, machinery and materials were being fully
employed. We wanted to undo the politically enforced Banker’s
deflation. Nash wanted to stabilise deflation. We did not want to
create money when men, materials and machinery were being fully
engaged; at that point we believed the cost of works should be met
out of revenue. </span></span></span><span style="color: #222222;"><span style="font-size: small;"><span lang="en-NZ"><b>But
we were not prepared to create debt as long as goods, machinery and
men were idle. That was the moment to use public credit.</b></span></span></span><span style="color: #222222;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222;">“</span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">Money
will be made available from the Reserve Bank.” The Prime Minister
made the promise.</span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><b>Pg
90 – Although the power to underwrite and arrange fresh borrowings
has been availed of rather than the power to make new issues, except
where the issue is an overdraft, such as has been arranged for the
dairy industry account, one definite issue has been arranged for. The
Government has instructed the Reserve Bank to make five million
pounds worth of credit available for housing purposes. These funds
will be drawn upon by the Housing Account of the State Advances
Corporation. </b></span></span></span></span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">All
the funds so advanced will be used to create new assets in the form
of houses and a straight out issue of money for the creation of such
assets was considered justifiable. </span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><b>The
instruction to the Reserve Bank, according to the Hon. Mr. Nash’s
statement to Parliament, specifically prohibits the Reserve Bank from
negotiating the sale of any portion of this issue, so that the whole
issue is to be new money upon which the interest earned will belong
in its entirety to the State. And the houses, of course, will belong
to the State.</b></span></span></span></span><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">Pg
91 – </span></span></span></span><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">In
the halfway house of socialism-capitalism the evils of both systems
are likely to afflict us if we are not careful. Labour must stimulate
the production of such quantities of goods as are necessary to New
Zealand’s welfare at an even higher standard. Capitalism cares only
that the transaction yields a cash profit. To use a money machine to
only create capital works and leave consumption goods to private
finance is dangerous. Hence at some stage Labour must give effect to
the Prime Ministers intention of making credit available to secondary
industry. Production that may not be profitable at the overdraft
rates of the trading banks may be so socially desirable as to
necessitate freeing it from the profit system so that quantities can
flow to the extent required by the nation.</span></span></span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg 133 -
As the 1928-35 economic crisis receded the electorate remained
pronouncedly conscious of monetary theory, of rates of interest and
of development by State credit rather than by recourse to higher
borrowing rates. The British Labour movement had the same lively
awareness. G. D. H. Cole, Arthur Henderson and many other socialists
who rejected the Douglas Credit mythology had become genuine social
creditors. I distinguish between social credit and mystical Douglas
Social Credit. The clamour for more intelligent use by the State of
its own resources and for lower interest rates continued across the
world, in the wake of the depression, until it was submerged in the
clamour of the Second World War. </span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Our
caucus resolution not only ordered exchange control but also that
there should be no increase in the interest rate without the consent
of caucus. But we did not trust the Old Man or Nash. Labour movements
the world over had not recovered from Ramsay MacDonald's and Philip
Snowden's determination to place the gold value of the pound above a
life-time's loyalty to Labour (even though the gold standard was
abandoned a week later).</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">During
the election the Old Man at his vast evangelic meetings had made
emotional affirmations, between the cheers, of his determination to
use the "internal credit of the people" for public works,
indeed for "loan-free public works", and had repeated
assurances that Labour intended to reduce interest rates for public
development.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">But from
the moment the M.P.s returned to their homes inspired news paragraphs
started to suggest a return to orthodoxy to deal with our exchange
crisis, a greater rate of interest to attract funk deposits, and
maybe a lesser use of credit in New Zealand, a policy which
contradicted everything Labour had........</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg
134.... s</span><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ">aid
about money since 1928. All this was easy for Walter Nash to swallow,
but not for the rest of us. We knew that, sentimentally, the Old Man
was with us, that he always talked our way, but we knew that in fact
he would defend whatever brief Walter Nash put into his mouth. Any
suggestion of a credit squeeze was abhorrent to us.</span></span></span></span><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /><br />Pg
178 – Preparations were being made for the 1940 Conference;
branches were appointing delegates in record numbers. I could count
my friends by the hundred. Branches were three to one behind me
(apart from areas where Catholic Action groups had intervened because
of the rumour that I opposed the Old Man’s conversion). They sent
me unsolicited promises of support.Dr. McMillan thought my article a
good one and printed 1,000 copies of Psychopathology in Politics which
he intended to distribute to Conference.<br />Some members of the
National Executive, behind my back, grew active. Up till then there
had been no card vote in the Labour party of the type that existed in
Britain. Unions were allowed at Conference a number of votes
proportionate to their membership. To this end their leading
delegates were provided, at the opening of Conference, with a card
showing the number of votes each could poll on behalf of his union.
But full voting power could only be exercised if all the union’s
branches were represented at Conference by delegates. Now a move was
started to allow union presidents and secretaries to poll the full
vote of a federation without such representation and without evidence
that its members had been consulted.<br />James Roberts and David
Wilson brought forward a proposal to allow the full card vote in such
circumstances. The Party’s constitution clearly provided that
alterations to the constitution had to be notified to branches by
prior remit. </span></span></span></span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">Roberts
and Wilson proposed to amend the rules by providing for the card vote
in the Executive Report with which Conference opened. Endorsement of
the Report would automatically amount to acceptance of the new
provision. This was clearly a means of amending the constitution
never contemplated. I knew that the jury was being…..</span></span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span></div>
<div style="margin-bottom: 0in;">
<strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">Pg
179 ……..loaded against me before Conference, but I was powerless.
A member of the Labour party cannot apply to a Supreme Court for an
injunction to prevent an illegal alteration of the rules, even when
he knows the change is being made in order to hang him.</span></span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br />“They
altered the rules regarding the composition of the jury after your
trial was started,” a judge of the Supreme Court was to say to me
later.As Conference drew near, so did Savage’s death while the
Standard still assured Party members that he was in full charge of
business. The daily press, however, was beginning to suggest that the
Prime Minister’s condition was critical. Some of my following began
to desert me. One member had written telling me he thought Psychopathology in Politics was one of the best things I had done and
hoping that I would not “run away from its truth”. He went to
earth as fast as political heels would carry him. It had taken him a
lifetime to become an M.P., so who am I to judge him ?Nor did he ever
raise his voice publicly afterwards, although he sent me many private
and friendly communications. I do not blame him. The card-vote
magnates were to be powerful in possession of tens of thousands of
unconsulted votes of their members many of them conscripted into
their unions by the compulsory legislation.</span></span></span></span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">Intransigent
as ever, Dr. McMillan wired from Dunedin that he had been informed
that the Prime Minister’s life could only last a matter of days or
even hours, and that an attempt would be made to end my political
life.As Savage showed signs of dying before conference ended, Fraser
made up his mind that I had to be expelled before Savage
died.</span></span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br />Expulsion
from the Labour Party is much like excommunication from the Communist
Party or the Mediaeval church. The world is invited to spit upon the
sinner. He has passed beyond the portals of decent treatment.</span></span></span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">Pg
162 – My reason for telling the truth about the Old Man was not any
wish to be a hero. I have never wanted to be one. Whenever I have
heard young children recite:</span></span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">“For
how can men die better than facing fearful foes,” I have always
mentally interjected, “ In bed, of old age, at peace.” I remember
the day I won my D.C.M. At Messines. The line was held up, men went
to earth. I jumped up. It was the only thing to do. No doubt an odd
one had jumped up before me and had fallen with a gut full of
machine-gun bullets. I jumped up because forward was the only way. As
I jumped up to run I heard a voice, despite the thunder of the guns,
say, “There goes a fellow for the V.C.” an observation that had
not the slightest bearing on my conduct. I would not have risked a
finger for twenty V.C.s. What I did was merely commonsense.</span></span></span></span></span></strong></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">Pg
215 - “I did not only want to fight Hitler, who was himself the
result of an evil economy, but to fight as well the economic
conditions which would continue to sprout Hitlers.”</span></span></span></span></span></strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><br /></span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;"><span style="color: #222222;"><span style="font-size: small;"><span lang="en-NZ">Pg
275 – If capitalists are still afraid of Labour as a conspiracy to
overturn the profit system let them sleep in peace! The trade union
magnates plan big unions and want power within their organisations.
They do not inspire the Labour Party to action. They are only hangers
on. They have rich appetites, they are more like the cartoonist Edgar
Dysons fat man than the capitalists themselves. The idea that they
are capable of a revolutionary conspiracy is unbelievably funny.
Union secretaries are the new conservative class; they hate
agitation. They love unions so big that the controllers are beyond
reach of the rank and file, safe from criticism.</span></span></span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">Pg
276 – Is Labour a conspiracy? Labour these days accepts the
existing system. The only case that Labour puts forward is about how
tax proceeds shall be shared. The present important task of Labour,
and I am not belittling it, is to humanise the capitalist system, not
to socialise or control it. Most of the M.Ps these days know nothing
of capitalism or socialism. They have never read a tract on the
capitalist crisis. Their loyalty is not to an idea, but to machine,
to a job as an M.P.</span></span></span></span></span></strong></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, sans-serif;">Pg 215 -
“</span><strong><span style="color: #222222;"><span style="font-family: Arial, sans-serif;"><span style="font-size: small;"><span lang="en-NZ"><span style="font-weight: normal;">I
did not only want to fight Hitler, who was himself the result of an
evil economy, but to fight as well the economic conditions which
would continue to sprout Hitlers.”</span></span></span></span></span></strong></div>
<br />
<div style="margin-bottom: 0in;">
<br /></div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com1tag:blogger.com,1999:blog-5037330197467032848.post-58986192413201065732014-11-22T14:39:00.001-08:002017-05-10T01:08:57.933-07:00In pursuit of financial capital gain racial reconciliation in New Zealand is being hindered by suppressed truths by elements on both sides of the process.<br />In pursuit of financial capital gain the racial reconciliation process in New Zealand is being hindered by truths being suppressed by elements on both sides of the process.<br /><br />I think some of the 'common folk' of every ethnicity within New Zealand are beginning to realise that we are all now suffering at the hands of the same types of people, what the first nations Maori peoples have suffered, by the same methods of deception.<br /><br />Commercial contract law written by the so-called 'trusted professions' has undermined common law.<br /><br />The slave master minded elites of European high finance, along with a few locally recruited Maori that they have cut in on the deal, have massively disproportionately benefited from their behind the scenes control of parliament's since 1852.<br /><br />They have used their influence to commit a financial system pyramid control fraud against the common peoples of New Zealand.<br /><br />The few among Maori that have been cut in on the deals, in order to keep their personal financial gains flowing, have heavily promoted the Maori romantic warrior myth, that Maori were gods gift to each other and the environment before the 'Pakeha' turned up and ruined the party.<br /><br />As long as this continues any racial reconciliation in fact will be almost impossible, as the children of every ethnicity in New Zealand are going to grow up with opinions formed from a misleading basis.<br /><br />In its current form, with its current predominant influences, the New Zealand government more conspires to have its people exploited for the benefit of foreign-financial-free-raiders and a few local mercenaries co-operating in full knowledge with them, than for the equal economic opportunity of as many of the locals as physically possible.<br /><br />If asked to summarise in short New Zealand history since the first point of continuous European contact 1769, I would say that the lower socioeconomic Maori tribes who were suffering economic exploitation at the hands of stronger slave master minded Maori, and an increasingly lawless bunch of early European mercantile exploiters, in 1840 signed an agreement called the Treaty of Waitangi, of which the slave master tribes did not sign. <br /><br />The lower socioeconomic tribes did so in an attempt to bring in a new governance model from Europe, after having heard of the European peasant revolutions out of which evolved the concept of a representative house of parliament where the commoners got a say in a national assembly and slavery by chains was abolished in the British Empire in 1830.<br /><br />They thought the European peasant tenant slaves had achieved equal economic opportunity freedom from their despotic slave masters.<br /><br />But as many former peasant tenant European slaves fled to Aotearoa seeking to build a better way of life, they ended up alongside a Maoridom, both suffering a new kind of slavery by financial system pyramid control fraud.<br /><br />As exposed in this 1764 historical incident with Benjamin Franklin, who was an elected public representative of the fledgling colonies, at the point of continuous European contact in what became known as the United States of America. Which was another nation to which many peasant tenants were fleeing to in hope of leaving behind the feudal caste class systems of Europe;<br /><br />1764 – Benjamin Franklin is asked by officials of the Bank of England to explain the prosperity of the colonies in America. He replies,<br /><br />“That is simple. In the Colonies we issue our own money. It is called Colonial Scrip. We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers. In this manner creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay no one.”<br /><br />As a result of Franklin’s statement, the British Parliament hurriedly passed the Currency Act of 1764. This prohibited colonial officials from issuing their own money and ordered them to pay all future taxes in gold or silver coins.<br /><br />This incident is a tiny part of a mountain of evidence that the sought after new governance model of equal economic opportunity from Europe, was far from a completely sealed deal in Europe itself.<br /><br />With religious elements that were also very predominantly class system conservative, from those times unto this very day, it was decreed by the then appointed upper house of parliament that debt of private owned foreign lending institutions was to circulates as the entire currency supply of New Zealand's money system.<br /><br />Which leaves New Zealand, as a whole, still suffering a fraudulent, divide and conquer, imperialist mercantile imbalanced system of commerce.<br /><br />As long as the 1764 Currency Act that was later imposed upon many target nations, remains essentially intact in those nations, although the means of repayment has moved from gold or silver into other demands and the base from which the control fraud is run has been moved around, those nations suffering it remain not sovereign of their economics, not offering their people as equal economic opportunity as physically possible, but still a colony.<br /><br />'He iwi tahi tatou' (We are all one people) was uttered at the signings of the Treaty of Waitangi, lets the commoners turn it into a truth and stuff up the plans of the criminal money elements.<br /><br />To whom it may concern,<br />Attempting to form public policy for equal economic opportunity of all citizens without a full knowledge of the fundamentals of money as invented and intended - that this submission details - is doing so by looking at 1/3 of a many piece puzzle forced together in frustrated confusion - thinking its complete - when 2/3 of the picture needed in the middle to make clear sense of it all - is in-fact one large piece that has been hidden by a self serving few to steal from wider society under false pretences.<br />http://publiccreditorbust.blogspot.co.nz/2014/09/warmongering-british-colonial-heritage.htmlPublic Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-78416362983177915952014-11-08T19:17:00.000-08:002014-11-10T07:26:26.970-08:00No equity gain for the cost of shelter means greater than ever financial enslavement of common Kiwis at the hands of the foreign owned private central banking network mafia!<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">No equity gain for the cost of shelter
will mean greater than ever financial enslavement of common Kiwis at
the hands of the foreign owned private central banking network mafia!
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><br />
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">If the New Zealand Parliament condones
these recently announced all of loan term - interest payment only
mortgages - of the private central banking network, it will be
condoning an even higher level than it does now of the already
massive outright criminal financial pyramid fraud that the citizens
and businesses of honest enterprise of New Zealand presently suffer
at the hands of foreign high finance institutions who can be traced
back to being privately owned, in the main, by the family trusts of
the worlds ultra-inter-generational-wealth-families of Europe and a
few other bribed co-operatives they have cut in on their predatory
lending pyramid fraud over centuries.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><br />
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">It does not take much scratching below
the service to find out from official on the record documentation
that when a New Zealand citizen enters a New Zealand based lending
institution seeking to take out a loan, that under the British
colonial private central banking system we still suffer, any loan
approved can be traced back to a foreign private owned financial
institution, that does not at that stage, as is often portrayed,
possess the credit or need the hard earned saved deposits of existing
currency, of a hard working existing customer, to be able to give a
new customer an interest bearing loan, if the lending institution
approves a new loan request.<br /><br />What backs the new credit the
private central banking network type into their accounts to then give
you as an interest bearing loan, should they approve it, is the
amount of the already developed or as yet undeveloped natural
resource collateral of the nation that you are a citizen of that
operates under this system, that you claim to be able to get access
to.<br /><br />Under present New Zealand money system structures, when
all is said and done, the New Zealand based lending institutions
makes a profit margin by organising loans within the nation at a
higher rate of interest than they then refinance with the largest
global lending institutions at the top of the global private central
banking network wholesale credit pyramid.
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><br />
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">It is little known that under the
present New Zealand money system structures the entire currency
circulating within the money system is originated as an interest
bearing loan owed to a private lending institution and is
extinguished at repayment of the principal and interest of the loan.
Thus to maintain the present level of economic activity we must
maintain the present level of private central banking network
supplied interest charged loans or to grow the present level of
economic activity we must grow the present level of private central
banking network interest charged loans. Which I contest is absolutely crazy when you fully understand the role of credit and currency
within a money system.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><br />
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">The interest charged upon the currency
supplied by the private central banking network to then circulate as
our means of exchange, is supposed to be a fair and reasonable fee
for the private central banking network keeping in balance the senior
most important balance sheet of economic activity authorised vs
sustainable natural resources to support whats enabled, that is
needed to be kept in balance for any money system to be able to
complete the sustainability loop of currency in circulation being
equal with present and future physically possible trade, that is
needed to keep any money system from becoming a
repeatingly-unsustainable-collapsing-ponzi-pyramid-control-fraud.<br /><br />The
repeated financial crisis over recent centuries within nations that
have been under private central banking network control have come
when the senior owners and greedy underlings have in the pursuit of
selfish financial enrichment cooked the base accountancy of credit
and currency issuance books without any due diligence what-so-ever in
regards the natural balances and boundaries of population or
sustainable natural resources. The perpetrators of the money system
control fraud then use the purchasing power proceeds of their pyramid
control fraud crimes to gain ownership of as much of the capital gain
and rent seeking assets of the real economy as they then are able,
with a view to then toll boothing wider society back to within an inch
of slavery for a very undignified access to their very necessities of
life. These all of term – interest payment only – housing or
business loans will help consolidate the aims of the very sinister
most senior elements of international high finance.<br /><br />If this
private central banking network ponzi pyramid control fraud, or any
publicly administered money system that is abused in the same manner
by a corrupt few, is allowed to continue unimpeded, the societies
suffering it will end up like a small birds nest being used by too
many birds to rare their chicks. The stronger ones will walk all over
the weaker ones to steal a lions share of the areas available
resources without even stopping to consider installing any drainage
for the rising tide of excrement that they contribute the most to but
for a short while suffer the least from, until the rising tide of
excrement becomes so high that it drowns all in the nest in their own
excrement before any can escape to freedom. If the cycle is repeated
enough it will become a threat to the entire species.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><br />
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">If the human species can't use its
ability to reason to learn to share the available resources more
equitably within the balances and boundaries of population and
sustainable resources it will collectively be in danger of drowning
in its own excrement.
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><br />
</span></div>
<div style="margin-bottom: 0in;">
</div>
<div style="margin-bottom: 0in;">
<a href="http://www.stuff.co.nz/business/money/63014826/Interest-only-mortgage-irresponsible" target="_blank"><span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">http://www.stuff.co.nz/business/money/63014826/Interest-only-mortgage-irresponsible</span></a></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">Westpac's new 30-year, interest-only
mortgage has been decried as irresponsible and likely to fuel
property investor speculation.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><br />
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">Details of the new loan product were
discreetly fed to mortgage broker channels in recent weeks. The
offering is a major shake-up to the market, with the term three to
six times as long as the maximum allowed by rival banks.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><br />
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">Wellington mortgage broker Simon Rule
said the three-decade loan had surprised brokers and rival lenders,
and was "disappointing" to see.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><br />
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">"You're basically encouraging
borrowers not to make any principal repayments on their mortgage
whatsoever," he said.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">End quote</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;"><br />
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">For a wider historical context of the
ever growing inequality of New Zealand's present money system
structures please read this below;</span></div>
<div style="margin-bottom: 0in;">
<a href="http://publiccreditorbust.blogspot.co.nz/2014/09/warmongering-british-colonial-heritage.html" target="_blank"><span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">http://publiccreditorbust.blogspot.co.nz/2014/09/warmongering-british-colonial-heritage.html</span></a></div>
<br />
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: large;">Warmongering British Colonial Heritage
Private Central Banking Empire.</span></div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-82271082430191387332014-10-09T15:59:00.000-07:002017-11-01T22:42:13.313-07:00New Zealand already under TPPA International Committee for Settlement of Investment Disputes (ICSID) arbitration tribunal that operates under the umbrella of the World Bank.<div style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14px; line-height: 19.3199996948242px; margin-bottom: 6px;">
For my fellow citizens and businesses of honest enterprise you are being eaten alive by foreign financial ticket clipping middlemen.</div>
<div style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14px; line-height: 19.3199996948242px; margin-bottom: 6px; margin-top: 6px;">
The senior elements of banking empire cartel have control of New Zealand under conditions of receivership via its International Monetary Fund (IMF) receivership branch. It is backed up by an old boy's Commercial Contract Law network known as the International Committee for Settlement of Investment Disputes (ICSID) that operates under the umbrella of the World Bank.</div>
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The World Bank and IMF are conduit institutions that can be traced back to the senior most institutions of the British colonial era old boys private central banking network that are owned by the family trusts of the worlds ultra-inter-generational-wealth-families.</div>
<div style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14px; line-height: 19.3199996948242px; margin-bottom: 6px; margin-top: 6px;">
The World Bank gives out the predatory interest-bearing soft loans of counterfeit credit in excess of the productive natural resource capacity of the target nation to ever be able to repay.<br />
<br />
Then when the mathematically inevitable bankruptcy receivership occurs the IMF is put in charge of bankruptcy receivership. Supposedly assisting you to trade your way out of your financial troubles.</div>
<div style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14px; line-height: 19.3199996948242px; margin-bottom: 6px; margin-top: 6px;">
However the former World Bank Vice President - Joseph E. Stiglitz - has stated that the IMF is the hospital that makes you sicker and quite clearly has ulterior motives than those that are publicly stated;<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fnewint.org%2Ffeatures%2F2004%2F03%2F01%2Fimf-failure%2F&h=JAQFwxLB3&enc=AZNe61rHl7d3V_tI1Cu9qz3dTSLKecR7Re8Bq2a-zq412U7GXhVNnzPVV_2tit_3a5qCm0LoyXI_xm9eS1T9wZzBLbWjH_SEyFEivZN0C_aUyCHrUd4PclWY2lW_ej_R3q-0Amwx0SAv6dwIuzAhrYKs&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://newint.org/features/2004/03/01/imf-failure/</a></div>
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Joseph E. Stiglitz - "I watched carefully what the IMF had done, the mistakes that it had made in crisis countries in East Asia, Latin America, Africa and the economies in transition. The mistakes were sufficiently frequent that they clearly weren’t just an accident – as an academic you look for patterns.</div>
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There were a couple of obvious explanations. One was that they were incompetent, stupid people. But that argument is just not persuasive – they pay among the highest wages, they get good people.<br />
You could say it was bad economic models. But there is an array of economic models out there and they chose to use ones that led to wrong predictions, wrong policies and really negative consequences.<br />
So why did they choose them? One is left with a possible answer that they had different objectives, that their objective in going into a country was not, for example, to keep employment as high as possible or to minimize poverty."</div>
<div style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14px; line-height: 19.3199996948242px; margin-bottom: 6px; margin-top: 6px;">
And then of course it all starts to make sense. You ask: ‘Who makes the decision, and on whose behalf do they make those decisions?’ You look at the decision-making structure – at the IMF the United States is the only country with a veto, other countries are represented by central bank governors and finance ministers. They were looking at the world with a particular perspective, a particular ideology that was in accord with their interests. And their interests were to make sure the creditors got paid. That took precedence over what would be good for the country.<br />
End quote</div>
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By 1961 in New Zealand the predatory lending of counterfeit credit had run New Zealand into bankruptcy receivership. At which time it was put under IMF receivership Structural Adjustment Program that I would argue they have since traded New Zealand even deeper into financial trouble on purpose to force it to sell its public assets on the open market at fire-sale prices.</div>
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These procedures are enforced by international arbitration courts in which commercial contract law supersedes individual human rights common law.<br />
<br />
Despite compelling evidence to the contrary there has since 1961 been contradicting denials and admissions by successive governments of New Zealand around the growing influence of the conduit institutions of external creditors over our nation.<br /><br />
The New Zealand Economy, A Personal view, book by Rob Muldoon 1985<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fpubliccreditorbust.blogspot.co.nz%2F2013%2F05%2Frob-muldoon-new-zealand-prime-minister.html&h=iAQEdLdK4&enc=AZOl_O0PjtwnT_l2KiRoxq1epnatH7eJf-teVi5nw47WdGKhvXGSYD16HxRyTt7V_dkewYMlsP6A8ec1WEH9nO1USnnjcXZAOD_WaST_xAXDGRrB3el_IAnzyQvIM1bgu60KI_ZTjp9HipkqJ3vMfvvl&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://publiccreditorbust.blogspot.co.nz/2013/05/rob-muldoon-new-zealand-prime-minister.html</a><br />
Page 33-34;<br />
page 52;<br />
The fact that even in good years we did not show an overall surplus on our external current account and had to borrow and even draw from the IMF was also of concern, so that we were forced to move to restrain not just consumption, but capital development as well.<br />
page 61;<br />
It was in 1967 that, as a result of the wool slump, we borrowed into the higher tranches by way of drawings from the International Monetary Fund and gave the fund a controversial letter of intent. The semantics of a letter of intent as debatable then as they are today when the Fund has some 40 such arrangements. When the left wing politicians and academics claimed that the Fund had laid down conditions before permitting us to draw in the higher tranches, I insisted, as did the Fund, that it was up to the Government of the member country to indicate the policies that it would pursue in order to restore balance to its economy, while the Fund made its decision on whether or not to agree to the drawings in light of the policies that were proposed.<br />
End quote</div>
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<br />
I sent this email to Minister of Finance Michael Cullen 4 September 2007 ;<br />
Regards Dr Cullen,<br />
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?<br />
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.?<br />
Yours sincerely<br />
Iain Parker</div>
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I received this reply from the Acting Minister of Finance Trevor Mallard 2 October 2007 ;<br />
Dear Iain Parker<br />
Thank you for your letter which was received on 5 September 2007 concerning an Official Information Act request. You requested:<br />
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?<br />
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.?</div>
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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.<br />
In June 1984, New Zealand drew down its Reserve Tranche at the IMF. The Reserve Tranche is essentially a country's 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.<br />
Once again, all relevant documents are publicly available at Archives New Zealand.<br />
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.<br />
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.<br />
This fully covers the information you requested.<br />
Yours sincerely<br />
Hon Trevor Mallard<br />
Acting Minister of Finance.</div>
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On the 5 October 2007 I sent this reply to Trevor Mallard;<br />
Regards Hon Trevor Mallard,<br />
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.<br />
Thank you<br />
Iain Parker</div>
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I then received on 10 October 2007 this reply from Michael Cullen;<br />
Dear Mr Parker<br />
I have received your email regarding the answer to your Official Information Act Request which was signed out by the Hon Trevor Mallard in my absence.<br />
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.<br />
In this case, the draft reply was prepared on my behalf by Andrew Turner, Head of Portfolio Management at the Treasury.<br />
Yours sincerely<br />
Hon Dr Michael Cullen<br />
Minister of Finance<br />
end quotes</div>
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<br />
This information below from the New Zealand parliamentary record makes it clear that the above rebutting of the growing control by the IMF over New Zealand economic affairs was misleading and makes very clear that IMF regulation now becomes automatic financial system law within New Zealand without having to pass through the New Zealand parliament to be debated or voted upon;<br />
<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fpubliccreditorbust.blogspot.co.nz%2F2014%2F08%2Fnew-zealand-international-finance.html&h=RAQHIktxZ&enc=AZPfZT-_gWSCZ6R8xSLPM_lpsTeuWaqdbeODIqh2wqTyEFbwApPhHDKmCtvUA0INTLm2E4D3fV2kwz5i_6-8Mgs1HDeP8n20UXXJSQwSI5V8UAPMgEFFOpfdDv96tu0P4x6C9qkD1IMd7rvqfPhXl6Si&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://publiccreditorbust.blogspot.co.nz/2014/08/new-zealand-international-finance.html</a><br />
New Zealand Minister of Finance the Hon BILL ENGLISH said in the debate;<br />
“I intend to move that the bill be referred to the Finance and Expenditure Committee. Our commitments to the IMF are effectively premiums to an insurance policy against damage to our economy from an unstable world....... New Zealand has already agreed to these changes, and adopting the International Finance Agreements Amendment Bill simply puts that agreement into practice......The bill also creates a regulation-making power in the principal Act so that further updates to the articles can be made by regulation. This power will simplify the process by which New Zealand meets its obligations. Once changes to the articles are agreed to by the requisite majority of members of the international financial institutions, New Zealand will be bound by the amendments, which means that we are required to bring our domestic legislation into line with our international obligations.”<br />
end</div>
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New Zealand opposition party finance spokesperson Hon DAVID PARKER (Labour) said in debate;<br />
“I rise to speak to this bill, the International Finance Agreements Amendment Bill, on behalf of the Labour Party. The Labour Party will be supporting this bill to the Finance and Expenditure Committee. The Labour Party supports the function of the International Monetary Fund and the International Bank for Reconstruction and Development and broadly agrees with the Minister of Finance that these are good institutions that assist the conduct of international economic affairs in a way that benefits New Zealand as well as other countries......I think New Zealanders will have more confidence in our participation in these international fora if they think that Governments are being transparent about changes to those international agreements and the effect of those changes on New Zealand. There is already enough suspicion out there as to the effect of international agreements. We breed further suspicion if we are not open and transparent about changes to those rules......For those reasons, amongst others, the Labour Party opposes future changes to this legislation by way of the statutory regulation-making power that this amendment Act creates. We believe that future amendments ought to come back to this Parliament. If we look back in the history, it has not been an onerous task for New Zealand to amend this legislation through annual amendments or anything like that. It is relatively rare that we have amendments to this International Finance Agreements Act, which dates back to 1975. “<br />
end quotes</div>
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New Zealand Green Party Co-Leader - Russel Norman - having displayed a sense of growing environmental and social injustice - had “come out” - asking hard questions of the current money system orthodoxy after his 21 Feb 2013 International Finance Agreement Amendment Bill third reading - in which Russel Norman admitted to having only recently gained an understanding of just how New Zealand money supply originates and under what terms and conditions;<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fpubliccreditorbust.blogspot.co.nz%2F2014%2F08%2Fnew-zealand-international-finance.html&h=JAQFwxLB3&enc=AZNHl0-BtYCJInoNLoO-ZRuYm0PBPy33yesVHMletRf7tqCfUvgVZNtG7sNVbz_h4bDiNh2w5DfhH2XDymi1g6EtfBP-mhfXyXlK-Mr2DSlwNeKz5-lyrxYcR0BQ8AHDZ6zGq0Rsr0j_-Dl1sCuixDM1&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://publiccreditorbust.blogspot.co.nz/2014/08/new-zealand-international-finance.html</a><br />
"The other thing that comes out of, I think, the IMF that surprises a lot of people is when the IMF says things like most of the money that is generated is generated by the private banks. Most of us, I think—and I was certainly one of these people, until reading IMF papers—always assume that the Government created the money. That is just because I actually did not follow it closely enough, whereas the IMF is very clear that it is the private banks that create most of the money. What the IMF—or, at least, some of the researchers within the IMF—is now saying is that the Government should use its ability to create money, so that there is some publicly created money as well as the privately created money, most of which is created by the private banks.<br />
This, of course, is a pretty radical proposition, and the IMF, in putting forward this proposition, has certainly been shaking the policy debates around monetary policy all over the world, except in New Zealand, of course, where we are kind of locked into some weird backwater where the Government does not want to have a debate around any of this kind of stuff. But if you read the international literature, it is pretty good."<br />
end quote</div>
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Russel Norman made clear his views again - and clearly had not yet buckled - in this 27 May 2013 article;<br />
"In the debate around monetary policy, it is often forgotten that the default position is that the private banks create most of the money and lead the increase in the monetary supply. They then charge interest to the users of the money that they have created......The debate should be: what constraints should apply to the private creation of money given the banks’ irresponsible behaviour in the past; and should the public institutions be expanding money supply as a policy tool, to what extent, and to what purpose? Should the state be allowed to also increase the money supply for public purposes such as refilling the Natural Disaster Fund and to see what effect it can have on reducing the very damaging high NZ dollar?<br />
The answers to these questions aren’t black and white but for my pick I think we need to restrain the banks lending into the housing bubble and use a trial public creation of money to restock the Natural Disaster Fund – both to be prepared for future disasters and to see what impact it would have on the dollar.<br />
It is of course difficult to have a rational conversation around these issues in the current political context (ie Key’s scaremongering) but it is an important conversation for rational adults to have. We do have an out of control current account deficit and if we want to be masters of our own destiny we need to change policy settings as under Key’s plan our deficit and debt increase dramatically."<br />
end quote</div>
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<span style="line-height: 19.3199996948242px;">To understand how a New Zealand old boys network of lawyers are already busy on global arbitration panels confiscating the commonwealth essentials of life natural resources of nations on behalf of intra-national corporations that are party related to the British colonial heritage old boys private central banking network please read the details below of the New Zealand Arbitration (International Investment Disputes) Act 1979 and loss of economic sovereignty that has resulted.</span></div>
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<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.legislation.govt.nz%2Fact%2Fpublic%2F1979%2F0039%2Flatest%2Fwhole.html&h=8AQHRPXUF&enc=AZOXoo8jhqllfbmEKadt8HZcOXQpLjtBQ-q86HF9krSbg0hk3bMywoS8WKIUYBA_Y0Go8-1AxGL8D35y7XyYXUslhVqh7Hzb-qT5IrXu-lweuO6JZM_aAj1bQ9qKvpeYw8L66KujxvcjbBO90bPJ-lkh&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.legislation.govt.nz/act/public/1979/0039/latest/whole.html</a><br />
An Act to implement an international Convention on the settlement of investment disputes between States and nationals of other States<br />
1Short Title<br />
This Act may be cited as the Arbitration (International Investment Disputes) Act 1979.<br />
2 Interpretation<br />
In this Act, unless the context otherwise requires,—<br />
award means an award made pursuant to the Convention; and includes—<br />
(a)any decision made pursuant to the Convention that interprets, revises, or annuls an award; and<br />
(b)any decision as to costs that, pursuant to the Convention, is to form part of an award<br />
Centre means the International Centre for Settlement of Investment Disputes established pursuant to the Convention<br />
Convention means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States that was opened for signature in Washington on 18 March 1965, a copy of the English text of which is set out in the Schedule.<br />
3Act binds the Crown<br />
This Act binds the Crown.<br />
Section 3: substituted, on 15 November 2000, by section 3 of the Arbitration (International Investment Disputes) Amendment Act 2000 (2000 No 52).</div>
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The Trans-Pacific-Partnership-Trade-Agreement (TPPA ) being negotiated by governments behind closed doors in secret, is in my opinion an attempt by the banking cartel pyramid fraudsters to boost the power of intra-national commercial contract law institutions in order to make it harder for nation states to take back what they have had stolen from them under false pretenses.</div>
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The New Zealand government signed up to the International Committee for the Settlement of Investment Disputes - ICSID - in 1970 - ratifying in 1980 – that has seen New Zealand lawyers involved global arbitration processes that have more often than not seen the findings fall in favour of corportions under very questionable circumstances;</div>
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<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.chapmantripp.com%2Fnews%2FPages%2FChapman-Tripp-acts-in-first-ever-bilateral-investment-treaty-hearing-in-NZ.aspx&h=QAQE7Apl4&enc=AZObveF19PP2cMgh7r3qzyHTrmPae-pzc5WFFzZcvb1HEcitYL7t1-2W3IGyIuYK2M44M7EsP4hhDsVCaXwsWwpfTugH5XR0xA-JmDf9W5MORgieh2V_kcCAXculuEjX2ty7p8cRrzdAhSkCkyP_sWh_&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.chapmantripp.com/news/Pages/Chapman-Tripp-acts-in-first-ever-bilateral-investment-treaty-hearing-in-NZ.aspx</a></div>
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Chapman Tripp acts in first ever bilateral investment treaty hearing held in New Zealand</div>
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27 April 2012</div>
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Leading New Zealand law firm Chapman Tripp, acting as co-counsel with international law firm Salans, have secured a successful decision in the first ever bilateral investment treaty arbitration hearing held in New Zealand.</div>
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Chapman Tripp obtains first NZ subpoena of witness for foreign arbitration</h1>
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02 March 2015</div>
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In a first for New Zealand, Chapman Tripp has obtained a High Court order of subpoena requiring a New Zealand-based witness to provide evidence for an international arbitration tribunal sitting in London.</div>
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New Zealand’s Arbitration Act 1996 expressly authorises the High Court to issue orders of subpoena, but only for New Zealand-seated arbitrations. The order was accordingly obtained using procedures in the Evidence Act 2006 for giving effect to letters of request from a foreign “requesting court”, which is defined as “any court or tribunal exercising jurisdiction in a country or territory outside New Zealand”. In this case, a letter of request was prepared and sent by the LCIA arbitral tribunal to the New Zealand High Court.</div>
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Chapman Tripp litigation partner Daniel Kalderimis successfully argued that a foreign arbitral tribunal qualified as a requesting court. The High Court agreed, holding that the limited scope of the Arbitration Act procedure did not preclude use of the Evidence Act procedure, and electing not to follow overseas authority – informed by the Hague Evidence Convention, to which New Zealand is not (yet) a party – holding that private arbitral tribunals are not requesting courts. </div>
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The witness’s evidence was given in the form of examination in New Zealand, from Chapman Tripp’s offices, with the LCIA arbitral tribunal and counsel in the London arbitration participating live by audio-visual link.</div>
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A copy of the High Court decision can be found <a href="http://www.chapmantripp.com/news/Documents/Dalian%20Deepwater%20v%20Dybdahl%20(3).pdf" style="color: #e6731e;">here</a>.</div>
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Look what the New Zealand arbitrators have been up to in our good name!<br />
<a href="https://www.facebook.com/l.php?u=https%3A%2F%2Ficsid.worldbank.org%2FICSID%2FFrontServlet%3FrequestType%3DCasesRH%26actionVal%3DOpenPage%26PageType%3DAnnouncementsFrame%26FromPage%3DAnnouncements%26pageName%3DAnnouncement152&h=NAQHnd67s&enc=AZM3jejIWVvgeDKQ2yeX3A1hOlhhWhgNrNapPrP_hUEM5MZSTtvsSYm5nYD0_C1Qkgl6X5vRNC_VKiKQgQRNUjbICy68qK6QGww9k4dck2hvEwnv255h57Zkg7f1jEHdq_kp3kjqT1iU64U9HR5u0eug&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">https://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=OpenPage&PageType=AnnouncementsFrame&FromPage=Announcements&pageName=Announcement152</a></div>
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NEW ZEALAND<br />
Panel of Arbitrators<br />
Designation effective November 12, 2013:<br />
Campbell Alan McLachlan<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.essexcourt.net%2Fnews%2F424%2Fprofessor-campbell-mclachlan-joins-essex-court-chambers&h=ZAQFDRE7U&enc=AZN22iF92PlAOCZtnPPk82GMNhirWikvldByGjY5ALQ6DN_b-WQxEITpd5Y5p4MEfXluVTLV_ikFVRKDn_1Pxr-VpDyguJAIIGECVb7aEtZZDw1ECdfweOe3RqRX230D35xaEnXqdUMv_Y5bFKzS3EFl&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.essexcourt.net/news/424/professor-campbell-mclachlan-joins-essex-court-chambers</a></div>
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Panel of Arbitrators<br />
Designation effective June 10, 2013:<br />
David A.R. Williams<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.bankside.co.nz%2FLatest%2Ftabid%2F87%2Fid%2F43%2Ftitle%2Flargest-award-ever-in-bilateral-investment-treaty-case-at-icsid%2FDefault.aspx&h=yAQGZ4CNc&enc=AZPyYddR7ooKD1b6ZhmYoh7MJ6qEbQbCVPME7dfJLoWXQ5yic7qAVFGtykCIsihR5ILiSF7tb1pL71lMnJxdDlOcLu5GRG5kutg3WxE3nTAcMQmMVQtAD9ZlRhrVq96Nmu4BKB-sRnl9wpa3ugRN16ie&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.bankside.co.nz/Latest/tabid/87/id/43/title/largest-award-ever-in-bilateral-investment-treaty-case-at-icsid/Default.aspx</a></div>
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ICSID: Details of operation and costs of cases.<br />
By Inna Uchkunova, International Moot Court Competition Association (IMCCA)</div>
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“Research is formalized curiosity…” – Z. Hurston</div>
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In what follows I have tried to gather information from publicly available sources regarding some of the questions which have troubled my mind lately. It is hoped that the results would be of interest to the readers. For me, this proved to be one of my most exciting projects so far. The idea was conceived during my work in the IMCCA – Bulgaria (International Moot Court Competition Association) which unites past and present Ph. C. Jessup Moot Court participants (as well as participants from other moot courts) who share their love for International Law in a country where it is not lectured in-depth in universities. IMCCA and America for Bulgaria Foundation provide us with the necessary stimuli to learn more and to achieve more.</div>
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The information presented is subject to the caveat that not all ICSID awards are public or may have otherwise escaped my acquisition efforts. In this and any other regard, I would appreciate further supplement or corrections.</div>
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Which arbitrators have sat the most in ICSID cases?<br />
(in alphabetical order, including cases which have been settled)<br />
Alexandrov, Stanimir A.<br />
Álvarez, Henri C.<br />
Berg, Albert Jan van den<br />
Berman, Franklin<br />
Bernardini, Piero<br />
Böckstiegel, Karl-Heinz<br />
Brower, Charles N.<br />
Crawford, James R.<br />
Cremades, Bernardo M.<br />
El-Kosheri, Ahmed Sadek<br />
Fernández-Armesto, Juan<br />
Fortier, L. Yves<br />
Gaillard, Emmanuel<br />
Griffith, Gavan<br />
Guillaume, Gilbert<br />
Hanotiau, Bernard<br />
Kaufmann-Kohler, Gabrielle<br />
Lalonde, Marc<br />
Lowe, Vaughan<br />
McLachlan, Campbell<br />
McRae, Donald M.<br />
Naón, Horacio A. Grigera<br />
Oreamuno, Rodrigo<br />
Paulsson, Jan<br />
Stern, Brigitte<br />
Tercier, Pierre<br />
Thomas, J. Christopher<br />
Veeder, V.V.<br />
Vicuña, Francisco Orrego<br />
Williams, David A.R.<br />
Wobeser, Claus von<br />
Who is the first woman to sit as an arbitrator in an ICSID case?<br />
Mme Rosalyn Higgins in 1987, in the resubmitted Amco case.<br />
It is noticeable that international arbitration remains a man-dominated profession.<br />
Which is the Claimant which has filed the most applications?<br />
Impregilo, S.p.A has appeared as Claimant in 5 cases so far (most of them discontinued):<br />
Impregilo S.p.A and Rizzani De Eccher S.p.A. v. United Arab Emirates(ICSID Case No. ARB/01/1)<br />
Impregilo S.p.A. v. Islamic Republic of Pakistan (ICSID Case No. ARB/02/2)<br />
Impregilo S.p.A. v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/3)<br />
Impregilo S.p.A. v. Argentine Republic (ICSID Case No. ARB/07/17)<br />
Impregilo S.p.A. v. Argentine Republic (ICSID Case No. ARB/08/14)</div>
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Which is the State appearing the most times as a Respondent?<br />
(includes cases which have been settled or discontinued)<br />
Argentina 49<br />
Venezuela 36<br />
Egypt 17<br />
Ecuador 12<br />
Congo 12<br />
Peru 11<br />
Ukraine 10</div>
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Curious facts regarding the composition of some of the Tribunals<br />
● All the initially appointed arbitrators in the cases MTD v. Chile (ICSID Case No. ARB/01/7), Vannessa Ventures v. Venezuela (ICSID Case No. ARB(AF)/04/6) and Víctor Pey Casado v. Chile (ICSID Case No. ARB/98/2) resigned.<br />
● Two of the three arbitrators in the annulment proceedings in the cases of MTD v. Chile and CMS v. Argentina were the same which made the outcome of e.g. the later-in-time decision on stay of enforcement.<br />
● The arbitrators in the Malaysian Historical Salvors v. Malaysia (ICSID Case No. ARB/05/10) annulment proceedings were all past and present Judges from the International Court of Justice.<br />
● The arbitrators in the cases of Pioneer v. Argentina (ICSID Case No. ARB/03/12) and Pan American v. Argentina (ICSID Case No. ARB/03/13), and Alcoa Minerals v. Jamaica (ICSID Case No. ARB/74/2), Kaiser Bauxite Company v. Jamaica (ICSID Case No. ARB/74/3) and Reynolds v. Jamaica(ICSID Case No. ARB/74/4), respectively, were all the same.<br />
Which law firms have served the most times in ICSID cases?<br />
(in alphabetical order)<br />
Arnold & Porter LLP<br />
Freshfields Bruckhaus Deringer LLP<br />
King & Spalding LLP<br />
Latham & Watkins LLP<br />
Shearman & Sterling LLP<br />
Sidley Austin LLP<br />
White & Case LLP</div>
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Which prominent scholars have served as party-representatives or counsels in ICSID cases?<br />
Judge Stephen M. Schwebel<br />
Prof. Dr. James R. Crawford<br />
Prof. Christopher Greenwood<br />
Prof. Alain Pellet<br />
Prof. Philippe Sands, QC<br />
Prof. Antonio Crivellaro</div>
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In which fields of economic activity most of the cases find their origin?<br />
Hydrocarbon concessions, petroleum and oil exploration and production, gas supply and distribution 71<br />
Electric power generation, distribution and sale 39<br />
Mining concessions and mineral exploration 31<br />
Construction contracts, including real estate, dams, etc. 21<br />
Highway construction contracts 14<br />
Telecommunications 13<br />
Water services 12</div>
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Which is the first ICSID award?<br />
The Award rendered on August 29, 1977 in the case of Adriano Gardella S.p.A. v. Côte d’Ivoire (ICSID Case No. ARB/74/1).<br />
What is the highest award amount so far?<br />
The highest award amount of US$ 1,769,625,000 was awarded in the case of Occidental v. Ecuador (ICSID Case No. ARB/06/11) Award of October 5, 2012.</div>
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What is the lowest award amount so far?<br />
It seems that the lowest award amount of US$ 460,000 (as principal) was awarded in Asian Agricultural Products Ltd. v. Sri Lanka (ICSID Case No. ARB/87/3) Award of June 27, 1990.</div>
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How much does an ICSID case cost in terms of legal costs?<br />
The information below was intended to bring light to the question how much does an ICSID case cost in terms of legal representation. The information provided must be retained with caution since legal costs depend, among others, on the duration and the complexity of the case. Moreover, many awards are not publicly available and most Tribunals order that each party bears its own costs of legal representation without mentioning the sums.<br />
Here are some examples of the practice of ICSID Tribunals:<br />
● In CDC v. Seychelles (ICSID Case No. ARB/02/14) Award of December 17, 2003, Seychelles were ordered to pay the Claimant the sum of £ 100,000 representing legal fees.<br />
● In Pantechniki v. Albania (ICSID Case No. ARB/07/21) Award of July 30, 2009, the cost claims of the parties were among the lowest – EUR 154,523 and EUR 269,657, respectively.<br />
● In Telenor Mobile v. Hungary (ICSID Case No. ARB/04/15) Award of September 13, 2006, the Counsel for Hungary demanded the reimbursement of US$ 1,249,340.29.<br />
● In Siag v. Egypt (ICSID Case No.ARB/05/15) Award of June 1, 2009, Egypt was ordered to pay the the sum of USD 6,000,000 in legal costs.<br />
● In Spyridon Roussalis v. Romania (ICSID Case No. ARB/06/1) Award of December 7, 2011, the Claimant had to pay 60% of the Respondent’s legal fees in the amount of EUR 6,053,443.78.<br />
● The Tribunal in Cementownia Nowa Huta S.A. v. Turkey (ICSID Case No. ARB(AF)/06/2) Award of September 17, 2009 found that:<br />
“the Respondent’s legal fees and expenses are not unreasonable having regard to the course of these proceedings and that, therefore, the Claimant is to bear such costs in the amount of USD 4,904,822.06.” (para. 178)<br />
● In Kardassopoulos & Fuchs v. Georgia (ICSID Case Nos. ARB/05/18 and ARB/07/15) Award of March 3, 2010, the Respondent was liable to pay the Claimants their costs for the proceedings in the total amount of US$ 7,942,297.<br />
● In ADC v. Hungary (ICSID Case No. ARB/03/16) Award of October 2, 2006, the Claimant demanded US$ 7,623,693 in respect of the Claimants’ costs and expenses. The Tribunal found<br />
“no reason to depart from the starting point that the successful party should receive reimbursement from the unsuccessful party.” (para. 533)<br />
See also Abaclat et al. v. Argentina (ICSID Case No. ARB/07/5) at para. 682.<br />
● The Tribunal in Gemplus & Talsud v. United Mexican States (ICSID Cases Nos. ARB (AF)/04/3 & ARB (AF)/04/4)) Award of June 16, 2010 recognized that:<br />
“It is well-known that legal costs incurred by respondent-state parties are usually much lower than costs incurred by claimant-private parties, partly because a claimant bears a greater burden in presenting and proving its case, partly because a state’s billing practices with its legal representatives are different and partly, as here, where there is more than one claimant bringing claims under more than one treaty.” (para. 17-25)</div>
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Which is the most invoked BIT?<br />
From the information available it may be concluded that this is the Argentina – U.S. Bilateral Investment Treaty which was relied upon,inter alia, in the following cases:<br />
CMS v. Argentina (ICSID Case No. ARB/01/8)<br />
Azurix Corp. v. Argentina (ICSID Case No. ARB/01/12)<br />
Continental Casualty Company v. Argentina (ICSID Case No. ARB/03/9)<br />
Pan American Energy LLC and BP Argentina Exploration Company v. Argentina (ICSID Case No. ARB/03/13)<br />
Enron v. Argentina (ICSID Case No. ARB/01/3)<br />
LG&E v. Argentina (ICSID Case No. ARB/02/1)<br />
Sempra v. Argentina (ICSID Case No. ARB/02/16)<br />
AES Corporation v. Argentina (ICSID Case No. ARB/02/17)<br />
El Paso Energy v. Argentina (ICSID Case No. ARB/03/15)<br />
How long does an ICSID case take?<br />
Approximately 3.6 years. See Sinclair, A., ICSID Arbitration: how long does it take?, 4:5 GAR J. (2009), available here .<br />
Which is the shortest merits award (in terms of length)?<br />
CDC v. Seychelles (ICSID Case No. ARB/02/14) Award of December 17, 2003 – 23 pages.</div>
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Which is the longest merits award (in terms of length)?<br />
Gemplus & Talsud v. United Mexican States (ICSID Cases Nos. ARB (AF)/04/3 & ARB (AF)/04/4)) Award of June 16, 2010 – 382 pages<br />
Are there claims filed by a State against an investor?<br />
Gabon v. Société Serete S.A. (ICSID Case No. ARB/76/1)<br />
The basis of jurisdiction was a contract. The case was eventually settled.<br />
Romania’s counterclaim in Spyridon Roussalis v. Romania (ICSID Case No. ARB/06/1) was admitted on the basis of the umbrella clause found in Article Article 2(6) of the Romania-Greece BIT. (Award of December 7, 2011, para. 781)<br />
Which cases may be called landmark cases?<br />
While it may be said that every decision and award rendered by an ICSID Tribunal (or committee) contains interesting findings of law, among them the following may be mentioned as particularly interesting:<br />
● Santa Elena v. Costa Rica (ICSID Case No. ARB/96/1) Final award of February 17, 2000, on the compound interest. Up until this point, most of the ICSID Tribunals denied awarding compound interest relying on a citation from Marjorie Whiteman in her book Damages in International Law vol. III (1943) at p. 1997:<br />
“[t]here are few rules within the scope of the subject of damages in international law that are better settled than the one that compound interest is not allowable.”<br />
This is, among other things, evidence of the influence a scholar can have on international law.<br />
● Maffezini v. Spain (ICSID Case No. ARB/97/7) Award of November 9, 2000, as to attribution of State responsibility.<br />
● Salini v. Morocco (ICSID Case No. ARB/00/4) Decision on Jurisdiction of July 23, 2001, regarding the so-called Salini test for the notion of investment.<br />
● Vivendi v. Argentina (ICSID Case No. ARB/97/3) First Annulment, Decision on Annulment dated July 3, 2002, as to the relation between treaty and contract.<br />
● SGS v. Pakistan (ICSID Case No. ARB/01/13) Decision of the Tribunal on objections to jurisdiction of August 6, 2003 and SGS v. Philippines(ICSID Case No. ARB/02/6) Decision of the Tribunal on objections to jurisdiction of January 29, 2004, with regard to the so-called umbrella clause.<br />
● ADC v. Hungary (ICSID Case No. ARB/03/16) Award of October 2, 2006, in relation to valuation in cases of unlawful expropriation.<br />
● Phoenix Action v. the Czech Republic (ICSID Case No. ARB/06/5) Award of April 15, 2009, as to bona fide investments.<br />
● Abaclat et al. v. Argentina (ICSID Case No. ARB/07/5) Decision on jurisdiction and admissibility August 4, 2011, regarding admissibility of mass claims of 60,000 Claimants (the total number of whom at the time of initiation of the arbitration exceeded 180,000) mostly natural persons of Italian nationality relating to bonds issued by Argentina.</div>
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Which States have refused to comply with ICSID awards or have considerably obstructed compliance?<br />
Argentina is well known for its interpretation of Articles 53 and 54, i.e. that the successful Claimant’s recourse to enforcement in its national courts is a pre-condition for payment of the award (See for e.g. Enron v. Argentina (ICSID Case No. ARB/01/3) Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 7 October 2008, available here).</div>
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Which States have withdrawn from the ICSID Convention?<br />
Bolivia, Ecuador and Venezuela.</div>
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Which States are not parties to the ICSID Convention?<br />
Brazil and India are not among the 158 Members to the ICSID Convention.</div>
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Other curious facts<br />
● After the award in the RSM v. Grenada (ICSID Case No. ARB/05/14) was rendered, RSM tried to sue Freshfields Bruckhaus Deringer LLP counsel for Grenada alleging that Freshfields conspired to violate the Racketeer Influenced and Corrupt Organizations Act by, for e.g., Jan Paulsson and Brian King being part of the conspiracy to bribe Grenada officials and deny RSM its licensing rights. RSM claimed the excess of US$500 million in damages. The claim was dismissed. See US District Court for the District of Columbia, Civil Action No. 10-00457 availablehere.<br />
● Both the Claimant and the Respondent in the Europe Cement Investment v. Turkey (ICSID Case No. ARB(AF)/07/2) Award of August 13, 2009, ended up claiming that the Tribunal lacked jurisdiction. This is one of the Uzan family-related cases against Turkey. The Claimant wanted to discontinue the proceedings but the Respondent State disagreed. (See para. 139 of the Award)</div>
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Funniest quote from an ICSID award<br />
“[H]appiness is multiple pipelines”<br />
Mentioned in the case of Kardassopoulos & Fuchs v. Georgia (ICSID Case Nos. ARB/05/18 and ARB/07/15) Award of March 3, 2010, para. 5, in relation to the Western Route which was of<br />
“significant national and strategic importance for Georgia as a means of securing its sovereignty following the break up of the Soviet Union and deepening its ties to the West.” (para. 3)<br />
Recommendations<br />
The site of ICSID is informative and accessible. Still it may be improved by, for e.g., adding information as to the basis of the jurisdiction in the particular case, nationality of the Claimant, amount claimed, amount awarded, who represented the parties, which was the successful party, costs of the proceedings, etc.<br />
End</div>
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<b>Largest Award Ever in Bilateral Investment Treaty Case at ICSID</b><br />
07 November 2012<br />
In the largest arbitral award ever to be rendered by a tribunal at the International Centre for Settlement of Investment Disputes (ICSID), the Republic of Ecuador has been ordered to pay $1,769,625,000 (US) for terminating an oil production investment held by the U.S. company, Occidental Petroleum. Arbitrators in the case were Canadian lawyer, L. Yves Fortier QC, retired New Zealand judge David AR Williams, and retired French law professor Brigitte Stern.<br />
Occidental filed for arbitration under the U.S.-Ecuador bilateral investment treaty (BIT) following Ecuador’s May 2006 decision to terminate a participation contract for Block 15 located in the Ecuadorian Amazon. Authorities blamed the move on Oxy’s having improperly transferred a share of its Ecuadorian production activity to a Canadian energy firm.<br />
In a 336 page award an ICSID arbitral tribunal conceded that Occidental had breached the terms of the participation contract by failing to obtain government authorization for the transfer of rights. However, arbitrators held that Ecuador’s decision to strip Occidental of its investment and its failure to pay compensation were disproportionate, and in breach of Ecuador’s treaty obligations to provide for “fair and equitable treatment” and to refrain from expropriating assets without compensation. Arbitrators also found that Ecuador’s actions breached its own laws.<br />
The damages awarded by arbitrators reflect the value of Occidental’s investment as of May 2006 when its contact was terminated, minus a 25% deduction due to Occidental’s own breach of the participation contract. Ecuador must also pay interest of 4.18% on the awarded sum, compounded annually, to reflect the increase in value of the damages from May 2006 until the time of the arbitral award.<br />
In a dissenting opinion Ecuador’s nominee to the three member arbitral tribunal, expressed her agreement with the majority’s analysis of the facts and the law, including its finding that Ecuador acted disproportionately in response to what she termed Occidental’s “serious violation” of Ecuadorian law.<br />
However, Prof. Stern expressed “complete disagreement with the way damages have been calculated”, and would have favoured a 50/50 approach to damages similar to that in an earlier ICSID arbitration (MTD v Chile), so that Oxy’s damages would be halved as a result of its having “acted both very imprudently and illegally.”<br />
End quote</div>
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Anyone wanting to know much more detail of exactly how the British colonial heritage old boys private central banking network has put New Zealand under the control of their receivership branch the - International Monetary Fund (IMF) - alongside their legal branch the - International Committee for Settlement of Investment Disputes (ICSID) - please read this document;<br />
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and many more informative global money system structure articles here;<br />
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Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com1tag:blogger.com,1999:blog-5037330197467032848.post-38386680012691790342014-09-12T03:38:00.002-07:002016-09-24T21:57:06.729-07:00New Zealand Minister's of Finance Official Information Replies re Money System Structures.<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #37404e; line-height: 0.21in;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;">Sorry
to tell you that in most cases politicians in the front office are
only swallowing and regurgitating second hand summarised information
supplied by 'officials' out in the back office. Below are several e</span></span></span><span style="line-height: 0.21in;"><span style="font-size: 10pt;"><span style="color: #37404e;">xamples of the admissions of this practice from
both former Minister of Finance Michael Cullen and present Minister
of Finance Bill English</span></span></span><span style="color: #37404e; line-height: 0.21in;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;">;</span></span></span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #37404e; line-height: 0.21in;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;"><br /></span></span></span>
<span style="color: #37404e; line-height: 0.21in;">(Please note the 2007 dates of the Michael Cullen Official Information Act reply and the line of questioning in it by Iain Parker over a year ahead of the 2008 global credit crisis and consider how correct his allegations stack up against the findings of the 2011 final report of the US National Commission On The Cause Of The Financial And Economic Crisis In The United States at this link here;</span></span><br />
<a href="http://www.gpo.gov/fdsys/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf"><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: small;">http://www.gpo.gov/fdsys/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf )</span></a><br />
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<span style="color: #37404e;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: 10pt;"><br /></span></span></span></div>
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<span style="color: #37404e;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: 10pt;">On
the 13th May 2007, I asked these questions of Minister of Finance
Michael Cullen;<br />Regards minister Cullen,<br />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?<br /><br />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?<br />yours<br />Iain
Parker<br /><br />May 2007;<br />Regards MR Cullen,<br />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?<br />Thank you<br />Iain
Parker<br /><br />I then received a reply from Michael Cullen 19 June
2007;</span></span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #37404e;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;">Dear Iain Parker<br />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.<br /><br />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.<br /><br />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).<br /><br />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.<br /><br />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).<br /><br />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<br />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.<br />I trust this has
helped to answer your question.<br />Yours sincerely<br />Hon Dr Michael
Cullen<br />Minister of Finance<br /><br />- 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 -</span></span></span><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.seccom.govt.nz%2Fnotices%2Fsummaries%2F2004%2F&h=-AQFaqW3h&s=1" target="_blank"><span style="color: #3b5998;"><span style="text-decoration: none;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;">http://www.seccom.govt.nz/notices/summaries/2004/</span></span></span></span></a><span style="color: #37404e;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;"> -
then scrolled down to find - Securities Act (Crown Wholesale Debt
Securities) Exemption Notice 2004 -<br />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.<br /><br />I sent this email to Minister of
Finance Michael Cullen 4 September 2007 ;<br />Regards Dr Cullen,<br />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?<br />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.?<br />Yours sincerely<br />Iain Parker<br /><br />I
received this reply from the Acting Minister of Finance Trevor
Mallard 2 October 2007 ;</span></span></span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #37404e;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;">Dear Iain Parker<br />Thank you for your
letter which was received on 5 September 2007 concerning an Official
Information Act request. You requested:<br />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?<br />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.?<br /><br />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.<br /><br />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.<br /><br />Once again, all relevant documents are publicly
available at Archives New Zealand.<br />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.<br /><br />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.<br />This fully
covers the information you requested.<br />Yours sincerely<br />Hon
Trevor Mallard<br />Acting Minister of Finance.<br /><br />On the 5 October
2007 I sent this reply to Trevor Mallard;<br />Regards Hon Trevor
Mallard,<br />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.<br />Thank you<br />Iain Parker<br /><br />I then received on
10 October 2007 this reply from Michael Cullen;<br />Dear Mr Parker<br />I
have received your email regarding the answer to your Official
Information Act Request which was signed out by the Hon Trevor
Mallard in my absence.<br />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.<br />In this case, the draft reply was prepared on my
behalf by Andrew Turner, Head of Portfolio Management at the
Treasury.<br />Yours sincerely<br />Hon Dr Michael Cullen<br />Minister of
Finance<br /></span></span></span></span><br />
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Former New Zealand Labour Party Minister of Finance Minister of Finance - 10 December 1999 > 19 November 2008 - Michael Cullen - said this in 2012;</div>
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'Govt wouldn't let the big banks fall over'</div>
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And in terms of the big banks, he says there has always been "a degree of pretense" around the idea the government didn't stand behind them.</div>
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"If they were systemically important in reality the government couldn't afford to let them fall over. But no Minister of Finance is ever going to say that as Minister of Finance. It's only when they're old and clapped out and out of a job that they can actually say that."<br /><br />Yet New Zealand Labour still put Michael Cullen up on a pedestal and New Zealand National Party appoint him to run government departments in preparation for privitisation, go figure?</div>
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #37404e;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;"><br /><br />Office of Hon Bill English<br />Deputy Prime
Minister Minister of Finance<br />Minister for Infrastructure<br />1 8
JAN 2010<br /><br />Dear lain Parker<br />Thank you for your Official
Information Act request, received on 27 November 2009. You asked
a”number of questions about the nature of government bonds; as well
as about the nature of money and the banking system.<br /><br />1. Could
you please tell me what a Government Bond is and what role it plays
in our economy?<br /><br />As you point out on page 7 of your submission,
New Zealand government bonds are wholesale, New Zealand dollar
denominated, fixed-term debt securities. They are secured by a charge
upon and are payable out of the revenues of the Crown. Cash received
by government bond issuance is used to fund goods and services
provided by the government, e.g. roading, hospitals and welfare
payments. Government bond yields provide an indication of the “risk
free” rate of return in an economy and provide companies and
households a benchmark with which to compare returns against those of
alternative investments.<br /><br />2. Could you please tell me who in
the world of high finance, as Primary Bond Dealers, has the right to
buy or monetise government debt bonds before they decide if they do
or don’t on sell them on the secondary bond market?<br /><br />New
Zealand does not have “Primary Bond Dealers.” The term “Primary
Bond Dealers” refers to institutions that, for example, trade
directly with the United States Federal Reserve, where they are
required to participate when the Federal Reserve holds securities
auctions. In New Zealand, the nearest equivalent institutions are
called registered tender counterparties. The main difference between
the US and New Zealand is that registered counterparties are eligible
but not required to participate in government securities tenders.<br />To
qualify for registration as a tender counterparty, an institution
must have a minimum credit rating of A-/A3, or have their obligations
guaranteed by a parent entity with a minimum credit rating of A-/A3,
or be a Crown financial institution.Tender counterparties are
primarily either New Zealand or Australian incorporated banks.<br /><br />3.
Are the Primary Bond Dealers private or publicly owned
institutions? That is not those that buy bonds on the secondary bond
market, but the Primary Bond Dealers?<br /><br />Tender counterparties
are primarily private sector banks.<br /><br />4. Could you please tell
me what they use to buy our government bonds and if that medium of
exchange existed before we pledged to pay it back with attached
interest out of the future taxes of the nation or was it an
electronic debt book entry, not anyone’s existing savings, but an
electronic book entry that brings into circulation new money?<br /><br />People
purchasing government bonds must do so with New Zealand dollars.
Settlement of the transaction between the purchaser and the Crown is
by electronic cash transfer rather than physical cash. All else being
equal, bond purchases result in a reduction in settlement cash
balances of the banking system (either at commercial banks, the
Reserve Bank or both) as cash is transferred to the Crown. An
explanation for how this cash may originally be created is included
in the answer to question 5 below.<br /><br />5. Is it true that in
excess of 90% of the money supply in circulation in New Zealand
entered circulation as interest bearing debt owed to the banking
network?<br /><br />It is correct that most of the money supply in New
Zealand has been created by the banking sector. This is done through
the process of financial intermediation. Commercial banks, and other
financial institutions, take deposits from members of the public and
firms who wish to hold cash in the form of bank deposits. They then
lend to individuals and firms who want to borrow — in the form of
mortgages or business loans. This process serves to channel funds
between savers and borrowers. It also shifts the risk of lending from
individual savers to the banks, thereby reducing the risk of
lending.<br />This process of intermediation involves the commercial
banks lending a greater value of funds than the cash they reserve to
meet expected deposit withdrawals. This is done because at any one
time only a fraction of depositors will want to withdraw their funds.
Banks therefore need to keep only a fraction of their deposits in
reserve in order to meet those demands. Because the banks lend more
than the total amount of cash held in reserve in the system, credit
is created – thus increasing the money supply.<br />The exact
proportion depends on the definition of the money supply. Using the
most common definition of the money supply as M2 (i.e. currency held
by the public + balances in cheque accounts + all other business or
personal deposits that are available on demand), the October 2009
data show that the part not accounted for by currency held by the
public is 95%.<br />Data on money aggregates can be found on the RBNZ
website at:</span></span></span><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.rbnz.govt%2F&h=gAQHX3DG6&s=1" target="_blank"><span style="color: #3b5998;"><span style="text-decoration: none;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;">http://www.rbnz.govt/</span></span></span></span></a><span style="color: #37404e;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;"> nzlstatistics/monfin/cl
/data.html.<br /><br />6. Prime Minister Key, could you please
describe your activities as a member of the Advisory Board of the
Foreign Exchange Committee of the US Federal Reserve between
1999-2001?<br /><br />I refer you to the reply from the Office of the
Prime Minister.<br /><br /><br />7. Could all please advise me if the US
Federal Reserve and the Bank of England are privately owned
institutions that sit within their respective governments or publicly
owned institutions within their governments?<br /><br />I refer you to
the following pages on the websites of the Board of Governors of the
Federal Reserve and the Bank of England respectively for this
information:</span></span></span><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.federalreserve.gov%2FQf%2Fpf.htm&h=IAQFn1KGK&s=1" target="_blank"><span style="color: #3b5998;"><span style="text-decoration: none;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;">http://www.federalreserve.gov/Qf/pf.htm</span></span></span></span></a><span style="color: #37404e;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;"><br /></span></span></span><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.bankofengland.co.uk%2Fabout%2FleciisIation%2Fleciis.htm&h=cAQG_kUWG&s=1" target="_blank"><span style="color: #3b5998;"><span style="text-decoration: none;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;">http://www.bankofengland.co.uk/about/leciisIation/leciis.htm</span></span></span></span></a><span style="color: #37404e;"><span style="font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif;"><span style="font-size: 10pt;"><br /><br />8.
Could you please explain to me the role and relationship of the
American Financial institution — Northern Trust — in regard to it
being appointed custodian of our own NZ Debt Management Office?<br /><br />The
New Zealand Debt Management Office (NZDMO) has appointed Northern
Trust as global custodian for NZDMO fixed income assets. The
appointment followed a competitive tender exercise which was
completed in 2008. Custodian duties provided by Northern Trust for
the NZDMO are standard for financial institutions and include: the
provision of trade settlement services; safekeeping of assets; and
other administrative functions.<br /><br />9. Could you please tell me if
in New Zealand, a “new” mortgage at issuance, before it becomes
tradable, is loaned to a borrower by a registered bank, is that
mortgage created as a debt book entry account, not anyone’s
existing savings, but an electronic debt book entry creating “new
money”?<br /><br />The creation of a new residential mortgage will
generally result in new money (bank deposits) being created. The bank
grants a new loan to a purchaser, who uses the cash to buy property
from a vendor. The vendor then may spend or save the proceeds
boosting deposits in the financial system.<br />You also ask for a list
of the names of the officials who contributed to this reply. I am
withholding these names in full under s.9(2)(g)(i) of the Official
Information Act — to maintain the effective conduct of public
affairs through the free and frank expression of opinions.<br />You
have the right to ask the Ombudsman to review my decision.This fully
covers the information you requested. I hope you find this
information useful<br />Yours sincerely<br />Bill English<br />Minister
of Finance</span></span></span></span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #141823;">Another
case of New Zealand Government throwing its arms in the air in
regards to financial frauds they clearly know the banking sector is
committing against the citizens and businesses of honest enterprise
of New Zealand.<br /><br />Here are the details of an email conversation
between the New Zealand Minister of Finance Office and a New Zealand
citizen in regards to an article about money system funding
structures they had read in a newspaper.<br /><br />The discussed article
can be read in full at the bottom of the email conversation
transcript.</span><span style="color: #141823;"><br /></span>From:
Anita Schurmann<br />Sent: Thursday, 4 June 2015 6:03 a.m.<br />To:
bill.english@national.org.nz<br />Subject: Money Creation</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Dear
Bill English<br />As you are the minister of finance I recommend that
you read this article which recently appeared in the Otaki Mail.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">http://otakimail.co.nz/outside-the-box-challenging-convent…/
<br />I expect you are aware that banks are allowed to create money
from nothing and lend it out at interest. In the past most people in
NZ were unaware or didn’t believe that banks did this. However, as
more and more people now understand and are realizing that this is
going on, I believe it is time to change legislation to stop this
unlawful behaviour. Money should be created for public good to
facilitate trade, and should not be under the control of private
corporations to make a profit. As you are probably aware this current
monetary system is the main reason why the world economy is in such
crisis. It is time to change the system for the good of all people.
If New Zealand takes the lead in this are the rest of the world will
most likely follow, as people throughout the world have had enough of
the corporate controlled system that is destroying our world and our
communities. Please let me know when you intend to change the law so
creation of money is under the control of the democratically elected
government rather than private companies.<br />Yours sincerely<br />Anita
Schurmann<br /><br /><br />
</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Office
of Hon Bill English
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<span style="font-family: "arial" , "helvetica" , sans-serif;">14
July 2015</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Dear
Anita Schurmann thank you for your email 4 June 2015 in which you
raised concerns about the the Government allowing banks to create
money on their own through the system of fractional reserve banking.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />The
system discussed in the article you refer to, is one that has been
considered at times as the role of financial institutions hs evolved.
Irving Fisher suggested a possible structure and approach to your
suggestion in the Chicago Plan, eighty years ago, and there are some
theoretical advantages that may result from a system set up in this
way, including better control of business cycle fluctuations.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">However,
the transition to such a system would be hugely coomplex and is
inherently fraught with great risks. We would wnt increased certainty
and evidence regarding the benefits before change could even be
considered, and the luck of such a system in any developed market
economies makes such evidence hard to obtain.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Equally,
the current monetary system allows for the provision of credit, which
serves a very important function in allowing people to smooth their
consumption over time and allowing firms to invest in productive
capital.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Finally,
it is not entirely clear whether it would be possible to move to the
system outlined in the 'Chicago Plan' without an intensive global
shift in monetary regimes. If New Zealand were to be a first mover,
it is unclear what the effects would be for trade and the exchange
rate in a small, open economy.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Yours
sincerely
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Hon
Bill English<br />Minister of Finance</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Here
is the article in full that is being discussed in the email
exchange;<br /><br />Outside the Box — challenging conventional
thinking and offering new perspectives about our world<br /><br /><span style="color: #111111;">Let’s
Change our Money-as-Debt Problem</span><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;">By
Amanda Vickers</span> June 2015<br /><br /><span style="color: #222222;">You’d
think that the most important aspect of a sovereign nation would be
for its Government to have sole rights to issue its country’s money
supply. But not so: this function has been appropriated primarily by
privately owned banks. “Whenever a bank makes a loan, it
simultaneously creates a matching deposit in the borrower’s bank
account, thereby creating new money.” — Bank of England Quarterly
Bulletin (Q1, 2014)*</span></span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Our
nation’s money comes in to existence through debt. As more money
enters the economy, the more debt we have (Government or private).
Counter-intuitively, what benefits the individual does not benefit
the nation as a whole. In fact, if we all repaid all our loans, there
would be 98% less money left in the economy because, as it turns out,
only ~2% of our nation’s money supply is issued by the RBNZ — as
notes and coins.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">So
there you have it. Banks create our nation’s money supply when
credit is drawn (monetized), destroy money when loans are repaid, and
profit immensely from the interest charged on the loans. Most bank
profit is obtained from the difference between interest we pay for
these loans (created credit) and the interest they pay out for the
corresponding deposits. The four big banks in NZ were making record
profits in 2014, with ~4.3 billion dollars heading offshore to
Australia and beyond. This is hard-earned New Zealander’s money
leaving our real economy, and being transferred to the private
banking sector.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Sovereign
money advocates term this concept “economic rent” and claim that
private banks, seeking to maximise profits, shouldn’t be “renting”
money to Government, businesses and citizens of a free, sovereign
country. This growing money supply and these growing debts are also
secured by NZ’s assets, resources and labour force (you).</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">If
we had a Government issued money supply requiring banks to have 100%
reserves for money they lend, we would see dramatic improvements in
our economy. We could have both less debt and enough money to thrive.
The International Movement for Monetary Reform proposes just this and
has gathered a huge following since the 2008 global financial crisis.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">This
“sovereign-money” proposal proved itself when it was modeled by
the International Monetary Fund**. Their analysis showed that the
benefits of 100% reserve banking would be: dramatically reduced
public and private (net) debt levels (because money creation no
longer requires simultaneous debt creation), better control of
business cycle fluctuations, complete elimination of bank runs,
output gains of 10% and that inflation can drop to zero without
posing problems for the conduct of monetary policy.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">It
is great the IMF analysis has concluded something that also seems
intuitive and logical. Sovereign money advocates extrapolate further
that the outcome would also be far reaching throughout our economy
and our lives. They say it could also improve: the inequality gap,
child poverty, housing bubble control, student debt, state asset
sales, job security, local businesses performance (due to the 10%
higher output gains), budgets for local community projects and
facilities, health care and education.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">It’s
not a bad outcome for one law change: 100% reserve banking. The irony
is that the law would change to how most people think it actually
works now — where our Government issues the nation’s money
supply. It simply requires updating the 1844 Bank Charter Act, which
forbade banks from printing notes. If only they’d included
something to prevent ledger balance accounting tricks, creating
credit — which they have done to this very day!</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">One
obstacle is the general lack of understanding about how the monetary
system really works by both the public and many politicians. There is
also a fair amount of inertia and political resistance to the reform.
The change is a big one, so is therefore daring and challenging. Some
politicians fear sovereign money because it may affect NZ’s
Standard and Poor’s (S&Ps) credit rating. S&Ps may mistrust
the Government thinking they would simply issue too much money too
easily, causing an inflationary crisis, creating a currency
devaluation, which would in turn affect trade.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Realising
the importance of “why” we should address a problem, motivates
people to find the “how”. Money reform advocates found it was not
rocket science. Their solution could work in much the same way that
the RBNZ independently oversees monetary policy now. A democratic,
transparent and accountable body (Monetary Policy Committee) could
independently separate the function of money issuance from money
spending. They would be tasked with the role private banks have now:
creating and destroying the nation’s money supply. This could be
done exactly as needed — debt free — within inflationary limits.
Our government would also have greater control over where and how our
money is spent, and would be able to steer the economy with greater
precision.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Here’s
a thought: if this scenario was already the status quo, and it was
now proposed to turn our nations’ money supply over to commercial
corporations (banks), whose mandate it is to maximise profit, as
debt-based money, there would be pandemonium on the streets!</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Money
is an abstract concept — designed by humans to serve humanity’s
needs. Let’s make it do this well. It is not a law of nature to
have a debt-backed money system: it can be redesigned. The present
design is not working well, and as Albert Einstein said, “insanity
is doing the same thing over and over again and expecting a different
result”.</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Please
support politicians embracing sovereign money and share this
information — an excellent source of further material is Positive
Money NZ (www.positivemoney.org.nz), the NZ chapter of the
International Movement for Monetary Reform
(www.internationalmoneyreform.org).</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">*(“The
reality of how money is created today differs from the description
found in some economics textbooks. Money creation in practice differs
from some popular misconceptions — banks do not act simply as
intermediaries, lending out deposits that savers place with them, and
nor do they ‘multiply up’ central bank money to create new loans
and deposits.” — Bank of England. However, the result is similar:
when making loans, new money enters the economy, whichever method one
has been taught)</span></div>
<div style="margin-bottom: 0cm;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br />
</span></div>
<span style="color: #141823;"><span style="font-family: "arial" , "helvetica" , sans-serif;">
</span></span><br />
<div style="margin-bottom: 0cm;">
<br /></div>
</div>
</div>
</div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-38907428893633788472014-09-09T01:04:00.000-07:002017-10-19T15:32:38.016-07:00Warmongering Colonial Era Private Central Banking Empire.<div dir="LTR" id="post-body-3329749071900071816" style="background-color: white; color: #222222; font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; line-height: 18.4799995422363px;">
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif; line-height: 18.4799995422363px;">Attempting to form public policy for the equal economic opportunity for all citizens within society, without a full knowledge of the function of money as a system, the role of credit and currency within a money system, is doing so by looking at</span><span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif; line-height: 18.4799995422363px;"> </span><span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif; line-height: 18.4799995422363px;">1/3 of a many piece puzzle thinking its complete.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><br /></span><strong><span style="color: #222222;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial;">The Bank of England<span style="font-weight: normal;"> - one of the senior most international financial institutions recently made this amazing historical admission in its </span>March 2014 quarterly bulletin, <span style="font-weight: normal;">that what they tell government officials about how the private central banking network funds itself has been inaccurate and misleading;</span></span></span></strong></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong><a href="http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf" style="color: #888888; text-decoration: none;" target="_blank"><span style="font-weight: normal;">http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf</span></a></strong></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong>• </strong><strong><span style="color: black;"><span style="font-weight: normal;">This article explains how the majority of money in the modern economy is created by commercial banks making loans.</span></span></strong></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong>• </strong><strong><span style="color: black;"><span style="font-weight: normal;">Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits.</span></span></strong></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong><span style="color: #222222;">• </span></strong><strong><span style="color: #222222;"><span style="font-weight: normal;">Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.</span></span></strong><span style="color: #222222;"><br /></span></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><br /></span></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;">Pg 2</span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><b>Two misconceptions about money creation</b></span><span style="color: #222222;"><br />The vast majority of money held by the public takes the form of bank deposits. But where the stock of bank deposits comes from is often misunderstood. One common misconception is that banks act simply as intermediaries, lending out the deposits that savers place with them.......Saving does not by itself increase the deposits or ‘funds available’ for banks to lend.<br />Indeed, viewing banks simply as intermediaries ignores the fact that, in reality in the modern economy, commercial banks are the creators of deposit money. This article explains how, rather than banks lending out deposits that are placed with them, the act of lending creates deposits — the reverse of the sequence typically described in textbooks.(3)<br />Another common misconception is that the central bank determines the quantity of loans and deposits in the economy by controlling the quantity of central bank money — the so-called ‘money multiplier’.......In reality, neither are reserves a binding constraint on lending, nor does the central bank fix the amount of reserves that are available. As with the relationship between deposits and loans, the relationship between reserves and loans typically operates in the reverse way to that described in some economics textbooks.<br />End</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br />It is absolutely the single most impacting issue relevant to the economic sovereignty of nations and the equal economic opportunity of those who live within them.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">I Iain Parker have completed a NZQA level 3 Certificate of Public Service Sector Knowledge. Researched for over a decade the history of the impact of international high finance upon global social and economic development. Have read thirty odd different authors of New Zealand history including the National Overview and District Reports of the Waitangi Tribunal.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br />This submission is long, but please remember it is the reduction of the very best of many thousands of documents I have researched over many thousands of hours that I believe will assist greatly the cause of anyone seeking to further peace and stability for the greater good.<br /><br />The current money - banking and credit system we suffer is a relic of the days of British Imperialist Empire ruling over subservient colonies. Imperialism being the proceeds of a local pyramid system being used to fund its expansion across borders that has no place in any world that wants to ever call itself a free-world occupied by free societies of individuals enjoying equal economic opportunity.</span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;"><b>Winston Churchill said:</b></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“The farther back you can look, the farther forward you are likely to see.”</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><br /></span><span style="color: #222222;"><b>Samuel Johnson said:</b></span><span style="color: #222222;"><br />“Integrity without knowledge is weak and useless, and knowledge without integrity is dangerous and dreadful”</span><span style="color: #222222;"><br /></span><strong><span style="color: black;"><br />1764 – Benjamin Franklin </span></strong><span style="color: black;"><b>is asked by officials of the Bank of England to explain the prosperity of the colonies in America.</b></span><strong><span style="color: black;"><span style="font-weight: normal;"> </span></span></strong><span style="color: black;"><b>He replies;</b></span><span style="color: #222222;"><br /></span><span style="color: black;">“</span><strong><span style="color: black;"><span style="font-weight: normal;">That is simple. In the Colonies we issue our own money. It is called Colonial Scrip. We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers. In this manner creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay no one.”</span></span></strong><span style="color: #222222;"><br />As a result of Franklin’s statement, the </span><span style="color: #222222;"><b>British Parliament hurriedly passed the </b></span><strong><span style="color: #222222;">Currency Act of 1764.<span style="font-weight: normal;"> This prohibited colonial officials from issuing their own money and ordered them to pay all future taxes in gold or silver coins.</span></span></strong><span style="color: #222222;">Referring to after this act was passed, Franklin would state the following in his autobiography, “In one year, the conditions were so reversed that the era of prosperity ended, and a depression set in, to such an extent that the streets of the colonies were filled with the unemployed…</span><strong><span style="color: #222222;"><span style="font-weight: normal;">The colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money which created unemployment and dissatisfaction. The viability of the colonists to get power to issue their own money permanently out of the hands of King George III and the international bankers was the prime reason for the revolutionary war.”</span></span></strong></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><br /></span><strong><span style="color: #222222;">1863<span style="font-weight: normal;"> </span></span></strong><span style="color: #222222;"><b>Letter from Rothschild European investment banking pyramid scam pioneers to prospective US affiliates in New York;</b></span><span style="color: #222222;"><br />Letter to: Messieurs. Iklheimer, Morton and Vandergould, No. 3 Wall St., New York, U.S.A.:<br />Dear Sirs: A Mr. John Sherman has written us from a town in Ohio, U.S.A., as to the profits that may be made in the National Banking business under a recent act of your Congress (National Bank Act of 1863), a copy of which act accompanied his letter. Apparently this act has been drawn upon the plan formulated here last summer by the British Bankers Association and by that Association recommended to our American friends as one that if enacted into law, would prove highly profitable to the banking fraternity throughout the world.</span><strong><span style="color: #222222;"><span style="font-weight: normal;">Mr. Sherman declares that there has never before been such an opportunity for capitalists to accumulate money, as that presented by this act and that the old plan, of State Banks is so unpopular, that the new scheme will, by contrast, be most favorably regarded, notwithstanding the fact that it gives the National Banks an almost absolute control of the National finance. The few who can understand the system will either be so interested in its profits, or so dependent on its favors, that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantages that capital derives from the system, will bear its burdens without complaint and perhaps without even suspecting that the system is inimical to their interests. Please advise us fully as to this matter and also state whether or not you will be of assistance to us, if we conclude to establish a National Bank in the City of New York… Awaiting your reply, we are.</span></span></strong><span style="color: #222222;"><br />Your respectful servants.<br />Rothschild Brothers.<br />London, June 25, 1863</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Former New Zealand Governor Sir George Grey speaking in Parliament in 1883 said;</b></span><br />
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“</span><span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">I conscientiously believe that </span><strong style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-weight: normal;">two or, three great’ establishments</span></span></strong><span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">, all really </span><strong style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-weight: normal;">under one directorate, </span></span></strong><span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">do’ exercise in the Legislature of this country an undoubted and dangerous influence. I sincerely believe that this existing Government is maintained in its place by those bodies… I say that even among the voters it will be a long time before that independence can come about which ought to prevail, because I fear many of them are in some manner entangled with engagements’ which will place them at the mercy of those persons who rule those different great bodies of which I speak. </span><span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;"><b>I go further and say-and in saying this I know, of course, that I create, and must create, a great many enemies - I firmly believe that the same persons by monetary influence control a great portion of the press 'One great central power in New Zealand oppresses it from end to end.</b></span><span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;"> That central power is moved by the Premier, and the Premier is the solicitor of these great moneyed corporations. Is it just?</span><strong style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-weight: normal;"> Does it give the people of New Zealand a fair chance?</span></span></strong><span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;"> Is it not hard for a man to know that if he cries for justice some debt upon his estate may he made the cause of his ruin instantly? Is it right for us to feel degraded by knowing that such is the case here? … </span><strong style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-weight: normal;">As long as this continues I see’ no hope for ourselves or our country.</span></span></strong><span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">”</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><br /></span></span> <span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><span style="line-height: 0.19in;"><b>Michael Joseph Savage (First New Zealand Independent Labour Party Prime Minister 1935-40) said in his 1920 maiden speech to Parliament;</b></span><span style="line-height: 0.19in;"><br />“</span><strong style="color: #666666; line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">The Government should create a state bank , and use the public credit for the public good as an alternative to borrowing overseas”</span></span></strong><span style="line-height: 0.19in;"><br /></span><strong style="color: #666666; line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;"><br /></span></span></strong><span style="line-height: 0.19in;"><b>Twice PrimeMinister of Canada – William Lyon Mackenzie King – spanning most of period 1921 – 1948 said in 1935;</b></span><span style="line-height: 0.19in;"><br />“</span><strong style="color: #666666; line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Once a nation parts with the control of its currency and credit, it matters not who makes that nation’s laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of Parliament and of democracy is idle and futile.”</span></span></strong></span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><br /></span></span> <span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><br /><b>New Zealand Prime Minister and former international investment banker John Key</b></span><span style="color: #222222;"> </span><span style="color: #222222;"><b>17 November 2012;</b></span><span style="color: #222222;"><br />“</span><span style="color: #222222;">Our (State) debt to GDP levels by then will top at just under 30 percent, in other words, we'll be relatively lowly indebted compared to countries like America and Europe, but I put it to you we are a small open economy, we have high levels(160% of expendable income) of private sector debt, We, Mum and Dad have borrowed that debt effectively from foreigners </span><span style="color: #222222;"><b>because their local bank has sourced that from foreigners.”</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>What is Money?</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Any public servant with integrity seeking to truly act in the public interest must learn the intricate dynamics of money or quite simply remain weak and useless!</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Dr. David C. Korten</b> worked for more than thirty-five years in preeminent business, academic, and international development institutions. Served for five and a half years as a faculty member of the Harvard University Graduate School of Business, where he taught in Harvard’s middle management, MBA, and doctoral programs. Asia regional adviser on development management to the U.S. Agency for International Development before he turned away from the establishment to work exclusively with public interest citizen-action groups.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Excerpt from David C Korten– How to liberate America From Wall Street July 2011;</b></span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“ Most people use money every day and rarely think to ask: What is money? Where does it come from? Who decides who gets it and for what purpose?<br />Money is essential to modern commerce as a medium of exchange. In earlier days, money took the form of material objects. As commerce grew, certificates redeemable in gold became popular. Most contemporary money is no more than a number stored on a computer hard drive and has value only because people agree to accept it in exchange for things of real value, like their labor.<br />The fact that most money is nothing but a number is not necessarily a problem, so long as we are clear that money itself has no intrinsic value and structure the money creation process to facilitate beneficial exchanges that build the real wealth of individuals, families, communities, and nature. <b>The fact that money is only a system of accounting entries becomes a serious problem when the economy is managed to make the inflation of financial assets its defining purpose and a few individuals are allowed to game the system to enrich themselves free from the exertions of contributing to the production of real wealth.</b></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">When the system gives to an elite group of private bankers the power to determine who has access to money and who does not, it renders democracy impotent and virtually assures an extreme and growing gap between the profligate few and the desperate many. When the citizenry is uneducated in the nature of money and the implications of money system design, it is powerless to resist.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Our common future depends on educating ourselves regarding the true nature of money and the implications of the structure of the institutional system by which it is created and allocated. Only then will we create a democratically accountable money system that operates as our servant, not our master.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The most powerful master is the one who rules unseen and unmentioned. In modern societies, the money system is that master. Those who control the creation and allocation of money control the nation’s values and priorities.”</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Former New Zealand Reserve Bank Governor 1988-2002 Don Brash has said;</b><br /><br />(Nov 1996 reply to information request letter to David Coote)<br /><br />"Commercial bank deposits are created by banks’ lending. When a bank makes a loan, it will, in the first instance , deposit the proceeds to the borrowers account. Of course, the the borrower invariably raises funds to spend them, so the proceeds (deposit) typically will end up in a bank account of someone other than the borrower – often at another bank than that which made the loan. <b>However, it remains that bank loan transactions ultimately lie behind the deposit balances that banks hold.</b> By influencing interest rates, the Reserve Bank is able to influence the rate of growth in bank lending and hence the rate of (bank deposit) money growth."<br /><b><br /></b></span></span><br />
<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>(Feb 2012)“ Every form of recognised money today is the obligation of some central bank”</b><br /><b><br /></b>(April 2009 ) “<b>Banking crises are not new of course</b> – they have been a recurring feature of the economic landscape for many decades, indeed for centuries. There have been scores of banking crises even since 1945, though of course none with such far-reaching impact as the present one.”<br /><br />“There was also a failure to understand the complexity of, and risks involved in, many of the products which were widely traded in recent years. This failure was almost certainly widespread both in senior management and on bank boards.”</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>New Zealand Westpac Chief Economist Michael Gordon Radio New Zealand – Afternoon Panel with Jim Mora Thursday 25 October 2012;</b></span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif; line-height: 0.19in;">“</span><span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif; line-height: 0.19in;">Money is, is it doesn't have value in itself, but its a useful thing, so it, you know, its, its useful to have it in society. But you really need some sort of control on it so you don't have people effectively, sort of, granting themselves more of this essentially valueless but useful product.......</span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">There is all these different ways of arranging it but ultimately someones got to be the adult and sort of, say, establish some discipline about it.<br />Which is why for example we have independent central banks so that this issue of the growth in the money supply doesn't get politicised and I think we've kind of been through atleast a decade or so of a period where central banks, while being independent, were probably a little bit lapsed.<br />They ran very loose monetary policy. We had very rapid growth in the money supply, um, very rapid growth in asset prices, but they kind of said its not our problem we deal with consumer prices, and I think there is a little bit of soul searching going on all around the world in that aspect of it.........</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">I guess the issue about, about bank profits, I mean, I guess my starting point for that is New Zealand still has this imbalance between saving, saving and investment here, were still effectively, you know, borrowing a lot more than the nation saves, you know, that gets funded from offshore by and large, that gets channeled through banks because they have the name out there and the reputation to raise the money from overseas.<br />And I think to some degree bank profits kind of reflect the fact that they have access to international markets, but the bottom line is even if that wasn't the case I think we would still be paying a lot of money offshore, it would just be less in the form of bank profits and more in the form of interest. The fundamental problem the fact that we<b> have this great need to, or I guess, this great desire</b> to borrow from overseas in the first place. ”</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Dr Alan Bollard Governor of the Reserve Bank of New Zealand 2002 - 2012.</b><br /><b>Excerpts from a book Alan Bollard published 1 Sept 2010;</b><br /><b>Crisis: One Central Bank Governor and the Global Financial Collapse</b></span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Pg 20</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: black;">Banking practices differ around the world, but we ensure ours meet international standards. <b>These are set by a somewhat shadowy group called the Basel Committee on Banking Supervision.</b> Comprised of representatives of large countries( not including New Zealand ), the group meets in Switzerland at the Bank of International Settlements (BIS).</span><span style="color: black;"> </span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Pg 96</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: black;">The Bank of International Settlements is an important institution, acting as a sort of </span><strong><span style="color: black;"><span style="font-weight: normal;">central bank for central banks</span></span></strong><span style="color: black;">. Set up in 1930, originally to facilitate German World War 1 reparations, it has a checkered history but today offers modern banking services and provides a forum for central bankers.</span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Pg 183</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong><span style="color: #222222;">“</span></strong><strong><span style="color: black;"><span style="font-weight: normal;">In self-interest, banks may encourage New Zealanders to take on more debt than is good for them individually or deliver more external liability than is good for the country.”</span></span></strong></span></div>
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<strong><span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif; font-weight: normal;">Pg 157</span></span></strong></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong><span style="color: #222222;">“</span></strong><strong><span style="color: black;"><span style="font-weight: normal;">Another governance worry related to the power and competence, or lack thereof, on the part of banks chief risk officers and risk committees. These officers assess the possible outcomes from any deal and decide whether the risks are acceptable under the banks mandated policies. We were now hearing about cases where risks had been miscalculated, procedures bypassed and officers overruled, all in the race for higher earnings.”</span></span></strong></span></div>
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<strong><span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif; font-weight: normal;">Pg 165</span></span></strong></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong><span style="color: #222222;">“</span></strong><strong><span style="color: black;"><span style="font-weight: normal;">In the case of some of the agricultural defaults, we felt that certain banks had been over-optimistic and under-analytical in their lending, and we moved to tighten some of the relevant capital requirements for the future.”</span></span></strong></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Pg 120-1</span></span></div>
<span style="font-family: "arial" , "helvetica" , sans-serif;">“Meanwhile, on 6 March a senior team from the Wellington made its three-monthly trek across Bowen Street, along the walkway above the Cenotaph, through security checks in the Beehive and across to the ornate old Parliament Building to Committee meeting rooms. Here, committees of parliamentarians from across all parties routinely advise on upcoming legislation and examine public bodies on their use of public funds. We are used to appearing before them as they regularly examine our Monetary and Financial Stability Reports. <b>But this session was different.</b> As was their duty on behalf of the taxpayer, they wanted to talk about the crisis, the steps we were taking and the costs and risks for government. The 2008-intake Finance and Expenditure Committee under the chairmanship of Craig Foss was seriously focused and prepared to put aside political differences during the crisis.<br />I was worried about what might happen at the session. Proceedings are on the record with journalists sitting in the back, television cameras rolling, digital recorders running and even media blogging live from the room. Select Committees have strong powers – they can require people to attend and answer questions. I knew that I might be asked questions about exchange rates, foreign reserves, bank liquidity and a whole range of topics on which straight-forward answers could upset financial markets. <b>The day before the hearing I rang the chairman and explained my concern. Craig Foss has a background in financial markets; he readily understood the dangers and assured me that he would guide the Committee away from dangerous questions in public.”</b></span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong><span style="color: black;">John McDermott Deputy New Zealand Reserve Bank Governor said 5 May 2011;</span></strong><strong><span style="color: black;"><span style="font-weight: normal;"><br /></span></span></strong></span></div>
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<strong><span style="color: black; font-family: "arial" , "helvetica" , sans-serif;">“<span style="font-weight: normal;">The crisis had also prompted a revival of interest by central banks in money and credit, whereas in previous decades central banks had paid less attention to monetary and credit aggregates”<br />“Overall, there has also been a recognition that credit growth over the past decade was excessive and a potential risk to financial stability given the build-up in leverage and rising asset prices that accompanied it. We are continuing to build our understanding of money and credit at the RBNZ, and its inter-relationship with both sectoral financial decision making and potential risks for the banking sector.”</span></span></strong></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Mr. Alan R Holmes was Senior Vice President, Federal Reserve Bank of New York.</b></span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif; line-height: 0.19in;">Mr. Holmes had worked for 33 years at the Federal Reserve Bank of New York, where from 1965 to 1979 he was manager of the Federal Reserve System Open Market Account. In that position, he was responsible for the creation of money in the United States.</span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Excerpt from 1969 speech – Operational Constraints On Stabilization of Money Supply;</b></span></span></div>
<span style="font-family: "arial" , "helvetica" , sans-serif;">"The idea of a regular injection of reserves-in some approaches at least-also suffers from a naive assumption that the banking system only expands loans after the System (or market factors) have put reserves in the banking system.<b> In the real world, banks extend credit, creating deposits in the process, and look for the reserves later.</b></span><br />
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: black;"><b>In answer to a letter from Byron Dale in 1982 John M. Yetter Attorney-Advisor Dept. of the U. S. Treasury said;</b></span><span style="color: black;"><br />“Money that one borrower uses to pay interest on a loan has been created somewhere else in the economy by another loan.”</span></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><b>Adair Turner - In September 2008 Lord Turner became Chairman of the Financial Stability Authority (FSA) financial regulator of England.</b></span><span style="color: #222222;"><br />Prior to September 2008 Lord Turner was a non-executive Director at Standard Chartered Bank, United British Media and Siemens; from 2000-2006 he was Vice-Chairman of Merrill Lynch Europe, and from 1995-99, Director General of the Confederation of British Industry. He was with McKinsey & Co. from 1982 to 1995, building McKinsey’s practice in Eastern Europe and Russia as a Director. He was previously Chair of the Overseas Development Institute (2007-10).<br />Lord Turner studied History and Economics at Gonville and Caius College, Cambridge from 1974-78.</span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><b><br /></b></span></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><b>This below is from an April 2013 interview from</b></span><span style="color: #222222;"> </span><a href="http://www.facebook.com/l.php?u=http%3A%2F%2Fwww.fungglobalinstitute.org%2F&h=eAQF8t1fD&s=1" style="color: #888888; text-decoration: none;" target="_blank">http://www.fungglobalinstitute.org/</a><span style="color: #222222;"><br />"One of the main things to learn for any emerging markets in Asia or elsewhere is to avoid some of the completely unnecessary financial instability which we allowed to occur in the West by falling in love with some intellectual delusions about the nature of finance capitalism. </span><span style="color: #222222;"><b>Finance is very different from other sectors of the economy, I mean essentially if you want good restaurants there is no better formula than a completely free market, you know, some will fail, some will succeed. Some will develop new styles, new ambiances, new menus that satisfy consumer expectations. Any attempt to plan or regulate it, other than in health and safety fashions just doesn't help at all.<br />Finance is different. There's some things about the nature of finance and particularly about when finance creates debt instruments in excessive quantities which can create risks, which can create what economists call rent extraction, people essentially making lots of money from activities which are not socially useful, are not a useful part of the market economy.</b></span><span style="color: #222222;">We failed to realise that in the developed world before the financial crisis. We fell in love with economic theories which believed you could apply completely free market principals to finance as to any other sector of the economy and that was a major intellectual delusion and one needs to be very careful of it, finance needs very careful regulation and in particular the processes of banking and credit creation need very careful regulation and control.”</span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><b><br /></b></span></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><b>Adair Turner had a keynote speech at The Institute for New Economic Thinking (INET) annual plenary conference in Hong Kong (April 7-4-2013) entitled - Private Debt and Fiat Money: Lessons from the crisis and from some old economic texts – in which he said;</b></span><span style="color: #222222;"><br />"Banks are different, and I think this is a crucial insight that we often miss but which Fisher, Symons and Friedman really focused on. It is often said in general text books or discussion's </span><span style="color: #222222;"><b>'what do banks do?' and you will often hear this description 'well they take deposits and they intermediate it to investment' This is a lousy description of what banks do.</b></span><span style="color: #222222;"> The idea that banks intermediate a pre-existing set of liquid asset savings is wrong!. Banks simultaneously create new private credit and new money."</span></span></div>
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<strong><span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Why the above needs to change!</span></span></strong></div>
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<strong><span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif; font-weight: normal;">Michael Hudson former balance of payment analyst for massive international banker Chase Manhattan and decades veteran of international level supply side of money included this in a paper he presented at an Institute For New Economics conference attended by many high level economists throughout the international spectrum held in Berlin over weekend of 12-15 April 2012;</span></span></strong></div>
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<strong><span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The fraudulent conveyance principle<br /><span style="font-weight: normal;">“A broad guideline for writing down debts was developed more than two centuries ago in the American colonies. British speculators and sharpies eyed the rich farmlands of upstate New York and refined the practice of making loans to farmers against their crops. Their strategy was to call in loans at an inconvenient time (e.g., just before harvest), or simply to loan the farmer more than could realistically be repaid in the epoch’s low-surplus economy. They then would foreclose.</span><br /><br /><span style="font-weight: normal;">To cope with this problem, the colony of New York passed the Fraudulent Conveyance law. This was retained when New York joined the United States, and remains on the books today. Its principle is that if a lender makes a loan that the borrower cannot reasonably be expected to pay off in the normal course of business – that is, without forfeiture of property – the loan should be declared null and void, and the debt canceled. The legal assumption is that such a loan was a ploy to gain control of property pledged as collateral, over and above simply earning interest.</span><br /><br /><span style="font-weight: normal;">The aim is to keep debts within the ability to pay, by placing an obligation on bankers and other creditors to make viable loans rather than covert property grabs. This principle has two major implications for today’s debt-strapped economies. It was cited in the 1980s as a defense against corporate raiders buying out stockholders with high-interest “junk” bonds. Victims of debt-leveraged buyouts claimed that there was no way that the loan could have been expected to be paid in the normal course of business and subject to existing employee contracts without selling off assets and, as noted above, downgrading their pension contracts with employees. The aim was to loot the company and leave it a bankrupt shell. The best-known recent case is the suit brought by Chicago Tribune employees against the real estate magnate Sam Zell who drove the company bankrupt and emptied out the Employee Stock Ownership Plan to pay his creditors. About half such ESOPs typically end up in bankruptcy through such financial sleight of hand.</span><br /><br /><span style="font-weight: normal;">The Fraudulent Conveyance principle may be applied to the public sector with regard to pressure brought on debt-strapped governments to sell off public enterprises to pay debtors. This situation is much like that of colonial farmers in upstate New York. Banks and bondholders have lent governments credit as if this were risk-free. This was done in the belief that if these governments have difficulty paying bondholders – especially in foreign currency – the IMF and other Washington Consensus institutions will step in and lend governments the foreign exchange to pay private-sector bankers, or simply strong-arm the sovereign debtor into paying, willy-nilly. Bondholders and banks are thus in the position of the British financial sharpies making ostensibly reckless loans in the belief that the local sheriff and other colonial officials would back up their property grab.”</span></span></span></strong></div>
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<strong><span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif; font-weight: normal;">VINCENT CARTWRIGHT VICKERS was born on 16th January 1879, and educated at Eton and Magdalen College, Oxford. He was a Deputy Lieutenant of the City of London, a director of Vickers, Limited, for twenty-two years, and a director of the London Assurance from which he resigned in January 1939. In 1910 he was made a governor of the Bank of England, and resigned this appointment in 1919. Later, he became President of the Economic Reform Club and Institute.</span></span></strong></div>
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<strong><span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Excerpts from - Economic Tribulation – by Vincent C Vickers - published 1941;</span></span></strong></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif; line-height: 0.19in;">FOREWORD</span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>I who write this, need no proof of the importance of the money system upon the very lives of the people and even to the future existence of the British race, so long as that system fills the position which it now holds in our National Economy.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">There are many thousands of well-educated men and women who, I believe, endorse my views in their entirety. But even for the most zealous of money reformers to attempt to write upon so vast and momentous a subject as our monetary system and the management of our national finances, such attempt would appear doomed to failure unless it were supported by great financial experts whose names were a by-word in the country. The next best alternative was that the author should himself be qualified by past experiences to express an opinion worth reading.</span></span></div>
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<strong><span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif; font-weight: normal;">I therefore decided to take the unprecedented course of offering to my readers my own qualifications for putting down before the British people the very precarious condition of our monetary system as it exists in this country to-day; that this our money system forms the most important part of our, economic system, and that the nation’s economic system forms part of our social system.......</span></span></strong></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Let us acknowledge the truth. Humanity is not suffering from unavoidable circumstances over which it has no control, but from the results of deliberate and dishonest actions of its own creation and invention. Fundamental laws, originally designed for the common welfare of the individuals of a community, have been broken – community laws which were never intended to permit the individual to grow fat upon the poverty of others; nor to permit him, in pursuit of his own personal profit, to base his standard of honesty upon his own flexible conscience, consoling himself with gratitude that he is within the law. Nevertheless, just as man has brought, upon himself, or has permitted, this world tribulation, so can he play his part in undoing the harm that has been done.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">But how is this possible? How can the ordinary individual change the world? Shall the man in the street become an expert economist, or a banker, or a cabinet minister and control the press and public opinion? How otherwise can he assist in the regulation of mankind? What is meant by ‘lack of economic equilibrium’, ‘sound finance’, ‘stability of foreign exchanges’, ‘currency restrictions’, ‘the creation of credit’, ‘the inverted pyramid of credit’, and a host of other such phrases? They smell of long study, special technical ability, and great learning. Surely, then, it is commonly felt, it is better that ordinary individuals should leave economics to the economists, finance to the bankers, and national policy to the politicians? But, alas, that is exactly what we have for too long been doing. Look at the result! The experts have hopelessly failed. What is needed is a little less economics and a little more common sense.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">All that is necessary for us ordinary men is that we should make use of the knowledge that is already ours – that is to say, the knowledge of good and evil; so that we may recognise, not only in others but in ourselves, those habits and customs and practices which are definitely harmful to the community as a whole, however advantageous they may appear to be to the individual or to some particular section of the community. For it is these habits and practices which have twisted scientific development into fetters upon the arms of society and turned the immense advantages of improved education into a growing discontent amongst the mass of the people. The future of the world is the future of the human race; the human race is the world; and the character and the welfare of Britain is the sum of the character and welfare of its population.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">In so far as we are able, we must try to assist our fellow men to understand. This we can do fearlessly; for that which is mistaken or false will carry no weight and will be lost and forgotten, whilst that which is true will prevail.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">What follows is certainly no economic treatise for experts to smile at. It is merely an attempt to show clearly that every man and woman in the country has his or her part to play in building up the future of the world; and it is primarily for them that this book is written.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">If the country were happy and contented, with its agriculture and its great basic industries at full swing, full of confidence in the future; if the numbers of our unemployed stood at something approaching the unavoidable minimum, with the standard of living of the people far above any threat of starvation, malnutrition or real poverty – then it might be possible for the nation to overlook some of the difficulties which are imposing such heavy handicaps upon its progress. But, as things are, the nation cannot continue to carry unnecessary burdens and can no longer afford to let these adversities pass unnoticed and untouched.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>If it be true that we have, in fact, a democratic government, the will of the people will prevail; and if it be not true, then it is best that this should be realised. For, in the latter case, still greater changes are inevitable.</b></span></span></div>
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<strong><span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif; font-weight: normal;">Although it is the money system which is to be accused of dishonesty, those who use and depend upon a dishonest system, knowing that system to be dishonest, cannot themselves be regarded as honest men. Moreover, it may be that the present system, which international finance has forced our democratic government to adopt, uphold, and protect by every possible means, has undermined the character of the people and forced them to alter their definition of the word honesty so that it may be made to comply more nearly with modern practice.........</span></span></strong></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>DEMOCRACY OR FINANCIAL DICTATORSHIP?</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>AGREEMENT amongst the nations to co-operate in the avoidance of war, so that the temptation to regard might as right may be eliminated for ever, and the consciousness of offensive or defensive superiority no longer exist in our mentality as a weapon to add force to national diplomacy, is an ideal which will always remain the aim of the civilized world. But democracy is in danger for the very reason that democratic government itself is subservient to the sectional interests which control finance, and which have it in their power to inflict a financial crisis upon the nation should they anticipate Legislation inimical to their own particular interests.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Such are the economic conditions which are declared to be unavoidable and which only circumstances can in time eradicate. The time has come when we must create those circumstances and change those adverse economic conditions; for, until this is done, war and the menace of war will continue to hover over us. General uncertainty, leading to discontent with existing forms of government, has increased the tendency towards dictatorship and of temporarily benefiting one nation at the expense of others. We have seen nation after nation, each in its own particular way, attempting to defend itself against the unnecessary hardships imposed upon it by a wrong monetary system. Whilst at any moment there may be currency reactions, it must remain difficult to contemplate any permanent recovery until the great creditor nations are willing to adopt a uniform policy.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">No greater threat to humanity and the progress of civilization can be conceived than the general spread of the Hitler regime of brute force. To crush out that regime for all time even if it stood alone as our sole war aim, would seem enough in itself without the necessity of searching for other objectives. Although we recognise how serious and how immense is the task that we have undertaken, the vast majority of us gain added strength from the knowledge that righteousness and justice are on our side. The nation has reached a state of preparedness, both mentally and physically, both for offence and <span lang="en-GB">defence</span>, which will render the sacrifices and hardships and swift calamities that we must inevitably endure powerless to divert it from the set course which it has determined to pursue to the end. Yet even then, even when this first great objective shall have been gained, our <span lang="en-AU">labours</span> will by no means be over. There is still a long way to go before we can begin to contemplate that promised land of peace and justice for mankind which no destructive war can ever of itself attain, and there remains vital work of preparation and reconstruction at home which cannot be neglected or delayed.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Unless we can contrive to design and establish an improved and reformed financial system, which is the first essential towards a new and better economy in our own country, no satisfactory outcome of the war is possible; for where there is still widespread injustice and discontent there can be no ending to that war, unless it be a tangle of internal revolts and revolutions. How can we presume to hold up our own social System as a pattern for other nations to follow, whilst it breeds selfishness, unrest, and dishonest competition amongst our own people, and whilst it is dominated by a decadent financial system in which we possess an ever-diminishing confidence and which is not even under the unbiased control or management of Government chosen by the will of the people? How can we hold out to the German people or to the world, the promise of justice under a new and better economic system that will eliminate poverty, malnutrition, and unemployment, whilst no such system exists, and whilst our own system is still permeated with these same evils?</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>On the other hand it is unthinkable that we should pretend to ourselves that we can, first of all, and by the successes of our arms, create in Germany an economic vacuum and, having done so, compel her to adopt a money lending system of international finance, designed for the benefit of international financiers who will become more and more anxious to preserve their monopoly and their immunity from governmental control. Are we now fighting to uphold freedom and democracy, or are we fighting to uphold and strengthen the dictatorship of international finance?</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>The mere conception that His Majesty’s Forces should fight for the benefit of such dictatorship, which already wields an independent power in exact opposition to social progress throughout the world, is wholly incompatible with the defence and maintenance of democratic freedom and seems utterly absurd. But this world power, with its permitted control of the national money supply and with its support of a monetary System that has plunged every nation into the miseries of irretrievable debt and the world into economic strife, should not be underestimated.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>It would have been wise to have expended some of our energies in strengthening our home defences by placing democracy in an impregnable position under a money machine managed and controlled by its Government and worthy of the public confidence. But although it is simple and obvious enough to suggest that the time for constructive reform is long overdue, this is a problem entailing war against a dictatorship of international finance which holds every key position on the battle front and the power to cut off essential supplies at the mere threat of attack.</b> We have only to remember the fate of President Roosevelt’s policy in the United States, which aimed at the introduction of the ‘honest dollar’ and a better standard of living for his people. Yet even these considerations must not be allowed to prevent us from making an endeavour to free democracy from the one great obstacle standing in the way of social progress; and we must also bear in mind that the alternative path leads to revolution and bolshevism and the break-up of what we call World Civilisation.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">In modern times there should exist no such thing as an economic system without a money supply System. All the business interests of the country, progress, trade, industry, and the well-being of the people, are dependent upon certain essential supplies without which the whole economic structure would collapse. We see how, in the case of all essential supplies, the greatest care is taken to protect the best interests of the community by just and adequate Legislation and Government control. <b>But we find the one outstanding and most important exception in the national money supply, upon which all other essential supplies are dependent for their sale and their purchase. The money supply and the management of the money system are almost entirely outside the control of the Government and are operated by an outside, individual, section of the community, working for profit and possessing a virtual monopoly of lending credit to the community at high interest – a credit based upon the community’s own money; this indeed being the only means, under the existing system, of distributing such credit as may be available, so that goods may continue to change hands and so that those in need of money can borrow the use of it, provided they are credit-worthy borrowers. Above and beyond this, we discover that, in the progress of time and through our own base carelessness and ignorance, we have permitted the money industry, by the very virtue of its business, gradually to attain a political and economic influence so wide and powerful that it has actually undermined the authority of the State and usurped the power of democratic government.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">There is nothing new in this emphatic assertion, and it does not emanate from a distorted imagination but expresses without exaggeration the sane belief held by many thousands of thinking individuals in this country and throughout the Empire, and, for that matter, throughout the world. It is shared also by many a score of highly intellectual business men in the City of London; the majority of whom, however, would no more dare – (and no one could blame them) openly to declare their views than they would tweak the noses of their bank managers, but who are certainly not solely guided by the profit motive and who would willingly sacrifice the present monetary policy in order that a reformed system should safeguard the future of the Empire and all the peoples who constitute it – employers and employed alike.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>The object and existence of money is to enable and facilitate the exchange of goods and services. The only value in money lies in the value of the goods which it enables us to exchange with other goods; where there are no goods to be exchanged money is completely valueless.</b> A sack of gold on a desert island is not worth as much as the sack that holds it; and to allow the supply of money to regulate the production and consumption of goods, is as if we allowed strawberry-baskets to regulate the supply of strawberries, or an insufficient supply of bus tickets to bring about a strike of bus-drivers. <b>And yet the present order of our lives is governed and controlled by the governors and controllers of money so that those who have developed the business of letting out strawberry baskets on hire, now control the production and consumption of strawberries. If an economist from Mars or a little child of ordinary intellect were told of the present position they would rock with laughter at the blind stupidity of mankind.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>This national and mainly international dictatorship of money, which plays off one country against another and which, through the ownership of a large portion of the Press, converts the advertisement of its own private opinion into the semblance of General public opinion, cannot for much longer be permitted to render Democratic Government a mere nickname. To-day, we see through a glass darkly; for there is so much which ‘it would not be in the public interest to divulge’. As a consequence the public has not unnaturally become suspicious; not so much of the Government, democratically elected, as of those other far-reaching influences which are suspected of exerting undue pressure upon the freedom and discretion of Government at all times to legislate and act for the benefit of the State.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Lest they should spread and replace democracy, this country now concentrates upon attacking or distrusting dictatorships in any shape or form in other countries. A constructive monetary policy in our own country would strengthen the power of democracy, and would cast out those enemies in our midst who are trading upon our supposed ignorance whilst depriving us of adequate means to express our opinions. In short, it has begun to be generally realised that the free vote of the people no longer insures democratic government except in name, and that the widespread influence of money, of finance, and of ‘big business’, and, above all, of international finance with its impartial patriotism, not only dominates governmental policy, both national and international, and affects the lives and livelihood of the people, but has very nearly succeeded in converting our boasted democracy into what is virtually a financial dictatorship.</b> Do the people of this country want such a procedure to continue? We are prepared to admit that, without honest and skilled leadership, democratic rule is akin to mob law; but are we prepared to entrust the future of democracy to sectional influences governed and controlled by those few who still govern and control our capital, our money, and capital’s international finance?</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Strenuous efforts have been made over some twenty-five years to patch up the money system in an attempt to make it last a little longer; but it has stood, and now stands, in the way of progress and social betterment, thereby creating universal unrest and a tendency to obtain by force what cannot be obtained otherwise. For the sake of our children let us take warning in time. Let us discard the policy of inaction and pretence, and boldly face the fact that it is not the inevitable smoke of the galley-stove which assails our nostrils but that a fire is raging in the hold and that the ship of State is in imminent danger. Our democratic system and our existing financial system can no longer live together; one of them must give way to the other.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>TO BANKERS AND OTHERS</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">This accusation against the monetary system is not intended to cast doubts or aspersions upon bankers and those few hundred individuals who, either directly or by their expert advice, control its management. Business is business, and it is only human nature and to be expected that a business man should consider his own business and his own shareholders first. There are some of us who believe that without armament companies there would be no war, just as there are others of us who believe that it is war which brings armament companies into existence; and so, when it is universally admitted that a community cannot nowadays lead a normal life without money, it is not unnatural that those who control and deal in money, who thereby possess the power of issuing or withdrawing credit, and who decide the ups and downs of the price level of commodities and the value of wages, should have come to regard their own business and their own property as transcending in importance all other considerations and all other businesses.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>For them it is perhaps only natural that they should argue: ‘Let the people and their governments be careful to take no action and do nothing which might weaken the power and strength of the money business; for money rules the world. As long as we can keep the international business of banking and finance intact and unaffected by troubles, all will come right in the end.’ But it is precisely this argument, and the monetary policy adopted for the last fifteen years and contrived for the benefit and preservation of the money business and of the System that it advocated, which has led up to the present world chaos.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The monetary experts, the banking and finance interests, led astray at first by the City of London and obsessed with the urgent necessity of getting back to what was considered to be the re-establishment of ‘sound finance’, failed to pay sufficient attention to the new factor which had arisen in the world – a factor which they themselves, through their own highly prized system, had created a century ago, but which has since grown suddenly to such vast dimensions that it now overwhelms and renders diminutive the favourite theories and admitted practices of the past. They watched with pride the growth of their own child, but they did not realise that they were nurturing a robot which must sooner or later grow up and become a serious menace to its over-indulgent parents.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>This new factor is the ogre of the world’s stupendous money-indebtedness to its own financial system. With every market short of purchasing power, the financial system set the whole world gambling on its future capacity to produce more and sell more and at the same time pay off its debts; and it is mainly the abnormal efforts of almost every nation to pay off, or even to pay the interest on, its impossible debts, which have resulted in the present international confusion where each nation seeks to exchange its own produce for the money of other nations, but not for the produce. For money debts cannot be repaid by produce unless and until that produce has been exchanged for money; production is of no value to finance except in so far as it may be converted into money; and the money industry, under the existing system, almost wholly depends for its prosperity upon the indebtedness of others. </b>What finance has failed to perceive is that there is a limit to the profitable increase of this indebtedness. Similarly, Vickers, Limited, and, as the Bank of England knows only too well, Armstrong Whitworth and Co., and their respective shareholders, were half ruined by the war of 1914-18 and its natural repercussions. Those who regard Vickers Armstrong as war-profiteers either possess superficial intellects or have no knowledge of the proven facts; and I, who write, have suffered, and I know.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Having indulged in these symbolic diversions, without animus, without prejudice, and with no personal axe to grind I would appeal to all those who have the power to pull the strings of influence – which under the present regime are more powerful than a thousand so-called democratic votes at a general election – to consider the economic situation as it exists to-day. If they are honest, if they would deem it a gross insult to be included among those who place temporary personal aggrandisement before permanent national welfare, let them consider the economic situation and think deeply.</b> It may be that many, in these precarious times, will be inclined to say: ‘This situation is not new. There is, of course, at such times as these, a natural division of opinion between those who are contented to continue the present order of things, and those others demanding what they believe to be a better and more Christian ideal which should replace it. This is no concern of mine; they must fight it out amongst themselves. I have quite enough to look after my own business.’ And to these I especially appeal; for every productive industry, great or small, every man and woman employed in that industry, and every office-boy, is dependent upon the profit and therefore upon the output of that industry.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Having had the opportunity of acquiring, over the last fifteen years, a greater knowledge of the feeling and the tendency of the people than most bankers could have achieved over two or three years, I would make the following appeal to the bankers of this country to those who manage the machinery of money and credit, and to those who are satisfied with things as they are and therefore see no reason for change:</b> -</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">1.) I ask you to remember that you are dealing to-day with a general public of a far greater education and of a more thorough knowledge of affairs, of foreign policy and of financial policy, than they have had in previous times; and that the majority of these are conscious that, in some way or another, the key that locks them out from the enjoyment of the good things in the world’s shop windows is money.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">2.) That, because the public come into contact with the monetary system mainly through the medium of banks, they naturally tend to blame the banks for the difficulty; not realising that they are, in large measure, tied houses – tied, that is, to the monetary system, and that, however great or small the faults of banks, it is in reality the system which is at fault.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">3.) That banking is an industry working for profit, just as a gas company or any other utility company works for profit. And the people, realising this – erroneously perhaps – do not believe that any essential supply company should, at one and the same time, have control of the volume of its output and control of the price of its output, when the supply of its product is essential to the lives and welfare of those masses of the people who are dependent upon that product.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>4.) That, whilst it may be possible, having regard to the immense power of money, artificially to maintain and uphold the present position for some months or for some years to come, against the rising revolt engendered by the present system, yet the time must eventually arrive (as it did in Russia, as it has in Spain, and as it may do in France) when the mass of the people will insist upon their right to possess a much larger share of the country’s available wealth, and when they will insist also upon a much nearer approach of to-day’s poverty to to-day’s wealth. With all earnestness and honesty I implore them to think of this possibility and to take warning in time; to recognise what is inevitable, and to decide: Whether it is best to continue the present regime and, with the power of the Press and with the power of money, to continue to fight for its supremacy; or, alternatively, whether it may be best to recognise that, for the good of the country, the maintenance of the Empire, the benefit of the British world community, and for their own benefit, they should immediately take steps to associate themselves with those who are demanding reform of the monetary system. This refers more especially to the controllers of the system, embracing the whole of that particular section of the community which deals in, manages, and controls money, credit, and finance, and whose business mainly depends upon the indebtedness of others.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>5.) At times there has been in operation an expedient of cheap money, coupled with a policy of secret and progressive inflation, when it has been hoped (not without reason) that such a policy, by creating a steady improvement in trade and a gradual diminution of unemployment, would in time obliterate or conceal the necessity for reform and the exacting demand for a better monetary system. And yet I would ask our experts and our financial advisers to accept assurances that such a policy, welcome though it is, will not suffice; for past experience has taught a very large section of the public that, whilst temporary policies may give temporary relief, nothing but a thorough reorganisation and rationalisation of the money industry and the money and credit system will satisfy the permanent needs of the community and once more restore confidence in the financial system. Rightly or wrongly, a conviction exists in the minds of individuals and organisations influencing a predominant fraction of public opinion, that finance must in future become the servant of industry, and that the welfare of the country and of the Empire is of far greater importance than the welfare of the City of London and the profits of international financiers.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">6.) That the true wealth of the nation does not consist in the hoarded gold of the Bank of England, nor in the book-entries standing to the credit of merchant bankers. The wealth of the nation lies in its capacity to produce goods, and its capacity to consume goods, and its capacity to exchange its surplus goods for necessary importations from other countries. If the City of London, with its banks, its gold, banknotes, and its money, were suddenly to sink into the bowels of the earth and be no more, the country would go on, and, with incredible rapidity, would recover from the shock and build a new and perhaps a better City. But if the country vanished, the City of London would be dead for ever. In the last resort, production and consumption could continue without money; but money would be useless dross without production and consumption.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>THE DIRECTION OF FUTURE POLICY</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">In the question of what steps should be taken to put matters right, I can only suggest the general direction in which our future policy should point; for I myself do not believe that there exists any perfect cut-and-dried scheme which is likely hereafter to be adopted, lock, stock, and barrel, as our future monetary system. Moreover, there are many other technical and psychological considerations which would be necessary in order to achieve peace and contentment amongst the people. The main objectives however, should include:-</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>1.) State control and State issue of currency and credit through a central organisation managed and controlled by the State.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">2.) Stabilisation of the wholesale price level of commodities. That is to say, a fixed and constant internal purchasing power of money; so that a pound will buy to-morrow what it bought yesterday; an honest pound, not a fluctuating pound. And this can be done by so issuing and regulating the volume of available credit and currency that it shall at all times be adequate to permit of the purchasing power of the consumer being equated with the volume of production; not by limiting the purchasing power, but by firstly increasing purchasing power more in proportion to the productive capacity of industry.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">3.) Fixation of foreign exchanges by foreign exchange equalisation funds, and agreement with Empire countries and all other countries willing to fall into line; and, once this was accomplished, the removal or diminution of trade barriers which to-day protect the countries from the results of a bad monetary system.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>4.) Any additional supply of money should be issued as a clear asset to the State; so that money will be spent into existence, and not lent into existence.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">5.) The fluctuating quantity of gold lying in the vaults of the banking system should never be permitted to govern the volume of credit and currency needed by the country.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">6.) The elimination of slumps and booms; and more direct procedure for eliminating unnecessary poverty</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>7.) The abolition of the Debt System where all credit is created by the banks and hired out at interest to the country.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>8.) Absolute State control over all foreign lending; and the adoption of the general principle that our foreign trade should be so conducted as to preserve -</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>(a) the interests of the Home Market,</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>(b) the interests of the Empire countries and the English-speaking nations,</b></span></span></div>
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<strong><span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif; font-weight: normal;">(c) the interests of Foreign nations, and that this principle should particularly apply in the case of Home production and foodstuffs.</span></span></strong></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Adair Turner</b> <b>was appointed UK Financal Stability Authority (FSA) Chairman in September 2008. He has combined careers in business, public policy and academia.</b><br /><b>Speech 6 February 2013 - Debt, money and mephistopheles: how do we get out of this - at Cass Business School;</b><br />Money – in its pure fiat irredeemable base money form - is a powerful economic medicine if used within tight constraints and a potential poison if used to excess........<br />At the extreme end of this spectrum of possible tools lies the overt money finance (OMF) of fiscal deficits – “helicopter money”, permanent monetisation of government debt......<br />But before you decide from that that we should always exclude the use of money financed deficits, consider the following paradox from the history of economic thought. Milton Friedman is rightly seen as a central figure in the development of free market economics and in the definition of policies required to guard against the dangers of inflation. But Friedman argued in an article in 1948 not only that government deficits should sometimes be financed with fiat money but that they should always be financed in that fashion with, he argued, no useful role for debt finance. Under his proposal, “government expenditures would be financed entirely by tax revenues or the creation of money, that is, the use of non-interest bearing securities” (EXHIBIT 1) (Friedman, 1948). And he believed that such a system of money financed deficits could provide a surer foundation for a low inflation regime than the complex procedures of debt finance and central bank open market operations which had by that time developed...........<br />When economists of the calibre of Simons, Fisher, Friedman, Keynes and Bernanke have all explicitly argued for a potential role for overt money financed deficits, and done so while believing that the effective control of inflation is central to a well run market economy – we would be unwise to dismiss this policy option out of hand. Rather, we should consider whether there are specific circumstances in which it could play a role and/or needs to play a role, and even if not, whether exploration of the theory of money and of debt helps us better understand the problems we face, problems that may be addressed by other policy tools...........<br /><b>The fundamental cause of the financial crisis of 2007 to 2008 was the build up of excessive leverage in both the financial system (banks and shadow banks) and in the real economy. Increased leverage creates rigidities and financial stability risks.........<br />Banks and Private Credit Creation<br />These risks are inherent in debt contracts and would exist even if there were no banks i.e. even if all debt contracts directly linked end investors with end borrowers. But fractional reserve banks, simultaneously creating private credit and private money, can greatly swell the scale of debt contracts in an economy and introduce maturity transformation. And there is no naturally arising mechanism to ensure that the scale of such majority transformation is optimal.</b><br />As a result banks can greatly increase the scale of financial and economic stability risks. They can also play an important autonomous role in the creation and destruction of spending power, i.e. of nominal demand, and as a result can generate booms and busts in overall economic activity..........<br />The danger of excessive and volatile bank credit creation is still further exacerbated when credit is extended to finance the purchase of assets – in particular real estate – whose value is itself dependent on the level of debt-financed demand. Unsustainable bank credit extension can therefore lead to credit and asset price cycles of the sort which Hyman Minsky described10: so too however, as we learnt before the crisis, can uncontrolled credit extension by chains of shadow-banking entities which in aggregate perform credit intermediation with leverage and maturity transformation (the defining characteristic of banks but outside the scope of bank regulation) Together these inherent characteristics of debt contracts, banks and credit/asset price cycles make the level of leverage in both the financial system and the real economy, and the rate of change of leverage key drivers of financial instability risks.<br /><b>And over the last 50 years, as in the decade running up to the 1929 crisis, levels of leverage in both the real economy and in the financial system hugely increased (EXHIBIT 11). EXHIBITS 11-13 provide some indicators of that increase in private leverage for the UK and the US. Ahead of the crisis, the predominant assumption of much economic theory and of macroeconomic policy was that such increasing leverage – since arising from private sector contracts between rational agents – could be either ignored or positively welcomed. Ignored because financial system developments were considered as neutral (or simply absent) in models of money demand, inflation and real output: or welcomed because financial deepening was axiomatically beneficial since it reflected market completion.<br />In retrospect those assumptions were part of a widespread intellectual delusion which left us ill-equipped to spot emerging financial stability risks. They are now being roundly challenged......</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><br /></b></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Public Banking System Nations present and past;</b></span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Ellen Brown March 7, 2012</span></span></div>
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<a href="http://www.webofdebt.com/articles/brics.php" style="color: #888888; text-decoration: none;" target="_blank"><span style="font-family: "arial" , "helvetica" , sans-serif;">http://www.webofdebt.com/articles/brics.php</span></a></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>It turns out that globally, not only are publicly-owned banks quite common but that countries with strong public banking sectors generally have strong, stable economies.</b> According to an Inter-American Development Bank paper presented in 2005, the percentage of state ownership in the banking industry globally by the mid-nineties was over 40 percent. The BRIC countries—Brazil, Russia, India, and China—contain nearly three billion of the world’s seven billion people, or 40% of the global population. The BRICs all make heavy use of public sector banks, which compose about 75% of the banks in India, 69% or more in China, 45% in Brazil, and 60% in Russia.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Focusing on the financing of real businesses and economic growth seems to be the secret of the BRICs, which are leading the world in economic development today. But the BRIC phenomenon is more than just a growth trend identified by an economist. It is now an international organization, an alliance of countries representing the common interests and goals of its members. The first BRIC meeting, held in 2008, was called a triumph for former Russian President Vladimir Putin’s policy of promoting multilateral arrangements that would challenge the United States’ concept of a unipolar world.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The BRIC countries had their first official summit and became a formal organization in Yekaterinburg, Russia, in 2009. They met in Brazil in 2010 and in China in 2011, and they will meet in India in 2012. In 2010, at China’s invitation, South Africa joined the group, making it “BRICS” and adding a strategic presence on the African continent.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The BRICS seek more voice in the United Nations, the IMF, and the World Bank. They are even discussing their own multicultural bank to fund projects within their own nations, in direct competition with the IMF. They oppose the dollar as global reserve currency. After the Yekaterinburg summit, they called for a new global reserve currency, one that was diversified, stable and predictable; and they have the clout to get it.According to Liam Halligan, writing in The U.K. Telegraph:</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The BRICs account for around three-quarters of total currency reserves. They have few serious fiscal issues and all are net external creditors.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Western financial interests have long fought to maintain the dollar as global reserve currency, but they are losing that battle, despite economic and military coercion. Russia, China and India are now nuclear powers. The BRICS will have to be negotiated with, and the first step to forming a working relationship is to understand how their economies work. Rather than declaring war on their more successful practices, we may decide to assimilate some of them into our own.</b></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><b>New BRICS Development Bank Announced;</b></span><span style="color: #222222;"><br /></span><a href="http://www.postwesternworld.com/" style="color: #888888; text-decoration: none;" target="_blank">http://www.postwesternworld.com/</a></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: black;">Stephen Lendman </span>Global Research, March 28, 2013</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">In September 2006, four original BRIC nations met in New York. On May 16, 2008, Yekaterinburg, Russia hosted a full-scale diplomatic meeting.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">In June 2009, Brazil, Russia, India and China again met in Yekaterinburg.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Early steps were taken to end dollar supremacy. Eventual plans may replace it with a global currency or basket of major ones.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">In 2010, South Africa joined the BRIC alliance. It was formally invited to do so. The group was renamed BRICS. Annual summits are held.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">On March 26 and 27, Durban, South Africa hosted the group’s fifth one. More on that below.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Their “mechanism aims to achieve peace, security, development and cooperation. It also seeks to contribute significantly to the development of humanity and establish a more equitable and fair world.”</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">America’s economic supremacy is declining. BRICS countries are some of the world’s fastest growing.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">They comprise a significant economic and political block. They account for over 20% of world GDP.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">They’re on three continents. They cover more than one-fourth of the world’s land mass.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Their population exceeds 2.8 billion. It’s 40% of the world total. By 2020 or earlier, China may become the world’s largest economy.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">By mid-century or sooner, India’s predicted to be number three, Brazil number five and Russia number six.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Between 2000 and 2008, BRICS contributed about half of global growth. In the late 1990s, Russia’s debt default and Brazil’s currency crisis rocked world economies. Today they have vast foreign exchange reserves.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">BRICS have more global trade than America. China’s the world’s largest exporter. India’s an information technology powerhouse.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Brazil’s a dominant agricultural exporter. It’s highly competitive. It has vast amounts of fertile land. It’s known as “the world’s biggest farm.” Russia is oil and gas rich.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">South Africa holds resources worth an estimated $2.5 trillion. It’s rich in gold, platinum, uranium, chrome and manganese ore, zirconium, vanadium, and titanium.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Two key institutions emerged from Durban’s summit. A BRICS Joint Business Council (JBC) and Development Bank were announced.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">JBC formerly functioned as a forum. It encourages free trade and investment. Two meetings will be held annually. Rotating chairmen will head them.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Each BRICS country chose five top business executives to represent them. They’ll coordinate relations between member states and private sector players.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Separately, China and Brazil agreed to a bilateral currency swap line. It permits them to trade up to $30 billion annually in their own currencies.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Doing so moves almost half their trade out of US dollars. It suggests other BRICS partners will make similar moves.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">They endorsed plans to create a joint foreign exchange reserves pool. Initially it’ll include $100 billion. It’s called a self-managed contingent reserve arrangement (CRA).</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">It’s a safety net precaution. It’s to strengthen financial stability. It’s an additional line of defense.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">They agreed to establish a new Development Bank. The idea was proposed last year in New Delhi.</span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“It’s done,” said South African Finance Minister Pravin Gordhan. BRICS leaders “will announce the details,” he added.</span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">South African President Jacob Zuma said:</span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“We have agreed to establish the new development bank. The initial capital contribution to the bank should be substantial and sufficient for the bank to be effective in financing infrastructure.”</span></blockquote>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Ahead of the summit, officials said each country may contribute $10 billion for starters. It’s aim is to fund infrastructure and other development projects.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">It’ll operate separately from Western international lending agencies. It’ll challenge their global dominance. It’ll test how they do business. They prioritize neoliberal harshness.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">It includes privatizing state enterprises, selling them at a fraction of their worth, mass layoffs, deregulation, deep social spending cuts, wage freezes or cuts, unrestricted market access for Western corporations, business-friendly tax cuts, trade unionism marginalized or crushed, and harsh recrimination against non-believers.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>It strip mines nations for profit. It shifts wealth from public to private hands. It destroys middle class societies. It turns workers into serfs.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>It substitutes debt peonage for freedom. A race to the bottom follows. An elite few benefit at the expense of most others. It sacrifices economic growth for private gain. It’s the worst of all possible worlds. Nations are transformed into dystopian backwaters.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">BRICS have other ideas in mind. They seek a multipolar world. Much work remains to be done. Agreement on details must be finalized. It’ll take time to begin operations.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">It’ll be a second alternative to Western debt bondage. In December 2006, Hugo Chavez proposed a Bank of the South (Banco del Sur).</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">A November 2007 summit launched it. In September 2009, it was established. Its members include Venezuela, Brazil, Argentina, Ecuador, Bolivia, Uruguay and Paraguay. Plans are to increase initial capitalization.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Member countries pledge to contribute. Full operations are expected to begin later this year. At issue is representing the needs of the South. It’ll contribute to its development. It’ll do so free from debt bondage.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>BRICS Development Bank intends no one country to dominate. Voting rights will reflect equality. Economic growth matters most.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>India’s Minister of Commerce, Industry and Textiles, Anand Sharma, said:</b></span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“<b>Our countries are making their own statement that we are proactively engaged in balancing the global economy.”</b></span></blockquote>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“<b>We are creating new axis of global development. The global economic order created several decades ago is now undergoing change and we believe for the better to make it more representative.”</b></span></blockquote>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">BRICS trade today exceeds $360 billion. By 2015, it should reach $500 billion. Continued longterm growth is expected. Mutual cooperation helps sustain it. Each member country benefits.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">It remains to be seen how plans unfold. Hopefully global changes for the better will follow. They’re long overdue. Dominant emerging economies will play leading roles. They’re laying the groundwork to do so.</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><br /></span><strong><span style="color: black;"><span style="font-weight: normal;">Tools needed for a transition to a Steady State Economy with a stable Honest Primary Public Money Supply Base to fund a sustainable primary economic base;</span></span></strong></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /><b>What is a Steady State Economy?</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Definition</b></span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">A steady state economy is an economy with stable or mildly fluctuating size. The term typically refers to a national economy, but it can also be applied to a local, regional, or global economy. An economy can reach a steady state after a period of growth or after a period of downsizing or degrowth. To be sustainable, a steady state economy may not exceed ecological limits.</span></span><br />
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Herman Daly</b> has received numerous significant awards (e.g., the Right Livelihood Award and the NCSE Lifetime Achievement Award) that recognize the value of his ideas for making this world a better place. For decades, he has been an inspiration to students of economics and public policy — how often do you see students lining up at the end of the semester to have their professor sign their textbooks?</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Over his career, Herman has taken a courageous stance, swimming upstream against the currents of conventional economic thought. Not content to bequeath his ideas on economic development solely to the academic realm, he did time at the World Bank to change policies in the real world. He also has written books that are popular with citizens around the world.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Herman Daly – Money and the Steady State Economy</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Why should money, a public utility (serving the public as medium of exchange, store of value, and unit of account), be largely the by-product of private lending and borrowing? Is that much of an improvement over being a by-product of private gold mining? Why should the public pay interest to the private banking sector to provide a medium of exchange that the government can provide at no cost? Why should not seigniorage, unavoidable in a fiat money system, go entirely to the government (the commonwealth) rather than in large part to the private sector?</span></span><br />
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Is there not a better away? Yes, there is. We need not go back to the gold standard. Keep fiat money, but move from fractional reserve banking to a system of 100% reserve requirements. The change need not be drastic–we could gradually raise the reserve requirement to 100%. This would put control of the money supply and all seigniorage in hands of the government rather than private banks, which would no longer be able to live the alchemist’s dream of creating money out of nothing and lending it at interest. </b></span></span><br />
<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">All quasi-bank financial institutions should be brought under this rule, regulated as commercial banks subject to 100% reserve requirements. Credit cards would become debit cards. Banks would earn their profit by financial intermediation only — i.e. lending savers’ money for them (charging a loan rate higher than the rate paid to savings account depositors) and charging for checking, safekeeping, and other services. With 100% reserves every dollar loaned to a borrower would be a dollar previously saved by a depositor, re-establishing the classical balance between investment and abstinence. </span></span><br />
<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><br /></b></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>The government would pay some of its expenses by issuing more non interest-bearing fiat money in order to make up for the eliminated bank-created, interest-bearing money. However, it can only do this up to a strict limit imposed by inflation. If the government issues more money than the public voluntarily wants to hold, the public will trade it for goods, bidding the price level up. As soon as the price index begins to rise the government must print less, tax more, or withdraw some of the previously issued currency from circulation.</b> </span></span><br />
<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Thus a policy of maintaining a constant price index would govern the internal value of the dollar (providing a trustworthy store of value and constant unit of account). In effect the fiat money would receive a real backing—not gold, but the basket of commodities in the price index. The external value of the dollar could be left to freely fluctuating exchange rates. These policies are not new—they go back to Frederick Soddy in1926, and to similar proposals by Frank Knight and Irving Fisher, the leading American economists of the 1920s. The fact that bankers and their friends in government and academia have willfully ignored these ideas for 90 years does not constitute a refutation of them, but rather is a tribute to the power of vested interests over the common good.</span></span><br />
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>How would the 100% reserve system serve the steady state economy?</b></span></span><br />
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>First, as just mentioned it would restrict borrowing for new investment to existing savings, greatly reducing speculative growth ventures—for example the leveraging of stock purchases with huge amounts of borrowed money would be severely limited.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><br /></b></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Second, the fact that money no longer has to grow to pay back the principal plus the interest required by the loan responsible for the money’s very existence lowers the general pressure to grow. Money becomes neutral with respect to growth rather than biasing the system toward growth.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><br /></b></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Third, the financial sector will no longer be able to capture such a large share of the nation’s wealth, leaving more available for meeting the needs of the poor. A steady state economy is not viable if it means a steady state of poverty for any significant proportion of the population.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Fourth, the money supply would no longer expand during a boom, when banks like to loan lots of money, and contract during a recession, when banks try to collect outstanding debts, thereby reinforcing the cyclical tendency of the economy. Reducing the risk of recession reduces the need to accumulate more to get us through the bad times.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Fifth, with 100% reserves there is no danger of a run on the bank leading to failure, and the FDIC could be abolished, along with its consequent moral hazard.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Sixth, the explicit policy of a constant price index would reduce fears of inflation and the resultant quest to accumulate more as a protection against inflation.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Seventh, a regime of fluctuating exchange rates automatically balances international trade accounts, eliminating big international surpluses and deficits. US consumption growth would be reduced without its deficit; Chinese production growth would be reduced without its surplus. By making balance-of-payments lending unnecessary, fluctuating exchange rates would greatly shrink the role of the IMF and its “conditionalities.” It also introduces more short-term risk and uncertainty into both international trade and investment. Many economists would see this as a disadvantage, but steady state economics favors a greater degree of national production for national consumption, and fluctuating rates would offer a bit of protection in the form of adding an extra element of cost (exchange rate risk) to international transactions. Like the Tobin tax it “throws a bit of sand into the gears” and reduces global commerce and interdependence to a more manageable level.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><br /></b></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>To dismiss such sound policies as “extreme” in the face of the demonstrated fraudulence of our current financial system is quite absurd. The idea is not to nationalize banks, but to nationalize money, which is a natural public utility in the first place. This monetary system makes sense independently of one’s views on the steady state economy. But it fits better in a steady state economy than in a growth economy.</b></span></span></div>
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<a href="http://steadystate.org/" style="color: #888888; text-decoration: none;" target="_blank"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>http://steadystate.org/</b></span></a></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>How might a dialysis of Sovereign Dollars work to achieve a Steady State Economy?</b></span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span><span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Raf Manji Sustento Institute 16-8-2011</b></span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Slowly but surely mainstream commentators, economists and policy analysts are all starting to realise that exponential debt is the core of our current economic malaise. This is great news to those of us who have been banging on about this for many years.</span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">But still there is confusion around what to do about it. “Saving” has become the new buzzword, sitting squarely alongside “austerity”, as private individuals are urged to save more and governments are urged to spend less. That sounds like a sensible way forward. But watch the economy tank when that happens. Why?</span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Simply because when debt is paid down (and no corresponding new loans made) the money supply contracts as the debt is destroyed. The debt never existed as “money” in the sense of notes and coin but as an asset and liability for the bank. The interest is collected and the debt destroyed, leaving the profit for the bank. A monetary system based on debt will always lead to booms and busts as the interest charged overwhelms the ability of the productive sector to pay it. Ironically the system always needs infusions of new debt to stay afloat as the amount of money in the system declines.</span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Of course, when companies start to lay off workers (their first cost saving option) this creates uncertainty and an unwillingness for new borrowing to take place. This creates a self-reinforcing cycle which in some cases leads to recessions and occasionally to depressions. So what’s the best way out of this?</span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Austerity? No. Austerity will keep some investors happy but generally this will simply lead to slower growth and higher unemployment. But austerity is also a fact of life. When you have borrowed money and spent it, you know one day you have to pay it back. If you haven’t saved for that day then you will have to forego consumption for repayment. If you are in that position, which many governments are, you have, in fact, over consumed your income and eaten into your future. That’s not a pleasant space to be.</span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Is there an alternative?</span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Yes there is. I’d like to propose what I term “Monetary Dialysis“. This process seeks to replace debt money with real money (let’s assume for the moment that fiat money is real). The difference between debt money and real money is two fold: firstly, real money is permanent and once it enters the banking system it remains there; secondly, real money enters the banking system without interest, with no charge for its creation.</b></span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">This two key differences will lead to new outcomes: a more stable money base and a less inflationary one.</span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;">How will this process take place?</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><a href="http://sustento.org.nz/wp-content/uploads/2013/02/The-Manning-Plan.pdf" style="color: #888888; text-decoration: none;" target="_blank">http://sustento.org.nz/wp-content/uploads/2013/02/The-Manning-Plan.pdf</a></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>THE MANNING PLAN FOR PERMANENT DEBT REDUCTION IN THE NATIONAL ECONOMY EXECUTIVE SUMMARY</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">1. This plan offers a very low risk way to resolve the world debt crisis without sudden or radical change to the world financial system. It brings together a number of ideas such as Universal Basic Income (UBI), Debt Jubilee Income (DJI), and Quantitative Easing (Monetary Dialysis) that are already receiving some attention but cause concern to some policy makers when they are considered in isolation. The plan can be implemented quickly and unilaterally.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">2. The plan is based on specific forms of UBI and DJI structured to avoid inflation. The plan avoids most inflation because it can easily be adjusted so that incomes match the physical and human resources available to the economy.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">3. The Manning Plan sets out implementation details for New Zealand. Each New Zealand legal resident will receive about $100/week in a special Basic Income Account, and each business will receive about $100/week in a special Debt Jubilee Income account for each Full Time Equivalent employee employed by that business who is paid wages and salaries under the PAYE (Pay as You Earn) tax system.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">4. The total Universal Basic Income payments are initially about NZ $23 billion/year and the total Debt Jubilee Income payments are initially about NZ$7 billion/year. The money to make the payments will be created debt-free and interestfree by the Reserve Bank and administered by a New Zealand Debt Management Authority (NZDMA).</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">5. The payments made to indebted persons and businesses will be used to retire their bank debt. The payments made to non-indebted persons and businesses will be invested in a New Zealand Public Development Fund (NZPDF) that will pay tax-free interest on the deposits at around 2.3%/year, a figure comparable to the existing average deposit interest rate after taking into account reduced inflation and taxation.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The NZDPF money will be used to fund new productive development both public and private. NZPDF acts as a publicly owned Savings and Loan institution for the purposes of new productive investment.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">6. About NZ$ 15 billion of bank debt will be retired during the first year, leaving new deposits of about NZ$15 billion, roughly similar to the present financial system.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">7. Bank deposit holders will be able to invest in a Public Investment Trust Account (PITA) that will act as a publicly-owned Savings and Loan institution to manage the on-lending of deposits to fund the exchange of existing assets and to provide personal loans (including student loans and credit cards).</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">8. Bank balance sheets will still grow, but there will be little bank debt. Instead, secondary lending will be 100% backed by monetary deposits. Banks will be paid a spread of around 1.7%/year for their services, comparable to what they get now after taking into account that their lending becomes largely risk free. Normal debt repayment is guaranteed through the Universal Basic Income and Debt Jubilee</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Income accounts.</span></span></div>
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<span style="color: black;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Natural Stabilizers to achieve a Steady State Economy.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Prof. Dr. Margrit Kennedy is an architect, an ecologist, a financial expert and a critic of the prevailing economic system. As a Professor she headed the department of "Technological Advancement and Resource Efficient Construction" at the Universtiy of Hannover's architecture school. As early as 1982 she recognized that the broader application of ecological principals was inhibited by fundamental flaws in the monetary system, especially the consistent need for economic growth resulting from interest and compound interest.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Through her continuous research and scrutiny she became an expert on the subject, working on practical solutions for essential Problems:</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">How can we create a sustainable monetary system?</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">What characterizes monetary systems which do not collapse repeatedly and which serve us rather than control us?</span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif; line-height: 0.19in;">Where can we find examples of well-working monetary systems in the past and present?</span></div>
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<strong style="font-family: Arial, Helvetica, sans-serif; line-height: 0.19in;"><span style="color: #888888;"><span style="font-weight: normal;"><a href="http://userpage.fu-berlin.de/~roehrigw/kennedy/english/Interest-and-inflation-free-money.pdf" style="color: #888888; text-decoration: none;" target="_blank">http://userpage.fu-berlin.de/~roehrigw/kennedy/english/Interest-and-inflation-free-money.pdf</a></span></span></strong><strong style="font-family: Arial, Helvetica, sans-serif; line-height: 0.19in;"><span style="color: #888888;"><span style="font-weight: normal;"> </span></span></strong></div>
<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Margrit Kennedy</b></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Interest and inflation free money excerpt;</b></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Within our monetary system we allow the operation of a hidden redistribution mechanism which constantly shuffles money from those who have less to those who have more money than they need: Thus, on the one hand, large amounts of money concentrate in the hands of ever fewer individuals and multinational corporations and, on the other, Third World Countries. will never be able to get out of debt in the current system, as by now they have to pay back several times the amount of what has been loaned to them.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>The interest and compound interest mechanism not only creates an impetus for pathological economic growth, but also works against the constitutional rights of the individual in most democracies. If a constitution guarantees equal access of every individual to governmental services - and the money system may be defined as such - then it is illegal to have a system in which 10% of the people continually receive more than they pay for that service and 80% of the people receive less than they pay.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Many of the great political and religious leaders like Moses, Mohammed, Luther, Ghandi and most of the churches and spiritual groups throughout history have tried to reduce social injustice by prohibiting interest payments. They understood it as the main cause of social injustice. However, they did not come up with a practical solution to keep money in circulation. Thus, the archaic flaw in the system remained unchanged. The prohibition of interest payments among the Christian community by the Popes during the Middle Ages in Europe, for instance, just shifted the problem to the Jews. While the Jews were not allowed to take interest from each other, they could do so from the gentiles. If they took interest from each other they allowed a remission of debts every seventh year. Islamic banks, which follow Muslim law, are not allowed to take interest from their clients. Instead they become partners in the business to which they make a loan. Whether or not this is a better solution depends on the partners, but it certainly creates a more direct link between creditor and debtor.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">3. A last misconception relates to the role of inflation in our economic system. For most people, inflation seems like an integral part of any money system, almost natural, since there is no country in the world without inflation. Few realize that this is just another form of taxation through which governments manage to overcome the worst problems of an increasing interest burden. Between 1950 and 85 the GNP in Germany increased 18 times, interest paid on debt, however, 51 times (Figure 5). Since the largest borrower on capital markets is the government, it pays the highest share of interest.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Obviously the larger the gap between increases in government income and government debt the higher the inflation needed. Printing money enables the government to reduce its debts. This is another way of making those 80% of the people who pay more interest than they gain, pay even more, since they cannot withdraw their assets into inflation resistant investments like those who are in the last 10% income bracket.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Two Further Effects:</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Arms Race and Ecological Exploitation</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Besides the social injustice of a constantly widening gap between the rich and the poor in industrially developing and industrialized nations alike, two further problems associated with the interest system need to be identified: the arms race and ecological exploitation of the earth.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">1. The present concentration of money in the hands of ever fewer people or large multinational corporations creates a constant pressure for large-scale investments, e.g. atomic power plants, huge dams for hydroelectric power, and arms. Seen from a purely economical angle, the politically contradictory behaviour of the U.S. and Europe installing bigger and better weapons against Russia on the one hand, and sending butter, wheat and technological know-how to Russia on the other, made perfect economic sense: military production was one area where the saturation point could be postponed indefinitely as long as the enemy was equally able to develop faster and better weapons. And profits in the military sector were far beyond any profits made in the civil sectors of our economy. While capital investments in the latter often have returns around 2-5%, the military sector often averages returns around 50%.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">2. A further problem may be seen in the vast field of ecological investment. Let us take an investment in solar collectors as an example. If they only allow a 2% return on our money, it would be economically unwise to invest in this sensible, ecological technology for preparing hot water, since in a bank it returns at least 6%.The bank in turn usually has to invest it in less ecological projects. Therefore, as long as every investment must compete with the money making power of money on the money market, most ecological investments, aimed at creating sustainable systems (i.e. stopping quantitative growth at an optimal level, see curve a Figure 1), don't have a chance.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>The Solution </b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>At the beginning of this century, a practical solution was formulated by a German merchant, called Silvio Gesell, which would eliminate the problems caused by interest. Instead of paying people a reward (= interest) in order to bring surplus money back into circulation he suggested that they would have to pay a small penalty if they did not. He proposed to use money as a public service instead as a private good.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>An Example</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Between 1932 and 1933, the small Austrian town of Worgl started one of the first model experiments, which has been an inspiration to all who have been concerned with the issue of monetary reform, up to this day. Within one year, the 12 .600,- “Free Schillings”(i.e. Interest free Shillings) circulated 463 times, thus creating goods and services worth over 2.547.360,- Schillings.(valued in 1995 at approx. 63.684.000,- Schillings) At a time when most countries in Europe had severe problems with decreasing numbers of jobs, Worgl reduced its unemployment rate by 25% within this one year. Income from taxes increased by 35% and investments in public works by 220%. The fee collected by the town government</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">which caused the money to change hands so quickly amounted to a total of 12% of the12.600,- Free Schillings, which is 1.512,- Schillings. This was used for public purposes and thus no single individual gained by it, but the community as a whole. In addition, the need for exchanging goods and services determined the pace of circulation and not the fee. If the town would had borrowed the 12.600,-Schillings on the money market they would have paid back three to four times the same amount over 10 to 20 years.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">When, however, over 300 communities in Austria began to be interested in adopting this model, the Austrian National Bank saw its own monopoly endangered. It clamped down on the town and prohibited the printing of its own money.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Practical Possibilities Today</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">As 90% of all monetary transactions are just numbers in a computer, the payment modalities of today would make a “use-fee”on money technically a much simpler issue. Everyone would have two accounts: one current account and one savings account. The money on the current account which is at the disposal of the owner continually would be treated like cash and lose as little as 1/2% per month or 6% per year. <b>Anyone with more money in his current account than needed for the payment of all expenses in a particular month would be prompted by this small circulation fee or demurrage to transfer the amount not needed for some time to a savings account. From there, the bank would be under the obligation to pass this money on to those who needed it for a certain amount of time and, therefore, on the savings account it would not be debited with a fee.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>By the same token, the money owner would not receive any interest on his or her savings account - but the money would retain its value. (As soon as interest is abolished, inflation becomes unnecessary - see above.) Equally, the person receiving credit would not pay interest, but a risk premium and bank charges quite comparable to those contained in every bank loan today. It amounts to about 2.5% of normal credit costs.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Thus, very little would change in practice. Banks would operate as usual, except that they would be more interested in giving loans, because they too would be subject to the same use fee that everyone else would have to pay, were they to sit on their money. In order to prevent the hoarding of cash, one additional technical aspect of the implementation of such a monetary reform would be to recall one particular series of banknotes once a year, or all bank notes every second year without prior announcement.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>The basis of this reform would be a fairly accurate adaptation of the amount of money created to the amount of money needed to handle all transactions in the exchange of goods and services within and without a given geographical area, region or nation. Money would now follow a “natural” physical growth pattern (curve a, Fig. 1 ) and no longer an exponential one. When enough money has been created to serve all transactions, no more would have to be produced.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Prospective Results</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Within the larger context of a global transformation of values and behavioural patterns as well as other changes such as land and tax reforms the change in our monetary system will hopefully assist the switch from quantitative growth to qualitative growth. As people would have the choice of leaving their money in a savings account where it would keep its value, or to invest it in a beautiful piece of furniture, an art work or a solidly-built house which equally would keep their respective values, they might well opt for those investments which would enrich their daily lives. Moreover, the more that lasting quality is asked for, the more it would be produced.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Iain Parker closing comments;</b></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;">If you take the time to visit my blog </span><a href="http://publiccreditorbust.blogspot.co.nz/" style="color: #888888; text-decoration: none;" target="_blank">http://publiccreditorbust.blogspot.co.nz/</a><span style="color: #888888;"> </span><span style="color: #222222;">you will discover that every nation of Anglo-Saxon ancestry has at various times practiced Fully Functioning Public Central Banking to fund its primary economic base free of the impost of private banker interest which saw those nations experience no greater prosperity with fairer distribution of wealth than when doing so.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>England - The Great War and the debt-free Bradbury Treasury Note:</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The Financiers and the Nation by the Rt. Hon. Thomas Johnston, P.C., ex-Lord Privy Seal. It was written in 1934 and republished in 1994 by Ossian Publishers Ltd. Here is the link to the text of this quite remarkable and rare book:</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><a href="http://archive.org/stream/financiersandthe033017mbp/financiersandthe033017mbp_djvu.txt" style="color: #888888; text-decoration: none;" target="_blank">http://archive.org/stream/financiersandthe033017mbp/financiersandthe033017mbp_djvu.txt</a><span style="color: #888888;"> </span><span style="color: #222222;"><br /><br />In Chapter 6, entitled ‘Usury on the Great War’, I’ve selected the following paragraphs which I believe are both shocking and self-explanatory:<br /><br />WHEN the whistle blew for the start of the Great War in August 1914 the Bank of England possessed only nine millions sterling of a gold reserve, and, as the Bank of England was the Bankers’ Bank, this sum constituted the effective reserve of all the other Banking Institutions in Great Britain.<br /><br />The bank managers at the outbreak of War were seriously afraid that the depositing public, in a panic, would demand the return of their money. And, inasmuch as the deposits and savings left in the hands of the bankers by the depositing public had very largely been sunk by the bankers in enterprises which, at the best, could not repay the borrowed capital quickly, and which in several and large-scale instances were likely to be submerged altogether in the stress of war and in the collapse of great areas of international trade, it followed that if there were a widespread panicky run upon the banks, the banks would be unable to pay and the whole credit system would collapse, to the ruin of millions of people.<br /><br />Private enterprise banking thus being on the verge of collapse, the Government (Mr. Lloyd George at the time was Chancellor of the Exchequer) hurriedly declared a moratorium, i.e. it authorized the banks not to pay out (which in any event the banks could not do), and it extended the August Bank Holiday for another three days. During these three or four days when the banks and stock exchanges were closed, the bankers held anxious negotiation with the Chancellor of the Exchequer. And one of them has placed upon record the fact that ‘he (Mr. George) did everything that we asked him to do.’ When the banks reopened, the public discovered that, instead of getting their money back in gold, they were paid in a new legal tender of Treasury notes (the £1 notes in black and the 10s. notes in red colours). This new currency had been issued by the State, was backed by the credit of the State, and was issued to the banks to prevent the banks from utter collapse. The public cheerfully accepted the new notes; and nobody talked about inflation.</span><span style="color: #222222;"><b>To return, however, to the early war period, no sooner had Mr. Lloyd George got the bankers out of their difficulties in the autumn of 1914 by the issue of the Treasury money, than they were round again at the Treasury door explaining forcibly that the State must, upon no account, issue any more money on this interest free basis; if the war was to be run, it must be run with borrowed money, money upon which interest must be paid, and they were the gentlemen who would see to the proper financing of a good, juicy War Loan at 31/2 per cent, interest, and to that last proposition the Treasury yielded.</b></span><span style="color: #222222;"> The War was not to be fought with interest-free money, and/or/with conscription of wealth; though it was to be fought with conscription of life. Many small businesses were to be closed and their proprietors sent overseas as redundant, and without any compensation for their losses, while Finance, as we shall see, was to be heavily and progressively remunerated.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Canada - Canadian public credit history more needed today than ever!</b></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">An Ugently Needed Change in Monetary Policy</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;">Borrowing from Bank of Canada would make governments debt-free<br />by George H. Crowell<br />National Office | The Monitor<br />Issue(s): Government finance<br />June 1, 2011 </span><a href="http://www.policyalternatives.ca/publications/monitor/ugently-needed-change-monetary-policy" style="color: #888888; text-decoration: none;" target="_blank">http://www.policyalternatives.ca/publications/monitor/ugently-needed-change-monetary-policy</a><span style="color: #222222;"><br /></span><span style="color: #222222;"><b>Through the publicly-owned Bank of Canada, which was established in 1935, the federal government can borrow money, essentially interest-free, and make such funds available not only for its own use, but also for provincial and municipal governments. Such borrowing helped Canada get out of the Great Depression, and to finance our participation in World War II. Continuation of this practice until the early 1970s played a key role in creating Canada’s post-war prosperity, as well as launching Medicare and other national social programs.</b></span><span style="color: #222222;"><br /></span><span style="color: #222222;"><b>For the past four decades, however, our governments at all levels have increasingly been borrowing instead from the private banks, and paying steep interest on those mounting debts. Each year, governments across Canada now pay some $60 billion in interest on their debts – interest payments that need not be incurred.</b></span><span style="color: #222222;"><br /><br />This enormous debt burden deprives our governments of revenue that could be used for much-needed improvements to social and economic services – and also to help civil society groups that work for the public welfare. Such organizations depend largely on government funding, but are repeatedly told there is never enough money available.<br /><br />Governments themselves also use their deliberately incurred borrowing debts as an excuse for cutting public programs and services instead of preserving and expanding them. At the same time, however, they keep cutting the tax rates on wealthy individuals and corporations who don’t need tax relief – and many of whom evade the taxes they owe, anyway, through tax loopholes or by hiding their wealth in offshore tax havens. There also doesn’t seem to be any shortage of funds for unnecessary new prisons, for unjustifiable military interventions, or the wasteful purchase of new weaponry.<br /><br />One of the organizations that has tirelessly called for a return to government borrowing from the Bank of Canada is the Committee on Monetary and Economic Reform (COMER). Since its formation in the 1980s, COMER has produced reams of statistics, reasons and arguments for reviving the lending powers of the Bank of Canada. It has shown how the massive interest-bearing debt now carried by our federal and provincial governments could gradually be replaced with interest-free debt.<br /><br />Such a change in monetary policy, combined with crucial changes in tax policy, would make available tens of billions of dollars that are urgently needed to rebuild our public infrastructure, protect our environment, and strengthen Medicare and other social programs so vital in meeting human needs. Such expanded government spending on worthwhile projects would also create jobs, stimulate additional economic activity, and significantly increase tax revenue.<br /><br />To start a campaign for the monetary reforms needed to achieve these national gains, COMER recently issued a “call for the renaissance of the Bank of Canada.” The call is directed at civil society organizations. It urges them to join with COMER in demanding that the federal government revive the power of the Bank to provide funding to all levels of government, mainly with interest-free loans, as was done between 1935 and the early 1970s. These loans, of course, would be for needed public investments, primarily to protect and improve social programs and repair and build public infrastructure. (Go to the COMER website – www.comer.org -- to read the full text of the call.)<br /><br />COMER has been dismayed that civil society groups have not pushed for these changes in monetary policy on their own, since it could make abundant funding available to meet a wide range of the social and environmental needs for which they advocate. This is perhaps because they are unaware of this possible answer to their funding shortages. The COMER campaign hopes to raise their awareness as it calls for their endorsements.<br /><br />Of course the COMER people have to be realistic. They know the monetary policy changes they propose challenge the power of the private banking system, and they know this system has the support of the new majority Harper government. </span><span style="color: #222222;"><b>But the enhanced status of the NDP in the new Parliament (and the election of the first Green Party candidate, leader Elizabeth May) heightens the prospect that a revival of the Bank of Canada’s lending powers will be more frequently and effectively raised in the House of Commons. (Maybe every time the Conservatives cite the debt as an excuse for cutting social programs and services.)</b></span><span style="color: #222222;"><br /></span><span style="color: #222222;"><b>Significantly, the NDP convention in 1995 and the Green Party convention last year both passed resolutions calling for a return to government borrowing from the Bank of Canada instead of the private banks. It would be in accordance with those resolutions for both parties to put this key monetary policy reform on their parliamentary agendas.</b></span><span style="color: #222222;"><br /><br />Indeed, it may be essential for the opposition to take this stand in the House, if only to deter Harper from making the Bank of Canada even less beneficial to the public interest. This could happen if Harper decides to act on his earlier support for the creation of a common U.S.-Canadian currency, or to bring Canada into a proposed new global currency system – both, of course, controlled by the private bankers. Such a loss of monetary policy independence would gravely impair the Canadian campaign for monetary justice.<br /><br />Right now, however, the renaissance of the Bank of Canada, though very difficult, is not beyond achievement. Particularly if the campaign garners the support it deserves from the civil society groups that now suffer so much from the Bank’s disuse.<br /><br />(George Crowell is a retired University of Windsor professor who has been working with COMER on monetary policy since 1994.)</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Australia - Australia's best years under public credit implemented by their Labor Party</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">National Banking in Australia:</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The Commonwealth Bank</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">July 2012</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">By Robert Barwick </span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">In two distinct phases, from its inception in 1911 to 1923, and then from 1942-49, the Commonwealth Bank proved the power of national banking: it directed the public credit of Australia into the development of great infrastructure and crucial industries, including the Trans-Australian Railway; it financed Australia’s participation in WWI; and it financed the miraculous war-time economic mobilisation of WWII which transformed Australia from an agrarian backwater into an agro-industrial powerhouse, including the postwar great Snowy Mountains Scheme. Just as in the United States, the rise and fall of the Commonwealth Bank is the story of Australia’s battle for national sovereignty.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The American-inspired patriots of colonial Australia who fought for nationhood knew that national banking was the determining issue. Australia’s labour movement was born out of the bloody 1890 maritime and shearers’ strikes against the London banks, pastoral houses and shipping companies that controlled the colonial economy, and whose stranglehold would unleash the devastating crash of 1893. Already in 1891, NSW’s Labor Electoral League, one of the components which would form the Australian Labor Party, enshrined a commitment to national banking in its electoral platform, alongside a demand for “<b>The federation of the Australasian colonies upon a national as opposed to an imperialistic basis….”</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">It was the expatriate American ALP politician King O’Malley who gave the Labor Party its deep appreciation of the workings and the signifi cance of national banking. In 1908 O’Malley convinced the federal Labor Party conference held in Brisbane to adopt a detailed national banking proposal in its fighting platform. <b>In a five-hour speech in Federal Parliament the following year, O’Malley emphasised the importance of a national bank for Australia’s sovereignty:</b></span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“<b>We are legislating for the countless multitudes of future generations, who may either bless or curse us. … We are in favour of protecting, not only the manufacturer, but also the man who works for him. ... I propose the institution of a government national bank for managing the finances of the Commonwealth and the States. … Cannot honourable members see how important it is that we should have a national banking system … —a system that will put us beyond the possibility of going as beggars to the shareholders of private banking corporations? The movement of the money volume is the vital monetary problem—the master-key to the financial situation. Through the control of this movement prices may be made to rise or fall or remain substantially steady. … Such power is an attribute of sovereignty … and ought to belong to none but the sovereign people exercised through … Parliament and Government in the interests of the whole people.”</b></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">O’Malley triumphantly proclaimed the precedent for his proposed new national bank. “I am the Hamilton of Australia”, he declared. “He was the greatest financial man who ever walked the earth, and his plans have never been improved upon. … The American experience should determine us to establish a national banking system which cannot be attacked.”</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Labor vs. the Money Power</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">To force the ALP caucus to implement the national banking policy, over the opposition of Melbourne’s British-controlled Collins Street banks, O'Malley formed what he called the “Torpedo Brigade” among Labor MPs. O’Malley and his allies pushed through the Commonwealth Bank Act in December 1911, and O’Malley personally handpicked Denison Miller to run the new national bank, exhorting him, “You have a chance to make history, Brother Miller, Australian history, which will become world history. Think the matter over deeply. And accept the job. Decide to make history— I’m sure you’re the man to do it.” In his 1962 book, The Great Bust, former New South Wales Treasurer and later NSW Prime Minister Jack Lang documented the terror which Miller and the Commonwealth Bank had struck into the British oligarchy, until Miller’s untimely death in 1923:</span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“<b>In Australia the war had been financed by the then newly established Commonwealth Bank. It had found all the money to keep the armies abroad, and also to finance the producers at home. It had financed the Commonwealth Shipping Line deal for Hughes. Denison Miller had gone to London after the war had finished and had thrown a great fright into the banking world by calmly telling a big bankers’ dinner that the wealth of Australia represented six times the amount of money that had been borrowed, and that the Bank could meet every demand because it had the entire capital of the country behind it. The Bank had found £350 million for war purposes. A deputation of unemployed waited on him after he arrived back from London at the head office of the Commonwealth Bank in Martin Place, Sydney. He was asked whether his bank would be prepared to raise another £350 million for productive purposes. He replied that not only was his bank able to do it, but would be happy to do it. Such statements as these caused a near panic in the City of London. If the Dominions were going to become financially independent of the City of London, then the entire financial structure would collapse.”</b></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Lang went on to describe the City of London’s intention to bridle the Commonwealth Bank, by creating a supranational banking structure that would take control over the finances of all nations, constituting a de facto world government. The subjugation of the banking system of Europe today, under the European Stability Mechanism (ESM) demanded by London and related financiers, is a dead ringer for the process exposed by Lang:</span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“<b>Basically it was a problem of banking. Some formula had to be devised which would enable such local institutions as the Commonwealth Bank of Australia to be drawn into the City of London’s net. The financial experts studied the problem deeply. Out of their deliberations emerged the plan to centralise the control of all banking throughout the Empire by channeling it directly into the supervision by the Bank of England. The Bank of England was to become the super Bankers’ Bank. … The Bank of England took up the idea of Empire control most enthusiastically. It was even decided to aim at a World Bank, to be run by the League of Nations, which would control the credit of the world. The grand idea was that one single Board of Directors would make the decisions which would determine the economic policy of the world. The bankers were to be the supreme rulers. Naturally, the Governor of the Bank of England expected to be at the apex of the system. If, for example, the Bank of England could control the Commonwealth Bank of Australia there should be no impediment in the way of controlling the government of the country as well. … The death of Miller removed at a critical moment the one man capable of defending the citadel of Australian fi nancial independence.”</b></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Notwithstanding the remarkable accomplishments of the Commonwealth Bank, its mere twelve years of operation, before private financiers seized control of it following Miller’s death, were not enough for the Bank to break the British monetary stranglehold on Australia. Frank Anstey, one of O'Malley’s former Torpedo Brigade members and the mentor of future prime minister John Curtin, showed in his 1921 book, The Money Power, that the issue was understood to be national sovereignty:</span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“<b>Australia is a mere appendage of financial London, without distinct economic existence. ... London is, so far, the web centre of international finance. In London are assembled the actual chiefs or the representatives of the great financial houses of the world. The Money Power is something more than Capitalism. ... These men constitute the Financial Oligarchy. No nation can be really free where this financial oligarchy is permitted to hold dominion, and no ‘democracy’ can be aught but a name that does not shake it from its throne.”</b></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Indeed, when Miller died in 1923 the London banks directed the Australian government to hand control of the bank to a board of private businessmen, who promptly turned off the tap of public credit. During the Great Depression, the privately controlled board of the Commonwealth Bank refused to follow a government directive to issue credit for public works— a plan to alleviate the 30 per cent unemployment, on the successful model being applied by U.S. President Franklin D. Roosevelt. This defiance of government policy, by the board of the bank, caused such a scandal that in 1936 a Royal Commission was established to investigate banking in Australia. The commission found that the government should be the ultimate authority over the banking system, findings ignored by the Lyons-Menzies governments.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">In a 1937 speech to the Labor Party’s election campaign launch in Fremantle, WA ALP leader John Curtin reiterated Anstey’s 1921 warning that there could be no Australian sovereignty without government control over the nation’s finances. Curtin demanded restoration of the Commonwealth Bank’s original charter, and that the Bank be freed from the vice of private financiers and put back under government control:</span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“<b>If the Government of the Commonwealth deliberately excluded itself from all participation in the making or changing of monetary policy it cannot govern except in a secondary degree.”</b></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">In 1939, on the eve of the war, the aging King O’Malley again went to bat to re-establish the Commonwealth Bank under its original purpose and charter, as opposed to its domination and speculative misuse by private fi nanciers. In his pamphlet Big Battle, O’Malley insisted that the individual rights people believed were theirs could not be guaranteed without sovereign control over credit, and that the purpose of national banking was to facilitate the creation of tangible, physical wealth, as opposed to the inevitably disastrous “fog wealth” of private banking speculation:</span></span></div>
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<span style="color: #222222; font-family: "arial" , "helvetica" , sans-serif;">“Permanent wealth is produced by the slow process of industry, combined with skill and the manipulation of capital. Fog wealth is produced by the rapid process of placing one piece of paper in the possession of a bank as a collateral security for two pieces of paper. Some of the enormous quantity of paper which is being created now will sooner or later collapse. But with the Commonwealth Bank capable of sustaining legitimate credits, there can come no panic which will again destroy the market value of intrinsic values, ruin debtors, deprive workers of work, and produce general distress. Oh! Would that I possessed the power to arouse the Australian people to the imperative importance of reviving the Commonwealth Bank!”</span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">After the War</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The Commonwealth Bank was indeed revived by John Curtin and Ben Chifley during and immediately after WWII, with stunning success. But the British Crown’s Privy Council overturned Chifley’s bank nationalisation legislation, which had been passed by both houses of Parliament in 1949, and soon Labor was out of power for the next 23 years. During that period Prime Minister Sir Robert Menzies, a professed admirer of Hitler and Mussolini during the 1930s and a notorious lackey of the anglophile Melbourne financier Sir Staniforth Ricketson, finished off what was left of the Commonwealth’s function as a national bank.4 He established the Reserve Bank as an independent central bank with control over the nation’s finances, and appointed as its first governor a British-educated Fabian, H.C. “Nugget” Coombs. As Minister of Post-War Reconstruction, Coombs had ripped up most of Labor’s grand postwar reconstruction plans. He gloated of the globalist control over banking when he said of himself, “I am a member of the international freemasonry of central bankers.”</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Remnants of a public credit policy continued to exist in Australia, through the Commonwealth Development Bank, the Australian Industry Development Corporation (AIDC), and the various state banks, which enabled the federal and state governments to direct lending into farming, manufacturing and small business. In 1981, under the direction of a cabal of investment bankers centred in Hill Samuel Australia (later renamed Macquarie Bank), a subsidiary of the City of London’s Hill Samuel & Co., Ltd., the Committee of Inquiry into the Australian Financial System (the Campbell Committee) demanded sweeping banking deregulation, including the elimination of all such public credit institutions. To its eternal shame, it was the Labor Party, under Fabian traitors Bob Hawke and Paul Keating, that delivered on the City of London’s demands upon assuming power in 1983.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Keating deregulated the banks, exposing Australia to the predations of foreign banks; floated the dollar; amalgamated unions to bust their bargaining power; annihilated manufacturing by slashing tariffs (to “enhance competition”); and privatised major public assets, including the Commonwealth Bank. As revealed in Keating: the Inside Story, by John Edwards, Keating declared his intention to dismantle every aspect of the advanced agro-industrial economy that “old” Labor governments had used public credit to build up, proposing that Australia’s economic future should be almost solely that of a raw materials exporter, with whatever shards of manufacturing might manage to hang on with low or no tariffs: “Minerals, wool and wheat—that’s our long suit. And we have to make secondary industry competitive.” Three decades after Keating began this assault on Australia’s economic sovereignty, his intention for Australia has been realised.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b>New Zealand - New Zealand’s proud history of pushing for an honest money system and monetary, banking and credit reform.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Compiled by Iain Parker 2012</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222; line-height: 0.19in;">Note – </span><span style="color: #222222; line-height: 0.19in;"><i>Italic text is written by Iain Parker</i></span><span style="color: #222222; line-height: 0.19in;">. Normal text is</span><span style="color: #222222; line-height: 0.19in;"> </span><span style="color: #222222; line-height: 0.19in;">excerpts of documents as named</span><span style="color: #222222; line-height: 0.19in;"><i>.</i></span><span style="color: #222222; line-height: 0.19in;"> </span><span style="color: #222222; line-height: 0.19in;"><b>Bold text are points of importance;</b></span><span style="color: #222222; line-height: 0.19in;"><br /></span><span style="color: #222222; line-height: 0.19in;"><b><br />Michael Joseph Savage (First New Zealand Independent Labour Party Prime Minister 1935-40) said in his 1920 maiden speech to Parliament;</b></span><span style="color: #222222; line-height: 0.19in;"><br />“</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">The Government should create a state bank , and use the public credit for the public good as an alternative to borrowing overseas”</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br /></span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;"><br /></span></span></strong><span style="color: #222222; line-height: 0.19in;"><b>Twice PrimeMinister of Canada – William Lyon Mackenzie King – spanning most of period 1921 – 1948 said in 1935;</b></span><span style="color: #222222; line-height: 0.19in;"><br />“</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Once a nation parts with the control of its currency and credit, it matters not who makes that nation’s laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of Parliament and of democracy is idle and futile.”</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br /></span><strong style="line-height: 0.19in;"><span style="color: #222222;"><i><span style="font-weight: normal;"><br /></span></i></span></strong><span style="color: #222222;"><i><span style="line-height: 0.19in;">Read on to find out what these two esteemed leaders were refering at the same period of time yet oceans apart and what relevance it still has upon our society today?</span><br /><span style="line-height: 0.19in;">Many monetary - banking and credit reformers throughout New Zealand’s history have been able to agree that the cause of inequality - disparities of wealth and poverty among plenty has been a mathematical systemic wealth </span><span style="line-height: 18.2399997711182px;">transferring</span><span style="line-height: 0.19in;"> pyramid scam of a banking system. But thus far have sadly lacked any viable cohesion of sufficient consensual agreement upon a solution.</span></i></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><i><span style="line-height: 18.2399997711182px;"><br /></span><span style="line-height: 0.19in;">Firstly I will produce the irrefutable proof that the total repayment of debt is collectively impossible from the day it was born under the Anglo-Saxon heritage private profit central banking model. That there is always less currency of any form in circulation than what is owed to the financial sector as interest bearing loans. Thus a few insiders will win by design - a few more players will win by luck - but for most the the unaddressed compounding interest collectively marches them straight into debt peonage or debt enslavement. No different to a casino designed and owned by the house to favour the house by mathematical certainty. Only this is a casino that the populous have no choice but to play on a daily basis as it is decreed that its chips are the only thing accepted as payment of taxes.</span></i></span><span style="color: #222222; line-height: 0.19in;"><br /></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b>Banking in New Zealand Fourth Edition - published by the New Zealand Bankers Association in 2006</b> -<i> makes it very clear that presently every dollar of currency circulating in New Zealand's money system originates as an interest bearing loan owed to a private owned lending institution and - that New Zealand's money system is presently administered by an international private central banking network - of which currently sits at the end of a wholesale credit discount interest supply chain - an accountancy system of credit weighed against available natural resources - as opposed to the re-lending of already existing pools of liquidity as often portrayed.</i><br /><b>Chapter 4 - THE CREATION OF MONEY AND CREDIT Pg 19;</b><br /><b>What actually happens </b></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">In reality<b>, </b>although the process outlined in the previous sections could occur, cash balances in bank vaults no longer act as a constraint on bank lending in the way that they might have up until the latter part of the 20th century.......<br />in such an environment, there is still scope for a bank to expand its lending and create credit, but it is dependent on there being net inflows of funds into the banking system as a whole. These inflows of funds may come from depositors from outside new Zealand (and we have seen significant inflows of funds from such sources in recent years), or from the government making net deposits of funds into the banking system (through its fiscal policy, as outlined below).<br />We also have a situation where, since 1985, new Zealand banks have not had any specific reserve requirements applied to their deposit liabilities. This means that, in theory, banks could keep on creating credit and expanding their loan portfolios indefinitely. in such an environment, it is the cost of credit, based upon the costs that banks have to pay to raise the deposits, that becomes the constraint on the quantity of credit that is created. </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><em style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-style: normal;">As made clear in the following <b>Jan 2010 Official Information Act reply from New Zealand Minister of Finance Bill English </b>the</span></span></em><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;"> </span></span></strong><strong style="line-height: 0.19in;"><span style="color: #222222;"><i><span style="font-weight: normal;">cash injection</span></i></span></strong><span style="color: #222222;"><i><span style="line-height: 0.19in;"> </span><span style="line-height: 18.2399997711182px;">referred</span><span style="line-height: 0.19in;"> to by the New Zealand Bankers Association above is the very same monetised debt we receive in electronic form from the privately owned primary bond exchanger's that is then introduced into our domestic system;</span></i></span><span style="color: #222222; line-height: 0.19in;"><br /></span><em style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-style: normal;"><br /></span></span></em><em style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-style: normal;"><b>Office of Hon Bill English</b></span></span></em><span style="color: #222222; line-height: 0.19in;"><b><br />Deputy Prime Minister Minister of Finance<br />Minister for Infrastructure<br />1 8 JAN 2010</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><br /></b>Dear lain Parker<br />Thank you for your Official Information Act request, received on 27 November 2009. You asked a”number of questions about the nature of government bonds; as well as about the nature of money and the banking system.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><i><br /></i></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><i>1. Could you please tell me what a Government Bond is and what role it plays in our economy?</i></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><i><br /></i></span><span style="color: #222222;">As you point out on page 7 of your submission, New Zealand government bonds are wholesale, New Zealand dollar denominated, fixed-term debt securities. They are secured by a charge upon and are payable out of the revenues of the Crown. </span><strong><span style="color: #222222;"><span style="font-weight: normal;">Cash received by government bond issuance is used to fund goods and services provided by the government, e.g. roading, hospitals and welfare payments. </span></span></strong><span style="color: #222222;">Government bond yields provide an indication of the “risk free” rate of return in an economy and provide companies and households a benchmark with which to compare returns against those of alternative investments.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><i>2. Could you please tell me who in the world of high finance, as Primary Bond Dealers, has the right to buy or monetise government debt bonds before they decide if they do or don’t on sell them on the secondary bond market?</i></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><i><br /></i></span><span style="color: #222222;">New Zealand does not have “Primary Bond Dealers.” The term “Primary Bond Dealers” refers to institutions that, for example, trade directly with the United States Federal Reserve, where they are required to participate when the Federal Reserve holds securities auctions. In New Zealand, the nearest equivalent institutions are called registered tender counterparties. The main difference between the US and New Zealand is that registered counterparties are eligible but not required to participate in government securities tenders.<br />To qualify for registration as a tender counterparty, an institution must have a minimum credit rating of A-/A3, or have their obligations guaranteed by a parent entity with a minimum credit rating of A-/A3, or be a Crown financial institution.</span><strong><span style="color: #222222;"><span style="font-weight: normal;">Tender counterparties are primarily either New Zealand or Australian incorporated banks.</span></span></strong></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><br /></b><i>3. Are the Primary Bond Dealers private or publically owned institutions? That is not those that buy bonds on the secondary bond market, but the Primary Bond Dealers?</i></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><i><br /></i></span><strong><span style="color: #222222;"><span style="font-weight: normal;">Tender counterparties are primarily private sector banks.</span></span></strong><span style="color: #222222;"><br /></span><span style="color: #222222;"><b><br /></b></span><span style="color: #222222;"><i>4. Could you please tell me what they use to buy our government bonds and if that medium of exchange existed before we pledged to pay it back with attached interest out of the future taxes of the nation or was it an electronic debt book entry, not anyone’s existing savings, but an electronic book entry that brings into circulation new money?</i></span><span style="color: #222222;"><br /></span><span style="color: #222222;"><i><br /></i></span><span style="color: #222222;">People purchasing government bonds must do so with New Zealand dollars. </span><strong><span style="color: #222222;"><span style="font-weight: normal;">Settlement of the transaction between the purchaser and the Crown is by electronic cash transfer rather than physical cash.</span></span></strong><span style="color: #222222;"> All else </span><strong><span style="color: #222222;"><span style="font-weight: normal;">being equal,</span></span></strong><span style="color: #222222;"> bond purchases result in a reduction in settlement cash balances of the banking system (either at commercial banks, the Reserve Bank or both) as cash is transferred to the Crown. </span><strong><span style="color: #222222;"><span style="font-weight: normal;">An explanation for how this cash may originally be created is included in the answer to question 5 below.</span></span></strong></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><i><br /></i></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><i>5. Is it true that in excess of 90% of the money supply in circulation in New Zealand entered circulation as interest bearing debt owed to the banking network?</i></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><br /></span><strong><span style="color: #222222;"><span style="font-weight: normal;">It is correct that most of the money supply in New Zealand has been created by the banking sector.</span></span></strong><span style="color: #222222;"> This is done through the process of </span><strong><span style="color: #222222;"><span style="font-weight: normal;">financial intermediation.</span></span></strong><span style="color: #222222;"> Commercial banks, and other financial institutions, take deposits from members of the public and firms who wish to hold cash in the form of bank deposits. They then lend to individuals and firms who want to borrow — in the form of mortgages or business loans. This process serves to channel funds between savers and borrowers. It also shifts the risk of lending from individual savers to the banks, thereby reducing the risk of lending.<br />This process of</span><strong><span style="color: #222222;"><span style="font-weight: normal;"> intermediation</span></span></strong><span style="color: #222222;"> involves the commercial banks lending a greater value of funds than the cash they reserve to meet expected deposit withdrawals. This is done because at any one time only a fraction of depositors will want to withdraw their funds. Banks therefore need to keep only a fraction of their deposits in reserve in order to meet those demands. </span><strong><span style="color: #222222;"><span style="font-weight: normal;">Because the banks lend more than the total amount of cash held in reserve in the system, credit is created – thus increasing the money supply.</span></span></strong><span style="color: #222222;"><br />The exact proportion depends on the definition of the money supply. Using the most common definition of the money supply as M2 (i.e. currency held by the public + balances in cheque accounts + all other business or personal deposits that are available on demand), </span><strong><span style="color: #222222;"><span style="font-weight: normal;">the October 2009 data show that the part not accounted for by currency held by the public is 95%.</span></span></strong><span style="color: #222222;"><br />Data on money aggregates can be found on the RBNZ website at:<br />http://www.rbnz.govt. nzlstatistics/monfin/cl /data.html. </span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><i><br /></i></span></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><i>6. Prime Minister Key, could you please describe your activities as a member of the Advisory Board of the Foreign Exchange Committee of the US Federal Reserve between 1999-2001?</i></span><span style="color: #222222;"><br /></span><em><span style="color: #222222;"><span style="font-style: normal;"><br /></span></span></em><span style="color: #222222;">I refer you to the reply from the Office of the Prime Minister.</span><span style="color: #222222;"><i><br /></i></span><span style="color: #222222;"><i><br /></i></span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><i>7. Could all please advise me if the US Federal Reserve and the Bank of England are privately owned institutions that sit within their respective governments or publicly owned institutions within their governments?</i></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><i><br /></i>I refer you to the following pages on the websites of the Board of Governors of the Federal Reserve and the Bank of England respectively for this information:<br />http://www.federalreserve.gov/Qf/pf.htm<br /><br />http://www.bankofengland.co.uk/about/leciisIation/leciis.htm</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><i>8. Could you please explain to me the role and relationship of the American Financial institution — Northern Trust — in regard to it being appointed custodian of our own NZ Debt Management Office?</i></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br />The New Zealand Debt Management Office (NZDMO) has appointed Northern Trust as global custodian for NZDMO fixed income assets. The appointment followed a competitive tender exercise which was completed in 2008. Custodian duties provided by Northern Trust for the NZDMO are standard for financial institutions and include: the provision of trade settlement services; safekeeping of assets; and other administrative functions.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><i><br /></i></span></span><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><i>9. Could you please tell me if in New Zealand, a “new” mortgage at issuance, before it becomes tradable, is loaned to a borrower by a registered bank, is that mortgage created as a debt book entry account, not anyone’s existing savings, but an electronic debt book entry creating “new money”?</i></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><i><br /></i></span><strong><span style="color: #222222;"><span style="font-weight: normal;">The creation of a new residential mortgage will generally result in new money (bank deposits) being created.</span></span></strong><span style="color: #222222;"> The bank grants a new loan to a purchaser, who uses the cash to buy property from a vendor. The vendor then may spend or save the proceeds boosting deposits in the financial system.</span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">You also ask for a list of the names of the officials who contributed to this reply. I am withholding these names in full under s.9(2)(g)(i) of the Official Information Act — to maintain the effective conduct of public affairs through the free and frank expression of opinions.</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;">You have the right to ask the Ombudsman to review my decision.</span><strong><span style="color: #222222;"><span style="font-weight: normal;">This fully covers the information you requested. </span></span></strong><span style="color: #222222;">I hope you find this information useful<br /><b>Yours sincerely<br />Bill English </b></span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong><span style="color: #222222;">Minister of Finance</span></strong><span style="color: #222222;"><br /></span><strong><span style="color: #222222;"><span style="font-weight: normal;">end</span></span></strong><span style="color: #222222;"><br /></span><strong><span style="color: #222222;"><span style="font-weight: normal;"><br /></span></span></strong><span style="color: #222222;"><i>Government Securities (Bonds and Treasury Bills) are currently issued and exchanged for the created credit of the private primary bond exchangers then pledged to be repaid out of future taxes of the borrowing nation. Many countries now have debts in excess of their level of sustainable natural resources to support enough commerce to ever tax enough to repay the ever compounding debt. The bankers are now insisting, just like pawnbroker shops - that the borrowers transfer real assets into ‘custodian’ banks such as Northern Trust so they are easily at hand when the inevitable debt repayment crisis occurs.<br />You can forget about the tender process mentioned being of some sort of consumer protection in the decision of just which one of these ‘custodian’ banks you are going to pay to inevitably remove your necessities of life from you - as they are generally all cross-owned by the private primary bond exchangers.<br />That made clear we will now continue with the expose of the impact it has had upon the social and economic development of New Zealand. At a time in history at the end of WW1 leading into the Great Depression when perhaps more citizens than ever had become more widely aware than ever of the crimes committed against humanity by the privately designed and controlled Anglo-Saxon heritage banking network and what was to come if they went unimpeded - and not long after the Independent Labour Party had been formed in New Zealand(1909) - another group of banking system reformers became internationally prominent from the 1920′s onward. </i></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><i><span style="line-height: 0.19in;">The C H Douglas Social Credit movement were just as fully financially literate in the area of Monetary - Banking and Credit Systems and thus the need for reforms. They however had some different ideas to those of the Labour Movement as to just what form those reforms should take.</span><br /><span style="line-height: 0.19in;">C H Douglas defined ‘Credit’ as an ‘estimate of compacity to pay money’, I feel it is not wrong to define Public Credit and C H Douglas Social Credit as two denominations of monetary easing. Many founding Labourite’s believed in introducing the Primary Monetary Base by spending it into circulation without private bankers compounding interest attached to build public infrastructure that provided the necessities of life made available free by nature as a public service. That portion of the Primary Monetary Base backed by the productive assets it created could remain in circulation as a grant providing the means of exchange for the citizenship and a store of value without causing inflation or having to risk ‘investing’ it to prevent inflation eroding its future value. There would then be a secondary level of Public Credit for worthy projects that would would be taxed or have a ‘simple’ interest attached to cover only the cost of administration of the monetary system and retire sufficient money from circulation as to suppress inflation should it occur and prevent the system from debasing itself.</span><br /><span style="line-height: 0.19in;">Any simple interest would be significantly less than the </span><span style="line-height: 18.2399997711182px;">usurious</span><span style="line-height: 0.19in;"> compounding interest charged under the present regime and any taxes significantly less having not to seek the means of repayment of ever increasing cost of debt servicing caused by compounding interest - and the price of goods and services significantly reduced by reducing the cost of compounding interest factored into pricing. National internal economies would be able to balance themselves to the benefit of as many citizens as possible with exports being the secondary consideration - not the primary consideration as under the current foreign debt stimulus - export led rapayment model that is an impossibility by mathematical formula.</span><br /><span style="line-height: 0.19in;">C H Douglas put forward the evidence that there was a lack of purchasing power for the wider citizenship compared to what was able to be produced because of the current monetary system - especially after the increase of machinery in the production process. The ‘Gap’ as he </span><span style="line-height: 18.2399997711182px;">referred</span><span style="line-height: 0.19in;"> to it was laid out in what he called the A + B Theorem. This was disputed by the financial spin doctors at the time - but after many decades of ‘Globalisation’ when the world - due to modern technology - is the smallest it has ever been I say it takes little proving today given the fact that under the current compounding interest based debt regime growth has never over the longterm - apart from anomalies such as war and after bankruptcy imposed asset sales - exceeded the debt you are forced to take on to attempt the growth. An estimated 24,000 people a day still die of starvation when the corporate inventory lines are full of food.</span><br /><span style="line-height: 0.19in;">C H Douglas main ideology plank was working out just what the ‘gap’ was in dollar terms - then dividing that sum by the population - then spending Social Credit into circulation without the private bankers compounding interest as what he called a National Dividend - just like a ‘shareholder’ in a corporation all citizens were to get a share of the nations unlocked wealth as the event of the machinery age made their labours less required to help unlock that wealth. The National Dividend was to be issued without any work test.</span><br /><span style="line-height: 0.19in;">Before Social Credit became a political party in its own right in 1953 Social Creditors used to inhabit the ranks of most political party’s in New Zealand. Although the Independent Labour Party were very close in the need banking reform ideology - most of its members questioned the stability of issuing large amounts of Social Credit into the populous and counting on the populous not to go on a consumer binge that would still lead to internal disparities of wealth that would be as destabilising and as inflationary as the status quo. They also had their concerns about the lack of a work test out of concern that if everyone could get money without working many might choose not to participate in the upkeep of society.</span><br /><span style="line-height: 0.19in;"> New Zealand Independent Labour Party’s Public Credit And C H Douglas Social Credit Are So Very Similar with few differences. Sadly those few differences have stagnated the effectiveness of the monetary - banking and credit system reform movement of New Zealand at a time when they need to be more effective than ever.</span></i></span><span style="color: #222222; line-height: 0.19in;"><br /></span><span style="color: #222222; line-height: 0.19in;"><b><br />C H Douglas wrote this of the situation in – Break Down Of The Employment System – 1934</b></span><span style="color: #222222; line-height: 0.19in;"><br />“It will usually be found that when the quasi-practical objections have thus been disposed of, the objector discloses his real position, which is what he calls a moral objection, that he hates the very idea that anyone should be comfortable in this world without being made very uncomfortable in the process. Some years ago I had the experience of discussing these proposals with Mr and Mrs Sidney Webb(New Zealand Labour), and after disposing, one after the other, of the objections raised to the feasibility of the scheme, </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">I was met with an objection with which, I confess, I found myself wholly unable to deal, and I recognize that objection in the Labour Party Report on the Douglas proposals.”</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br /></span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;"><br /></span></span></strong><span style="color: #222222; line-height: 0.19in;"><b>Michael Joseph Savages (First New Zealand Independent Labour Party PrimeMinister 1935-40) views as cronicled in – From The Cradle To The Grave – by Barry Gustafson 1986</b></span><span style="color: #222222; line-height: 0.19in;"><i><br /></i></span><span style="color: #222222; line-height: 0.19in;">Pg 146 – Savage read and quoted Keynes, and agreed wholeheartedly with Keyne’s suggestion that ‘the first necessity was that bank credit should be cheap and abundant’ if the economy was to be expanded and unemployment overcome. But he wanted a more of a permanent solution than Keyne’s subsequent suggestion of increased public investment financed through a budget deficit as a means of offsetting a temporary decline in private investment, thus maintaining or stimulating consumption and………<br />Pg 147….production in the short term. </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Savage believed in increased government expenditure on social welfare, public works, guaranteed prices to farmers and minimum wages to workers as a means of increasing consumption, demand and economic activity. </span></span></strong><span style="color: #222222; line-height: 0.19in;">But he also believed in balancing the budget as far as possible through supplementary, graduated, direct taxation; restrained borrowing; and </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">credit creation.</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br /></span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Nor was Savage convinced that the answer to New Zealand’s economic problems lay in the monetary mechanism suggested by Douglas and the Social Credit movement, though he certainly shared their basic assumption that what was physically possible should be financially possible. </span></span></strong><span style="color: #222222; line-height: 0.19in;">Lee and some other Labour Mps, notably Langstone, Parry, Mason and Carr, found Douglas’s critique ‘identical with that of the Labour Party’ and Douglas’s National Dividend scheme similar ‘in every sense’ to Labours policy of increased and redistributed purchasing power. </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Savage, though not as critical as Holland, who believed Social Credits solution ‘would mean disasterous inflation’ had serious reservations and joined Holland in stating publicly that the Labour Party ‘ does not accept the Douglas scheme’.</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br />Douglas emphasised a continuous creation and injection of credit to bridge what he claimed was a permanent gap between purchasing power and production, not a temporary flaw in the distribution of adequate means of exchange. Douglas also wanted an economic system that would provide the basis for individual freedom and a move away from the growing concentration of power in the hands of government, big business, banks and trade unions, all of which he regarded as conspiring against the people as a whole. </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Social harmony would only be possible when all the ‘useful people’ were able to enjoy the wealth they created, and that in turn would only be possible when the hidden but real government, the banks, had their financial powers stripped from them and new economic mechanisms were created to increase and distribute money and credit.</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br /></span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Savage, however, argued that the creation of extra currency and credit was useless and even dangerous if not accompanied by a redistribution of purchasing power and balanced by increased production. He admitted that ‘ The Douglasites have an idea that is atleast a step out of the orthodox rut, and to the extent that it is going to cause people to think we should welcome it, but to my mind it does not bridge the gap from where we are now to a free circulation of commodities, and that is the object of currency and credit generally.’ </span></span></strong><span style="color: #222222; line-height: 0.19in;"><br />While Savage pressed for an increase in credit, therefore, he made it clear that, in his opinion, an increased supply of money on its own was insufficient; </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">the use to which that money was put was all important.</span></span></strong><span style="color: #222222; line-height: 0.19in;"> Savage believed that ‘ the careful use of public credit through the existing banking machinery for the purpose of national construction was paramount. what is wrong with the monetary system,’ he argued, ‘is that there is……<br />Pg 148….insufficient money finding its way into the pockets of the mass of the people,</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">because I believe definitely that so long as private individuals control finance they control everything else. Banking has become an integral part of industry, and the bankers govern the situation, and whatever steps may be taken by Parliament to relieve or assist industry may be nullified by refusal of credit by those controlling it.’</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br />Savage concluded, reflecting the influence of Fisher and Soddy rather than Douglas, </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">‘I do not know that there is much wrong with the present banking system except the control of it. That is what matters in the finish.’ </span></span></strong><span style="color: #222222; line-height: 0.19in;">Only when the state, not private banks, control the money supply could it be expanded when necessary and directed into productive not speculative areas of the economy. Only then, Savage believed, could there be stable, sustained sensible growth in the economy. ‘Parliament can, and should, be the master in financial affairs,’ asserted Savage, and by Parliament he meant the whole of Parliament, not ministers using regulations that led to ‘comparative autocratic Government’ or commissions and boards not directly responsible to the voters.</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Savage believed that credit creation, which would supplement not replace taxation and loans, would be non-inflationary only if ‘carefully applied to reconstruction purposes’ and used ‘wisely and economically.’ Over dependence on or excessive use of any single method of funding government expenditure – excessive taxation, excessive borrowing, excessive credit and currency creation – were all equally objectionable and as dangerous in Savages view as an insufficient supply of purchasing power.</span></span></strong><span style="color: #222222; line-height: 0.19in;">‘Artificially created credit must be guarded against’, especially, because it was no ‘remedy for a condition which is often due rather to insufficient collateral security, a fall in prices, or unsatisfactory farming.’</span><span style="color: #222222; line-height: 0.19in;"><i><br /><br />So there we have Savage in disagreement with Douglas. It must be said it would appear a rather confused and contradictory Michael Joseph Savage at times. Perhaps that is why the </i></span><strong style="line-height: 0.19in;"><span style="color: #222222;"><i><span style="font-weight: normal;">next excerpt from the book – Simple On A Soap Box – by John A Lee 1963</span></i></span></strong><span style="color: #222222; line-height: 0.19in;"><i> proves that he differs and disagrees with both Savage and Douglas as to how public credit should be issued. It must be noted that Barry Gustafson implied John A Lee totally agreed with C H Douglas Social Credit when from his own writings below it is clear he did not;</i></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222; line-height: 0.19in;"><br />Pg 133 – </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">As the 1928-35 economic crisis receded the electorate remained pronouncedly conscious of monetary theory, of rates of interest and of development by State credit rather than by recourse to higher borrowing rates. The British Labour movement had the same lively awareness. G. D. H. Cole, Arthur Henderson and many other socialists who rejected the Douglas Credit mythology had become genuine social creditors. I distinguish between social credit and mystical Douglas Social Credit. </span></span></strong><span style="color: #222222; line-height: 0.19in;">The clamour for more intelligent use by the State of its own resources and for lower interest rates continued across the world, in the wake of the depression, until it was submerged in the clamour of the Second World War.<br />Our caucus resolution not only ordered exchange control but also that there should be no increase in the interest rate without the consent of caucus. But we did not trust the Old Man or Nash. Labour movements the world over had not recovered from Ramsay MacDonald’s and Philip Snowden’s determination to place the gold value of the pound above a life-time’s loyalty to Labour (even though the gold standard was abandoned a week later). </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">During the election the Old Man at his vast evangelic meetings had made emotional affirmations, between the cheers, of his determination to use the “internal credit of the people” for public works, indeed for “loan-free public works”, and had repeated assurances that Labour intended to reduce interest rates for public development.</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br />But from the moment the M.P.s returned to their homes inspired news paragraphs started to suggest a return to orthodoxy to deal with our exchange crisis, a greater rate of interest to attract funk deposits, and maybe a lesser use of credit in New Zealand, a policy which contradicted everything Labour had…..<br />Pg 134……..said about money since 1928. All this was easy for Walter Nash to swallow, but not for the rest of us. We knew that, sentimentally, the Old Man was with us, that he always talked our way, but we knew that in fact he would defend whatever brief Walter Nash put into his mouth. Any suggestion of a credit squeeze was abhorent to us.<br />Pg 53 – During a budget debate in the depth of the depression Savage, Nash, Parry and McCombs had tabled a resolution in caucus. They wanted the Labour Opposition in Parliament to move that a certain sum of money be borrowed on the security of the unemployment fund and used to alleviate distress. The time had arrived for a challenge. I became very active and lobbied every Labour M.P. I ensured a big caucus attendance.</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">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.</span></span></strong><span style="color: #222222; line-height: 0.19in;"> </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">We could see no reason at that 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 rights of issue for their own bank. The goods existed, why not create credits?</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br />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 was adjourned four times. I think every member insisted on speaking. At the third meeting Harry Holland, then Leader of the Party, espoused our cause. I saw M.P.s taking their coats off to one another 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 M.P.s voted for credit issue including Harry Holland himself. We moved accordingly in Parliament.<br />Out of that debate had come a new finance policy in which, I am convinced , Nash never believed. </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">In 1935 the Labour Party affirmed that the Government should have sole right over the issue and control of new credit. </span></span></strong><span style="color: #222222; line-height: 0.19in;">But in the meantime Holland had died. Savage, the oldest surviving private and deputy, had become Labour Leader and was on the road to the Prime Ministership. He never forgave me the humiliating defeat I had organised. Prior to that caucus Savage used to tell everyone, both publically and privately, that I would be one of the first chosen in a Labour Cabinet. After the defeat I knew that only a caucus vote would compel Savage to accept me. He became unfriendly from that day on.<br />Pg 58 – Factory production had become unprofitable. I wanted to see money issued for essential works until production flowed once more. I did not want to take over factories. I did want us to take over banking and the issue of credit. I did want us to use our credit to finance work so long as unemployment existed. </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">I objected to New Zealand being made bankrupt because prices had fallen overseas.</span></span></strong><span style="color: #222222; line-height: 0.19in;"> We should maintain our own price level and with it solvency. This attitude to price was indeed the genisis to our guaranteed price scheme. Twenty other voices in caucus urged the same thing I did.<br />But alone, perhaps, I sensed that if we issued internal credits and did not establish exchange control and import selection our credits would create demand for imports in excess of our London funds and create a financial crisis which would bring the Labour Government to its knees when it set out to renew London loans. To me exchange control and import selections, so that we could control the flow of credits and imports and maintan a reserve, was absolutely essential to socialist financial policy.<br />Pg 68 – I am sure that much of Labour’s success is a consequence of good or bad times. Labour was good for business after Nationalist bad business. </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">The average Labour MP did want to restore purchasing power to the masses and that was in itself a fruitful idea. But there were no ideas as to how to change or gradually transform the economic system so that increased production could spell expanding incomes and greater leisure and fewer depressions by breaking the cursed cycle of capitalist inflation-deflation. For half a century Labour in Britain, Australia, and New Zealand had talked of socialising ‘the system’ but when the moment came for modest doses of the socialism for which the electorate had granted a mandate Labour either did not know or where there was knowledge, did not have the courage to make changes.</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br />Pg 77 – A few days later the PrimeMinister sent for me again. Nash had come up with a proposition. “</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">We will make you the Under-Secretary in charge of housing. </span></span></strong><span style="color: #222222; line-height: 0.19in;">You will handle housing business as though you were a Minister. You will present housing to Cabinet, you will deal with housing business in Parliament. Walter will be your Minister, but he will be going to England by the time you get started and it will be up to you. We will introduce legislation the moment Parliament settles down. No one will get in your way.”<br />“</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Will money be available from the Reserve Bank?” I asked.</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br />This was a contensious Party issue. With tens of thousands of men on relief work the Labour Party, Nash and Fraser apart, believed that the funds of the Reserve Bank should be used for essential capital works until available men, machinery and materials were being fully employed. We wanted to undo the politically enforced Banker’s deflation. Nash wanted to stabalize deflation. We did not want to create money when men, materials and machinery were being fully engaged; at that point we believed the cost of works should be met out of revenue. But we were not prepared to create debt as long as goods, machinery and men were idle. That was the moment to use public credit.<br />“</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Money will be made available from the Reserve Bank.” The Prime Minister made the promise.</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br />Pg 90 – Although the power to underwrite and arrange fresh borrowings has been availed of rather than the power to make new issues, except where the issue is an overdraft, such as has been arranged for the dairy industry account, one definite issue has been arranged for. The Government has instructed the Reserve Bank to make five million pounds worth of credit available for housing purposes. These funds will be drawn upon by the Housing Account of the State Advances Corporation. </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">All the funds so advanced will be used to create new assets in the form of houses and a straight out issue of money for the creation of such assets was considered justifiable. </span></span></strong><span style="color: #222222; line-height: 0.19in;">The instruction to the Reserve Bank, according to the Hon. Mr. Nash’s statement to Parliament, specifically prohibits the Reserve Bank from negotiating the sale of any portion of this issue, so that the whole issue is to be new money upon which the interest earned will belong in its entirety to the State. And the houses, of course, will belong to the State.<br />Pg 91 – </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">In the halfway house of socialism-capitalism the evils of both systems are likely to afflict us if we are not careful. Labour must stimulate the production of such quantities of goods as are necessary to New Zealand’s welfare at an even higher standard. Capitalism cares only that the transaction yeilds a cash profit. To use a money machine to only create capital works and leave consumption goods to private finance is dangerous. Hence at some stage Labour must give effest to the Prime Ministers intention of making credit available to secondary industry. Production that may not be profitable at the overdraft rates of the trading banks may be so socially desirable as to necessitate freeing it from the profit system so that quantities can flow to the extent required by the nation.</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br /></span><span style="color: #222222;"><i><span style="line-height: 0.19in;">(Incredulously John A Lee who had contributed so much to the Labour Party and kept them on track to keep their promise of needed fair-minded financial system reforms would go on to be thrown out of the party by union leaders who became all powerful due to </span><span style="line-height: 18.2399997711182px;">acquiring</span><span style="line-height: 0.19in;"> the </span><span style="line-height: 18.2399997711182px;">compulsory</span><span style="line-height: 0.19in;"> union block vote at Labour Party conferences and who Lee had criticised for gaining so much for contributing so little);</span></i></span><span style="color: #222222; line-height: 0.19in;"><br />Pg 178 – Preparations were being made for the 1940 Conference; branches were appointing delegates in record numbers. I could count my friends by the hundred. Branches were three to one behind me (apart from areas where Catholic Action groups had intervened because of the rumour that I opposed the Old Man’s conversion). They sent me unsolicited promises of support.Dr. McMillan thought my article a good one and printed 1,000 copies of Pychopathology in Politics which he intended to distribute to Conference.<br />Some members of the National Executive, behind my back, grew active. Up till then there had been no card vote in the Labour party of the type that existed in Britain. Unions were allowed at Conference a number of votes proportionate to their membership. To this end their leading delegates were provided, at the opening of Conference, with a card showing the number of votes each could poll on behalf of his union. But full voting power could only be exercised if all the union’s branches were represented at Conference by delegates. Now a move was started to allow union presidents and secretaries to poll the full vote of a federation without such representation and without evidence that its members had been consulted.<br />James Roberts and David Wilson brought forward a proposal to allow the full card vote in such circumstances. The Party’s constitution clearly provided that alterations to the constitution had to be notified to branches by prior remit. </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Roberts and Wilson proposed to amend the rules by providing for the card vote in the Executive Report with which Conference opened. Endorsement of the Report would automatically amount to acceptance of the new provision. This was clearly a means of amending the constitution never contemplated. I knew that the jury was being…..</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br /></span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Pg 179 ……..loaded against me before Conference, but I was powerless. A member of the Labour party cannot apply to a Supreme Court for an injunction to prevent an illegal alteration of the rules, even when he knows the change is being made in order to hang him.</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br />“They altered the rules regarding the composition of the jury after your trial was started,” a judge of the Supreme Court was to say to me later.As Conference drew near, so did Savage’s death while the Standard still assured Party members that he was in full charge of business. The daily press, however, was beginning to suggest that the Prime Minister’s condition was critical. Some of my following began to desert me. One member had written telling me he thought Pychopathology in Politics was one of the best things I had done and hoping that I would not “run away from its truth”. He went to earth as fast as political heels would carry him. It had taken him a lifetime to become an M.P., so who am I to judge him ?Nor did he ever raise his voice publicly afterwards, although he sent me many private and friendly communications. I do not blame him. The card-vote magnates were to be powerful in possession of tens of thousands of unconsulted votes of their members many of them conscripted into their unions by the compulsory legislation.</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Intransigent as ever, Dr. McMillan wired from Dunedin that he had been informed that the Prime Minister’s life could only last a matter of days or even hours, and that an attempt would be made to end my political life.As Savage showed signs of dying before conference ended, Fraser made up his mind that I had to be expelled before Savage died.</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br />Expulsion from the Labour Party is much like excommunication from the Communist Party or the Mediaeval church. The world is invited to spit upon the sinner. He has passed beyond the portals of decent treatment.</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Pg 162 – My reason for telling the truth about the Old Man was not any wish to be a hero. I have never wanted to be one. Whenever I have heard young children recite: </span></span></strong><span style="color: #222222; line-height: 0.19in;"><br /></span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">“ For how can men die better than facing fearful foes,” I have always mentally interjected, “ In bed, of old age, at peace.” I remember the day I won my D.C.M. At Messines. The line was held up, men went to earth. I jumped up. It was the only thing to do. No doubt an odd one had jumped up before me and had fallen with a gut full of machine-gun bullets. I jumped up because forward was the only way. As I jumped up to run I heard a voice, despite the thunder of the guns, say, “There goes a fellow for the V.C.” an observation that had not the slightest bearing on my conduct. I would not have risked a finger for twenty V.C.s. What I did was merely commonsense.</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br />Pg 275 – If capitalists are still afraid of Labour as a conspiracy to overturn the profit system let them sleep in peace! The trade union magnates plan big unions and want power within their organisations. They do not inspire the Labour Party to action. They are only hangers on. They have rich appetites, they are more like the cartoonist Edgar Dysons fat man than the capitalists themselves. The idea that they are capable of a revolutionary conspiracy is unbelievably funny. Union secretaries are the new conservative class; they hate agitation. They love unions so big that the controllers are beyond reach of the rank and file, safe from criticism.</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Pg 276 – Is Labour a conspiracy? Labour these days accepts the existing system. The only case that Labour puts forward is about how tax proceeds shall be shared. The present important task of Labour, and I am not belittling it, is to humanise the capitalist system, not to socialise or control it. Most of the M.Ps these days know nothing of capitalism or socialism. They have never read a tract on the capitalist crisis. Their loyalty is not to an idea, but to machine, to a job as an M.P. </span></span></strong></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222; line-height: 0.19in;"><br /></span><span style="color: #222222;"><i><span style="line-height: 0.19in;">So as the current New Zealand Independent Labour Party head down the path to become the </span><span style="line-height: 18.2399997711182px;">impostors</span><span style="line-height: 0.19in;"> they are at present - who would not currently seem to have a clue of their long lost founding ideals that are even more needed today than ever for the very same reasons. To the point that Private Public Partnerships as a means of finding money to build public infrastructure sits officially in the economic policy section of its 2008 election manifesto.</span><br /><span style="line-height: 0.19in;">At the point it had become clear that Labour had abandoned its Public Credit credentials it appears that both Public Creditor's and C H Douglas Social Creditor's gravitated to the only remaining option - the Social Credit Party. They had some great success before the advent of Mixed Member Proportional(MMP) voting system. Polling 21% of the vote in the 1981 election but only winning two seats in Parliament - a major reason MMP came about by national referendum vote.</span><br /><span style="line-height: 0.19in;">In my studies of the monetary - banking and credit systems - before I knew of the New Zealand Labour Party’s history of Public Credit I stumbled across the modern spin off of the original Social Credit Party - now the Democrats for Social Credit(DSC). Before knowing what I now know I stood for DSC as a candidate for Taranaki King-Country in the 2008 election. An experience I don’t regret as I thought they were the only credit reform option in the nation at the time with any history and infrastructure - and I met some of the most decent civic minded tireless people you would ever wish to have in your trench.</span><br /><span style="line-height: 0.19in;">The sad thing is knowing what I now do of the wider history of credit reform in New Zealand I am amazed that Social Credit did as well as they did over the years given the factional rift in the party over just what form that credit reform should take - that of Labourite Public Credit basis or that of C H Douglas Social Credit including a National Dividend Payment without a work test. Also disagreement over the practicality of a Financial Transaction Tax(FTT) The Party in my personal opinion is stalemated to the point of probably never again gaining traction.</span><br /><span style="line-height: 0.19in;">In my personal opinion I now deem Public Credit as far more viable an option over that of fundamental C H Douglas Social Credit. At the risk of offending those I never wish to - but know it must I feel that the clinging to the fundamentalist ideas of C H Douglas have made the Social Credit Movement easily ridiculed by co-operatives of predatory foreign lenders. I also believe that Productive Public Credit if implemented alleviates the need for FTT - thus could put the debate to rest. I feel this allowed the likes of Bob Jones to easily dent DSCs popularity so much so that it contributed to the Party voting to change its name to the Democrats in 1985.</span><br /><span style="line-height: 0.19in;">All credit reformers know the importance of having your own national bank with its own clearing house software for transfer - payment and settlement to deliver your own public credit money through. The Democrats must be congratulated for their part in the formation of KiwiBank in 2001 when they were part of the Alliance Party in coalition Government with Labour in 1999. The Alliance Party broke up toward the end of the term. The Democrats renamed themselves the the New Zealand Democratic Party for Social Credit or Democrats for Social Credit in short.</span><br /><span style="line-height: 0.19in;">New Zealand - 2014 - is facing its darkest hours at the hands of the Anglo-Saxon heritage private central banking network and their subsidiary multinational corporations and knowing what I do now of the history of credit reform in New Zealand I feel the best hope of success of ever having any success in the urgent time frame needed is for every credit reformer with a knowledge of monetary - banking and credit systems - in the interest of credibility - drop the pursuit fundamental C H Douglas Social Credit in its entirety and hammer home to the grassroots of Labour in a concerted campaign the founding ideals of the Labour Party that are even more needed today than ever for the very same reasons.</span><br /><br /><span style="line-height: 0.19in;">Below details Michael Joseph Savage explaining John A Lee’s State Housing Scheme funded by Productive Public Credit - the National Opposition Leaders remarks after it was done and Labour's financial spokesman Walter Nash’s comment twenty seven years to late - should assist anyone wondering just how to articulate such an incomprehensible proposition for someone with no financial system knowledge whatsoever in order they might be able to understand it;</span></i></span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222; line-height: 0.19in;"><i><br /></i></span><span style="color: #222222; line-height: 0.19in;"><b>Man to Man by Tom Skinner 1981 – Michael Savage explained the State housing scheme to Tom Skinner of the (New Zealand) Federation of Labour as such;</b></span><span style="color: #222222; line-height: 0.19in;"><i><br /></i></span><span style="color: #222222; line-height: 0.19in;">Pg 45 – “I was with Joe on one occasion when he began chatting about the ramifications of the </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">Governments State Housing Scheme. </span></span></strong><span style="color: #222222; line-height: 0.19in;">He told me … how the construction of those houses created assets in a productive way. </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">The Government created the money through the Reserve Bank </span></span></strong><span style="color: #222222; line-height: 0.19in;">at a moderate rate of interest to cover the contract price, which paid for materials, tradesmen’s wages, the purchase and development of the land and all the other essentials required to finish the house. On completion the house was transferred from the Housing Division of the public works department to the State Advances Corporation – in effect from one department to another. The corporation was the renting agency responsible for selecting the tenants, collecting rents and maintaining the house and the property. </span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">The philosophy was that as the money was created for productive purposes no loss could occur if it were not repaid from one department to another. </span></span></strong><span style="color: #222222; line-height: 0.19in;">Meanwhile, during construction, tradesmen had been paid wages which had been spent and absorbed into the economy. But it was solid money backed by the creation of assets. People had been kept fully employed while the government built homes for the people.</span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222; line-height: 0.19in;"><br /><b>Tom Skinner;</b><br />“</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">While Joe spoke I began suddenly to grasp the Labour philosophy related to the creation of credit. It set me off thinking about money and what it meant to the economy. The Government, figuratively speaking, could rub a state house debt out of the books because a building stood in its place. But money created by the banks in order to gain profits in the form of interest was the other side of the coin. It was unproductive, inflationary creation of money if unmatched by equivalent goods and services…..”</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br />“</span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;">I have read and believe that monetary mismanagement is the greatest evil of our time. It breeds injustice, increased costs and, as the root cause of inflation, it diminishes the value of our money. Governments should carry out their pre-election promises and take the necessary steps to reform the monetary system. It can be done only by making the State the sole authority for the issue of currency and credit….. unfortunately, in this area politicians seem to be abysmally ignorant of elementary financial and economic truths.”</span></span></strong><span style="color: #222222; line-height: 0.19in;"><br /></span><strong style="line-height: 0.19in;"><span style="color: #222222;"><span style="font-weight: normal;"><br /></span></span></strong><span style="color: #222222; line-height: 0.19in;"><b>From The Cradle To The Grave – A biography of Michael Joseph Savage (First New Zealand Labour Party Prime Minister 1935-1940) by Barry Gustafson 1986;</b></span><span style="color: #222222; line-height: 0.19in;"><br />Pg 198-9<br />The National Opposition (1936) was astonished by the use of Reserve Bank credit for housing, which disregarded traditional principles of budget finance. Forbes (George Forbes ex Prime Minister 1930-5 Great Depression era) admitted confidentially to Stewart (William Downie Stewart Jnr – Finance Advisor);<br />“</span><span style="color: #222222;"><span style="line-height: 0.19in;">This places them in a unique position, the houses after erection carry <b>no interest on capital cost,</b> and for instance a thousand pound house can be let for 5s per week and be a financial success. The </span><span style="line-height: 18.2399997711182px;">millennium</span><span style="line-height: 0.19in;"> seems to have arrived and it makes one wonder why we had to struggle in the bog, when there was such an easy way out of our troubles, houses, after being built with the highest paid workers in the world, at the lowest cost heard of, makes our policy of orthodox finance seem almost prehistoric.”</span></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><b><br />In July 1962 the leader of the Labour Party, the Rt. Hon. W. Nash, made a lengthy statement in which he said;</b><br />“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 Reserve Bank Credit, within the limits set out is not only justified, but has already contributed much towards the Nation’s economic well-being.”<br /><b>Thus, 27 years too late, Nash accepted the policy on which Labour was elected in 1935.</b></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /><i>Surely now the onion is beginning to peel to such an extent that even the slightly financially literate can now see - as opposed to sense - that something is just not adding up!</i></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><b>The exchange between New Zealand Prime Minister John Key and Leader of the Opposition Phil Goff earlier this week (November 9 2010) regarding the NZ dollar was very enlightening:</b></span><span style="color: #222222;"><br />Labour leader Phil Goff earlier reiterated his party’s proposals on monetary policy, saying it should not just be reliant on the current objectives and the current tools.<br />“Clearly the [NZ] dollar is at such a high level that it’s helping to destroy the manufacturing industry in this country at the moment,” Goff said.</span><strong><span style="color: #222222;"><span style="font-weight: normal;">“We have to take that seriously and I would expect the government, with its army of bureaucrats, to have some answers, so far we've seen none,” he said.</span></span></strong></span></div>
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<strong><span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Key later retorted that Goff was talking about the same 'army of bureaucrats' that worked for Labour when it was in power.</span></span></strong></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><i><span style="line-height: 0.19in;"><br /></span></i></span></span><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><i><span style="line-height: 0.19in;">The above is very insightful in openly disclosing that the monetary and economic advisory bureaucrats overlap governments. Infact many have been behind the scenes for several decades. Research back even further you will discover that unto 1951 New Zealand had an upper house referred to as the Legislative Council. For most of its existence it was the conduit of the London Colonial Office made up in the main of members of the financial sector including the private owners of the patriotically named Bank of New Zealand – Thomas Russell and Frederick Whitaker who were involved in many well documented legislative abuses and Maori land grabs to line their own pockets that all of society are struggling to fix unto this day.</span><br /><span style="line-height: 0.19in;"><br /></span></i></span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><i><span style="line-height: 0.19in;">After New Zealand had suffered the indignity of two </span><span style="line-height: 18.2399997711182px;">receivership's</span><span style="line-height: 0.19in;"> at the hands of our foreign bankers in 1961 and 1984 Rob Muldoon who was very aware of the historical predatory actions of the banking elite included the </span></i></span><strong style="line-height: 0.19in;"><span style="color: #222222;"><i><span style="font-weight: normal;">below excerpt on </span>page 34 of – The New Zealand Economy, A Personal view, by Rob Muldoon 1985 </i></span></strong><span style="color: #222222;"><i><span style="line-height: 0.19in;">– which was very much an account of his attempts to prevent what </span><span style="line-height: 18.2399997711182px;">occurred</span><span style="line-height: 0.19in;"> then and is again </span><span style="line-height: 18.2399997711182px;">occurring</span><span style="line-height: 0.19in;"> now. If anything Rob Muldoon was guilty of the most I would suggest it was underestimating the depth and breadth of their global influence:</span></i></span><span style="color: #222222; line-height: 0.19in;"><b><br /></b></span><span style="color: #222222; line-height: 0.19in;"><br />“</span><span style="color: #222222; line-height: 0.19in;">We announced that we would be joining the International Monetary Fund and the WorldBank and a principal reason was that it would give us access to drawing rights. <b>Although this had not been in our election policy, we carried out our policy by appointing various advisory bodies in the economic field, </b></span><strong style="line-height: 0.19in;"><span style="color: #222222;">the principal one being the Monetary and Economic Council, a three member council with supporting staff which had the task of advising the Government on matters of economic policy,<span style="font-weight: normal;"> but most importantly, the right to publish its advice, in various forms, with various amendments to its composition and order of reference, the Monetary and Economic Council and its successors have continued up until the present time.”</span></span></strong></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><i>My question for any public representative that has shown the respect of my efforts to read the above is;<br /><br />“If you continue to support the status quo of New Zealand's entirely interest bearing private, mainly foreign originated, loan based money system, can you please give me your explanation of how under the current terms and conditions that growth can exceed the debt you are forced to take on to attempt to achieve the growth.?”</i></span></span></div>
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<span style="color: #222222;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><i>If you cant? Can you please use the time, money and resources the citizens and busineses of legitimate enterprise provide for you to protect them from financial free raiders!</i></span></span></div>
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<span style="background-color: white; color: #222222; font-family: "arial" , "helvetica" , sans-serif; line-height: 18.4799995422363px;"><b>On the record official documented impact of global private banking pyramid fraud upon New Zealand.</b></span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><br />Presently New Zealand's domestic banking network solicits loans and then refinances with foreign private central bankers at a lower rate of interest to cut a profit margin. How those foreign private central bankers fund themselves - who those foreign private central bankers are - and just how much they have gained from what is clearly a systemic pyramid scam is not that hard to find if you bother to look – but quite some effort has been made in New Zealand legislation to keep quiet the internal dynamics of it – as evidenced below;</span><strong><span style="color: #222222;"><span style="font-weight: normal;">First of all - the Bank of England is one of the senior most international financial institutions recently made this amazing - amazing historical admission in its March 2014 quarterly bulletin that what they tell government officials about how the private central banking network funds itself has been a lie;</span></span></strong><strong><a href="http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf" style="color: #888888; text-decoration: none;" target="_blank"><span style="font-weight: normal;">http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf</span></a></strong></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong>• </strong><strong><span style="color: black;"><span style="font-weight: normal;">This article explains how the majority of money in the modern economy is created by commercial banks making loans.</span></span></strong></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong>• </strong><strong><span style="color: black;"><span style="font-weight: normal;">Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits.</span></span></strong></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><strong><span style="color: #222222;">• </span></strong><strong><span style="color: #222222;"><span style="font-weight: normal;">Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits.</span></span></strong><span style="color: #222222;"><br /></span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;">Pg 2</span></span><br />
<b style="color: #222222; font-family: Arial, Helvetica, sans-serif;">Two misconceptions about money creation</b><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;">The vast majority of money held by the public takes the form of bank deposits. But where the stock of bank deposits comes from is often misunderstood. One common misconception is that banks act simply as intermediaries, lending out the deposits that savers place with them.......Saving does not by itself increase the deposits or ‘funds available’ for banks to lend.<br />Indeed, viewing banks simply as intermediaries ignores the fact that, in reality in the modern economy, commercial banks are the creators of deposit money. This article explains how, rather than banks lending out deposits that are placed with them, the act of lending creates deposits — the reverse of the sequence typically described in textbooks.(3)<br />Another common misconception is that the central bank determines the quantity of loans and deposits in the economy by controlling the quantity of central bank money — the so-called ‘money multiplier’.......In reality, neither are reserves a binding constraint on lending, nor does the central bank fix the amount of reserves that are available. As with the relationship between deposits and loans, the relationship between reserves and loans typically operates in the reverse way to that described in some economics textbooks.<br />end</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;"><br /><b>New Zealand has had a chronic ongoing historical foreign borrowing balance of payment crisis since 1833;</b><br /><br />Official Bank of England Central Banking Handbook makes very clear New Zealand's place in the scheme; </span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><a href="http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q101.pdf" style="color: #888888; text-decoration: none;" target="_blank">http://www.bankofengland.co.uk/education/Documents/ccbs/handbooks/pdf/ccbshb06.pdf</a><span style="color: #222222;"><br />International And Local Level Lending Practice Secrecy<br />Centre For Central Banking Studies Bank of England<br />Primary Dealers In Government Securities Markets<br />Handbooks In Central Banking No6 1996<br />Pg 6-7<br />PRIMARY DEALERS IN GOVERNMENT<br />SECURITIES MARKETS<br /><b>1</b> <b>General</b><br />The basic objective of a government debt manager is to cover the government's borrowing needs as cheaply as possible....There are several ways of trying to achieve this but many OECD countries appoint a group of highly qualified financial firms to play a role as specialist intermediaries in the government securities markets between the authorities on the one hand and the market on the other. These are generally called primary dealers - as for example in. the United States - but they are sometimes referred to simply as market-makers. In the government securities market in the United Kingdom they are known as gilt-edged market-makers (or GEMMS - the term "gilt-edged" is used to describe government securities), while in France they are called specialists in Treasury securities (SVTs). In this Handbook the terms "primary dealer" and "market- maker" are used largely without distinction.<br />In return for a set of obligations, such as making continuous bid and offer prices in marketable government securities or submitting reasonable bids in the auctions, these firms receive a set of privileges in the market. The nature and content of these obligations and privileges varies greatly from country to country. In some cases there are firms which play the role of primary dealers without formal official recognition but nevertheless with a degree of official encouragement.<br /><br /><b>2</b> <b>International practice</b><br />Primary dealers have existed for some time, for example in Canada, France, Italy, Spain, the United Kingdom and the United States of America. These countries all use official recognition as an incentive: it is granted under specific conditions and the "licence" thus created is reviewed from time to time. Ireland has recently introduced this system as appropriate to the stage of development of its market.<br />By contrast, in Australia, Germany, Japan, Netherlands and New Zealand there are no formally designated primary dealers, although in these countries a group of firms do collaborate in the allocation and proper development of the market in an informal way.<br />end<br /><br /><b>Banking in New Zealand Fourth Edition - published by the New Zealand Bankers Association in 2006 -</b> makes it very clear that presently every dollar of currency circulating in New Zealand's money system originates as an interest bearing loan owed to a private owned lending institution and - that New Zealand's money system is presently administered by an international private central banking network - of which currently sits at the end of a wholesale credit discount interest supply chain - an accountancy system of credit weighed against available natural resources - as opposed to the re-lending of already existing pools of liquidity as often portrayed. </span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;">Chapter 4 - The Creation of Money and Credit - is especially enlightening;</span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><a href="http://www.johnpemberton.co.nz/Banking_in_NZ-06-final.pdf" style="color: #888888; text-decoration: none;" target="_blank">http://www.johnpemberton.co.nz/Banking_in_NZ-06-final.pdf</a><span style="color: #222222;"><br /><b>THE CREATION OF MONEY AND CREDIT<br />What Actually Happens</b></span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;">In reality, although the process outlined in the previous sections could occur, cash balances in bank vaults no longer act as a constraint on bank lending in the way that they might have up until the latter part of the 20th century.......<br />in such an environment, there is still scope for a bank to expand its lending and create credit, but it is dependent on there being net inflows of funds into the banking system as a whole. These inflows of funds may come from depositors from outside new Zealand (and we have seen significant inflows of funds from such sources in recent years), or from the government making net deposits of funds into the banking system (through its fiscal policy, as outlined below).<br />We also have a situation where, since 1985, new Zealand banks have not had any specific reserve requirements applied to their deposit liabilities. This means that, in theory, banks could keep on creating credit and expanding their loan portfolios indefinitely. in such an environment, it is the cost of credit, based upon the costs that banks have to pay to raise the deposits, that becomes the constraint on the quantity of credit that is created.<br />end<br /><br />The contracting out of central banking in New Zealand by its public money system administration authority - the Reserve Bank of New Zealand (RBNZ) - to the international private central banking network - represented in New Zealand by the New Zealand Debt Management Office (NZDMO) that operates under the umbrella of the New Zealand Treasury advisers - is acknowledged by New Zealand Treasury in official document here;</span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.nzdmo.govt.nz%2Fsecurities%2Ftendering%2Fpdfs%2Finfo-tendering-18feb08.pdf&h=aAQFgh3ox&s=1" style="color: #888888; text-decoration: none;" target="_blank">http://www.nzdmo.govt.nz/securities/tendering/pdfs/info-tendering-18feb08.pdf</a><span style="color: #222222;"><br />18 February 2008<br />GOVERNMENT SECURITIES TENDERING IMPORTANT CHANGES IN TENDERING OPERATIONS<br />The New Zealand Debt Management Office (NZDMO) will be assuming responsibility for the tendering of New Zealand Government Bonds and Treasury Bills from the Reserve Bank of New Zealand (RBNZ). The transfer will be a staged process that will take place over the next two months. This follows many years of the RBNZ acting as an agent for the NZDMO.<br />end</span><span style="color: #222222;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial;">In New Zealand the Minister of Finance has the power to borrow on behalf of the government. The day-to-day operations arising from this authority have been delegated to the New Zealand Debt Management Office (NZDMO), a unit of the Treasury since 1988.</span></span><span style="color: #222222;"><br /></span><a href="http://publiccreditorbust.blogspot.co.nz/2013/03/an-insight-into-new-zealand-debt.html" style="color: #888888; text-decoration: none;" target="_blank">Insight into New Zealand Debt Management Office (NZDMO)</a><span style="color: #222222;"><br /><br />Many politicians in New Zealand are one or two social issue lobbyists that are completely financial system illiterate and very dependent upon second hand advice - so the concerns for the nation are obvious when that advice is coming from people educated from textbooks that have now been admitted at the very highest level of financial academia too have been in many cases been completely misleading in regards to the internal dynamics of the role of credit and currency within a money system.</span></span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;">The identity of the foreign Wholesale Credit Providers that supply our entire currency in circulation as interest bearing loans for all production and consumption - thus making our national debt as a whole mathematically unrepayable and natural abundance will never be able to head off the compounding interest hurdle as they tell us it will - is kept secret by this parliamentary legislation meaning you will not even be told when asking under the Official Information Act here;</span></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.legislation.govt.nz%2Fregulation%2Fpublic%2F2009%2F0224%2Flatest%2FDLM2303519.html&h=hAQHA-udn&s=1" style="color: #888888; text-decoration: none;" target="_blank">http://www.legislation.govt.nz/regulation/public/2009/0224/latest/DLM2303519.html</a><span style="color: #222222;"><br />Statement of reasons<br />This notice, which comes into force on the day after the date of its notification in the Gazette, amends the Securities Act (Crown Wholesale Debt Securities) Exemption Notice 2004 (the principal notice) to extend the expiry date of the principal notice from 31 August 2009 to 31 August 2014. The principal notice exempts the Crown, and certain other offerors of specified debt securities, from regulation 7A(1) and clause 5(1)(b) of Schedule 3D of the Securities Regulations 1983. These provisions relate to the content of investment statements.<br />The Securities Commission considers it appropriate that the principal notice be renewed because the reasons justifying the original exemptions remain valid. They are as follows:<br />where Part 2 of the Securities Act 1978 applies to an offer of previously allotted securities to the public, both the person offering the securities and the original allotter of the securities have a responsibility for the offer as issuers. In this case, the more relevant information for disclosure to investors is about the Crown. Information about the wholesale investors (being the persons offering the securities) as issuers may not be useful to the retail investors and may also be confusing. The conditions of the exemption from regulation 7A(1) of the Securities Regulations 1983 require potential investors to be advised that the offerors remain legally responsible as issuers:<br />the investment statements for the offers of debt securities to the public made by the wholesale investors are prepared by the Crown. The exemptions in the principal notice recognise that certain information relating to the wholesale investors is not available to the Crown at the time the investment statement is prepared. The exemptions enable information to be given to investors in a form other than the investment statement, so long as it is given prior to subscription.<br />end</span></span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #222222;">The foreword to this </span><span style="color: #888888;"><a href="http://www.oag.govt.nz/2007/nzdmo/docs/oag-nzdmo.pdf" style="color: #888888; text-decoration: none;" target="_blank">2007 New Zealand Auditor-General report Effectiveness of the New Zealand Debt Management Office.</a> </span><span style="color: #222222;">makes very clear how dependent upon second hand advice the New Zealand public service are and - how susceptible to being mislead that they are;<br />Foreword<br />The New Zealand Debt Management Office (NZDMO) is a unit within the Treasury. It is responsible for the efficient management of the Crown’s debt and associated financial assets within an appropriate risk management framework. Its broader responsibilities include providing capital market advice and financial transaction services to other agencies of the Crown. NZDMO manages gross debt of about $40,000 million and financial assets of approximately $18,000 million.<br /><br />In carrying out a performance audit of NZDMO, my overall objective was to determine NZDMO’s level of performance, under the authority of the Minister of Finance, in managing the Crown’s public debt and financial asset portfolios.<br /><br />Given the specialist technical functions of NZDMO, I sought expert technical assistance with the audit. I appointed KPMG under section 33(1) of the Public Audit Act 2001 to carry out the performance audit on my behalf under section 16(1) of the Act.<br /><br />The material in my audit report is of a very technical nature because of the specialist functions undertaken by NZDMO. The non-technical reader can be assured that the audit did not identify any fundamental concerns with the performance of NZDMO.</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Please just type - KPMG fines - into a Google search – then read of the many cases of financial fraud that KPMG - and the often referred to 'big four' global accountancy houses - have been involved in when assisting financial institutions to commit pyramid frauds - then please consider how prudent it is to continue taking second hand auditing advice from them - upon financial system issues so crucial to the equal economic opportunity of our society?<br /><br />Anybody having taken the time to read this irrefutable on the record official document proof of - the crime of Fraudulent Conveyance of Predatory Lending of Counterfeit Credit - by the Anglo-Saxon Heritage Private Central Banking Network that we are suffering and - then chooses to remain silent on the most contributing factor of the ever growing external and internal inequities within our society - is undeniably committing an act of tyranny against wider society - plain and simple!<br />Any political party that can not articulate an evidence supported case for or against the foreign private authority over the nations accountancy of credit and issuance of currency - that includes the undeniable - admitted at the very highest levels from on the record official documents of how the current monetary system truly works - should remain unelectable!</span><br />
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Thank you for your time.</span></div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com6tag:blogger.com,1999:blog-5037330197467032848.post-54214782887405385532014-08-30T23:35:00.000-07:002015-04-28T01:33:18.476-07:00New Zealand already under TPPA International Committee for Settlement of Investment Disputes (ICSID) arbitration tribunal that operates under the umbrella of the Worldbank.<div style="background-color: white; color: #141823; font-family: Helvetica, Arial, 'lucida grande', tahoma, verdana, arial, sans-serif; font-size: 14px; line-height: 19.31999969482422px; margin-bottom: 6px;">
For my fellow citizens and businesses of honest enterprise being eaten alive by foreign financial ticket clipping middlemen, this is for you.</div>
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British colonial heritage old boys private central banking network have control of New Zealand under conditions of receivership via its International Monetary Fund (IMF) receivership branch backed up by its old boys Commercial Contract Law network legal branch known as the International Committee for Settlement of Investment Disputes (ICSID) that operates under the umbrella of the Worldbank.</div>
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The Worldbank and IMF are conduit institutions that can be traced back to the senior most institutions of the British colonial heritage old boys private central banking network that are owned by the family trusts of the worlds ultra-inter-generational-wealth-families.</div>
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The Worldbank gives out the predatory interest bearing loans of counterfeit credit in excess of the productive natural resource capacity of the target nation to ever be able to repay. Then when the mathematically inevitable bankruptcy receivership occurs, the IMF is put in charge of bankruptcy receivership, supposedly attempting to trade you out of your financial troubles.</div>
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But former Worldbank Vice President Joseph E. Stiglitz has stated that the IMF is the hospital that makes you sicker and quite clearly has ulterior motives than those that are publicly stated by it;<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fnewint.org%2Ffeatures%2F2004%2F03%2F01%2Fimf-failure%2F&h=JAQFwxLB3&enc=AZNe61rHl7d3V_tI1Cu9qz3dTSLKecR7Re8Bq2a-zq412U7GXhVNnzPVV_2tit_3a5qCm0LoyXI_xm9eS1T9wZzBLbWjH_SEyFEivZN0C_aUyCHrUd4PclWY2lW_ej_R3q-0Amwx0SAv6dwIuzAhrYKs&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://newint.org/features/2004/03/01/imf-failure/</a></div>
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Joseph E. Stiglitz - "I watched carefully what the IMF had done, the mistakes that it had made in crisis countries in East Asia, Latin America, Africa and the economies in transition. The mistakes were sufficiently frequent that they clearly weren’t just an accident – as an academic you look for patterns.</div>
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There were a couple of obvious explanations. One was that they were incompetent, stupid people. But that argument is just not persuasive – they pay among the highest wages, they get good people.<br />
You could say it was bad economic models. But there is an array of economic models out there and they chose to use ones that led to wrong predictions, wrong policies and really negative consequences.<br />
So why did they choose them? One is left with a possible answer that they had different objectives, that their objective in going into a country was not, for example, to keep employment as high as possible or to minimize poverty."</div>
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And then of course it all starts to make sense. You ask: ‘Who makes the decision, and on whose behalf do they make those decisions?’ You look at the decision-making structure – at the IMF the United States is the only country with a veto, other countries are represented by central bank governors and finance ministers. They were looking at the world with a particular perspective, a particular ideology that was in accord with their interests. And their interests were to make sure the creditors got paid. That took precedence over what would be good for the country.<br />
End quote</div>
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In New Zealand by 1961 the predatory lending of counterfeit credit from the British colonial heritage old boys private central banking network had run New Zealand into bankruptcy receivership. At which time it was put into the hands of there receivership branch the International Monetary Fund (IMF) under a Structural Adjustment Program that I would argue, as former WorldBank Vice President Joseph E. Stiglitz does, that they have since on purpose traded New Zealand even deeper into further bankruptcy receivership's and demanded that its essentials of life public assets be sold on the open market.</div>
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These procedures are enforced by international arbitration courts in which commercial contract law supersedes individual human rights common law.<br />
All governments of New Zealand have since officially denied the growing influence of the conduit institutions of the British colonial heritage old boys private central banking network over its economic model, as evidenced here;<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fpubliccreditorbust.blogspot.co.nz%2F2013%2F05%2Frob-muldoon-new-zealand-prime-minister.html&h=iAQEdLdK4&enc=AZOl_O0PjtwnT_l2KiRoxq1epnatH7eJf-teVi5nw47WdGKhvXGSYD16HxRyTt7V_dkewYMlsP6A8ec1WEH9nO1USnnjcXZAOD_WaST_xAXDGRrB3el_IAnzyQvIM1bgu60KI_ZTjp9HipkqJ3vMfvvl&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://publiccreditorbust.blogspot.co.nz/2013/05/rob-muldoon-new-zealand-prime-minister.html</a><br />
The New Zealand Economy, A Personal view, by Rob Muldoon 1985<br />
Page 33-34;<br />
page 52;<br />
The fact that even in good years we did not show an overall surplus on our external current account and had to borrow and even draw from the IMF was also of concern, so that we were forced to move to restrain not just consumption, but capital development as well.<br />
page 61;<br />
It was in 1967 that, as a result of the wool slump, we borrowed into the higher tranches by way of drawings from the International Monetary Fund and gave the fund a controversial letter of intent. The semantics of a letter of intent as debatable then as they are today when the Fund has some 40 such arrangements. When the left wing politicians and academics claimed that the Fund had laid down conditions before permitting us to draw in the higher tranches, I insisted, as did the Fund, that it was up to the Government of the member country to indicate the policies that it would pursue in order to restore balance to its economy, while the Fund made its decision on whether or not to agree to the drawings in light of the policies that were proposed.<br />
End quote</div>
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I Iain Parker sent this email to Minister of Finance Michael Cullen 4 September 2007 ;<br />
Regards Dr Cullen,<br />
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?<br />
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.?<br />
Yours sincerely<br />
Iain Parker</div>
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I received this reply from the Acting Minister of Finance Trevor Mallard 2 October 2007 ;<br />
Dear Iain Parker<br />
Thank you for your letter which was received on 5 September 2007 concerning an Official Information Act request. You requested:<br />
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?<br />
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.?</div>
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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.<br />
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.<br />
Once again, all relevant documents are publicly available at Archives New Zealand.<br />
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.<br />
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.<br />
This fully covers the information you requested.<br />
Yours sincerely<br />
Hon Trevor Mallard<br />
Acting Minister of Finance.</div>
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On the 5 October 2007 I sent this reply to Trevor Mallard;<br />
Regards Hon Trevor Mallard,<br />
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.<br />
Thank you<br />
Iain Parker</div>
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I then received on 10 October 2007 this reply from Michael Cullen;<br />
Dear Mr Parker<br />
I have received your email regarding the answer to your Official Information Act Request which was signed out by the Hon Trevor Mallard in my absence.<br />
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.<br />
In this case, the draft reply was prepared on my behalf by Andrew Turner, Head of Portfolio Management at the Treasury.<br />
Yours sincerely<br />
Hon Dr Michael Cullen<br />
Minister of Finance<br />
end quotes</div>
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This information below from the New Zealand parliamentary record makes it clear that the above rebutting of the growing control by the IMF over New Zealand economic affairs was misleading and makes very clear that IMF regulation now becomes automatic financial system law within New Zealand without having to pass through the New Zealand parliament to be debated or voted upon;<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fpubliccreditorbust.blogspot.co.nz%2F2014%2F08%2Fnew-zealand-international-finance.html&h=RAQHIktxZ&enc=AZPfZT-_gWSCZ6R8xSLPM_lpsTeuWaqdbeODIqh2wqTyEFbwApPhHDKmCtvUA0INTLm2E4D3fV2kwz5i_6-8Mgs1HDeP8n20UXXJSQwSI5V8UAPMgEFFOpfdDv96tu0P4x6C9qkD1IMd7rvqfPhXl6Si&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://publiccreditorbust.blogspot.co.nz/2014/08/new-zealand-international-finance.html</a><br />
New Zealand Minister of Finance the Hon BILL ENGLISH said in the debate;<br />
“I intend to move that the bill be referred to the Finance and Expenditure Committee. Our commitments to the IMF are effectively premiums to an insurance policy against damage to our economy from an unstable world....... New Zealand has already agreed to these changes, and adopting the International Finance Agreements Amendment Bill simply puts that agreement into practice......The bill also creates a regulation-making power in the principal Act so that further updates to the articles can be made by regulation. This power will simplify the process by which New Zealand meets its obligations. Once changes to the articles are agreed to by the requisite majority of members of the international financial institutions, New Zealand will be bound by the amendments, which means that we are required to bring our domestic legislation into line with our international obligations.”<br />
end</div>
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New Zealand opposition party finance spokesperson Hon DAVID PARKER (Labour) said in debate;<br />
“I rise to speak to this bill, the International Finance Agreements Amendment Bill, on behalf of the Labour Party. The Labour Party will be supporting this bill to the Finance and Expenditure Committee. The Labour Party supports the function of the International Monetary Fund and the International Bank for Reconstruction and Development, and broadly agrees with the Minister of Finance that these are good institutions that assist the conduct of international economic affairs in a way that benefits New Zealand as well as other countries......I think New Zealanders will have more confidence in our participation in these international fora if they think that Governments are being transparent about changes to those international agreements and the effect of those changes on New Zealand. There is already enough suspicion out there as to the effect of international agreements. We breed further suspicion if we are not open and transparent about changes to those rules......For those reasons, amongst others, the Labour Party opposes future changes to this legislation by way of the statutory regulation-making power that this amendment Act creates. We believe that future amendments ought to come back to this Parliament. If we look back in the history, it has not been an onerous task for New Zealand to amend this legislation through annual amendments or anything like that. It is relatively rare that we have amendments to this International Finance Agreements Act, which dates back to 1975. “<br />
end quotes</div>
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New Zealand Green Party Co-Leader - Russel Norman - having displayed a sense of growing environmental and social injustice - had “come out” - asking hard questions of the current money system orthodoxy after his 21 Feb 2013 International Finance Agreement Amendment Bill third reading - in which Russel Norman admitted to having only recently gained an understanding of just how New Zealand money supply originates and under what terms and conditions;<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fpubliccreditorbust.blogspot.co.nz%2F2014%2F08%2Fnew-zealand-international-finance.html&h=JAQFwxLB3&enc=AZNHl0-BtYCJInoNLoO-ZRuYm0PBPy33yesVHMletRf7tqCfUvgVZNtG7sNVbz_h4bDiNh2w5DfhH2XDymi1g6EtfBP-mhfXyXlK-Mr2DSlwNeKz5-lyrxYcR0BQ8AHDZ6zGq0Rsr0j_-Dl1sCuixDM1&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://publiccreditorbust.blogspot.co.nz/2014/08/new-zealand-international-finance.html</a><br />
"The other thing that comes out of, I think, the IMF that surprises a lot of people is when the IMF says things like most of the money that is generated is generated by the private banks. Most of us, I think—and I was certainly one of these people, until reading IMF papers—always assume that the Government created the money. That is just because I actually did not follow it closely enough, whereas the IMF is very clear that it is the private banks that create most of the money. What the IMF—or, at least, some of the researchers within the IMF—is now saying is that the Government should use its ability to create money, so that there is some publicly created money as well as the privately created money, most of which is created by the private banks.<br />
This, of course, is a pretty radical proposition, and the IMF, in putting forward this proposition, has certainly been shaking the policy debates around monetary policy all over the world, except in New Zealand, of course, where we are kind of locked into some weird backwater where the Government does not want to have a debate around any of this kind of stuff. But if you read the international literature, it is pretty good."<br />
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Russel Norman made clear his views again - and clearly had not yet buckled - in this 27 May 2013 article;<br />
"In the debate around monetary policy, it is often forgotten that the default position is that the private banks create most of the money and lead the increase in the monetary supply. They then charge interest to the users of the money that they have created......The debate should be: what constraints should apply to the private creation of money given the banks’ irresponsible behaviour in the past; and should the public institutions be expanding money supply as a policy tool, to what extent, and to what purpose? Should the state be allowed to also increase the money supply for public purposes such as refilling the Natural Disaster Fund and to see what effect it can have on reducing the very damaging high NZ dollar?<br />
The answers to these questions aren't black and white but for my pick I think we need to restrain the banks lending into the housing bubble and use a trial public creation of money to restock the Natural Disaster Fund – both to be prepared for future disasters and to see what impact it would have on the dollar.<br />
It is of course difficult to have a rational conversation around these issues in the current political context (ie Key’s scaremongering) but it is an important conversation for rational adults to have. We do have an out of control current account deficit and if we want to be masters of our own destiny we need to change policy settings as under Key’s plan our deficit and debt increase dramatically."<br />
end quote</div>
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This is like the pot calling the kettle black, but sadly George Soros would know better than most that nothing has changed since 2008. Maybe he is trying to distance himself from what he has been a big part of?<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.telegraph.co.uk%2Ffinance%2Ffinancialcrisis%2F10684896%2FGeorge-Soros-blasts-parasite-banks.html&h=EAQHF5gRl&enc=AZP_3mpFe_ih98GvpaQVV20kMc0aeDmHFBYDYx0K1hy5dS37me-0fPsXhpqsBRHFuiaaKjxKiY7kNuxkCUwM7DPnBrbRPOeGqUpTVWl-2Ehf0hZIrG25mlNjWnSCstu_WZ_hPvaWddzOJ2OuAAZwH2ts&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.telegraph.co.uk/finance/financialcrisis/10684896/George-Soros-blasts-parasite-banks.html</a><br />
George Soros, the billionaire investor, believes the banking sector is a “parasite” holding back the economic recovery and an “incestuous” relationship with regulators means little has been done to resolve the issues behind the 2008 crisis.<br />
“The banking sector is acting as a parasite on the real economy,” Mr Soros said in his new book “The Tragedy of the European Union”.<br />
“The profitability of the finance industry has been excessive. For a while 35pc of all corporate profits in the United Kingdom and the United States came from the financial sector. That’s absurd.”<br />
Mr Soros outlined how the problems that caused the Eurozone economic crisis remain largely unresolved.<br />
“Very little has been done to correct the excess leverage in the European banking system. The equity in the banks relative to their balance sheets is wafer thin, and that makes them very vulnerable.<br />
End quote</div>
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The Bank of International Settlements (BIS) is an organization akin to the Board of Directors representing the network of nations that have private owned and controlled money systems said in its 2014 annual report;</div>
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"The overall, somewhat gloomy message from the central bankers was that the world is drunk on easy money and has already forgotten the lessons of recent years.<br />
Instead of adding to productive capacity, large firms prefer to buy back shares or engage in mergers and acquisitions.<br />
The temptation to postpone adjustment can prove irresistible, especially when times are good and financial booms sprinkle the fairy dust of illusory riches.<br />
The consequence is a growth model that relies too much on debt, both private and public, and which over time sows the seeds of its own demise.”<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.nytimes.com%2F2014%2F06%2F30%2Fbusiness%2Finternational%2Fcentral-bankers-issue-strong-warning-on-asset-bubbles.html%3F_r%3D0&h=QAQE7Apl4&enc=AZNybNhJEOQuq5maP-jxLYk29kX74hzduVsz5kwcjD1j1QI1KKStO4Ucq2IdShqsRAbeZHk6q_56y3tIwme5s1MO7DdAOgqhYAIK-qVabDzdz2-TmsY6JhMzUccteIaRscV20jlopOXvaY6papbBXlY2&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.nytimes.com/2014/06/30/business/international/central-bankers-issue-strong-warning-on-asset-bubbles.html?_r=0</a></div>
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The 2014 BIS warnings are very similar to back in 2007 prior to the 2008 Global Credit Crisis here;<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.telegraph.co.uk%2Ffinance%2Feconomics%2F2811081%2FBIS-warns-of-Great-Depression-dangers-from-credit-spree.html&h=DAQFjjS8L&enc=AZNkEPXJYYZRp8wwzcwb1KHcstQ1tzD8x_Q894cZTYysAjOi4K37w_xxYOiczwLUS9ZzVnkTAfZEqT65WHW9a5oPzO6v18ToddKoAXSxxvmvTtsvRWyhiQdH9uqIQ1gitEt4WpZazKbIdr3wY7WBMItB&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.telegraph.co.uk/finance/economics/2811081/BIS-warns-of-Great-Depression-dangers-from-credit-spree.html</a></div>
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The Bank for International Settlements, the world's most prestigious financial body, has warned that years of loose monetary policy has fuelled a dangerous credit bubble, leaving the global economy more vulnerable to another 1930s-style slump than generally understood.<br />
"Virtually nobody foresaw the Great Depression of the 1930s, or the crises which affected Japan and southeast Asia in the early and late 1990s. In fact, each downturn was preceded by a period of non-inflationary growth exuberant enough to lead many commentators to suggest that a 'new era' had arrived", said the bank.<br />
The BIS, the ultimate bank of central bankers, pointed to a confluence a worrying signs, citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system.<br />
"Behind each set of concerns lurks the common factor of highly accommodating financial conditions. Tail events affecting the global economy might at some point have much higher costs than is commonly supposed," it said.<br />
End quote</div>
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I allege the warnings put out by the Bank of International Settlements in 2007 was a dog whistle for those out side of the insider British colonial heritage old boys private central banking families, that had helped those families set up another pyramid fraud scam, to now cash out their gains from financial markets because they were set to spring the trap.</div>
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The predatory trap being they had again authorised more credit than there existed the productive natural resource collateral means of repayment. That they had collected a fortune of purchasing power by way of interest repayments gained on the counterfeit credit. That they were now about to start calling in loans or increasing the interest charged on credit under the guise of stabalising the financial system. Thus causing a recession involving much bankruptcy receivership's in which they and those who assisted them would use their proceeds of crime purchasing power they had gained to buy up at quickfire sale prices the assets that borrowers had built with their blood-sweat and tears.</div>
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Now take a look at more of the warnings from the BIS recent 2014 annual report;<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.nytimes.com%2F2014%2F06%2F30%2Fbusiness%2Finternational%2Fcentral-bankers-issue-strong-warning-on-asset-bubbles.html%3F_r%3D0&h=YAQHQRQFf&enc=AZMywQ5Jbza7kcDGImNTedcaULI5-itbWOMylPo-crWIynxCoRHlzdvmoX65UgWhpNULelu21ucKY2H0P0pq3WfZJC33b_PAvpmPCGUn8mtkOKA2yYUnvYIduaJO3Rrm17JY5_c-9fcztLMsgNeyKfgl&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.nytimes.com/2014/06/30/business/international/central-bankers-issue-strong-warning-on-asset-bubbles.html?_r=0</a><br />
The Bank of International Settlements (BIS) provides financial services to national central banks and also acts as a setting where central bankers can discuss monetary policy and other issues like financial stability or bank regulation. The board of directors includes Janet L. Yellen, chairwoman of the Federal Reserve; Mario Draghi, president of the European Central Bank; and the heads of central banks from Japan, China, India and many other countries.</div>
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The organization, which reflects a widespread view among central bankers that they are bearing more than their share of the burden of fixing the global economy, often uses its annual reports to send a message to political leaders, commercial bankers and investors. But the B.I.S.’s language in the 2014 edition was unusually direct, as was its warning that the world could be hurtling toward a new crisis.</div>
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“There is a disappointing element of déjà vu in all this,” Claudio Borio, head of the monetary and economic department at the B.I.S., said in an interview ahead of Sunday’s release of the report.</div>
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He described the report “as a call to action.”</div>
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The organization said governments should do more to improve the performance of their economies, such as reducing restrictions on hiring and firing. The report also urged banks to raise more capital as a cushion against risk and to speed efforts to deal with past problems. Countries that are growing quickly, like some emerging markets, must be alert to the danger of overheating, the group said.</div>
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“The signs of financial imbalances are there,” Mr. Borio said. “That’s why we are emphasizing it is important to take further action while the time is still there.”</div>
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To understand how a New Zealand old boys network of lawyers are already busy on global arbitration panels confiscating the commonwealth essentials of life natural resources of nations on behalf of intra-national corporations that are party related to the British colonial heritage old boys private central banking network please read the details below of the New Zealand Arbitration (International Investment Disputes) Act 1979 and loss of economic sovereignty that has resulted.</div>
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<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.legislation.govt.nz%2Fact%2Fpublic%2F1979%2F0039%2Flatest%2Fwhole.html&h=8AQHRPXUF&enc=AZOXoo8jhqllfbmEKadt8HZcOXQpLjtBQ-q86HF9krSbg0hk3bMywoS8WKIUYBA_Y0Go8-1AxGL8D35y7XyYXUslhVqh7Hzb-qT5IrXu-lweuO6JZM_aAj1bQ9qKvpeYw8L66KujxvcjbBO90bPJ-lkh&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.legislation.govt.nz/act/public/1979/0039/latest/whole.html</a><br />
An Act to implement an international Convention on the settlement of investment disputes between States and nationals of other States<br />
1Short Title<br />
This Act may be cited as the Arbitration (International Investment Disputes) Act 1979.<br />
2 Interpretation<br />
In this Act, unless the context otherwise requires,—<br />
award means an award made pursuant to the Convention; and includes—<br />
(a)any decision made pursuant to the Convention that interprets, revises, or annuls an award; and<br />
(b)any decision as to costs that, pursuant to the Convention, is to form part of an award<br />
Centre means the International Centre for Settlement of Investment Disputes established pursuant to the Convention<br />
Convention means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States that was opened for signature in Washington on 18 March 1965, a copy of the English text of which is set out in the Schedule.<br />
3Act binds the Crown<br />
This Act binds the Crown.<br />
Section 3: substituted, on 15 November 2000, by section 3 of the Arbitration (International Investment Disputes) Amendment Act 2000 (2000 No 52).</div>
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The Trans-Pacific-Partnership-Trade-Agreement (TPPA ) being negotiated by governments behind closed doors in secret, put very simply in my opinion, is an attempt by the British colonial heritage private central banking network pyramid scammers to boost the power of intra-national commercial contract law institutions that they implemented post World War 2 at the 1945 Bretton Woods monetary system conference, in order to make it harder for nation states to take back what they have had stolen from them under false pretenses in repeated financial system pyramid frauds ever since.</div>
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The New Zealand government signed up to the International Committee for the Settlement of Investment Disputes - ICSID - in 1970 - ratifying in 1980 – that has seen New Zealand lawyers involved global arbitration processes that have more often than not seen the findings fall in favour of corportions under very questionable circumstances;</div>
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<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.chapmantripp.com%2Fnews%2FPages%2FChapman-Tripp-acts-in-first-ever-bilateral-investment-treaty-hearing-in-NZ.aspx&h=QAQE7Apl4&enc=AZObveF19PP2cMgh7r3qzyHTrmPae-pzc5WFFzZcvb1HEcitYL7t1-2W3IGyIuYK2M44M7EsP4hhDsVCaXwsWwpfTugH5XR0xA-JmDf9W5MORgieh2V_kcCAXculuEjX2ty7p8cRrzdAhSkCkyP_sWh_&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.chapmantripp.com/news/Pages/Chapman-Tripp-acts-in-first-ever-bilateral-investment-treaty-hearing-in-NZ.aspx</a></div>
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Chapman Tripp acts in first ever bilateral investment treaty hearing held in New Zealand<br />
27 April 2012<br />
Leading New Zealand law firm Chapman Tripp, acting as co-counsel with international law firm Salans, have secured a successful decision in the first ever bilateral investment treaty arbitration hearing held in New Zealand.</div>
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Look what the New Zealand arbitrators have been up to in our good name!<br />
<a href="https://www.facebook.com/l.php?u=https%3A%2F%2Ficsid.worldbank.org%2FICSID%2FFrontServlet%3FrequestType%3DCasesRH%26actionVal%3DOpenPage%26PageType%3DAnnouncementsFrame%26FromPage%3DAnnouncements%26pageName%3DAnnouncement152&h=NAQHnd67s&enc=AZM3jejIWVvgeDKQ2yeX3A1hOlhhWhgNrNapPrP_hUEM5MZSTtvsSYm5nYD0_C1Qkgl6X5vRNC_VKiKQgQRNUjbICy68qK6QGww9k4dck2hvEwnv255h57Zkg7f1jEHdq_kp3kjqT1iU64U9HR5u0eug&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">https://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=OpenPage&PageType=AnnouncementsFrame&FromPage=Announcements&pageName=Announcement152</a></div>
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NEW ZEALAND<br />
Panel of Arbitrators<br />
Designation effective November 12, 2013:<br />
Campbell Alan McLachlan<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.essexcourt.net%2Fnews%2F424%2Fprofessor-campbell-mclachlan-joins-essex-court-chambers&h=ZAQFDRE7U&enc=AZN22iF92PlAOCZtnPPk82GMNhirWikvldByGjY5ALQ6DN_b-WQxEITpd5Y5p4MEfXluVTLV_ikFVRKDn_1Pxr-VpDyguJAIIGECVb7aEtZZDw1ECdfweOe3RqRX230D35xaEnXqdUMv_Y5bFKzS3EFl&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.essexcourt.net/news/424/professor-campbell-mclachlan-joins-essex-court-chambers</a></div>
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Panel of Arbitrators<br />
Designation effective June 10, 2013:<br />
David A.R. Williams<br />
<a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.bankside.co.nz%2FLatest%2Ftabid%2F87%2Fid%2F43%2Ftitle%2Flargest-award-ever-in-bilateral-investment-treaty-case-at-icsid%2FDefault.aspx&h=yAQGZ4CNc&enc=AZPyYddR7ooKD1b6ZhmYoh7MJ6qEbQbCVPME7dfJLoWXQ5yic7qAVFGtykCIsihR5ILiSF7tb1pL71lMnJxdDlOcLu5GRG5kutg3WxE3nTAcMQmMVQtAD9ZlRhrVq96Nmu4BKB-sRnl9wpa3ugRN16ie&s=1" rel="" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.bankside.co.nz/Latest/tabid/87/id/43/title/largest-award-ever-in-bilateral-investment-treaty-case-at-icsid/Default.aspx</a></div>
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ICSID: Details of operation and costs of cases.<br />
By Inna Uchkunova, International Moot Court Competition Association (IMCCA)</div>
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“Research is formalized curiosity…” – Z. Hurston</div>
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In what follows I have tried to gather information from publicly available sources regarding some of the questions which have troubled my mind lately. It is hoped that the results would be of interest to the readers. For me, this proved to be one of my most exciting projects so far. The idea was conceived during my work in the IMCCA – Bulgaria (International Moot Court Competition Association) which unites past and present Ph. C. Jessup Moot Court participants (as well as participants from other moot courts) who share their love for International Law in a country where it is not lectured in-depth in universities. IMCCA and America for Bulgaria Foundation provide us with the necessary stimuli to learn more and to achieve more.</div>
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The information presented is subject to the caveat that not all ICSID awards are public or may have otherwise escaped my acquisition efforts. In this and any other regard, I would appreciate further supplement or corrections.</div>
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Which arbitrators have sat the most in ICSID cases?<br />
(in alphabetical order, including cases which have been settled)<br />
Alexandrov, Stanimir A.<br />
Álvarez, Henri C.<br />
Berg, Albert Jan van den<br />
Berman, Franklin<br />
Bernardini, Piero<br />
Böckstiegel, Karl-Heinz<br />
Brower, Charles N.<br />
Crawford, James R.<br />
Cremades, Bernardo M.<br />
El-Kosheri, Ahmed Sadek<br />
Fernández-Armesto, Juan<br />
Fortier, L. Yves<br />
Gaillard, Emmanuel<br />
Griffith, Gavan<br />
Guillaume, Gilbert<br />
Hanotiau, Bernard<br />
Kaufmann-Kohler, Gabrielle<br />
Lalonde, Marc<br />
Lowe, Vaughan<br />
McLachlan, Campbell<br />
McRae, Donald M.<br />
Naón, Horacio A. Grigera<br />
Oreamuno, Rodrigo<br />
Paulsson, Jan<br />
Stern, Brigitte<br />
Tercier, Pierre<br />
Thomas, J. Christopher<br />
Veeder, V.V.<br />
Vicuña, Francisco Orrego<br />
Williams, David A.R.<br />
Wobeser, Claus von<br />
Who is the first woman to sit as an arbitrator in an ICSID case?<br />
Mme Rosalyn Higgins in 1987, in the resubmitted Amco case.<br />
It is noticeable that international arbitration remains a man-dominated profession.<br />
Which is the Claimant which has filed the most applications?<br />
Impregilo, S.p.A has appeared as Claimant in 5 cases so far (most of them discontinued):<br />
Impregilo S.p.A and Rizzani De Eccher S.p.A. v. United Arab Emirates(ICSID Case No. ARB/01/1)<br />
Impregilo S.p.A. v. Islamic Republic of Pakistan (ICSID Case No. ARB/02/2)<br />
Impregilo S.p.A. v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/3)<br />
Impregilo S.p.A. v. Argentine Republic (ICSID Case No. ARB/07/17)<br />
Impregilo S.p.A. v. Argentine Republic (ICSID Case No. ARB/08/14)</div>
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Which is the State appearing the most times as a Respondent?<br />
(includes cases which have been settled or discontinued)<br />
Argentina 49<br />
Venezuela 36<br />
Egypt 17<br />
Ecuador 12<br />
Congo 12<br />
Peru 11<br />
Ukraine 10</div>
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Curious facts regarding the composition of some of the Tribunals<br />
● All the initially appointed arbitrators in the cases MTD v. Chile (ICSID Case No. ARB/01/7), Vannessa Ventures v. Venezuela (ICSID Case No. ARB(AF)/04/6) and Víctor Pey Casado v. Chile (ICSID Case No. ARB/98/2) resigned.<br />
● Two of the three arbitrators in the annulment proceedings in the cases of MTD v. Chile and CMS v. Argentina were the same which made the outcome of e.g. the later-in-time decision on stay of enforcement.<br />
● The arbitrators in the Malaysian Historical Salvors v. Malaysia (ICSID Case No. ARB/05/10) annulment proceedings were all past and present Judges from the International Court of Justice.<br />
● The arbitrators in the cases of Pioneer v. Argentina (ICSID Case No. ARB/03/12) and Pan American v. Argentina (ICSID Case No. ARB/03/13), and Alcoa Minerals v. Jamaica (ICSID Case No. ARB/74/2), Kaiser Bauxite Company v. Jamaica (ICSID Case No. ARB/74/3) and Reynolds v. Jamaica(ICSID Case No. ARB/74/4), respectively, were all the same.<br />
Which law firms have served the most times in ICSID cases?<br />
(in alphabetical order)<br />
Arnold & Porter LLP<br />
Freshfields Bruckhaus Deringer LLP<br />
King & Spalding LLP<br />
Latham & Watkins LLP<br />
Shearman & Sterling LLP<br />
Sidley Austin LLP<br />
White & Case LLP</div>
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Which prominent scholars have served as party-representatives or counsels in ICSID cases?<br />
Judge Stephen M. Schwebel<br />
Prof. Dr. James R. Crawford<br />
Prof. Christopher Greenwood<br />
Prof. Alain Pellet<br />
Prof. Philippe Sands, QC<br />
Prof. Antonio Crivellaro</div>
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In which fields of economic activity most of the cases find their origin?<br />
Hydrocarbon concessions, petroleum and oil exploration and production, gas supply and distribution 71<br />
Electric power generation, distribution and sale 39<br />
Mining concessions and mineral exploration 31<br />
Construction contracts, including real estate, dams, etc. 21<br />
Highway construction contracts 14<br />
Telecommunications 13<br />
Water services 12</div>
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Which is the first ICSID award?<br />
The Award rendered on August 29, 1977 in the case of Adriano Gardella S.p.A. v. Côte d’Ivoire (ICSID Case No. ARB/74/1).<br />
What is the highest award amount so far?<br />
The highest award amount of US$ 1,769,625,000 was awarded in the case of Occidental v. Ecuador (ICSID Case No. ARB/06/11) Award of October 5, 2012.</div>
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What is the lowest award amount so far?<br />
It seems that the lowest award amount of US$ 460,000 (as principal) was awarded in Asian Agricultural Products Ltd. v. Sri Lanka (ICSID Case No. ARB/87/3) Award of June 27, 1990.</div>
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How much does an ICSID case cost in terms of legal costs?<br />
The information below was intended to bring light to the question how much does an ICSID case cost in terms of legal representation. The information provided must be retained with caution since legal costs depend, among others, on the duration and the complexity of the case. Moreover, many awards are not publicly available and most Tribunals order that each party bears its own costs of legal representation without mentioning the sums.<br />
Here are some examples of the practice of ICSID Tribunals:<br />
● In CDC v. Seychelles (ICSID Case No. ARB/02/14) Award of December 17, 2003, Seychelles were ordered to pay the Claimant the sum of £ 100,000 representing legal fees.<br />
● In Pantechniki v. Albania (ICSID Case No. ARB/07/21) Award of July 30, 2009, the cost claims of the parties were among the lowest – EUR 154,523 and EUR 269,657, respectively.<br />
● In Telenor Mobile v. Hungary (ICSID Case No. ARB/04/15) Award of September 13, 2006, the Counsel for Hungary demanded the reimbursement of US$ 1,249,340.29.<br />
● In Siag v. Egypt (ICSID Case No.ARB/05/15) Award of June 1, 2009, Egypt was ordered to pay the the sum of USD 6,000,000 in legal costs.<br />
● In Spyridon Roussalis v. Romania (ICSID Case No. ARB/06/1) Award of December 7, 2011, the Claimant had to pay 60% of the Respondent’s legal fees in the amount of EUR 6,053,443.78.<br />
● The Tribunal in Cementownia Nowa Huta S.A. v. Turkey (ICSID Case No. ARB(AF)/06/2) Award of September 17, 2009 found that:<br />
“the Respondent’s legal fees and expenses are not unreasonable having regard to the course of these proceedings and that, therefore, the Claimant is to bear such costs in the amount of USD 4,904,822.06.” (para. 178)<br />
● In Kardassopoulos & Fuchs v. Georgia (ICSID Case Nos. ARB/05/18 and ARB/07/15) Award of March 3, 2010, the Respondent was liable to pay the Claimants their costs for the proceedings in the total amount of US$ 7,942,297.<br />
● In ADC v. Hungary (ICSID Case No. ARB/03/16) Award of October 2, 2006, the Claimant demanded US$ 7,623,693 in respect of the Claimants’ costs and expenses. The Tribunal found<br />
“no reason to depart from the starting point that the successful party should receive reimbursement from the unsuccessful party.” (para. 533)<br />
See also Abaclat et al. v. Argentina (ICSID Case No. ARB/07/5) at para. 682.<br />
● The Tribunal in Gemplus & Talsud v. United Mexican States (ICSID Cases Nos. ARB (AF)/04/3 & ARB (AF)/04/4)) Award of June 16, 2010 recognized that:<br />
“It is well-known that legal costs incurred by respondent-state parties are usually much lower than costs incurred by claimant-private parties, partly because a claimant bears a greater burden in presenting and proving its case, partly because a state’s billing practices with its legal representatives are different and partly, as here, where there is more than one claimant bringing claims under more than one treaty.” (para. 17-25)</div>
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Which is the most invoked BIT?<br />
From the information available it may be concluded that this is the Argentina – U.S. Bilateral Investment Treaty which was relied upon,inter alia, in the following cases:<br />
CMS v. Argentina (ICSID Case No. ARB/01/8)<br />
Azurix Corp. v. Argentina (ICSID Case No. ARB/01/12)<br />
Continental Casualty Company v. Argentina (ICSID Case No. ARB/03/9)<br />
Pan American Energy LLC and BP Argentina Exploration Company v. Argentina (ICSID Case No. ARB/03/13)<br />
Enron v. Argentina (ICSID Case No. ARB/01/3)<br />
LG&E v. Argentina (ICSID Case No. ARB/02/1)<br />
Sempra v. Argentina (ICSID Case No. ARB/02/16)<br />
AES Corporation v. Argentina (ICSID Case No. ARB/02/17)<br />
El Paso Energy v. Argentina (ICSID Case No. ARB/03/15)<br />
How long does an ICSID case take?<br />
Approximately 3.6 years. See Sinclair, A., ICSID Arbitration: how long does it take?, 4:5 GAR J. (2009), available here .<br />
Which is the shortest merits award (in terms of length)?<br />
CDC v. Seychelles (ICSID Case No. ARB/02/14) Award of December 17, 2003 – 23 pages.</div>
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Which is the longest merits award (in terms of length)?<br />
Gemplus & Talsud v. United Mexican States (ICSID Cases Nos. ARB (AF)/04/3 & ARB (AF)/04/4)) Award of June 16, 2010 – 382 pages<br />
Are there claims filed by a State against an investor?<br />
Gabon v. Société Serete S.A. (ICSID Case No. ARB/76/1)<br />
The basis of jurisdiction was a contract. The case was eventually settled.<br />
Romania’s counterclaim in Spyridon Roussalis v. Romania (ICSID Case No. ARB/06/1) was admitted on the basis of the umbrella clause found in Article Article 2(6) of the Romania-Greece BIT. (Award of December 7, 2011, para. 781)<br />
Which cases may be called landmark cases?<br />
While it may be said that every decision and award rendered by an ICSID Tribunal (or committee) contains interesting findings of law, among them the following may be mentioned as particularly interesting:<br />
● Santa Elena v. Costa Rica (ICSID Case No. ARB/96/1) Final award of February 17, 2000, on the compound interest. Up until this point, most of the ICSID Tribunals denied awarding compound interest relying on a citation from Marjorie Whiteman in her book Damages in International Law vol. III (1943) at p. 1997:<br />
“[t]here are few rules within the scope of the subject of damages in international law that are better settled than the one that compound interest is not allowable.”<br />
This is, among other things, evidence of the influence a scholar can have on international law.<br />
● Maffezini v. Spain (ICSID Case No. ARB/97/7) Award of November 9, 2000, as to attribution of State responsibility.<br />
● Salini v. Morocco (ICSID Case No. ARB/00/4) Decision on Jurisdiction of July 23, 2001, regarding the so-called Salini test for the notion of investment.<br />
● Vivendi v. Argentina (ICSID Case No. ARB/97/3) First Annulment, Decision on Annulment dated July 3, 2002, as to the relation between treaty and contract.<br />
● SGS v. Pakistan (ICSID Case No. ARB/01/13) Decision of the Tribunal on objections to jurisdiction of August 6, 2003 and SGS v. Philippines(ICSID Case No. ARB/02/6) Decision of the Tribunal on objections to jurisdiction of January 29, 2004, with regard to the so-called umbrella clause.<br />
● ADC v. Hungary (ICSID Case No. ARB/03/16) Award of October 2, 2006, in relation to valuation in cases of unlawful expropriation.<br />
● Phoenix Action v. the Czech Republic (ICSID Case No. ARB/06/5) Award of April 15, 2009, as to bona fide investments.<br />
● Abaclat et al. v. Argentina (ICSID Case No. ARB/07/5) Decision on jurisdiction and admissibility August 4, 2011, regarding admissibility of mass claims of 60,000 Claimants (the total number of whom at the time of initiation of the arbitration exceeded 180,000) mostly natural persons of Italian nationality relating to bonds issued by Argentina.</div>
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Which States have refused to comply with ICSID awards or have considerably obstructed compliance?<br />
Argentina is well known for its interpretation of Articles 53 and 54, i.e. that the successful Claimant’s recourse to enforcement in its national courts is a pre-condition for payment of the award (See for e.g. Enron v. Argentina (ICSID Case No. ARB/01/3) Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 7 October 2008, available here).</div>
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Which States have withdrawn from the ICSID Convention?<br />
Bolivia, Ecuador and Venezuela.</div>
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Which States are not parties to the ICSID Convention?<br />
Brazil and India are not among the 158 Members to the ICSID Convention.</div>
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Other curious facts<br />
● After the award in the RSM v. Grenada (ICSID Case No. ARB/05/14) was rendered, RSM tried to sue Freshfields Bruckhaus Deringer LLP counsel for Grenada alleging that Freshfields conspired to violate the Racketeer Influenced and Corrupt Organizations Act by, for e.g., Jan Paulsson and Brian King being part of the conspiracy to bribe Grenada officials and deny RSM its licensing rights. RSM claimed the excess of US$500 million in damages. The claim was dismissed. See US District Court for the District of Columbia, Civil Action No. 10-00457 availablehere.<br />
● Both the Claimant and the Respondent in the Europe Cement Investment v. Turkey (ICSID Case No. ARB(AF)/07/2) Award of August 13, 2009, ended up claiming that the Tribunal lacked jurisdiction. This is one of the Uzan family-related cases against Turkey. The Claimant wanted to discontinue the proceedings but the Respondent State disagreed. (See para. 139 of the Award)</div>
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Funniest quote from an ICSID award<br />
“[H]appiness is multiple pipelines”<br />
Mentioned in the case of Kardassopoulos & Fuchs v. Georgia (ICSID Case Nos. ARB/05/18 and ARB/07/15) Award of March 3, 2010, para. 5, in relation to the Western Route which was of<br />
“significant national and strategic importance for Georgia as a means of securing its sovereignty following the break up of the Soviet Union and deepening its ties to the West.” (para. 3)<br />
Recommendations<br />
The site of ICSID is informative and accessible. Still it may be improved by, for e.g., adding information as to the basis of the jurisdiction in the particular case, nationality of the Claimant, amount claimed, amount awarded, who represented the parties, which was the successful party, costs of the proceedings, etc.<br />
End</div>
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<b>Largest Award Ever in Bilateral Investment Treaty Case at ICSID</b><br />
07 November 2012<br />
In the largest arbitral award ever to be rendered by a tribunal at the International Centre for Settlement of Investment Disputes (ICSID), the Republic of Ecuador has been ordered to pay $1,769,625,000 (US) for terminating an oil production investment held by the U.S. company, Occidental Petroleum. Arbitrators in the case were Canadian lawyer, L. Yves Fortier QC, retired New Zealand judge David AR Williams, and retired French law professor Brigitte Stern.<br />
Occidental filed for arbitration under the U.S.-Ecuador bilateral investment treaty (BIT) following Ecuador’s May 2006 decision to terminate a participation contract for Block 15 located in the Ecuadorian Amazon. Authorities blamed the move on Oxy’s having improperly transferred a share of its Ecuadorian production activity to a Canadian energy firm.<br />
In a 336 page award an ICSID arbitral tribunal conceded that Occidental had breached the terms of the participation contract by failing to obtain government authorization for the transfer of rights. However, arbitrators held that Ecuador’s decision to strip Occidental of its investment and its failure to pay compensation were disproportionate, and in breach of Ecuador’s treaty obligations to provide for “fair and equitable treatment” and to refrain from expropriating assets without compensation. Arbitrators also found that Ecuador’s actions breached its own laws.<br />
The damages awarded by arbitrators reflect the value of Occidental’s investment as of May 2006 when its contact was terminated, minus a 25% deduction due to Occidental’s own breach of the participation contract. Ecuador must also pay interest of 4.18% on the awarded sum, compounded annually, to reflect the increase in value of the damages from May 2006 until the time of the arbitral award.<br />
In a dissenting opinion Ecuador’s nominee to the three member arbitral tribunal, expressed her agreement with the majority’s analysis of the facts and the law, including its finding that Ecuador acted disproportionately in response to what she termed Occidental’s “serious violation” of Ecuadorian law.<br />
However, Prof. Stern expressed “complete disagreement with the way damages have been calculated”, and would have favoured a 50/50 approach to damages similar to that in an earlier ICSID arbitration (MTD v Chile), so that Oxy’s damages would be halved as a result of its having “acted both very imprudently and illegally.”<br />
End quote</div>
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Anyone wanting to know much more detail of exactly how the British colonial heritage old boys private central banking network has put New Zealand under the control of their receivership branch the - International Monetary Fund (IMF) - alongside their legal branch the - International Committee for Settlement of Investment Disputes (ICSID) - please read this document;<br />
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and many more informative global money system structure articles here;<br />
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Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0tag:blogger.com,1999:blog-5037330197467032848.post-82405016504116056422014-08-08T04:15:00.001-07:002017-02-09T00:07:42.169-08:00New Zealand International Finance Agreements Act Amendment Bill 2013<span style="background-color: white; color: #37404e; font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif; font-size: 14px; line-height: 20px;">New Zealand International Finance Agreements Act Amendment Bill </span><br />
<span class="text_exposed_show" style="background-color: white; color: #37404e; display: inline; font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif; font-size: 14px; line-height: 20px;"><span style="color: #4b4f56; font-family: Helvetica, Arial, sans-serif; white-space: pre-wrap;">In 2013 the New Zealand Parliament passed an amendment bill into law, making any regulation changes of the International Monetary Fund(IMF) from then on become automatic New Zealand financial system regulation, without having to any longer pass through the New Zealand House of Representatives - as irrefutably evidenced here;</span><br /><br />Web link <a href="http://www.parliament.nz/en-nz/pb/legislation/bills/00DBHOH_BILL11131_1/international-finance-agreements-amendment-bill" rel=" nofollow" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.parliament.nz/en-nz/pb/legislation/bills/00DBHOH_BILL11131_1/international-finance-agreements-amendment-bill</a> List of all parliamentary debates on lower right hand side.<br /><br />New Zealand Minister of Finance the Hon BILL ENGLISH said in debate; </span><br />
<span style="background-color: white; color: #37404e; font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif; font-size: 14px; line-height: 20px;"> “I intend to move that the bill be referred to the Finance and Expenditure Committee. Our commitments to the IMF are effectively premiums to an insurance policy against damage to our economy from an unstable world....... New Zealand has already agreed to these changes, and adopting the International Finance Agreements Amendment Bill simply puts that agreement into practice......The bill also creates a regulation-making power in the principal Act so that further updates to the articles can be made by regulation. This power will simplify the process by which New Zealand meets its obligations. Once changes to the articles are agreed to by the requisite majority of members of the international financial institutions, New Zealand will be bound by the amendments, which means that we are required to bring our domestic legislation into line with our international obligations.”</span><br />
<span class="text_exposed_show" style="background-color: white; color: #37404e; display: inline; font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif; font-size: 14px; line-height: 20px;"><br />New Zealand opposition party finance spokesperson Hon DAVID PARKER (Labour) said in debate;</span><br />
<span class="text_exposed_show" style="background-color: white; color: #37404e; display: inline; font-family: "helvetica" , "arial" , "lucida grande" , "tahoma" , "verdana" , "arial" , sans-serif; font-size: 14px; line-height: 20px;"> “I rise to speak to this bill, the International Finance Agreements Amendment Bill, on behalf of the Labour Party. The Labour Party will be supporting this bill to the Finance and Expenditure Committee. The Labour Party supports the function of the International Monetary Fund and the International Bank for Reconstruction and Development, and broadly agrees with the Minister of Finance that these are good institutions that assist the conduct of international economic affairs in a way that benefits New Zealand as well as other countries......I think New Zealanders will have more confidence in our participation in these international fora if they think that Governments are being transparent about changes to those international agreements and the effect of those changes on New Zealand. There is already enough suspicion out there as to the effect of international agreements. We breed further suspicion if we are not open and transparent about changes to those rules......For those reasons, amongst others, the Labour Party opposes future changes to this legislation by way of the statutory regulation-making power that this amendment Act creates. We believe that future amendments ought to come back to this Parliament. If we look back in the history, it has not been an onerous task for New Zealand to amend this legislation through annual amendments or anything like that. It is relatively rare that we have amendments to this International Finance Agreements Act, which dates back to 1975. “<br />end quotes<br /><br />In the description of the bill it was said that indepth discussion of New Zealand money system structures were not needed because apparently a 'majority' of New Zealand people already know how it works as said here;<br />"The Act does not mention monetary policy. The majority of us understand that in doing so, the bill aims to ensure that governments take explicit note of the fact that fiscal policy and monetary policy are interdependent; and that different fiscal strategies can prompt different monetary policy responses."<br />end quote<br /><br />New Zealand Green Party Co-Leader - Russel Norman - having displayed a sense of growing environmental and social injustice - had “come out” - asking hard questions of the current money system orthodoxy after his 21 Feb 2013 International Finance Agreement Amendment Bill third reading - in which Russel Norman admitted to having only recently gained an understanding of just how New Zealand money supply originates and under what terms and conditions;<br /><br />"The other thing that comes out of, I think, the IMF that surprises a lot of people is when the IMF says things like most of the money that is generated is generated by the private banks. Most of us, I think—and I was certainly one of these people, until reading IMF papers—always assume that the Government created the money. That is just because I actually did not follow it closely enough, whereas the IMF is very clear that it is the private banks that create most of the money. What the IMF—or, at least, some of the researchers within the IMF—is now saying is that the Government should use its ability to create money, so that there is some publicly created money as well as the privately created money, most of which is created by the private banks.<br />This, of course, is a pretty radical proposition, and the IMF, in putting forward this proposition, has certainly been shaking the policy debates around monetary policy all over the world, except in New Zealand, of course, where we are kind of locked into some weird backwater where the Government does not want to have a debate around any of this kind of stuff. But if you read the international literature, it is pretty good."<br />end quote<br /><br />Russel Norman made clear his views again - and clearly had not yet buckled - in this 27 May 2013 article;<br />"In the debate around monetary policy, it is often forgotten that the default position is that the private banks create most of the money and lead the increase in the monetary supply. They then charge interest to the users of the money that they have created......The debate should be: what constraints should apply to the private creation of money given the banks’ irresponsible behaviour in the past; and should the public institutions be expanding money supply as a policy tool, to what extent, and to what purpose? Should the state be allowed to also increase the money supply for public purposes such as refilling the Natural Disaster Fund and to see what effect it can have on reducing the very damaging high NZ dollar?<br />The answers to these questions aren’t black and white but for my pick I think we need to restrain the banks lending into the housing bubble and use a trial public creation of money to restock the Natural Disaster Fund – both to be prepared for future disasters and to see what impact it would have on the dollar.<br />It is of course difficult to have a rational conversation around these issues in the current political context (ie Key’s scaremongering) but it is an important conversation for rational adults to have. We do have an out of control current account deficit and if we want to be masters of our own destiny we need to change policy settings as under Key’s plan our deficit and debt increase dramatically."<br />end quote<br /><br />What is made clear from Russel Norman's musings of our current money supply being 'partly funded offshore' is that he does not yet fully comprehend just how it works - and is very poor at being able to articulate the various forms of monetary easing - those that only favour the private bankers and those that dont.<br /><br />New Zealand mainstream media senior editors have let New Zealand down no less than Russel Norman who they set out to ridicule.<br /><br />TV3 Patrick Gower & TV1 Corin Dann just might be the highest paid clowns in New Zealand's economic circus! Radio New Zealand Jim Mora - I am quessing one of the lowest paid clowns - knows who the ring master is - but chooses to sweep it under the carpet?<br /><br />New Zealand Prime Minister and former international investment banker John Key 17 November 2012;<br />“Our (Govt) debt to GDP levels by then will top at just under 30 percent, in other words, um, we'll be relatively lowly indebted compared to countries like America and Europe, but I put it to you we are a small open economy, we have high levels of private sector debt, we, mum and dad have borrowed that debt effectively from foreigners because their local bank has sourced that from foreigners.”<br /><br />TV3 Patrick Gower;<br />"The Prime Minister lost use of one of his favourite political weapons today, thanks to a policy U-turn by the Greens over printing money to improve the exchange rate."<br />"Known as 'quantitative easing', it's been done by some of the world's big economies."<br /><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.3news.co.nz%2FGreens-U-turn-wont-quiet-Key%2Ftabid%2F1607%2FarticleID%2F302045%2FDefault.aspx&h=WAQFH_vdO&s=1" rel="nofollow nofollow" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.3news.co.nz/Greens-U-turn-wont-quiet-Key/tabid/1607/articleID/302045/Default.aspx</a><br /><br />TV1 Corin Dann;<br />"It is after all exactly the policy that's been used by the US Central bank for the last couple of years to prevent deflation and keep the US economy afloat."<br /><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Ftvnz.co.nz%2Fpolitics-news%2Fcorin-dann-greens-had-drop-money-printing-5469780&h=vAQH4qSni&s=1" rel="nofollow nofollow" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://tvnz.co.nz/politics-news/corin-dann-greens-had-drop-money-printing-5469780</a><br /><br />RNZ Jim Mora;<br />"Banks have ended up in the position, as Bernard Hickey has said a time or two on the panel, where they have the franchise on the creation of money"<br /><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fpubliccreditorbust.blogspot.co.nz%2F2013%2F03%2Fwestpac-new-zealand-senior-economist.html&h=GAQHHnnqQ&s=1" rel="nofollow nofollow" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://publiccreditorbust.blogspot.co.nz/2013/03/westpac-new-zealand-senior-economist.html</a><br /><br />You lazy fools - its not 'exactly' the same at all - you have the same problem in reporting on this matter as Russel Norman did trying to sell it as policy - you have not done you research - because if you had you would discover the truth is not hard to find - as documented beyond any reasonable doubt in my research here;<br /><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fpubliccreditorbust.blogspot.co.nz%2F2013%2F04%2Funiversal-public-credit-public-policy.html&h=vAQH4qSni&s=1" rel="nofollow nofollow" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://publiccreditorbust.blogspot.co.nz/2013/04/universal-public-credit-public-policy.html</a><br /><br />What dictates if Quantitative Easing benefits your nation or only private bankers - is if the money trail of your central bank traces back to your public institutions being the lender of last resort or if your public institutions have contracted out that privilege and become just a conduit of the international private banking network.<br />QE occurs when even if interest rates are heading to zero the economy remains flat because society has no more compacity to borrow money into circulation - so the lender of last resort then simply gets to type some money into their computer and start directly buying distressed assets of all kinds out in the market as direct stimulus. If your central bank - as is the case in New Zealand - has just become a conduit for private banking institutions - the private banking institutions gain heaps for nothing - but if your money issuance trial leads to a public institution - such as in the case of Japan who's government is typing the money into their account and buying up distressed assets - it will internally re-balance your economy.<br /><br />Olivier Blanchard the current IMF Chief Economist on the record admits the shortcomings of the private central banking network administration of money systems in its area of influence in this article;<br />Five Lessons for Economists From the Financial Crisis<br />By David Wessel of Wall Street Journal re;<br /><br />London School of Economics and Political Science<br />What should economists and policymakers learn from the financial crisis?<br />Monday 25 March 2013<br /><br />What did the worst financial crisis and deepest recession in 75 years teach academic economists and policymakers on whose watch it happened? At a recent London School of Economics forum, convened to honor Bank of England Governor Mervyn King,Olivier Blanchard offered some answers.<br /><br />Mr. Blanchard, 64 years old, is well positioned to offer such reconsideration. An internationally prominent macroeconomist, he spent 25 years on the MIT faculty before becoming chief economist at the International Monetary Fund in September 2008, just before the collapse of Lehman Brothers.<br />Here are Mr. Blanchard¹s five lessons in his own words, lightly edited by The Wall Street Journal’s David Wessel:<br /><br />#1: Humility is in order.<br />The Great Moderation [the economically tranquil period from 1987 to 2007] convinced too many of us that the large-economy crisis - a financial crisis, a banking crisis - was a thing of the past. It wasn’t going to happen again, except maybe in emerging markets. History was marching on.<br />My generation, which was born after World War II, lived with the notion that the world was getting to be a better and better place. We knew how to do things better, not only in economics but in other fields as well. What we have learned is that¹s not true. History repeats itself. We should have known.<br />#2: The financial system matters — a lot.<br />It’s not the first time that we¹re confronted with [former U.S. Defense Secretary Donald] Rumsfeld called “unknown unknowns,” things that happened that we hadn’t thought about. There is another example in macro-economics:<br />The oil shocks of the 1970s during which we were students and we hadn’t thought about it. It took a few years, more than a few years, for economists to understand what was going on. After a few years, we concluded that we could think of the oil shock as yet another macroeconomic shock. We did not need to understand the plumbing. We didn’t need to understand the details of the oil market. When there’s an increase in the price of energy or materials, we can just integrate it into our macro models - the implications of energy prices on inflation and so on.<br />This is different. What we have learned about the financial system is that the problem is in the plumbing and that we have to understand the plumbing. Before I came to the Fund, I thought of the financial system as a set of arbitrage equations. Basically the Federal Reserve would chose one interest rate, and then the expectations hypothesis would give all the rates everywhere else with premia which might vary, but not very much. It was really easy. I thought of people on Wall Street as basically doing this for me so I didn¹t have to think about it.<br />What we have learned is that that’s not the case. In the financial system, a myriad of distortions or small shocks build on each other. When there are enough small shocks, enough distortions, things can go very bad. This has fundamental implications for macro-economics. We do macro on the assumption that we can look at aggregates in some way and then just have them interact in simple models. I still think that¹s the way to go, but this shows the limits of that approach. When it comes to the financial system, it¹s very clear that the details of the plumbing matter.<br />#3 Interconnectedness matters.<br />This crisis started in the U.S. and across the ocean in a matter of days and weeks. Each crisis, even in small islands, potentially has effects on the rest of the world. The complexity of the cross border claims by creditors and by debtors clearly is something that many of us had not fully realized: the cross border movements triggered by the risk-on/risk-off movements, which countries are safe havens, and when and why? Understanding this has become absolutely essential. What happens in the part of the world cannot be ignored by the rest of the world. The fact that we all spend so much time thinking about Cyprus in the last few days is an example of that.<br />It’s also true in trade side. We used to think if one country was doing badly, then exports to that country would do badly and therefore the exporting countries would do badly. In our models, the effect was relatively small. One absolutely striking fact of the crisis is the collapse of trade in 2009. Output went down. Trade collapsed. Countries which felt they were not terribly exposed through trade turned out to be enormously exposed.<br />#4 We don’t know if macro-prudential tools work.<br />It’s very clear that the traditional monetary and fiscal tools are just not good enough to deal with the very specific problems in the financial system. This has led to the development of macro-prudential tools, which what may or may not become the third leg of macroeconomic policies.<br />[Macroprudential tools allow a central bank to restrain lending in specific sectors without raising interest rates for the whole economy, such as increasing the minimum down payment required to get a mortgage, which reduces the loan-to-value ratio.] In principle, they can address specific issues in the financial sector. If there is a problem somewhere you can target the tool at the problem and not use the policy interest rate, which basically is kind of an atomic bomb without any precision.<br />The big question here is: How reliable are these tools? How much can they be used? The answer — from some experiments before the crisis with loan-to-value ratios and during crisis with variations in cyclical bank capital ratios or loan-to-value ratios or capital controls, such as in Brazil — is this: They work but they don’t work great. People and institutions find ways around them. In the process of reducing the problem somewhere you tend to create distortions elsewhere.<br />#5 Central bank independence wasn’t designed for what central banks are now asked to do.<br />There is two-way interaction between monetary policy and macro prudential tools. When Ben Bernanke does expansionary monetary policy, quantitative easing, and interest rates on many assets are close to zero, there’s a tendency by many players to take risks to increase their rate of return Some of this risk actually we want them to take. Some we don¹t want them to take. That is the interaction of monetary policy on the financial system.<br />You also have it the other way around. If you use macro prudential tools to, say, slow down the building in the housing sector but you have an effect on aggregate demand, which is going to decrease output.<br />The question is: How do you organize the use of these tools? It makes sense to have them under the same roof. In practice means the central bank. But that poses questions not only about coordination between the two functions, but also about central bank independence.<br />One of the major achievements of the last 20 years is that most central banks have become independent of elected governments. Independence was given because the mandate and the tools were very clear. The mandate was primarily inflation, which can be observed over time. The tool was some short-term interest rate that could be used by the central bank to try to achieve the inflation target. In this case, you can give some independence to the institution in charge of this because the objective is perfectly well defined, and everybody can basically observe how well the central bank does..<br />If you think now of central banks as having a much larger set of responsibilities and a much larger set of tools, then the issue of central bank independence becomes much more difficult. Do you actually want to give the central bank the independence to choose loan-to-value ratios without any supervision from the political process. Isn’t this going to lead to a democratic deficit in a way in which the central bank becomes too powerful? I¹m sure there are ways out. Perhaps there could be independence with respect to some dimensions of monetary policy - the traditional ones — and some supervision for the rest or some interaction with a political process.<br />End quote<br /><br />In July of 2014 the New Zealand TV1 news ran a completely inaccurate misleading article about the structures of the New Zealand banking system. The following week it is the turn of New Zealand TV3 news who ridiculed a New Zealand First MP for saying that the Reserve Bank of New Zealand is foreign controlled in this video link below;<br /><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.3news.co.nz%2FNZ-First-MP-confused-over-bank-ownership%2Ftabid%2F1607%2FarticleID%2F353729%2FDefault.aspx&h=DAQGKrwJZ&s=1" rel="nofollow nofollow" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://www.3news.co.nz/NZ-First-MP-confused-over-bank-ownership/tabid/1607/articleID/353729/Default.aspx</a><br /><br />when the foreign control of the RBNZ is something former RBNZ Governor Alan Bollard made very clear in 2010 book he wrote titled – Crisis – excerpts below;<br /><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fpubliccreditorbust.blogspot.co.nz%2F2013%2F11%2Fbook-excerpts-crisis-by-new-zealand.html&h=CAQGBDV3H&s=1" rel="nofollow nofollow" style="color: #3b5998; cursor: pointer; text-decoration: none;" target="_blank">http://publiccreditorbust.blogspot.co.nz/2013/11/book-excerpts-crisis-by-new-zealand.html</a><br />*Pg 19-20 - “Banking practices differ around the world, but we ensure ours meet international standards. These are set by a somewhat shadowy group called the Basel Committee on Banking Supervision. Comprised of representatives of large countries( not including New Zealand ), the group meets in Switzerland at the Bank of International Settlements (BIS).”<br /><br />*pg 98 - Agreed convention at the Bank of International Settlement means that what is said in the room stays in the room.<br /><br />*pg 69 - We had lived through the biggest shock to the financial system since the Great Depression. But a financial shock of this magnitude was clearly also going to cause significant economic damage. This effect first showed in the large, northern, developed economies with the biggest financial sectors. The festering finance problems were flowing into the non-financial sectors, what we call the “real economy”.<br /><br />*pg 186 - The worlds financial system and the worlds economy are inextricably linked; a banking crisis hurts growth in the “real economy”.<br /><br />*pg 145 - For the first time as an economist, I started seriously to wonder about just how tenuous our Western market-based world might be.<br />End quote<br /><br />New Zealand really is presently very poorly served by its public service and media who in pursuit of the quickest way to pay day are to quick to swallow and regurgitate second hand summarised information without researching the veracity of it. </span>Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com1tag:blogger.com,1999:blog-5037330197467032848.post-39700606265191815592014-07-18T00:00:00.001-07:002014-09-07T11:04:21.244-07:00Submission to Strategic review of the Reserve Bank of New Zealand’s payment and settlement systems.<div style="margin-bottom: 0in;">
</div>
<div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Tahoma, sans-serif;"><span style="font-size: 9pt;">From:
Mike Firth</span></span></span><br />
<span style="color: black;"><span style="font-family: Tahoma, sans-serif;"><span style="font-size: 9pt;">Date:
Thursday, July 31, 2014 7:25am</span></span></span><br />
<span style="color: black;"><span style="font-family: Tahoma, sans-serif;"><span style="font-size: 9pt;">To:
Parkers </span></span></span>
<br />
<span style="color: black;"><span style="font-family: Tahoma, sans-serif;"><span style="font-size: 9pt;">Subject:
RE: Please confirm you received my submission sent 18 July 2014</span></span></span><br />
<span style="color: #1f497d;"><span style="font-family: Calibri, sans-serif;"><span style="font-size: 11pt;">Dear
Mr Parker</span></span></span><br />
<span style="color: #1f497d;"><span style="font-family: Calibri, sans-serif;"><span style="font-size: 11pt;">Apologies
for not responding earlier</span></span></span><br />
<span style="color: #1f497d;"><span style="font-family: Calibri, sans-serif;"><span style="font-size: 11pt;">Yes
your submission has been received</span></span></span><br />
<span style="color: #1f497d;"><span style="font-family: Calibri, sans-serif;"><span style="font-size: 11pt;">Thank
you</span></span></span><br />
<br />
<span style="color: #1f497d;"><span style="font-family: Calibri, sans-serif;"><span style="font-size: 11pt;">Regards</span></span></span><br />
<span style="color: #1f497d;"><span style="font-family: Calibri, sans-serif;"><span style="font-size: 11pt;">Mike
Frith</span></span></span><br />
<span style="color: #1f497d;"><span style="font-family: Calibri, sans-serif;"><span style="font-size: 11pt;">Reserve
Bank of New Zealand</span></span></span><br />
<br />
<div style="border-bottom: none; border-left: none; border-right: none; border-top: 1.00pt solid #b5c4df; padding-bottom: 0in; padding-left: 0in; padding-right: 0in; padding-top: 0.04in;">
<span style="font-family: Tahoma, sans-serif;"><span style="font-size: x-small;"><span lang="en-US"><b>From:</b></span></span></span>
<span style="font-family: Tahoma, sans-serif;"><span style="font-size: x-small;"><span lang="en-US">Parkers
[mailto:parkersnz1@gmail.com] </span></span></span><span style="font-family: Tahoma, sans-serif;"><span style="font-size: x-small;"><span lang="en-US"><b>Sent:</b></span></span></span><span style="font-family: Tahoma, sans-serif;"><span style="font-size: x-small;"><span lang="en-US">
Tuesday, 29 July 2014 5:35 p.m.</span></span></span><span style="font-family: Tahoma, sans-serif;"><span style="font-size: x-small;"><span lang="en-US"><b>To:</b></span></span></span><span style="font-family: Tahoma, sans-serif;"><span style="font-size: x-small;"><span lang="en-US">
PASSreview</span></span></span><span style="font-family: Tahoma, sans-serif;"><span style="font-size: x-small;"><span lang="en-US"><b>Subject:</b></span></span></span><span style="font-family: Tahoma, sans-serif;"><span style="font-size: x-small;"><span lang="en-US">
Please confirm you received my submission sent 18 July 2014</span></span></span></div>
<br /><br />
<br />
<span style="font-family: Arial, sans-serif;"><span style="font-size: x-small;">----- Original Message
----- </span></span>
<br />
<div style="background: #e4e4e4;">
<span style="font-family: Arial, sans-serif;"><span style="font-size: x-small;"><b>From:</b></span></span>
<span style="font-family: Arial, sans-serif;"><span style="font-size: x-small;"><a href="mailto:parkersnz1@gmail.com">Parkers</a>
</span></span>
</div>
<span style="font-family: Arial, sans-serif;"><span style="font-size: x-small;"><b>To:</b></span></span>
<span style="font-family: Arial, sans-serif;"><span style="font-size: x-small;"><a href="mailto:PassReview@rbnz.govt.nz">PassReview@rbnz.govt.nz</a>
</span></span>
<br />
<span style="font-family: Arial, sans-serif;"><span style="font-size: x-small;"><b>Sent:</b></span></span>
<span style="font-family: Arial, sans-serif;"><span style="font-size: x-small;">Friday, July 18, 2014
5:50 PM</span></span><br />
<span style="font-family: Arial, sans-serif;"><span style="font-size: x-small;"><b>Subject:</b></span></span>
<span style="font-family: Arial, sans-serif;"><span style="font-size: x-small;">Iain Parker submission to
Strategic review of the Reserve Bank of New Zealand's payment and
settlement systems.</span></span><br />
<br /><br />
<br />
<span style="font-family: Arial;"><span style="font-size: 8pt;"><br />******************************************************************************</span></span><br />
<span style="font-family: Arial;"><span style="font-size: 8pt;">"This
message (and any files transmitted with it) are confidential and<br />may
be legally privileged. If you are not the intended recipient
please<br />notify the sender immediately and delete this message from
your system.</span></span><br />
<span style="font-family: Arial;"><span style="font-size: 8pt;"><br />This
message does not necessarily reflect the views of the<br />Reserve Bank
of New Zealand. If the recipient has any concerns about<br />the
content of this message they should seek alternative
confirmation<br />from the Reserve Bank of New Zealand."</span></span><br />
<span style="font-family: Arial;"><span style="font-size: 8pt;">******************************************************************************</span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br />Iain Parker submission to Strategic
review of the Reserve Bank of New Zealand’s payment and settlement
systems.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">RBNZ details of </span><span style="font-family: Arial, Helvetica, sans-serif;">Strategic review of the Reserve Bank of New Zealand’s payment and settlement systems</span><span style="font-family: Arial, Helvetica, sans-serif;"> here </span><a href="http://www.rbnz.govt.nz/news/2014/5724020.html" style="font-family: Arial, Helvetica, sans-serif;" target="_blank">http://www.rbnz.govt.nz/news/2014/5724020.html</a><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">To whom
it may concern;</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">I Iain Parker wish to register my concerns at any
suggestion of the passing of New Zealand's payment and settlement
system into private hands – domestic or otherwise.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">The RBNZ
discussion paper often refers to knowing of the economic sovereignty
issue of maintaining control of our payment settlement system – but
then seems to attempt to soften the stance toward privatisation of
the system by just as often pointing out the issue of ongoing
financial cost of maintaining the system.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">The economic
sovereignty issues have been confirmed valid by events in other
financial system ructions in other parts of the world at present –
such
as;</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><a href="http://www.bdlive.co.za/opinion/columnists/2014/05/14/swift-way-to-get-putin-to-scale-back-his-ambitions" target="_blank">http://www.bdlive.co.za/opinion/columnists/2014/05/14/swift-way-to-get-putin-to-scale-back-his-ambitions</a> in
which it was stated;</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">“Western governments have the power to
exclude Russia from the world’s financial system. The key to that
system is based in Brussels. It is the Society for Worldwide
Interbank Financial Telecommunication (Swift).”</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">I allege
that much of the reason that the elements of the Anglo-Saxon heritage
private central banking network that 'cooked the credit books' beyond
the level of natural resource collateral in physical existence to
ever cover leading to the greatest yet ever credit fraud crisis in
history in 2008 not being held to account too the full extent of
civil law within other nations of which the frauds were seated was
because of the lack of any ready available other means of payment
settlement system than that of which the criminals could flick the
switch upon.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">I already have grave concerns about the present
structures of where New Zealand's base accountancy of credit and
issuance of currency reside within our money system. My concerns are
that I do not believe under present terms and conditions growth can
ever exceed the debt you are forced to take on to attempt to achieve
the growth.</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span style="font-family: Arial, Helvetica, sans-serif;">So not only do I protest any thought of
privatisation of New Zealand's payment settlement system – but I
also advocate a reforming of our entire financial system as evidenced
as too cause and solution below;<span style="font-size: small;"><br /></span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">Cause<strong><span style="color: #222222;">;</span></strong></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-family: Arial, Helvetica, sans-serif; font-weight: normal;">Here
is on the record official documentation making clear that the
Anglo-Saxon heritage private central banking network model is a
systemic pyramid fraud is stealing under false pretenses amounts of
the honest New Zealand citizen and business earners purchasing power
from income when it is understood who supplies the collateral -
where the risk in the system sits and just what that is;</span></span></span></strong></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;">1
- the Bank of England is one of the senior most international
financial institutions recently made this amazing - amazing
historical admission in its March 2014 quarterly bulletin that what
they tell government officials about how the private central banking
network funds itself has been a
lie;</span></span></span></strong><strong><a href="http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf" target="_blank"><span style="color: #888888;"><span style="text-decoration: none;"><span style="font-size: small;"><span style="font-weight: normal;">http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf</span></span></span></span></a></strong></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><strong>• </strong><strong><span style="color: black;"><span style="font-size: small;"><span style="font-weight: normal;">This
article explains how the majority of money in the modern economy is
created by commercial banks making loans.</span></span></span></strong></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><strong>• </strong><strong><span style="color: black;"><span style="font-size: small;"><span style="font-weight: normal;">Money
creation in practice differs from some popular misconceptions —
banks do not act simply as intermediaries, lending out deposits
that savers place with them, and nor do they ‘multiply up’ central
bank money to create new loans and deposits.</span></span></span></strong></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><strong><span style="color: #222222;">•
</span></strong><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;">Rather
than banks receiving deposits when households save and then lending
them out, bank lending creates deposits.</span></span></span></strong><span style="color: #222222;"><br />Page
2 </span></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><br /></span></span>
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: small;"><b>Two
misconceptions about money creation</b></span></span><span style="color: #222222;"><br />The
vast majority of money held by the public takes the form of bank
deposits. But where the stock of bank deposits comes from is often
misunderstood. One common misconception is that banks act simply as
intermediaries, lending out the deposits that savers place with
them.......Saving does not by itself increase the deposits or ‘funds
available’ for banks to lend.<br /><br />Indeed, viewing banks simply
as intermediaries ignores the fact that, in reality in the modern
economy, commercial banks are the creators of deposit money. This
article explains how, rather than banks lending out deposits that are
placed with them, the act of lending creates deposits — the reverse
of the sequence typically described in textbooks.(3)<br />Another
common misconception is that the central bank determines the quantity
of loans and deposits in the economy by controlling the quantity
of central bank money — the so-called ‘money multiplier’.......In
reality, neither are reserves a binding constraint on lending, nor
does the central bank fix the amount of reserves that are available.
As with the relationship between deposits and loans, the relationship
between reserves and loans typically operates in the reverse way to
that described in some economics textbooks.<br />End</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;">2
- Official Bank of England Central Banking Handbook makes very clear
New Zealand's place in the
scheme;</span><a href="http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q101.pdf" target="_blank"><span style="color: #888888;"><span style="text-decoration: none;">http://www.bankofengland.co.uk/education/Documents/ccbs/handbooks/pdf/ccbshb06.pdf</span></span></a><span style="color: #222222;"><br />International
And Local Level Lending Practice Secrecy<br />Centre For Central
Banking Studies Bank of England<br />Primary Dealers In Government
Securities Markets<br />Handbooks In Central Banking No6 1996<br />Pg
6-7<br />PRIMARY DEALERS IN GOVERNMENT<br />SECURITIES MARKETS<br /><br />1
General<br />The basic objective of a government debt manager is to
cover the government's borrowing needs as cheaply as
possible....There are several ways of trying to achieve this but many
OECD countries appoint a group of highly qualified financial firms to
play a role as specialist intermediaries in the government securities
markets between the authorities on the one hand and the market on the
other. These are generally called primary dealers - as for example
in. the United States - but they are sometimes referred to simply as
market-makers. In the government securities market in the United
Kingdom they are known as gilt-edged market-makers (or GEMMS - the
term "gilt-edged" is used to describe government
securities), while in France they are called specialists in Treasury
securities (SVTs). In this Handbook the terms "primary dealer"
and "market- maker" are used largely without
distinction.<br />In return for a set of obligations, such as making
continuous bid and offer prices in marketable government securities
or submitting reasonable bids in the auctions, these firms receive a
set of privileges in the market. The nature and content of these
obligations and privileges varies greatly from country to country. In
some cases there are firms which play the role of primary dealers
without formal official recognition but nevertheless with a degree of
official encouragement.<br /><br />2 International practice<br />Primary
dealers have existed for some time, for example in Canada, France,
Italy, Spain, the United Kingdom and the United States of America.
These countries all use official recognition as an incentive: it is
granted under specific conditions and the "licence" thus
created is reviewed from time to time. Ireland has recently
introduced this system as appropriate to the stage of development of
its market.<br />By contrast, in Australia, Germany, Japan, Netherlands
and New Zealand there are no formally designated primary dealers,
although in these countries a group of firms do collaborate in the
allocation and proper development of the market in an informal
way.<br />end </span>
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;">3
- Banking in New Zealand Fourth Edition - published by the New
Zealand Bankers Association in 2006 - makes it very clear that
presently every dollar of currency circulating in New Zealand's money
system originates as an interest bearing loan owed to a private owned
lending institution and - that New Zealand's money system is
presently administered by an international private central banking
network - of which currently sits at the end of a wholesale credit
liquidity discount interest chain - an accountancy system of credit
weighed against available natural resources - as opposed to the
re-lending of already existing pools of liquidity as often portrayed
- Chapter 4 - The Creation of Money and Credit - is especially
enlightening;</span><a href="http://www.johnpemberton.co.nz/Banking_in_NZ-06-final.pdf" target="_blank"><span style="color: #888888;"><span style="text-decoration: none;">http://www.johnpemberton.co.nz/Banking_in_NZ-06-final.pdf</span></span></a><span style="color: #222222;"><br />THE
CREATION OF MONEY AND CREDIT<br />what Actually Happens in reality,
although the process outlined in the previous sections could occur,
cash balances in bank vaults no longer act as a constraint on bank
lending in the way that they might have up until the latter part of
the 20th century.......<br />in such an environment, there is
still scope for a bank to expand its lending and create credit, but
it is dependent on there being net inflows of funds into the banking
system as a whole. These inflows of funds may come from depositors
from outside new Zealand (and we have seen significant inflows of
funds from such sources in recent years), or from the government
making net deposits of funds into the banking system (through its
fiscal policy, as outlined below).<br />We also have a situation where,
since 1985, new Zealand banks have not had any specific reserve
requirements applied to their deposit liabilities. This means that,
in theory, banks could keep on creating credit and expanding their
loan portfolios indefinitely. in such an environment, it is the cost
of credit, based upon the costs that banks have to pay to raise the
deposits, that becomes the constraint on the quantity of credit that
is created.<br />end </span>
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;">4
- The contracting out of central banking in New Zealand by its public
money system administration authority - the Reserve Bank of New
Zealand (RBNZ) - to the international private central banking network
- represented in New Zealand by the New Zealand Debt Management
Office (NZDMO) that operates under the umbrella of the New Zealand
Treasury advisers - is acknowledged by New Zealand Treasury in
official document
here;</span><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.nzdmo.govt.nz%2Fsecurities%2Ftendering%2Fpdfs%2Finfo-tendering-18feb08.pdf&h=aAQFgh3ox&s=1" target="_blank"><span style="color: #888888;"><span style="text-decoration: none;">http://www.nzdmo.govt.nz/securities/tendering/pdfs/info-tendering-18feb08.pdf</span></span></a><span style="color: #222222;"><br />18
February 2008<br />GOVERNMENT SECURITIES TENDERING IMPORTANT
CHANGES IN TENDERING OPERATIONS<br />The New Zealand Debt
Management Office (NZDMO) will be assuming responsibility for the
tendering of New Zealand Government Bonds and Treasury Bills from the
Reserve Bank of New Zealand (RBNZ). The transfer will be a staged
process that will take place over the next two months. This follows
many years of the RBNZ acting as an agent for the NZDMO.<br />end</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;">5
- The identity of the foreign Wholesale Credit Liquidity Providers
that supply our entire currency in circulation as interest bearing
loans for all production and consumption - thus making our national
debt as a whole mathematically unrepayable and natural abundance will
never be able to head off the compounding interest hurdle as they
tell us it will - is kept secret by this parliamentary legislation
meaning you will not even be told when asking under the Official
Information Act
here;</span><a href="http://l.facebook.com/l.php?u=http%3A%2F%2Fwww.legislation.govt.nz%2Fregulation%2Fpublic%2F2009%2F0224%2Flatest%2FDLM2303519.html&h=hAQHA-udn&s=1" target="_blank"><span style="color: #888888;"><span style="text-decoration: none;">http://www.legislation.govt.nz/regulation/public/2009/0224/latest/DLM2303519.html</span></span></a><span style="color: #222222;"><br />Statement
of reasons<br />This notice, which comes into force on the day after
the date of its notification in the Gazette, amends the Securities
Act (Crown Wholesale Debt Securities) Exemption Notice 2004 (the
principal notice) to extend the expiry date of the principal notice
from 31 August 2009 to 31 August 2014. The principal notice exempts
the Crown, and certain other offerors of specified debt securities,
from regulation 7A(1) and clause 5(1)(b) of Schedule 3D of the
Securities Regulations 1983. These provisions relate to the content
of investment statements.<br />The Securities Commission considers it
appropriate that the principal notice be renewed because the reasons
justifying the original exemptions remain valid. They are as
follows:<br />where Part 2 of the Securities Act 1978 applies to an
offer of previously allotted securities to the public, both the
person offering the securities and the original allotter of the
securities have a responsibility for the offer as issuers. In this
case, the more relevant information for disclosure to investors is
about the Crown. Information about the wholesale investors (being the
persons offering the securities) as issuers may not be useful to the
retail investors and may also be confusing. The conditions of the
exemption from regulation 7A(1) of the Securities Regulations 1983
require potential investors to be advised that the offerors remain
legally responsible as issuers:<br />the investment statements for the
offers of debt securities to the public made by the wholesale
investors are prepared by the Crown. The exemptions in the principal
notice recognise that certain information relating to the wholesale
investors is not available to the Crown at the time the investment
statement is prepared. The exemptions enable information to be given
to investors in a form other than the investment statement, so long
as it is given prior to subscription.<br />End</span></span></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222; font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;">6
- The foreword to this </span><a href="http://www.oag.govt.nz/2007/nzdmo/docs/oag-nzdmo.pdf" target="_blank"><span style="color: #888888;"><span style="text-decoration: none;">2007
New Zealand Auditor-General report Effectiveness of the New Zealand
Debt Management Office.</span></span></a><span style="color: #222222;"> makes
very clear how dependent upon second hand advice the New Zealand
public service are and - how susceptible to being mislead that they
are;<br />Foreword<br />The New Zealand Debt Management Office (NZDMO) is
a unit within the Treasury. It is responsible for the efficient
management of the Crown’s debt and associated financial assets
within an appropriate risk management framework. Its broader
responsibilities include providing capital market advice and
financial transaction services to other agencies of the Crown. NZDMO
manages gross debt of about $40,000 million and financial assets of
approximately $18,000 million.<br /><br />In carrying out a performance
audit of NZDMO, my overall objective was to determine NZDMO’s level
of performance, under the authority of the Minister of Finance, in
managing the Crown’s public debt and financial asset
portfolios.<br /><br />Given the specialist technical functions of NZDMO,
I sought expert technical assistance with the audit. I appointed KPMG
under section 33(1) of the Public Audit Act 2001 to carry out the
performance audit on my behalf under section 16(1) of the Act.<br /><br />The
material in my audit report is of a very technical nature because of
the specialist functions undertaken by NZDMO. The non-technical
reader can be assured that the audit did not identify any fundamental
concerns with the performance of NZDMO.</span></span></div>
<div style="line-height: 0.19in; margin-bottom: 0in;">
<span style="color: #222222; font-family: Arial, Helvetica, sans-serif;">end</span></div>
<div style="line-height: 0.19in; margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="line-height: 0.19in; margin-bottom: 0in;">
<span style="color: #222222; font-family: Arial, Helvetica, sans-serif;">Please
just type - KPMG fines - into Google search - read the many cases of
financial fraud that KPMG and the often referred to 'big four' global
accountancy houses have been involved in and - then please consider
how prudent it is to be taking second hand auditing advice from them
upon financial system issues so crucial to the equal economic
opportunity of our society?</span></div>
<div style="line-height: 0.19in; margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="line-height: 0.19in; margin-bottom: 0in;">
<span style="color: #222222;"><span style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><b>Flawed
statistic methodologies designed to make things appear that they
better than they actually are – Employment stats and Consumer Price
Index Interest Inflation Rate Targeting;</b></span></span></div>
<div style="line-height: 0.19in; margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="color: #222222; font-family: Arial, Helvetica, sans-serif;">7
- Bogus employment statistics</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">-
On the 8th November 2004 I sent an e-mail to Steve Maharay, the then
Minister for Social Development and Employment, asking him what the
minimum number of hours you have to have worked in a week to be
deemed to be employed?</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">-On
the 3rd December I received a reply from Steve Maharey;</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Dear
Iain</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Thank
you for your e-mail 8th November 2004 concerning the definition of
employment.
</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">For
benefit purposes section 3 of the Social Securities Act 1064 defines
"employment" as paid employment.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">The
Social Security Act also defines full employment and part-time work
as;</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Full
employment or part-time, in relation to any person, means-</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">(a)employment
under contract or service or apprenticeship which requires the person
to work, whether on time or piece rates, no less than an average of
30 hours each week; or</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">(b)self-employment
of the person in any business, profession, trade, manufacture, or
undertaking carried on for pecuniary profit for no less than an
average of 30 hours each week; or</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">(c)employment
of the person for any number of hours which is regarded as full-time
employment for the purposes of any award, agreement, or contract
relating to that employment.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">part-time
work[...]means work that averages not less than 15 hours a week when
calculated over the preceding 3 months...</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">(a)under
a contract of service, whether on time or piece rates ; or</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">(b)as
a self-employed person in any business, profession, trade,
manufacture, or undertaking.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">I
trust this has been helpful.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Yours
sincerely</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Steve
Maharay</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Minister
for Social Development and Employment.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">-To
which I replied 3rd December 2004;</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Hi</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Thanks
for replying to my question.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">What
I am really wishing to know is, what is the minimum number of hours a
person would of had to of worked, in any fashion deemed to be work,
before they are deemed able to be presented to the public in
government statistics, as employed.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Is
it as per the statistics methods used on www2.stats.govt.nz which
explains -(a)worked for 1 hour or more for pay or profit in the
context of an employee/employer relationship or selfemployed.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Cheers</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Iain</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">-I
then received an e-mail 6th December 2004;</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Iain,
can I have your postal address so the Minister can respond to the
issue you raised.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Margaret
Monks</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Ministerial
Secretary</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Office
of Hon Steve Maharay</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">-
I then supplied my postal address.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">-
I then received this letter in the post dated 7th December 2004;</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Dear
Mr Parker</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">On
behalf of Hon Steve Maharay, Minister for Social Development and
Employment, thank you for your letter 3rd December 2004 regarding
employment statistics.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">The
matter you have raised falls within the portfolio responsibilities of
the acting Minister of Statistics. I have therefore referred your
letter to Hon DR Michael Cullen for his consideration.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Yours
sincerely</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Scott
Josling</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Private
Secretary(Social Development)</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">-
I then received a letter by post(not dated) from Michael Cullen;</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Dear
Mr Parker</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Thanks
for your e-mail of 3 December, enquiring about employment statistics
and the definition of an employed person.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">In
short, the answer to your question is yes, it is as per the
definition on Statistics New Zealand's website.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">New
Zealand's official employment counts are sourced from Statistics New
Zealand's quarterly Household Labour Force Survey. In this survey, a
person is deemed to be employed if they worked for 1 hour or more,
for pay or profit, in the context of an employee / employer
relationship, or self-employed.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">This
definition is used as the measurement of employment because it aligns
with the standard definitions of the International Labour
Organisation.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">I
hope this response is helpful.</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Yours
sincerely</span></div>
<div align="LEFT" style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Hon
Michael Cullen</span></div>
<div style="line-height: 0.19in; margin-bottom: 0in;">
<span style="color: #222222; font-family: Arial, Helvetica, sans-serif;">Acting
Minister of Statistics</span></div>
<div style="line-height: 0.19in; margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="line-height: 0.19in; margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="line-height: 0.19in; margin-bottom: 0in;">
<span style="color: #222222; font-family: Arial, Helvetica, sans-serif;">7
- Housing removed from CPI of New Zealand and England has allowed
senior elements of the Anglo-Saxon heritage private central banking
network to saturate these nations with counterfeit credit without it
registering as inflationary on official inflation measurement in
order to rule them via enforced bankruptcy receivership under false
pretenses in order that they then use their proceeds of crime excess
interest repayments received to buy up the liquidated assets at
distressed prices in order to then be able to toll booth the target
societies for access to their necessities of life;</span></div>
<div style="line-height: 0.19in; margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><br />20
February 2012 Deirdre Kent put this Official Information Act question
to New Zealand Minister of Statistics;<br /><br />- Despite the fact that
section prices tripled in fifteen years to 2007, land is not now
included in the Consumer Price Index. This means that the official
measure of inflation is unreliable as it is far lower than the actual
figure.<br /><br />and received this reply;<br /><br />Today I received a
letter back from the Minister of Statistics, Hon Maurice Williamson.
I had heard that land went out of the CPI but couldn’t remember
when or why so I sent in an Official Information request. The
Minister dates the letter 14 Mar 2012 and says<br />Dear Ms
Kent<br />Thank you for your letter of 20 February regarding the
exclusion of the price of land from the Consumers Price Index (CPI)
basket of goods.<br />I am advised by Statistics New Zealand that land
(i.e. residential section) was included in the CPI until the June
1999 quarter. Following a review of the CPI in 1997 land was
excluded, taking effect from the September 1999 quarter.<br />The 1997
review by an external advisory committee confirmed the CPI’s main
purpose as being informing monetary policy setting, and that the CPI
should be focussed on the concept of acquisition. The reason given
for excluding land from the CPI from 1999 was that it was considered
to represent the investment component of home ownership (with
dwellings representing the shelter component).<br />The September 1999
quarter CPI information release explained it as follows: A dwelling
provides shelter over a long period of time. Over time land is not
consumed and so can be considered to represent the investment
component of home ownership. As investment expenses are outside the
scope of the CPI the rebased CPI excludes expenditure on residential
sections.<br />Information on the sale of land is available from QV
(www.qv.co.nz) and the Real Estate Insititute of New Zealand
(www.reinz.co.nz).<br />I trust this information meets your needs and
thank you again for taking the time to write.<br />Yours sincerely<br />Hon
Maurice Williamson<br />Minister of Statistics.<br /><br />BoE boss wants
house prices in inflation<br />This is Money<br />22 July 2007,
12:00am<br />The Governor of the Bank of England has admitted he is
‘surprised’ that rising house prices are not included in the
official inflation figures, according the BBC.<br />Mervyn King told
Radio 4’s Money Box programme that he wished the Consumer Prices
Index (CPI) – the measure that tracks the cost of goods and
services – did include house prices, as the previous official
measure, the Retail Price Index (RPI), used to.<br />He said:
‘Some of these issues are controversial. I wish it did include
housing, but it doesn’t – at least at present. Maybe one day it
will.’<br />Since 1997 Mr King and the Monetary Policy Committee at
the Bank of England has had the task of keeping the CPI around a
target of 2%. It has raised interest as a method to reduce inflation
if prices climb too sharply.<br />However, critics have said that
because the CPI does not include the cost of mortgage repayments,
official inflation figures are artificially low. Some say this has
created a bubble in the property market as house buyers are able to
over-borrow with cheap loans.<br />Currently the CPI stands at 2.4%,
but the RPI – which includes mortgage repayments – stands at
4.4%.<br />Economists expect the Bank of England to raise interest
rates to 6% by September, something that could prove a problem for
some homeowners struggling with large mortgages.<br />Mr King said:
‘CPI is meant to be constructed in the same manner in all European
countries, and so far the European statisticians have not worked out
a way of how they can calculate the cost of housing in a way that can
be done uniformly across Europe.’<br />Notwithstanding the
limitations of the CPI, Mr King defended the record of the Bank of
England in setting rates. He said: ‘The track record is pretty
good, so if we have made wrong decisions from time to time, there
can’t have been very many of them and they can’t have been that
wrong.’ ‘The Monetary Policy Committee I think was well designed.
I think it’s been successful for 10 years and I see no reason to
believe that it cannot be successful for another 10 years and decades
after that.’ </span>
</span></div>
<div style="line-height: 0.19in; margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">John Fullerton former Managing Director
of JP Morgan after an 18-year career at JP Morgan</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">said in a <span style="color: black;">2011
interview;</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">“ I learned that a lot of what we
practiced in finance through no ill intent, this is unrelated to the</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">financial crisis, and the ethical
challenges of the financial system, but that the system itself is</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">designed to propel growth in the
economic system with no regard to the physical boundaries of the </span><span style="font-family: Arial, Helvetica, sans-serif;">planet and with little regard to the
social criteria, social constraints of human well being and so it </span><span style="font-family: Arial, Helvetica, sans-serif;">struck me that a lot of the symptoms
that we talk about such as climate change obviously being on </span><span style="font-family: Arial, Helvetica, sans-serif;">top of everyone’s agenda, but
ecosystem degradation, soil degradation, biodiversity loss. All of </span><span style="font-family: Arial, Helvetica, sans-serif;">these issues are symptoms of an
economic system that is essentially bumping into the boundaries of </span><span style="font-family: Arial, Helvetica, sans-serif;">the biosphere, and if you think about
finance and even our money system, which is built on a </span><span style="font-family: Arial, Helvetica, sans-serif;">money system which is created through
expanding money that has interest associated, so as </span><span style="font-family: Arial, Helvetica, sans-serif;">the money supply grows the requirement
to service money grows at a compound rate. That </span><span style="font-family: Arial, Helvetica, sans-serif;">forces at a systemic level the economy
to continue growing which if the economy is related to </span><span style="font-family: Arial, Helvetica, sans-serif;">material throughput eventually creates
this conflict with the boundaries of the biosphere. So </span><span style="font-family: Arial, Helvetica, sans-serif;">its been a very profound realisation
and what I have discovered is that there are an increasing </span><span style="font-family: Arial, Helvetica, sans-serif;">amount of people thinking about this
question, but its very much outside the halls of conventional </span><span style="font-family: Arial, Helvetica, sans-serif;">economics and very much new economic
thinking.”</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><br />Reform
solutions to address New Zealand's ongoing chronic balance of
payments crisis;</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="background: #ffffff;"><br /></span></span>
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="background: #ffffff;">Change
of public policy proposal for </span>nation-state
government’s - including New Zealand at this time - that currently
outsource the accountancy of their primary credit base - based upon
value of their own natural resource collateral - to then have private
banks type that value into their accounts to then lend it back to the
nation-state as interest bearing loans to circulate as the nations
entire currency.</span></div>
<div dir="LTR" id="post-body-4335588738985579734">
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="background: #ffffff;">To
solve the seemingly impossible economic puzzle of downward pressure
degradation facing most every public service sector and wider
society of private central banking nations - as currently without
more debt they cant have growth - with less debt they have less
money causing economic contraction and what they need is more
currency with less debt. </span><br /><span style="background: #ffffff;"><br />Without
reform of the entirely interest bearing private loan based money
system they currently suffer - the poverty among plenty downstream
of it - leading to domestic and global instability - can never be
fixed!</span><br /><span style="background: #ffffff;"><br />The
current money system we suffer is a relic of the days of British
Imperialist Empire ruling over subservient colonies. Imperialism
being the proceeds of a local wealth pyramid system based upon a
fraud being used to fund its expansion across borders and has no
place in any world that wants to ever call itself a free-world
occupied by free societies of individuals enjoying equal economic
opportunity.</span><br /><br /><b>Winston
Churchill said:</b><br />“The
farther back you can look, the farther forward you are likely to
see.”<br /><br /><b>Samuel
Johnson said:</b><br />“Integrity
without knowledge is weak and useless, and knowledge without
integrity is dangerous and dreadful”</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /><b>Former
New Zealand Governor Sir George Grey speaking in Parliament in 1883
said;</b><br />“I conscientiously believe that two or, three great’
establishments, all really under one directorate, do’ exercise in
the Legislature of this country an undoubted and dangerous
influence. I sincerely believe that this existing Government is
maintained in its place by those bodies… I say that even among the
voters it will be a long time before that independence can come
about which ought to prevail, because I fear many of them are in
some manner entangled with engagements’ which will place them at
the mercy of those persons who rule those different great bodies of
which I speak.<br />I go further and say and in saying this I know, of
course, that I create, and must create, a great many enemies I
firmly believe that the same persons by monetary influence control a
great portion of the press 'One great central power in New Zealand
oppresses it from end to end. That central power is moved by the
Premier, and the Premier is the solicitor of these great moneyed
corporations. Is it just? Does it give the people of New Zealand a
fair chance? Is it not hard for a man to know that if he cries for
justice some debt upon his estate may he made the cause of his ruin
instantly? Is it right for us to feel degraded by knowing that such
is the case here? As long as this continues I see’ no hope for
ourselves or our country.”<br /><br /><b>New Zealand Prime Minister
and former international<br />investment banker John Key said in
an interview on TV3 The<br />Nation - 17 November 2012;</b><br /><br />“Our
(Govt) debt to GDP levels by then will top at just under 30 percent,
in other words, um, we'll be relatively lowly indebted compared to
countries like America and Europe, but I put it to you we are a
small open economy, we have high levels of private sector debt, we,
mum and dad, have borrowed that debt effectively from foreigners
because their local bank has sourced that from foreigners.”</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><b>Tools
needed for a transition to a Steady State Economy with a stable
Honest Primary Public Money Supply Base to fund a sustainable
primary economic base;</b></span></div>
<div style="margin-bottom: 0in;">
<span style="font-size: small;"><b><span style="background: #ffffff; font-family: Arial, Helvetica, sans-serif;"><br />What
is a Steady State Economy?</span></b></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br />Definition<br />A
steady state economy is an economy with stable or mildly fluctuating
size. The term typically refers to a national economy, but it can
also be applied to a local, regional, or global economy. An economy
can reach a steady state after a period of growth or after a period
of downsizing or degrowth. To be sustainable, a steady state economy
may not exceed ecological limits.<br /><br /><b>Vincent Cartwright
Vickers</b> was born on 16th January 1879, and educated at Eton and
Magdalen College, Oxford. He was a Deputy Lieutenant of the City of
London, a director of Vickers, Limited, for twenty-two years, and a
director of the London Assurance from which he resigned in January
1939. In 1910 he was made a governor of the Bank of England, and
resigned this appointment in 1919. Later, he became President of the
Economic Reform Club and Institute.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<strong><span style="color: black;"><span style="font-size: small;"><b><span style="background: #ffffff; font-family: Arial, Helvetica, sans-serif;">Excerpts
from - Economic Tribulation – by Vincent C Vickers - published
1941;</span></b></span></span></strong></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><a href="http://userpage.fu-berlin.de/roehrigw/vickers/">http://userpage.fu-berlin.de/roehrigw/vickers/</a><span style="color: #888888;"><span style="font-size: small;"><b><span style="background: #ffffff;">
</span></b></span></span>
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">THE
DIRECTION OF FUTURE POLICY</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">In
the question of what steps should be taken to put matters right, I
can only suggest the general direction in which our future policy
should point; for I myself do not believe that there exists any
perfect cut-and-dried scheme which is likely hereafter to be
adopted, lock, stock, and barrel, as our future monetary system.
Moreover, there are many other technical and psychological
considerations which would be necessary in order to achieve peace
and contentment amongst the people. The main objectives however,
should include:-</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">1.)
State control and State issue of currency and credit through a
central organisation managed and controlled by the State.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">2.)
Stabilisation of the wholesale price level of commodities. That is
to say, a fixed and constant internal purchasing power of money; so
that a pound will buy to-morrow what it bought yesterday; an honest
pound, not a fluctuating pound. And this can be done by so issuing
and regulating the volume of available credit and currency that it
shall at all times be adequate to permit of the purchasing power of
the consumer being equated with the volume of production; not by
limiting the purchasing power, but by firstly increasing purchasing
power more in proportion to the productive capacity of industry.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">3.)
Fixation of foreign exchanges by foreign exchange equalisation
funds, and agreement with Empire countries and all other countries
willing to fall into line; and, once this was accomplished, the
removal or diminution of trade barriers which to-day protect the
countries from the results of a bad monetary system.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">4.)
Any additional supply of money should be issued as a clear asset to
the State; so that money will be spent into existence, and not lent
into existence.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">5.)
The fluctuating quantity of gold lying in the vaults of the banking
system should never be permitted to govern the volume of credit and
currency needed by the country.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">6.)
The elimination of slumps and booms; and more direct procedure for
eliminating unnecessary poverty</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">7.)
The abolition of the Debt System where all credit is created by the
banks and hired out at interest to the country.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">8.)
Absolute State control over all foreign lending; and the adoption of
the general principle that our foreign trade should be so conducted
as to preserve -</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">(a)
the interests of the Home Market,</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">(b)
the interests of the Empire countries and the English-speaking
nations,</span></div>
<div style="margin-bottom: 0in;">
<strong><span style="color: black;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff; font-family: Arial, Helvetica, sans-serif;">(c)
the interests of Foreign nations, and that this principle should
particularly apply in the case of Home production and foodstuffs.</span></span></span></span></strong></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Public
Banking System Nations past and present;</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Every
nation of Anglo-Saxon ancestry has at various times practiced Fully
Functioning Public Banking to fund its primary economic base free of
the impost of private banker interest which saw those nations
experience no greater prosperity with fairer distribution of wealth
than when doing so.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">England
- The Great War and the debt-free Bradbury Treasury Note:</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">The
Financiers and the Nation by the Rt. Hon. Thomas Johnston, P.C.,
ex-Lord Privy Seal. It was written in 1934 and republished in 1994
by Ossian Publishers Ltd. Here is the link to the text of this quite
remarkable and rare book:</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="font-size: small;"><a href="http://archive.org/stream/financiersandthe033017mbp/financiersandthe033017mbp_djvu.txt">http://archive.org/stream/financiersandthe033017mbp/financiersandthe033017mbp_d</a><a href="http://archive.org/stream/financiersandthe033017mbp/financiersandthe033017mbp_djvu.txt">jvu.txt</a></span><span style="color: #888888;"><span style="font-size: small;"><span style="background: #ffffff;">
</span></span></span><span style="color: #888888;"><span style="font-size: small;"><span style="background: #ffffff;"> </span></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /><br />In
Chapter 6, entitled ‘Usury on the Great War’, I’ve selected
the following paragraphs which I believe are both shocking and
self-explanatory:<br /><br />WHEN the whistle blew for the start of the
Great War in August 1914 the Bank of England possessed only nine
millions sterling of a gold reserve, and, as the Bank of England was
the Bankers’ Bank, this sum constituted the effective reserve of
all the other Banking Institutions in Great Britain.<br /><br />The bank
managers at the outbreak of War were seriously afraid that the
depositing public, in a panic, would demand the return of their
money. And, inasmuch as the deposits and savings left in the hands
of the bankers by the depositing public had very largely been sunk
by the bankers in enterprises which, at the best, could not repay
the borrowed capital quickly, and which in several and large-scale
instances were likely to be submerged altogether in the stress of
war and in the collapse of great areas of international trade, it
followed that if there were a widespread panicky run upon the banks,
the banks would be unable to pay and the whole credit system would
collapse, to the ruin of millions of people.<br /><br />Private
enterprise banking thus being on the verge of collapse, the
Government (Mr. Lloyd George at the time was Chancellor of the
Exchequer) hurriedly declared a moratorium, i.e. it authorized the
banks not to pay out (which in any event the banks could not do),
and it extended the August Bank Holiday for another three days.
During these three or four days when the banks and stock exchanges
were closed, the bankers held anxious negotiation with the
Chancellor of the Exchequer. And one of them has placed upon record
the fact that ‘he (Mr. George) did everything that we asked him to
do.’ When the banks reopened, the public discovered that, instead
of getting their money back in gold, they were paid in a new legal
tender of Treasury notes (the £1 notes in black and the 10s. notes
in red colours). This new currency had been issued by the State, was
backed by the credit of the State, and was issued to the banks to
prevent the banks from utter collapse. The public cheerfully
accepted the new notes; and nobody talked about inflation.</span></span></span><span style="color: #222222;"><span style="font-size: small;"><b><span style="background: #ffffff;">To
return, however, to the early war period, no sooner had Mr. Lloyd
George got the bankers out of their difficulties in the autumn of
1914 by the issue of the Treasury money, than they were round again
at the Treasury door explaining forcibly that the State must, upon
no account, issue any more money on this interest free basis; if the
war was to be run, it must be run with borrowed money, money upon
which interest must be paid, and they were the gentlemen who would
see to the proper financing of a good, juicy War Loan at 31/2 per
cent, interest, and to that last proposition the Treasury
yielded.</span></b></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"> The
War was not to be fought with interest-free money, and/or/with
conscription of wealth; though it was to be fought with conscription
of life. Many small businesses were to be closed and their
proprietors sent overseas as redundant, and without any compensation
for their losses, while Finance, as we shall see, was to be heavily
and progressively remunerated.</span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Canada
- Canadian public credit history more needed today than ever!</span></div>
<div dir="LTR" id="post-body-7997088526959805169">
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">An
Urgently Needed Change in Monetary Policy</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">Borrowing
from Bank of Canada would make governments debt-free<br />by George
H. Crowell<br />National Office | The Monitor<br />Issue(s): Government
finance<br />June 1,
2011 </span></span></span><a href="http://www.policyalternatives.ca/publications/monitor/ugently-needed-change-monetary-policy">http://www.policyalternatives.ca/publications/monitor/ugently-needed-change-monetary-policy</a><span style="color: #888888;"><span style="font-size: small;"><span style="background: #ffffff;">
</span></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /></span></span></span><span style="color: #222222;"><span style="font-size: small;"><b><span style="background: #ffffff;">Through
the publicly-owned Bank of Canada, which was established in 1935,
the federal government can borrow money, essentially interest-free,
and make such funds available not only for its own use, but also
for provincial and municipal governments. Such borrowing helped
Canada get out of the Great Depression, and to finance our
participation in World War II. Continuation of this practice until
the early 1970s played a key role in creating Canada’s post-war
prosperity, as well as launching Medicare and other national social
programs.</span></b></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /></span></span></span><span style="color: #222222;"><span style="font-size: small;"><b><span style="background: #ffffff;">For
the past four decades, however, our governments at all levels have
increasingly been borrowing instead from the private banks, and
paying steep interest on those mounting debts. Each year,
governments across Canada now pay some $60 billion in interest on
their debts – interest payments that need not be incurred.</span></b></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /><br />This
enormous debt burden deprives our governments of revenue that could
be used for much-needed improvements to social and economic
services – and also to help civil society groups that work for
the public welfare. Such organizations depend largely on government
funding, but are repeatedly told there is never enough money
available.<br /><br />Governments themselves also use their
deliberately incurred borrowing debts as an excuse for cutting
public programs and services instead of preserving and expanding
them. At the same time, however, they keep cutting the tax rates on
wealthy individuals and corporations who don’t need tax relief –
and many of whom evade the taxes they owe, anyway, through tax
loopholes or by hiding their wealth in offshore tax havens. There
also doesn’t seem to be any shortage of funds for unnecessary new
prisons, for unjustifiable military interventions, or the wasteful
purchase of new weaponry.<br /><br />One of the organizations that has
tirelessly called for a return to government borrowing from the
Bank of Canada is the Committee on Monetary and Economic Reform
(COMER). Since its formation in the 1980s, COMER has produced reams
of statistics, reasons and arguments for reviving the lending
powers of the Bank of Canada. It has shown how the massive
interest-bearing debt now carried by our federal and provincial
governments could gradually be replaced with interest-free
debt.<br /><br />Such a change in monetary policy, combined with
crucial changes in tax policy, would make available tens of
billions of dollars that are urgently needed to rebuild our public
infrastructure, protect our environment, and strengthen Medicare
and other social programs so vital in meeting human needs. Such
expanded government spending on worthwhile projects would also
create jobs, stimulate additional economic activity, and
significantly increase tax revenue.<br /><br />To start a campaign for
the monetary reforms needed to achieve these national gains, COMER
recently issued a “call for the renaissance of the Bank of
Canada.” The call is directed at civil society organizations. It
urges them to join with COMER in demanding that the federal
government revive the power of the Bank to provide funding to all
levels of government, mainly with interest-free loans, as was done
between 1935 and the early 1970s. These loans, of course, would be
for needed public investments, primarily to protect and improve
social programs and repair and build public infrastructure. (Go to
the COMER website – www.comer.org -- to read the full
text of the call.)<br /><br />COMER has been dismayed that civil
society groups have not pushed for these changes in monetary policy
on their own, since it could make abundant funding available to
meet a wide range of the social and environmental needs for which
they advocate. This is perhaps because they are unaware of this
possible answer to their funding shortages. The COMER campaign
hopes to raise their awareness as it calls for their
endorsements.<br /><br />Of course the COMER people have to be
realistic. They know the monetary policy changes they propose
challenge the power of the private banking system, and they know
this system has the support of the new majority Harper
government. </span></span></span><span style="color: #222222;"><span style="font-size: small;"><b><span style="background: #ffffff;">But
the enhanced status of the NDP in the new Parliament (and the
election of the first Green Party candidate, leader Elizabeth May)
heightens the prospect that a revival of the Bank of Canada’s
lending powers will be more frequently and effectively raised in
the House of Commons. (Maybe every time the Conservatives cite the
debt as an excuse for cutting social programs and
services.)</span></b></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /></span></span></span><span style="color: #222222;"><span style="font-size: small;"><b><span style="background: #ffffff;">Significantly,
the NDP convention in 1995 and the Green Party convention last year
both passed resolutions calling for a return to government
borrowing from the Bank of Canada instead of the private banks. It
would be in accordance with those resolutions for both parties to
put this key monetary policy reform on their parliamentary
agendas.</span></b></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /><br />Indeed,
it may be essential for the opposition to take this stand in the
House, if only to deter Harper from making the Bank of Canada even
less beneficial to the public interest. This could happen if Harper
decides to act on his earlier support for the creation of a common
U.S.-Canadian currency, or to bring Canada into a proposed new
global currency system – both, of course, controlled by the
private bankers. Such a loss of monetary policy independence would
gravely impair the Canadian campaign for monetary justice.<br /><br />Right
now, however, the renaissance of the Bank of Canada, though very
difficult, is not beyond achievement. Particularly if the campaign
garners the support it deserves from the civil society groups that
now suffer so much from the Bank’s disuse.<br /><br />(George Crowell
is a retired University of Windsor professor who has been working
with COMER on monetary policy since 1994.)</span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><b>Australia
- Australia's best years under public credit implemented by their
Labor Party</b></span></div>
<div dir="LTR" id="post-body-4416917275080298020">
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">National
Banking in Australia:</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">The
Commonwealth Bank</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">July
2012</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">By
Robert Barwick </span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">In
two distinct phases, from its inception in 1911 to 1923, and then
from 1942-49, the Commonwealth Bank proved the power of national
banking: it directed the public credit of Australia into the
development of great infrastructure and crucial industries,
including the Trans-Australian Railway; it financed Australia’s
participation in WWI; and it financed the miraculous war-time
economic mobilisation of WWII which transformed Australia from an
agrarian backwater into an agro-industrial powerhouse, including
the postwar great Snowy Mountains Scheme. Just as in the United
States, the rise and fall of the Commonwealth Bank is the story of
Australia’s battle for national sovereignty.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: small;">The
American-inspired patriots of colonial Australia who fought for
nationhood knew that national banking was the determining issue.
Australia’s labour movement was born out of the bloody 1890
maritime and shearers’ strikes against the London banks,
pastoral houses and shipping companies that controlled the
colonial economy, and whose stranglehold would unleash the
devastating crash of 1893. Already in 1891, NSW’s Labor
Electoral League, one of the components which would form the
Australian Labor Party, enshrined a commitment to national banking
in its electoral platform, alongside a demand for “<b>The
federation of the Australasian colonies upon a national as opposed
to an imperialistic basis….”</b></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: small;">It
was the expatriate American ALP politician King O’Malley who
gave the Labor Party its deep appreciation of the workings and the
signifi cance of national banking. In 1908 O’Malley convinced
the federal Labor Party conference held in Brisbane to adopt a
detailed national banking proposal in its fighting platform. <b>In
a five-hour speech in Federal Parliament the following year,
O’Malley emphasised the importance of a national bank for
Australia’s sovereignty:</b></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">“<span style="font-size: small;"><b>We
are legislating for the countless multitudes of future
generations, who may either bless or curse us. … We are in
favour of protecting, not only the manufacturer, but also the man
who works for him. ... I propose the institution of a government
national bank for managing the finances of the Commonwealth and
the States. … Cannot honourable members see how important it is
that we should have a national banking system … —a system that
will put us beyond the possibility of going as beggars to the
shareholders of private banking corporations? The movement of the
money volume is the vital monetary problem—the master-key to the
financial situation. Through the control of this movement prices
may be made to rise or fall or remain substantially steady. …
Such power is an attribute of sovereignty … and ought to belong
to none but the sovereign people exercised through … Parliament
and Government in the interests of the whole people.”</b></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">O’Malley
triumphantly proclaimed the precedent for his proposed new
national bank. “I am the Hamilton of Australia”, he declared.
“He was the greatest financial man who ever walked the earth,
and his plans have never been improved upon. … The American
experience should determine us to establish a national banking
system which cannot be attacked.”</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Labor
vs. the Money Power</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">To
force the ALP caucus to implement the national banking policy,
over the opposition of Melbourne’s British-controlled Collins
Street banks, O'Malley formed what he called the “Torpedo
Brigade” among Labor MPs. O’Malley and his allies pushed
through the Commonwealth Bank Act in December 1911, and O’Malley
personally handpicked Denison Miller to run the new national bank,
exhorting him, “You have a chance to make history, Brother
Miller, Australian history, which will become world history. Think
the matter over deeply. And accept the job. Decide to make
history— I’m sure you’re the man to do it.” In his 1962
book, The Great Bust, former New South Wales Treasurer and later
NSW Prime Minister Jack Lang documented the terror which Miller
and the Commonwealth Bank had struck into the British oligarchy,
until Miller’s untimely death in 1923:</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">“<span style="font-size: small;"><b>In
Australia the war had been financed by the then newly established
Commonwealth Bank. It had found all the money to keep the armies
abroad, and also to finance the producers at home. It had financed
the Commonwealth Shipping Line deal for Hughes. Denison Miller had
gone to London after the war had finished and had thrown a great
fright into the banking world by calmly telling a big bankers’
dinner that the wealth of Australia represented six times the
amount of money that had been borrowed, and that the Bank could
meet every demand because it had the entire capital of the country
behind it. The Bank had found £350 million for war purposes. A
deputation of unemployed waited on him after he arrived back from
London at the head office of the Commonwealth Bank in Martin
Place, Sydney. He was asked whether his bank would be prepared to
raise another £350 million for productive purposes. He replied
that not only was his bank able to do it, but would be happy to do
it. Such statements as these caused a near panic in the City of
London. If the Dominions were going to become financially
independent of the City of London, then the entire financial
structure would collapse.”</b></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Lang
went on to describe the City of London’s intention to bridle the
Commonwealth Bank, by creating a supranational banking structure
that would take control over the finances of all nations,
constituting a de facto world government. The subjugation of the
banking system of Europe today, under the European Stability
Mechanism (ESM) demanded by London and related financiers, is a
dead ringer for the process exposed by Lang:</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">“<span style="font-size: small;"><b>Basically
it was a problem of banking. Some formula had to be devised which
would enable such local institutions as the Commonwealth Bank of
Australia to be drawn into the City of London’s net. The
financial experts studied the problem deeply. Out of their
deliberations emerged the plan to centralise the control of all
banking throughout the Empire by channeling it directly into the
supervision by the Bank of England. The Bank of England was to
become the super Bankers’ Bank. … The Bank of England took up
the idea of Empire control most enthusiastically. It was even
decided to aim at a World Bank, to be run by the League of
Nations, which would control the credit of the world. The grand
idea was that one single Board of Directors would make the
decisions which would determine the economic policy of the world.
The bankers were to be the supreme rulers. Naturally, the Governor
of the Bank of England expected to be at the apex of the system.
If, for example, the Bank of England could control the
Commonwealth Bank of Australia there should be no impediment in
the way of controlling the government of the country as well. …
The death of Miller removed at a critical moment the one man
capable of defending the citadel of Australian fi nancial
independence.”</b></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Notwithstanding
the remarkable accomplishments of the Commonwealth Bank, its mere
twelve years of operation, before private financiers seized
control of it following Miller’s death, were not enough for the
Bank to break the British monetary stranglehold on Australia.
Frank Anstey, one of O'Malley’s former Torpedo Brigade members
and the mentor of future prime minister John Curtin, showed in his
1921 book, The Money Power, that the issue was understood to be
national sovereignty:</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">“<span style="font-size: small;"><b>Australia
is a mere appendage of financial London, without distinct economic
existence. ... London is, so far, the web centre of international
finance. In London are assembled the actual chiefs or the
representatives of the great financial houses of the world. The
Money Power is something more than Capitalism. ... These men
constitute the Financial Oligarchy. No nation can be really free
where this financial oligarchy is permitted to hold dominion, and
no ‘democracy’ can be aught but a name that does not shake it
from its throne.”</b></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Indeed,
when Miller died in 1923 the London banks directed the Australian
government to hand control of the bank to a board of private
businessmen, who promptly turned off the tap of public credit.
During the Great Depression, the privately controlled board of the
Commonwealth Bank refused to follow a government directive to
issue credit for public works— a plan to alleviate the 30 per
cent unemployment, on the successful model being applied by U.S.
President Franklin D. Roosevelt. This defiance of government
policy, by the board of the bank, caused such a scandal that in
1936 a Royal Commission was established to investigate banking in
Australia. The commission found that the government should be the
ultimate authority over the banking system, findings ignored by
the Lyons-Menzies governments.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">In
a 1937 speech to the Labor Party’s election campaign launch in
Fremantle, WA ALP leader John Curtin reiterated Anstey’s 1921
warning that there could be no Australian sovereignty without
government control over the nation’s finances. Curtin demanded
restoration of the Commonwealth Bank’s original charter, and
that the Bank be freed from the vice of private financiers and put
back under government control:</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">“<span style="font-size: small;"><b>If
the Government of the Commonwealth deliberately excluded itself
from all participation in the making or changing of monetary
policy it cannot govern except in a secondary degree.”</b></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">In
1939, on the eve of the war, the aging King O’Malley again went
to bat to re-establish the Commonwealth Bank under its original
purpose and charter, as opposed to its domination and speculative
misuse by private fi nanciers. In his pamphlet Big Battle,
O’Malley insisted that the individual rights people believed
were theirs could not be guaranteed without sovereign control over
credit, and that the purpose of national banking was to facilitate
the creation of tangible, physical wealth, as opposed to the
inevitably disastrous “fog wealth” of private banking
speculation:</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">“Permanent
wealth is produced by the slow process of industry, combined with
skill and the manipulation of capital. Fog wealth is produced by
the rapid process of placing one piece of paper in the possession
of a bank as a collateral security for two pieces of paper. Some
of the enormous quantity of paper which is being created now will
sooner or later collapse. But with the Commonwealth Bank capable
of sustaining legitimate credits, there can come no panic which
will again destroy the market value of intrinsic values, ruin
debtors, deprive workers of work, and produce general distress.
Oh! Would that I possessed the power to arouse the Australian
people to the imperative importance of reviving the Commonwealth
Bank!”</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">After
the War</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">The
Commonwealth Bank was indeed revived by John Curtin and Ben
Chifley during and immediately after WWII, with stunning success.
But the British Crown’s Privy Council overturned Chifley’s
bank nationalisation legislation, which had been passed by both
houses of Parliament in 1949, and soon Labor was out of power for
the next 23 years. During that period Prime Minister Sir Robert
Menzies, a professed admirer of Hitler and Mussolini during the
1930s and a notorious lackey of the anglophile Melbourne financier
Sir Staniforth Ricketson, finished off what was left of the
Commonwealth’s function as a national bank.4 He established the
Reserve Bank as an independent central bank with control over the
nation’s finances, and appointed as its first governor a
British-educated Fabian, H.C. “Nugget” Coombs. As Minister of
Post-War Reconstruction, Coombs had ripped up most of Labor’s
grand postwar reconstruction plans. He gloated of the globalist
control over banking when he said of himself, “I am a member of
the international freemasonry of central bankers.”</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Remnants
of a public credit policy continued to exist in Australia, through
the Commonwealth Development Bank, the Australian Industry
Development Corporation (AIDC), and the various state banks, which
enabled the federal and state governments to direct lending into
farming, manufacturing and small business. In 1981, under the
direction of a cabal of investment bankers centred in Hill Samuel
Australia (later renamed Macquarie Bank), a subsidiary of the City
of London’s Hill Samuel & Co., Ltd., the Committee of
Inquiry into the Australian Financial System (the Campbell
Committee) demanded sweeping banking deregulation, including the
elimination of all such public credit institutions. To its eternal
shame, it was the Labor Party, under Fabian traitors Bob Hawke and
Paul Keating, that delivered on the City of London’s demands
upon assuming power in 1983.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Keating
deregulated the banks, exposing Australia to the predations of
foreign banks; floated the dollar; amalgamated unions to bust
their bargaining power; annihilated manufacturing by slashing
tariffs (to “enhance competition”); and privatised major
public assets, including the Commonwealth Bank. As revealed in
Keating: the Inside Story, by John Edwards, Keating declared his
intention to dismantle every aspect of the advanced
agro-industrial economy that “old” Labor governments had used
public credit to build up, proposing that Australia’s economic
future should be almost solely that of a raw materials exporter,
with whatever shards of manufacturing might manage to hang on with
low or no tariffs: “Minerals, wool and wheat—that’s our long
suit. And we have to make secondary industry competitive.” Three
decades after Keating began this assault on Australia’s economic
sovereignty, his intention for Australia has been realised.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: small;"><b>New
Zealand - New Zealand’s proud history of pushing for an honest
money system and monetary, banking and credit reform.</b></span></div>
<div dir="LTR" id="single-date">
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Compiled
by Iain Parker 2012</span></div>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">Note
– </span></span></span><span style="color: #222222;"><span style="font-size: small;"><i><span style="background: #ffffff;">Italic
text is written by Iain Parker</span></i></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">.
Normal text is excerpts of documents as named</span></span></span><span style="color: #222222;"><span style="font-size: small;"><i><span style="background: #ffffff;">.</span></i></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"> </span></span></span><span style="color: #222222;"><span style="font-size: small;"><b><span style="background: #ffffff;">Bold text
are points of importance;</span></b></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /></span></span></span><span style="color: #222222;"><span style="font-size: small;"><b><span style="background: #ffffff;"><br />Michael
Joseph Savages (First New Zealand Independent Labour Party
PrimeMinister 1935-40) said in his 1920 maiden speech to
Parliament;</span></b></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />“</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">The
Government should create a state bank , and use the public credit
for the public good as an alternative to borrowing
overseas”</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /></span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;"><br /></span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><b><span style="background: #ffffff;">Twice
PrimeMinister of Canada – William Lyon Mackenzie King –
spanning most of period 1921 – 1948 said in 1935;</span></b></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />“</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Once
a nation parts with the control of its currency and credit, it
matters not who makes that nation’s laws. Usury, once in
control, will wreck any nation. Until the control of the issue of
currency and credit is restored to government and recognized as
its most conspicuous and sacred responsibility, all talk of the
sovereignty of Parliament and of democracy is idle and futile.”</span></span></span></span></strong></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Michael
Joseph Savages (First New Zealand Independent Labour Party
PrimeMinister 1935-40) views as cronicled in – From The Cradle
To The Grave – by Barry Gustafson 1986</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">Pg
146 – Savage read and quoted Keynes, and agreed wholeheartedly
with Keyne’s suggestion that ‘the first necessity was that
bank credit should be cheap and abundant’ if the economy was to
be expanded and unemployment overcome. But he wanted a more of a
permanent solution than Keyne’s subsequent suggestion of
increased public investment financed through a budget deficit as a
means of offsetting a temporary decline in private investment,
thus maintaining or stimulating consumption and………<br />Pg
147….production in the short term. </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Savage
believed in increased government expenditure on social welfare,
public works, guaranteed prices to farmers and minimum wages to
workers as a means of increasing consumption, demand and economic
activity. </span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">But
he also believed in balancing the budget as far as possible
through supplementary, graduated, direct taxation; restrained
borrowing; and </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">credit
creation.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /></span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Nor
was Savage convinced that the answer to New Zealand’s economic
problems lay in the monetary mechanism suggested by Douglas and
the Social Credit movement, though he certainly shared their basic
assumption that what was physically possible should be financially
possible. </span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">Lee
and some other Labour Mps, notably Langstone, Parry, Mason and
Carr, found Douglas’s critique ‘identical with that of the
Labour Party’ and Douglas’s National Dividend scheme similar
‘in every sense’ to Labours policy of increased and
redistributed purchasing power. </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Savage,
though not as critical as Holland, who believed Social Credits
solution ‘would mean disasterous inflation’ had serious
reservations and joined Holland in stating publicly that the
Labour Party ‘ does not accept the Douglas scheme’.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />Douglas
emphasised a continuous creation and injection of credit to bridge
what he claimed was a permanent gap between purchasing power and
production, not a temporary flaw in the distribution of adequate
means of exchange. Douglas also wanted an economic system that
would provide the basis for individual freedom and a move away
from the growing concentration of power in the hands of
government, big business, banks and trade unions, all of which he
regarded as conspiring against the people as a whole. </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Social
harmony would only be possible when all the ‘useful people’
were able to enjoy the wealth they created, and that in turn would
only be possible when the hidden but real government, the banks,
had their financial powers stripped from them and new economic
mechanisms were created to increase and distribute money and
credit.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /></span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Savage,
however, argued that the creation of extra currency and credit was
useless and even dangerous if not accompanied by a redistribution
of purchasing power and balanced by increased production. He
admitted that ‘ The Douglasites have an idea that is
atleast a step out of the orthodox rut, and to the extent that it
is going to cause people to think we should welcome it, but to my
mind it does not bridge the gap from where we are now to a free
circulation of commodities, and that is the object of currency and
credit generally.’ </span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />While
Savage pressed for an increase in credit, therefore, he made it
clear that, in his opinion, an increased supply of money on its
own was insufficient; </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">the
use to which that money was put was all important.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"> Savage
believed that ‘ the careful use of public credit through the
existing banking machinery for the purpose of national
construction was paramount. what is wrong with the monetary
system,’ he argued, ‘is that there is……<br />Pg
148….insufficient money finding its way into the pockets of the
mass of the people,</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">because
I believe definitely that so long as private individuals control
finance they control everything else. Banking has become an
integral part of industry, and the bankers govern the situation,
and whatever steps may be taken by Parliament to relieve or assist
industry may be nullified by refusal of credit by those
controlling it.’</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />Savage
concluded, reflecting the influence of Fisher and Soddy rather
than Douglas, </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">‘I
do not know that there is much wrong with the present banking
system except the control of it. That is what matters in the
finish.’ </span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">Only
when the state, not private banks, control the money supply could
it be expanded when necessary and directed into productive not
speculative areas of the economy. Only then, Savage believed,
could there be stable, sustained sensible growth in the economy.
‘Parliament can, and should, be the master in financial
affairs,’ asserted Savage, and by Parliament he meant the whole
of Parliament, not ministers using regulations that led to
‘comparative autocratic Government’ or commissions and boards
not directly responsible to the voters.</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Savage
believed that credit creation, which would supplement not replace
taxation and loans, would be non-inflationary only if ‘carefully
applied to reconstruction purposes’ and used ‘wisely and
economically.’ Over dependence on or excessive use of any single
method of funding government expenditure – excessive taxation,
excessive borrowing, excessive credit and currency creation –
were all equally objectionable and as dangerous in Savages view as
an insufficient supply of purchasing power.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">‘Artificially
created credit must be guarded against’, especially, because it
was no ‘remedy for a condition which is often due rather to
insufficient collateral security, a fall in prices, or
unsatisfactory farming.’</span></span></span><span style="color: #222222;"><span style="font-size: small;"><i><span style="background: #ffffff;"><br /><br />So
there we have Savage in disagreement with Douglas. Perhaps that is
why the </span></i></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><i><span style="font-weight: normal;"><span style="background: #ffffff;">next
excerpt from the book – Simple On A Soap Box – by John A
Lee 1963</span></span></i></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><i><span style="background: #ffffff;"> proves
that he differs and disagrees with both Savage and Douglas as to
how public credit should be issued. It must be noted that Barry
Gustafson implied John A Lee totally agreed with C H Douglas
Social Credit when from his own writings below it is clear he did
not;</span></i></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />Pg
133 – </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">As
the 1928-35 economic crisis receded the electorate remained
pronouncedly conscious of monetary theory, of rates of interest
and of development by State credit rather than by recourse to
higher borrowing rates. The British Labour movement had the same
lively awareness. G. D. H. Cole, Arthur Henderson and many other
socialists who rejected the Douglas Credit mythology had become
genuine social creditors. I distinguish between social credit and
mystical Douglas Social Credit. </span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">The
clamour for more intelligent use by the State of its own resources
and for lower interest rates continued across the world, in the
wake of the depression, until it was submerged in the clamour of
the Second World War.<br />Our caucus resolution not only ordered
exchange control but also that there should be no increase in the
interest rate without the consent of caucus. But we did not trust
the Old Man or Nash. Labour movements the world over had not
recovered from Ramsay MacDonald’s and Philip Snowden’s
determination to place the gold value of the pound above a
life-time’s loyalty to Labour (even though the gold standard was
abandoned a week later). </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">During
the election the Old Man at his vast evangelic meetings had made
emotional affirmations, between the cheers, of his determination
to use the “internal credit of the people” for public works,
indeed for “loan-free public works”, and had repeated
assurances that Labour intended to reduce interest rates for
public development.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />But
from the moment the M.P.s returned to their homes inspired news
paragraphs started to suggest a return to orthodoxy to deal with
our exchange crisis, a greater rate of interest to attract funk
deposits, and maybe a lesser use of credit in New Zealand, a
policy which contradicted everything Labour had…..<br />Pg
134……..said about money since 1928. All this was easy for
Walter Nash to swallow, but not for the rest of us. We knew that,
sentimentally, the Old Man was with us, that he always talked our
way, but we knew that in fact he would defend whatever brief
Walter Nash put into his mouth. Any suggestion of a credit squeeze
was abhorent to us.<br />Pg 53 – During a budget debate in the
depth of the depression Savage, Nash, Parry and McCombs had tabled
a resolution in caucus. They wanted the Labour Opposition in
Parliament to move that a certain sum of money be borrowed on the
security of the unemployment fund and used to alleviate distress.
The time had arrived for a challenge. I became very active and
lobbied every Labour M.P. I ensured a big caucus attendance.</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">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.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"> </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">We
could see no reason at that 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
rights of issue for their own bank. The goods existed, why not
create credits?</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />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 was adjourned four times. I
think every member insisted on speaking. At the third meeting
Harry Holland, then Leader of the Party, espoused our cause. I saw
M.P.s taking their coats off to one another 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 M.P.s voted for credit issue
including Harry Holland himself. We moved accordingly in
Parliament.<br />Out of that debate had come a new finance policy in
which, I am convinced , Nash never believed. </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">In
1935 the Labour Party affirmed that the Government should have
sole right over the issue and control of new credit. </span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">But
in the meantime Holland had died. Savage, the oldest surviving
private and deputy, had become Labour Leader and was on the road
to the Prime Ministership. He never forgave me the humiliating
defeat I had organised. Prior to that caucus Savage used to tell
everyone, both publically and privately, that I would be one of
the first chosen in a Labour Cabinet. After the defeat I knew that
only a caucus vote would compel Savage to accept me. He became
unfriendly from that day on.<br />Pg 58 – Factory production had
become unprofitable. I wanted to see money issued for essential
works until production flowed once more. I did not want to take
over factories. I did want us to take over banking and the issue
of credit. I did want us to use our credit to finance work so long
as unemployment existed. </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">I
objected to New Zealand being made bankrupt because prices had
fallen overseas.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"> We
should maintain our own price level and with it solvency. This
attitude to price was indeed the genisis to our guaranteed price
scheme. Twenty other voices in caucus urged the same thing I
did.<br />But alone, perhaps, I sensed that if we issued internal
credits and did not establish exchange control and import
selection our credits would create demand for imports in excess of
our London funds and create a financial crisis which would bring
the Labour Government to its knees when it set out to renew London
loans. To me exchange control and import selections, so that we
could control the flow of credits and imports and maintan a
reserve, was absolutely essential to socialist financial
policy.<br />Pg 68 – I am sure that much of Labour’s success is
a consequence of good or bad times. Labour was good for business
after Nationalist bad business. </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">The
average Labour MP did want to restore purchasing power to the
masses and that was in itself a fruitful idea. But there were no
ideas as to how to change or gradually transform the economic
system so that increased production could spell expanding incomes
and greater leisure and fewer depressions by breaking the cursed
cycle of capitalist inflation-deflation. For half a century Labour
in Britain, Australia, and New Zealand had talked of socialising
‘the system’ but when the moment came for modest doses of the
socialism for which the electorate had granted a mandate Labour
either did not know or where there was knowledge, did not have the
courage to make changes.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />Pg
77 – A few days later the PrimeMinister sent for me again. Nash
had come up with a proposition. “</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">We
will make you the Under-Secretary in charge of housing. </span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">You
will handle housing business as though you were a Minister. You
will present housing to Cabinet, you will deal with housing
business in Parliament. Walter will be your Minister, but he will
be going to England by the time you get started and it will be up
to you. We will introduce legislation the moment Parliament
settles down. No one will get in your way.”<br />“</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Will
money be available from the Reserve Bank?” I asked.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />This
was a contensious Party issue. With tens of thousands of men on
relief work the Labour Party, Nash and Fraser apart, believed that
the funds of the Reserve Bank should be used for essential capital
works until available men, machinery and materials were being
fully employed. We wanted to undo the politically enforced
Banker’s deflation. Nash wanted to stabalize deflation. We did
not want to create money when men, materials and machinery were
being fully engaged; at that point we believed the cost of works
should be met out of revenue. But we were not prepared to create
debt as long as goods, machinery and men were idle. That was the
moment to use public credit.<br />“</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Money
will be made available from the Reserve Bank.” The Prime
Minister made the promise.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />Pg
90 – Although the power to underwrite and arrange fresh
borrowings has been availed of rather than the power to make new
issues, except where the issue is an overdraft, such as has been
arranged for the dairy industry account, one definite issue has
been arranged for. The Government has instructed the Reserve Bank
to make five million pounds worth of credit available for housing
purposes. These funds will be drawn upon by the Housing Account of
the State Advances Corporation. </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">All
the funds so advanced will be used to create new assets in the
form of houses and a straight out issue of money for the creation
of such assets was considered justifiable. </span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">The
instruction to the Reserve Bank, according to the Hon. Mr. Nash’s
statement to Parliament, specifically prohibits the Reserve Bank
from negotiating the sale of any portion of this issue, so that
the whole issue is to be new money upon which the interest earned
will belong in its entirety to the State. And the houses, of
course, will belong to the State.<br />Pg 91 – </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">In
the halfway house of socialism-capitalism the evils of both
systems are likely to afflict us if we are not careful. Labour
must stimulate the production of such quantities of goods as are
necessary to New Zealand’s welfare at an even higher standard.
Capitalism cares only that the transaction yeilds a cash profit.
To use a money machine to only create capital works and leave
consumption goods to private finance is dangerous. Hence at some
stage Labour must give effest to the Prime Ministers intention of
making credit available to secondary industry. Production that may
not be profitable at the overdraft rates of the trading banks may
be so socially desirable as to necessitate freeing it from the
profit system so that quantities can flow to the extent required
by the nation.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /></span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><i><span style="font-weight: normal;"><span style="background: #ffffff;">(Incredulously
John A Lee who had contributed so much to the Labour Party and
kept them on track to keep their promise of needed fair-minded
financial system reforms would go on to be thrown out of the party
by union leaders who became all powerful due to aquiring the
compolsory union block vote at Labour Party conferences and who
Lee had criticised for gaining so much for contributing so
little);</span></span></i></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />Pg
178 – Preparations were being made for the 1940 Conference;
branches were appointing delegates in record numbers. I could
count my friends by the hundred. Branches were three to one behind
me (apart from areas where Catholic Action groups had intervened
because of the rumour that I opposed the Old Man’s conversion).
They sent me unsolicited promises of support.Dr. McMillan thought
my article a good one and printed 1,000 copies of Pychopathology
in Politics which he intended to distribute to Conference.<br />Some
members of the National Executive, behind my back, grew active. Up
till then there had been no card vote in the Labour party of the
type that existed in Britain. Unions were allowed at Conference a
number of votes proportionate to their membership. To this end
their leading delegates were provided, at the opening of
Conference, with a card showing the number of votes each could
poll on behalf of his union. But full voting power could only be
exercised if all the union’s branches were represented at
Conference by delegates. Now a move was started to allow union
presidents and secretaries to poll the full vote of a federation
without such representation and without evidence that its members
had been consulted.<br />James Roberts and David Wilson brought
forward a proposal to allow the full card vote in such
circumstances. The Party’s constitution clearly provided that
alterations to the constitution had to be notified to branches by
prior remit. </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Roberts
and Wilson proposed to amend the rules by providing for the card
vote in the Executive Report with which Conference opened.
Endorsement of the Report would automatically amount to acceptance
of the new provision. This was clearly a means of amending the
constitution never contemplated. I knew that the jury was
being…..</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /></span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Pg
179 ……..loaded against me before Conference, but I was
powerless. A member of the Labour party cannot apply to a Supreme
Court for an injunction to prevent an illegal alteration of the
rules, even when he knows the change is being made in order to
hang him.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />“They
altered the rules regarding the composition of the jury after your
trial was started,” a judge of the Supreme Court was to say to
me later.As Conference drew near, so did Savage’s death while
the Standard still assured Party members that he was in full
charge of business. The daily press, however, was beginning to
suggest that the Prime Minister’s condition was critical. Some
of my following began to desert me. One member had written telling
me he thought Pychopathology in Politics was one of the best
things I had done and hoping that I would not “run away from its
truth”. He went to earth as fast as political heels would carry
him. It had taken him a lifetime to become an M.P., so who am I to
judge him ?Nor did he ever raise his voice publicly afterwards,
although he sent me many private and friendly communications. I do
not blame him. The card-vote magnates were to be powerful in
possession of tens of thousands of unconsulted votes of their
members many of them conscripted into their unions by the
compulsory legislation.</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Intransigent
as ever, Dr. McMillan wired from Dunedin that he had been informed
that the Prime Minister’s life could only last a matter of days
or even hours, and that an attempt would be made to end my
political life.As Savage showed signs of dying before conference
ended, Fraser made up his mind that I had to be expelled before
Savage died.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />Expulsion
from the Labour Party is much like excommunication from the
Communist Party or the Mediaeval church. The world is invited to
spit upon the sinner. He has passed beyond the portals of decent
treatment.</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Pg
162 – My reason for telling the truth about the Old Man was not
any wish to be a hero. I have never wanted to be one. Whenever I
have heard young children recite: </span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /></span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">“ For
how can men die better than facing fearful foes,” I have always
mentally interjected, “ In bed, of old age, at peace.” I
remember the day I won my D.C.M. At Messines. The line was held
up, men went to earth. I jumped up. It was the only thing to do.
No doubt an odd one had jumped up before me and had fallen with a
gut full of machine-gun bullets. I jumped up because forward was
the only way. As I jumped up to run I heard a voice, despite the
thunder of the guns, say, “There goes a fellow for the V.C.”
an observation that had not the slightest bearing on my conduct. I
would not have risked a finger for twenty V.C.s. What I did was
merely commonsense.</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />Pg
275 – If capitalists are still afraid of Labour as a conspiracy
to overturn the profit system let them sleep in peace! The trade
union magnates plan big unions and want power within their
organisations. They do not inspire the Labour Party to action.
They are only hangers on. They have rich appetites, they are more
like the cartoonist Edgar Dysons fat man than the capitalists
themselves. The idea that they are capable of a revolutionary
conspiracy is unbelievably funny. Union secretaries are the new
conservative class; they hate agitation. They love unions so big
that the controllers are beyond reach of the rank and file, safe
from criticism.</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Pg
276 – Is Labour a conspiracy? Labour these days accepts the
existing system. The only case that Labour puts forward is about
how tax proceeds shall be shared. The present important task of
Labour, and I am not belittling it, is to humanise the capitalist
system, not to socialise or control it. Most of the M.Ps these
days know nothing of capitalism or socialism. They have never read
a tract on the capitalist crisis. Their loyalty is not to an idea,
but to machine, to a job as an M.P. </span></span></span></span></strong></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #222222;"><span style="font-size: small;"><b><span style="background: #ffffff;">Man
to Man by Tom Skinner 1981 – Michael Savage explained the
State housing scheme to Tom Skinner of the (New Zealand)
Federation of Labour as such;</span></b></span></span><span style="color: #222222;"><span style="font-size: small;"><i><span style="background: #ffffff;"><br /></span></i></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">Pg
45 – “I was with Joe on one occasion when he began chatting
about the ramifications of the </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">Governments
State Housing Scheme. </span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">He
told me … how the construction of those houses created assets in
a productive way. </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">The
Government created the money through the Reserve Bank </span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">at
a moderate rate of interest to cover the contract price, which
paid for materials, tradesmen’s wages, the purchase and
development of the land and all the other essentials required to
finish the house. On completion the house was transferred from
the Housing Division of the public works department to the State
Advances Corporation – in effect from one department to another.
The corporation was the renting agency responsible for selecting
the tenants, collecting rents and maintaining the house and the
property. </span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">The
philosophy was that as the money was created for productive
purposes no loss could occur if it were not repaid from one
department to another. </span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">Meanwhile,
during construction, tradesmen had been paid wages which had been
spent and absorbed into the economy. But it was solid money backed
by the creation of assets. People had been kept fully employed
while the government built homes for the people.<br />Tom
Skinner;<br />“</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">While
Joe spoke I began suddenly to grasp the Labour philosophy related
to the creation of credit. It set me off thinking about money and
what it meant to the economy. The Government, figuratively
speaking, could rub a state house debt out of the books because a
building stood in its place. But money created by the banks in
order to gain profits in the form of interest was the other side
of the coin. It was unproductive, inflationary creation of money
if unmatched by equivalent goods and services…..”</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />“</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">I
have read and believe that monetary mismanagement is the greatest
evil of our time. It breeds injustice, increased costs and, as the
root cause of inflation, it diminishes the value of our money.
Governments should carry out their pre-election promises and take
the necessary steps to reform the monetary system. It can be done
only by making the State the sole authority for the issue of
currency and credit….. unfortunately, in this area politicians
seem to be abysmally ignorant of elementary financial
and economic truths.”</span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br /></span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;"><br /></span></span></span></span></strong><span style="color: #222222;"><span style="font-size: small;"><b><span style="background: #ffffff;">From
The Cradle To The Grave – A biography of Michael Joseph Savage
(First New Zealand Labour Party Prime Minister 1935-1940) by Barry
Gustafson 1986;</span></b></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;"><br />Pg
198-9<br />The National Opposition (1936) was astonished by the use
of Reserve Bank credit for housing, which disregarded traditional
principles of budget finance. Forbes (George Forbes ex Prime
Minister 1930-5 Great Depression era) admitted confidentially to
Stewart (William Downie Stewart Jnr – Finance Advisor);<br />“</span></span></span><strong><span style="color: #222222;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">This
places them in a unique position, the houses after erection carry
no interest on capital cost, and for instance a thousand pound
house can be let for 5s per week and be a financial success. The
millenium seems to have arrived and it makes one wonder why we had
to struggle in the bog, when there was such an easy way out of our
troubles, houses, after being built with the highest paid workers
in the world, at the lowest cost heard of, makes our policy of
orthodox finance seem almost prehistoric.”</span></span></span></span></strong></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><b><br />In
July 1962 the leader of the Labour Party, the Rt. Hon. W. Nash,
made a lengthy statement in which he said;</b><br />“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 Reserve Bank Credit,
within the limits set out is not only justified, but has already
contributed much towards the Nation’s economic
well-being.”<br /><b>Thus, 27 years too late, Nash accepted the
policy on which Labour was elected in 1935.</b></span></div>
</div>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Ellen
Brown March 7, 2012</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><a href="http://www.webofdebt.com/articles/brics.php">http://www.webofdebt.com/articles/brics.php</a><span style="color: #888888;"><span style="font-size: small;"><span style="background: #ffffff;">
</span></span></span>
</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><b>It
turns out that globally, not only are publicly-owned banks quite
common but that countries with strong public banking sectors
generally have strong, stable economies.</b> According to an
Inter-American Development Bank paper presented in 2005, the
percentage of state ownership in the banking industry globally by
the mid-nineties was over 40 percent. The BRIC countries—Brazil,
Russia, India, and China—contain nearly three billion of the
world’s seven billion people, or 40% of the global population. The
BRICs all make heavy use of public sector banks, which compose about
75% of the banks in India, 69% or more in China, 45% in Brazil, and
60% in Russia.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Focusing
on the financing of real businesses and economic growth seems to be
the secret of the BRICs, which are leading the world in economic
development today. But the BRIC phenomenon is more than just a
growth trend identified by an economist. It is now an international
organization, an alliance of countries representing the common
interests and goals of its members. The first BRIC meeting, held in
2008, was called a triumph for former Russian President Vladimir
Putin’s policy of promoting multilateral arrangements that would
challenge the United States’ concept of a unipolar world.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">The
BRIC countries had their first official summit and became a formal
organization in Yekaterinburg, Russia, in 2009. They met in Brazil
in 2010 and in China in 2011, and they will meet in India in 2012.
In 2010, at China’s invitation, South Africa joined the group,
making it “BRICS” and adding a strategic presence on the African
continent.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">The
BRICS seek more voice in the United Nations, the IMF, and the World
Bank. They are even discussing their own multicultural bank to fund
projects within their own nations, in direct competition with the
IMF. They oppose the dollar as global reserve currency. After the
Yekaterinburg summit, they called for a new global reserve currency,
one that was diversified, stable and predictable; and they have the
clout to get it.According to Liam Halligan, writing in The U.K.
Telegraph:</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">The
BRICs account for around three-quarters of total currency reserves.
They have few serious fiscal issues and all are net external
creditors.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Western
financial interests have long fought to maintain the dollar as
global reserve currency, but they are losing that battle, despite
economic and military coercion. Russia, China and India are now
nuclear powers. The BRICS will have to be negotiated with, and the
first step to forming a working relationship is to understand how
their economies work. Rather than declaring war on their more
successful practices, we may decide to assimilate some of them into
our own.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">How
might a dialysis of Sovereign Dollars work to achieve a Steady State
Economy?</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Raf
Manji Sustento Institute 16-8-2011</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Slowly
but surely mainstream commentators, economists and policy analysts
are all starting to realise that exponential debt is the core of our
current economic malaise. This is great news to those of us who have
been banging on about this for many years.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">But
still there is confusion around what to do about it. “Saving”
has become the new buzzword, sitting squarely alongside “austerity”,
as private individuals are urged to save more and governments are
urged to spend less. That sounds like a sensible way forward. But
watch the economy tank when that happens. Why?</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Simply
because when debt is paid down (and no corresponding new loans made)
the money supply contracts as the debt is destroyed. The debt never
existed as “money” in the sense of notes and coin but as an
asset and liability for the bank. The interest is collected and the
debt destroyed, leaving the profit for the bank. A monetary system
based on debt will always lead to booms and busts as the interest
charged overwhelms the ability of the productive sector to pay it.
Ironically the system always needs infusions of new debt to stay
afloat as the amount of money in the system declines.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Of
course, when companies start to lay off workers (their first cost
saving option) this creates uncertainty and an unwillingness for new
borrowing to take place. This creates a self-reinforcing cycle which
in some cases leads to recessions and occasionally to depressions.
So what’s the best way out of this?</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Austerity?
No. Austerity will keep some investors happy but generally this will
simply lead to slower growth and higher unemployment. But austerity
is also a fact of life. When you have borrowed money and spent it,
you know one day you have to pay it back. If you haven’t saved for
that day then you will have to forego consumption for repayment. If
you are in that position, which many governments are, you have, in
fact, over consumed your income and eaten into your future. That’s
not a pleasant space to be.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Is
there an alternative?</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Yes
there is. I’d like to propose what I term “Monetary Dialysis“.
This process seeks to replace debt money with real money (let’s
assume for the moment that fiat money is real). The difference
between debt money and real money is two fold: firstly, real money
is permanent and once it enters the banking system it remains there;
secondly, real money enters the banking system without interest,
with no charge for its creation.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">This
two key differences will lead to new outcomes: a more stable money
base and a less inflationary one.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">How
will this process take place?</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><a href="http://sustento.org.nz/wp-content/uploads/2013/02/The-Manning-Plan.pdf">http://sustento.org.nz/wp-content/uploads/2013/02/The-Manning-Plan.pdf</a><span style="color: #888888;"><span style="font-size: small;"><span style="background: #ffffff;">
</span></span></span><span style="color: #222222;"><span style="font-size: small;"><span style="background: #ffffff;">(for
full detail of below)</span></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">THE
MANNING PLAN FOR PERMANENT DEBT REDUCTION IN THE NATIONAL ECONOMY
EXECUTIVE SUMMARY</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">1.
This plan offers a very low risk way to resolve the world debt
crisis without sudden or radical change to the world financial
system. It brings together a number of ideas such as Universal Basic
Income (UBI), Debt Jubilee Income (DJI), and Quantitative Easing
(Monetary Dialysis) that are already receiving some attention but
cause concern to some policy makers when they are considered in
isolation. The plan can be implemented quickly and unilaterally.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">2.
The plan is based on specific forms of UBI and DJI structured to
avoid inflation. The plan avoids most inflation because it can
easily be adjusted so that incomes match the physical and human
resources available to the economy.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">3.
The Manning Plan sets out implementation details for New Zealand.
Each New Zealand legal resident will receive about $100/week in a
special Basic Income Account, and each business will receive about
$100/week in a special Debt Jubilee Income account for each Full
Time Equivalent employee employed by that business who is paid wages
and salaries under the PAYE (Pay as You Earn) tax system.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">4.
The total Universal Basic Income payments are initially about NZ $23
billion/year and the total Debt Jubilee Income payments are
initially about NZ$7 billion/year. The money to make the payments
will be created debt-free and interestfree by the Reserve Bank and
administered by a New Zealand Debt Management Authority (NZDMA).</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">5.
The payments made to indebted persons and businesses will be used to
retire their bank debt. The payments made to non-indebted persons
and businesses will be invested in a New Zealand Public Development
Fund (NZPDF) that will pay tax-free interest on the deposits at
around 2.3%/year, a figure comparable to the existing average
deposit interest rate after taking into account reduced inflation
and taxation.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">The
NZDPF money will be used to fund new productive development both
public and private. NZPDF acts as a publicly owned Savings and Loan
institution for the purposes of new productive investment.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">6.
About NZ$ 15 billion of bank debt will be retired during the first
year, leaving new deposits of about NZ$15 billion, roughly similar
to the present financial system.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">7.
Bank deposit holders will be able to invest in a Public Investment
Trust Account (PITA) that will act as a publicly-owned Savings and
Loan institution to manage the on-lending of deposits to fund the
exchange of existing assets and to provide personal loans (including
student loans and credit cards).</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">8.
Bank balance sheets will still grow, but there will be little bank
debt. Instead, secondary lending will be 100% backed by monetary
deposits. Banks will be paid a spread of around 1.7%/year for their
services, comparable to what they get now after taking into account
that their lending becomes largely risk free. Normal debt repayment
is guaranteed through the Universal Basic Income and Debt Jubilee</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Income
accounts.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="color: black; font-family: Arial, Helvetica, sans-serif;"><b>Natural
Stabilizers to achieve a Steady State Economy.</b></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><strong><a href="http://userpage.fu-berlin.de/~roehrigw/kennedy/english/Interest-and-inflation-free-money.pdf">http://userpage.fu-berlin.de/~roehrigw/kennedy/english/Interest-and-inflation-free-money.pdf</a></strong><strong><span style="color: #888888;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">
</span></span></span></span></strong><strong><span style="color: #888888;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;"> </span></span></span></span></strong><strong><span style="color: black;"><span style="font-size: small;"><span style="font-weight: normal;"><span style="background: #ffffff;">(for
full details of below)</span></span></span></span></strong></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Prof.
Dr. Margrit Kennedy is an architect, an ecologist, a financial
expert and a critic of the prevailing economic system. As a
Professor she headed the department of "Technological
Advancement and Resource Efficient Construction" at the
Universtiy of Hannover's architecture school. As early as 1982 she
recognized that the broader application of ecological principals was
inhibited by fundamental flaws in the monetary system, especially
the consistent need for economic growth resulting from interest and
compound interest.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Through
her continuous research and scrutiny she became an expert on the
subject, working on practical solutions for essential Problems:</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">How
can we create a sustainable monetary system?</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">What
characterizes monetary systems which do not collapse repeatedly and
which serve us rather than control us?</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Where
can we find examples of well-working monetary systems in the past
and present?</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Within
our monetary system we allow the operation of a hidden
redistribution mechanism which constantly shuffles money from those
who have less to those who have more money than they need: Thus, on
the one hand, large amounts of money concentrate in the hands of
ever fewer individuals and multinational corporations and, on the
other, Third World Countries. will never be able to get out of debt
in the current system, as by now they have to pay back several times
the amount of what has been loaned to them.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">The
interest and compound interest mechanism not only creates an impetus
for pathological economic growth, but also works against the
constitutional rights of the individual in most democracies. If a
constitution guarantees equal access of every individual to
governmental services - and the money system may be defined as such
- then it is illegal to have a system in which 10% of the people
continually receive more than they pay for that service and 80% of
the people receive less than they pay.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Many
of the great political and religious leaders like Moses, Mohammed,
Luther, Ghandi and most of the churches and spiritual groups
throughout history have tried to reduce social injustice by
prohibiting interest payments. They understood it as the main cause
of social injustice. However, they did not come up with a practical
solution to keep money in circulation. Thus, the archaic flaw in the
system remained unchanged. The prohibition of interest payments
among the Christian community by the Popes during the Middle Ages in
Europe, for instance, just shifted the problem to the Jews. While
the Jews were not allowed to take interest from each other, they
could do so from the gentiles. If they took interest from each
other they allowed a remission of debts every seventh year. Islamic
banks, which follow Muslim law, are not allowed to take interest
from their clients. Instead they become partners in the business to
which they make a loan. Whether or not this is a better solution
depends on the partners, but it certainly creates a more direct link
between creditor and debtor.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">3.
A last misconception relates to the role of inflation in our
economic system. For most people, inflation seems like an integral
part of any money system, almost natural, since there is no country
in the world without inflation. Few realize that this is just
another form of taxation through which governments manage to
overcome the worst problems of an increasing interest burden.
Between 1950 and 85 the GNP in Germany increased 18 times, interest
paid on debt, however, 51 times (Figure 5). Since the largest
borrower on capital markets is the government, it pays the highest
share of interest.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Obviously
the larger the gap between increases in government income and
government debt the higher the inflation needed. Printing money
enables the government to reduce its debts. This is another way
of making those 80% of the people who pay more interest than they
gain, pay even more, since they cannot withdraw their assets
into inflation resistant investments like those who are in the last
10% income bracket.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Two
Further Effects:</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Arms
Race and Ecological Exploitation</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Besides
the social injustice of a constantly widening gap between the rich
and the poor in industrially developing and industrialized nations
alike, two further problems associated with the interest system need
to be identified: the arms race and ecological exploitation of the
earth.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">1.
The present concentration of money in the hands of ever fewer people
or large multinational corporations creates a constant pressure for
large-scale investments, e.g. atomic power plants, huge dams for
hydroelectric power, and arms. Seen from a purely economical angle,
the politically contradictory behaviour of the U.S. and Europe
installing bigger and better weapons against Russia on the one hand,
and sending butter, wheat and technological know-how to Russia on
the other, made perfect economic sense: military production was one
area where the saturation point could be postponed indefinitely as
long as the enemy was equally able to develop faster and better
weapons. And profits in the military sector were far beyond any
profits made in the civil sectors of our economy. While capital
investments in the latter often have returns around 2-5%, the
military sector often averages returns around 50%.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">2.
A further problem may be seen in the vast field of ecological
investment. Let us take an investment in solar collectors as an
example. If they only allow a 2% return on our money, it would be
economically unwise to invest in this sensible, ecological
technology for preparing hot water, since in a bank it returns at
least 6%.The bank in turn usually has to invest it in less
ecological projects. Therefore, as long as every investment must
compete with the money making power of money on the money market,
most ecological investments, aimed at creating sustainable systems
(i.e. stopping quantitative growth at an optimal level, see curve a
Figure 1), don't have a chance.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">The
Solution </span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">At
the beginning of this century, a practical solution was formulated
by a German merchant, called Silvio Gesell, which would eliminate
the problems caused by interest. Instead of paying people a reward
(= interest) in order to bring surplus money back into circulation
he suggested that they would have to pay a small penalty if they did
not. He proposed to use money as a public service instead as a
private good.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">An
Example</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Between
1932 and 1933, the small Austrian town of Worgl started one of the
first model experiments, which has been an inspiration to all who
have been concerned with the issue of monetary reform, up to this
day. Within one year, the 12 .600,- “Free Schillings”(i.e.
Interest free Shillings) circulated 463 times, thus creating goods
and services worth over 2.547.360,- Schillings.(valued in 1995 at
approx. 63.684.000,- Schillings) At a time when most countries in
Europe had severe problems with decreasing numbers of jobs, Worgl
reduced its unemployment rate by 25% within this one year. Income
from taxes increased by 35% and investments in public works by 220%.
The fee collected by the town government</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">which
caused the money to change hands so quickly amounted to a total of
12% of the12.600,- Free Schillings, which is 1.512,- Schillings.
This was used for public purposes and thus no single individual
gained by it, but the community as a whole. In addition, the need
for exchanging goods and services determined the pace of circulation
and not the fee. If the town would had borrowed the
12.600,-Schillings on the money market they would have paid back
three to four times the same amount over 10 to 20 years.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">When,
however, over 300 communities in Austria began to be interested in
adopting this model, the Austrian National Bank saw its own monopoly
endangered. It clamped down on the town and prohibited the printing
of its own money.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Practical
Possibilities Today</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: small;">As
90% of all monetary transactions are just numbers in a computer, the
payment modalities of today would make a “use-fee”on money
technically a much simpler issue. Everyone would have two accounts:
one current account and one savings account. The money on the
current account which is at the disposal of the owner continually
would be treated like cash and lose as little as 1/2% per month or
6% per year. <b>Anyone with more money in his current account
than needed for the payment of all expenses in a particular month
would be prompted by this small circulation fee or demurrage to
transfer the amount not needed for some time to a savings account.
From there, the bank would be under the obligation to pass this
money on to those who needed it for a certain amount of time and,
therefore, on the savings account it would not be debited with
a fee.</b></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">By
the same token, the money owner would not receive any interest on
his or her savings account - but the money would retain its value.
(As soon as interest is abolished, inflation becomes unnecessary -
see above.) Equally, the person receiving credit would not pay
interest, but a risk premium and bank charges quite comparable to
those contained in every bank loan today. It amounts to about 2.5%
of normal credit costs.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Thus,
very little would change in practice. Banks would operate as usual,
except that they would be more interested in giving loans, because
they too would be subject to the same use fee that everyone else
would have to pay, were they to sit on their money. In order to
prevent the hoarding of cash, one additional technical aspect of the
implementation of such a monetary reform would be to recall one
particular series of banknotes once a year, or all bank notes every
second year without prior announcement.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">The
basis of this reform would be a fairly accurate adaptation of the
amount of money created to the amount of money needed to handle all
transactions in the exchange of goods and services within and
without a given geographical area, region or nation. Money would now
follow a “natural” physical growth pattern (curve a, Fig. 1 )
and no longer an exponential one. When enough money has been created
to serve all transactions, no more would have to be produced.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Prospective
Results</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Within
the larger context of a global transformation of values and
behavioural patterns as well as other changes such as land and tax
reforms the change in our monetary system will hopefully assist the
switch from quantitative growth to qualitative growth. As people
would have the choice of leaving their money in a savings account
where it would keep its value, or to invest it in a beautiful piece
of furniture, an art work or a solidly-built house which equally
would keep their respective values, they might well opt for those
investments which would enrich their daily lives. Moreover, the more
that lasting quality is asked for, the more it would be produced.</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">My
question for any public representative that has shown the respect of
my efforts to read the above is;</span></div>
<div dir="LTR" id="Section1">
<div dir="LTR" id="Section2">
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">“If
you continue to support the status quo of New Zealand's entirely
interest bearing private, mainly foreign originated, loan based
money system, can you please give me your explanation of how under
the current terms and conditions that growth can exceed the debt
you are forced to take on to attempt to achieve the growth.?”</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">If
you cant? Can you please use the time, money and resources the
citizens and businesses of legitimate enterprise provide
for you - to protect them from financial free raiders!</span></div>
</div>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Thank
you for your time</span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Arial, Helvetica, sans-serif;">Iain
Parker</span></div>
</div>
Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com1tag:blogger.com,1999:blog-5037330197467032848.post-27384690651173353472014-04-29T04:23:00.002-07:002015-05-23T01:56:56.769-07:00Has repeal of New Zealand land aggregation laws opened gate for peasant tenantry?<div style="margin-bottom: 0in;">
<span style="font-family: 'Times New Roman', serif; font-size: medium;">Firstly
– a little back ground of the Land Aggregation Laws that former New
Zealand Minister of Finance - Ruth Richardson - so desperately wanted
to repeal and who of course it should be noted - went on to form a
market exchange listed joint stock ownership diary produce production
company that brought many farms – which was later sold to foreign
buyers (excerpts at bottom of article from Ruth Richardson's book –
Making A Difference - 1995) ;</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">LAND
POLICY AND LAND SETTLEMENT IN NEW ZEALAND</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">An
Analysis of Land Policy Goals and an Evaluation of their Effect</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">by
John R. Fairweather</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Research
Report No. 165</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">May
1985</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><a href="https://researcharchive.lincoln.ac.nz/bitstream/10182/224/1/aeru_rr_165.pdf" target="_blank">https://researcharchive.lincoln.ac.nz/bitstream/10182/224/1/aeru_rr_165.pdf</a>
</span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">It
is necessary to review the earliest land policies and land
legislation because later policies have been built upon these. A
complete understanding of contemporary legislation thus requires an
appreciation of preceding legislation. To this end I begin with a
brief account of early colonial legislation concerning the issue of
how the State gained control over land settlement.....</span></span><br />
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><br /></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">From
colonial settlement to 1890, land policy initially was directed to
obtaining land and then using land to foster settlement (MacLachlan,
1966). After the Treaty of Waitangi in 1840, the Crown gained the
legal right to all land, and pre-1840 purchases by Europeans were
declared void subject to validation in terms of Government policy and
the terms of the Treaty (Gardner, 1981:59). (For a more detailed
account of the racial conflicts surrounding the Treaty of Waitangi,
see Sorrenson, 1981.) Having gained control over land sales the State
was reluctant to begin settlement immediately. Although land was the
drawcard and basis of the Wakefieldian colonies, the general intent
of the Crown in the 1840 to 1853 period was to restrict disposal of
Crown lands (Jourdain, 1925:19). Crown land was to be sold at a
uniform price in order to generate a "buoyant land revenue"
(Gardner, 1981:59). Further, the organisers of regional colonial
settlement confined land sales to restricted areas in line with the
high price of land idea in an attempt to restrict land ownership and
maintain a landless labour force. At this time unsold Crown land was
called "waste" lands of the Crown......</span></span><br />
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><br /></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">After
the abolition of the provincial governments in 1876, the central
government continued with its land settlement goal but introduced a
variety of options for settlers to lease land rather than purchase
it. These leases were of a small scale when compared to the
large-scale runholders' leases. Leaseholding represented a move by
the State to maintain a degree of control of land ownership, in
particular to maintaining control over any future increases in land
value. Although the State did not obtain cash on sale it did retain
land rental and the potential for continued rental income......</span></span><br />
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><br /></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">By
1913, the legislation began to show concern for "aggregation"
of farm land. Part III of the 1912 Land Laws Amendment Act provided
for agreement between the Minister of Lands and a </span></span><span style="font-family: 'Times New Roman', serif; font-size: medium;">landowner
to subdivide land for disposal by public tender under lease with
right of purchase or outright sale. The 1913 amendments provided for
the Minister to notify a landowner in writing that his land was
required for settlement. The owner, within six months, had to elect
private subdivision, negotiation or compulsory purchase under the
conditions of the Land for Settlement Act. Part VII of the 1913
amendments provided for compulsory purchase of aggregated land where
this was contrary to the public interest. In the words of the
Yearbook (N.Z.O.Y.B., 1925:388) the Land Laws Amendment Acts of 1912
and 1913 "went further in the direction of encouraging or
compelling subdivision of land held in large areas"........</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Thus,
policies which gave support to the "man of small means"
meshed neatly into the prevailing attitudes which emphasised equality
and democracy........</span></span><br />
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><br /></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">The
Land Act, 1948 and the Land Settlement Promotion and Land Acquisition
Act, 1952 are the two main Acts relevant to government land policy
today. The following discussion emphasises some of the detailed
provisions of these Acts because they are the basis for current law.</span></span><br />
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><br /></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">However,
the fact remains that contemporary land policy still emphasises the
closer settlement goal, as the following analysis demonstrates.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">The
Land Act (1948) continues the general policy of extending freehold to
Crown tenants (Evans, 1969:46); it consolidates all acts relating to
Crown lands and provides the right of freehold to those </span></span><span style="font-family: 'Times New Roman', serif; font-size: medium;">tenures
not previously covered. Those acts consolidated were: The Land Act
(1924), The Land for Settlement Act (1925) and the Small Farms Act
(1932-1933). The Discharged Soldiers Settlement Act (1915) and the
Servicemen's Settlement and Land Sales Act (1943) with its amendments
were repealed. This change lifted completely the controls on the
price of land........</span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">The
remaining contemporary legislation to be considered is the Land
Settlement Promotion and Land Acquisition Act (1952). This act takes
over from the Servicemen's Settlement and Land Sales Act (1943) and
the Servicemen Settlement Act (1950) and continues the compulsory
purchase and control of aggregation theme. The 1952 Act seeks to:</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">provide
for closer settlement of farm land, for the acquisition of farm land
that is, or, when subdivided and developed, will be, capable of
substantially increased production, to prevent the undue aggregation
of farm land, and to require that, for a period of 3 years from the
passing of this Act, persons acquiring farm land shall personally
reside on and farm the land. (Reprinted</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Statutes,
Volume 3, 1980: 139-186).</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">end
excerpt</span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Things
did not go quite as smoothly for several classes of people in the
fledgling nation of New Zealand as the above would suggest and those
with a knowledge of history had every right to be concerned about
Ruth Richardson rabid pursuit of the repeal of land aggregation laws.</span></span><br />
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><br /></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">A
good way to get an understanding of who was doing what to whom in the
foundation years of the fledgling democracy of New Zealand is to read
the excerpts I extracted from the first four chapters of a book
titled – The Truth About New Zealand – published 1939 by an
investigative journalist historian by the name of A N Field;</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><br /></span></span>
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">The
Truth About New Zealand A N Field 1939<br />Pg 1<br />CHAPTER I<br />A FLAW
IN THE FOUNDATIONS<br />When the colony of New Zealand was founded in
1840 one person in every seven in the British Isles was a pauper on
the rates. Emigration offered a way of escape from the prevailing
distress directly or indirectly affecting nearly all classes; and it
so happened that at this juncture Edward Gibbon Wakefield came
forward with a plan making the promotion of emigration attractive as
a financial speculation.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Wakefield's
plan was for an emigration company to' acquire land overseas, and to
sell this land at a Sufficient Price, emigrating thereto both
capitalists and labourers. The sufficient price was to be
sufficiently low to attract the capitalists, and sufficiently high to
be out of reach of the labourers without a period of careful saving
from their wages. In this way the capitalists would be provided with
a permanent supply of labour, to work their properties, and as the
labourers saved enough to acquire holdings of their own, funds would
be available from the money they paid for land to emigrate more
labourers, and also to yield more profits to the promoters of the
scheme.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><span style="color: #222222;">The
distress which was the driving force behind the emigration movement
was due to the monetary manipulation after the Napoleonic wars, by
which a heavy war debt incurred in paper money was made repayable in
gold. The consequences were similar to those more recently
experienced when the same thing<br />Pg 2<br />was done after the
European war of 19I4-18. Prices fell heavily, unemployment became
widespread, and at the other end of the population much money was
heaped up in the hands of a few men looking for investment and
speculation.<br /><br />To this moneyed interest in his day Wakefield
successfully appealed for the means to conduct his scheme. In 1838 a
New Zealand Association was formed with Sir Francis Baring, M.P., a
financier of the first water, as its chairman, and the next year the
association blossomed out at a meeting in a Covent Garden
banking-house into the New Zealand Company with a board
representative of both finance and philanthropy. The first chairman
was the Earl of Durham, a Radical peer, who was presently succeeded
in the chair by Mr. Joseph Somes, the greatest ship- owner in the
world at this date.<br /><br />The company founded an enduring settlement
which remains as its monument, and it also achieved its object of
making money. It began by selling in London a hundred thousand acres
of town lots and country estates in New Zealand at a time when it had
not acquired a single acre of land there. Just ahead of its first
shiploads of emigrants it sent out an expedition which succeeded in
inducing a number of Maori chiefs in return for presents of trading
truck to place their marks on a document allegedly selling the
company a million acres of land. When the company finally surrendered
its charter to the Crown in 1850 it had not given legal title to one
solitary piece of land to even one individual among the twelve
thousand it had emigrated to New Zealand.<br /><br />Six years later the
colonists in their first Parliament were obliged to raise a loan in
London to extinguish the company's claim on the colony for £200,000,
which claim the Crown Commissioner on the company's board had
described as established "by gross frauds,<br />Pg 3<br />concealments,
and misrepresentations, practised chiefly on Earl Grey and Sir
Charles Wood, Chancellor of the Exchequer." Thus was the public
debt of New Zealand born.<br /><br />The Wakefield plan of a
"sufficient price" for land was only partly applied. Such
capitalists as emigrated presently began to find ways and means of
acquiring very large blocks of land for very little, so that land
monopoly became and remained a burning question. At the same time the
price of small holdings was in general kept at such a point that the
ordinary run of people were obliged to seek a path to landownership
through the moneylenders' offices.<br /><br />Almost every contemporary
book on early New Zealand lists among the attractions of the colony
as a place of residence the high rates to be obtained by lending
money. Hursthouse (1857) speaks of ten per cent. as the average
interest rate on mortgages in New Zealand, as against five on no
better security in England. Another writer (Puseley, 1858) mentions
ten and twelve per cent. as common, and in some districts fifteen and
twenty per cent.<br /><br />In the founding of New Zealand it was
nobody's business in particular to see that there was a sufficient
supply of money in circulation to meet the community's need. The
Wakefield idea was that the emigrant capitalists would provide this,
but they proved to he neither very numerous nor heavily endowed. The
British Government considered it had done its part by remitting funds
as needed for the expenses of the Governor. A Government Colonial
Bank of Issue was set up in 1850 to do something to meet the acute
shortage of cash, but as it was only empowered to issue notes in
exchange for coin, this brought no augmentation. This hank was
unpopular, and lasted only six years. Its main effect by monopolising
the note issue was to cause the one commercial bank then in the<br />Pg
4<br />colony almost to close clown. In Nelson province during this
period almost the only circulating medium to be seen during eight
years up to 1856 was notes issued by a firm of merchants: other
districts carried on similarly.</span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><span style="color: #222222;">Private
banking companies stepped into the breach, and from this time onwards
were left to supply the necessary medium of exchange for the
expanding business of the colony. Under the charters given them the
banks were required to hold coin to the value of one-third of their
note issue, and bullion or Government securities for the remaining
two-thirds; and it was laid down that their total liabilities must
not of exceed three times their coin, bullion, and Government
securities. This meant that on a bank opening up in a bank-less
community, and the community paying in, say,<br /><br />£1000 in coin
for safe-keeping in the bank, the bank could thereupon expand this
into £9000 of notes in circulation and deposits to credit of
customers. For example on deposit of the £1000 in coin, the bank
could print £2000 in notes and expend these in buying Government
securities. It would then possess £3000 in coin and Government
securities, with liabilities of £1000 in deposits and £2000 in
notes. As the law allowed total liabilities to be three times the
amount of coin and Government securities, the bank could next advance
to customers £6000 on overdraft, taking security over their property
for the loans. As these customers wrote cheques against their
overdrafts, the recipients of the cheques would pay them in, and
presently the original £1000 in<br /><br />deposits would increase by
£6000. The public would finish up with £7000 to credit in the bank
and £2000 in notes in circulation as well, whereas before the bank
came all it had was a beggarly £1000 in coin. The bank, on its side,
would collect interest on £2000 in Government securities and on
£6000 in advances, less any interest it had to pay for deposits, a
not unprofitable result considering that all it really<br />Pg 5<br />needed
to find was the premises to do the business in.<br /><br />In practice
banking did not expand the means of payment to this extent. The law
had another provision requiring the bank to redeem its paper in coin
on demand at its head office in the colony. The banker's problem was
not to exceed the maximum issue of paper that could be kept afloat
without inconvenient demands for coin. This depended on the readiness
of the public to accept imagined money for real.<br /><br />These
interesting arrangements, enabling the five loaves and two fishes to
feed the multitude financially, had two important consequences on the
history of New Zealand the banks naturally became particularly
interested in increasing the stock of gold coin in the country. This
meant increasing the export trade. With the settlers producing much
more than they could consume, exports were bound to be a big item in
any case. The currency arrangements on top of this made external
trade the dominating interest of the banks. Local production for
local consumption brought no increase of coined gold, and no expanded
base for banking operations. The whole financial bias was thus
heavily in favour of financing exports and imports, and the
development of a one-sided national economy. This was intensified as
time went on.<br /><br />The second consequence was that financial
expansion automatically meant debt expansion. The banks financed
farmers to export, and they bought from the farmers with their notes
the sterling received in London from the sale of exported produce. At
the same time the banks advanced money on overdraft to traders to
import goods from London, and they then sold to the traders the bulk
of the sterling they had bought from the farmers, and with this
sterling the bills for imports were paid in London.<br /><br />Practically
the whole of these advances made by the banks were payable on demand,
and throughout its<br />Pg 6<br />history the bulk of the leading
citizens of New Zealand have necessarily conducted their business
affairs on the basis of debt to the banks, their overdraft demand
liabilities usually being very much greater than most of them could
actually meet on demand. From men so situated a considerable portion
of New Zealand's members of Parliament and other public leaders have
been drawn—men who could be bankrupted at any moment by their
bankers quietly calling up their loans.<br /><br />This latter fact is
important to bear in mind, for there presently arose in the colony a
bank with far-reaching political interests.<br /><br />Pg 7<br />CHAPTER I
1<br />THE POWER BEHIND THE THRONE<br />In 186o two banks were doing
business in New Zealand, the Union Bank of Australia which had opened
up in the colony in 184o, and a more recent arrival, the Oriental
Bank, managed in New Zealand at this time by Mr. Falconer Larkworthy.
Among the customers of the Oriental Bank was Mr. Thomas Russell,
solicitor, of Auckland. Mr. Russell, a young man of thirty, born in
humble circumstances, had built up an extensive connection in
Auckland, and in this year he induced Mr. Frederick Whitaker to go
into partnership with him. This was an important happening for Mr.
Russell and for New Zealand. Mr. Whitaker was an English barrister
who had arrived in New Zealand via Sydney; He had been a member of
the Governor's Council from the foundation of the colony, and in 186o
held the office of Attorney-General in the Ministry. Mr. Larkworthy
in his memoirs (Ninety-One Years, Mills & Boon, 1924) says that
Mr. Russell guaranteed his new partner no less than £5000 a year as
his part-share of the profits. Law business was largely moneylending,
and that one law firm should be able to make money at this rate
speaks for itself as to the extent to which the handful of colonists
were submerged in debt.<br /><br />In the next year the Oriental Bank
decided to retire from New Zealand, and the Bank of New South Wales
entered the colony by buying its business. The new bank looked
askance at Mr. Russell's large and speculative account, and Mr.
Russell, in high indignation, persuaded Mr. Larkworthy to join with
him in establishing a local bank, the Bank of New Zealand. No<br />Pg
8<br />sooner had the new bank opened its doors than rich goldfields
were discovered in Otago, and by the simple process of printing notes
and using them to buy gold from the diggers, the bank was soon in
possession of the sinews of war. It got on its feet at once, and
became a flourishing success.<br /><br />The connection between the Bank
of New Zealand and the Government of New Zealand was close and
intimate from the start. The bank got the Government account almost
immediately, and retained it until the establishment of the Reserve
Bank in 1934. Mr. Whitaker (Sir Frederick after 1884) was solicitor
to the bank from 1861 until 1889, and during the first thirty years
of the bank's existence he was twice Premier of the colony, five
times Attorney-General in different Ministries to 1890, and once
Postmaster-General, Mr. Russell himself was also in Parliament for
six years from 1861, and during part of the Maori war period held the
important post of Minister of Colonial Defence.<br /><br />The Maori war
broke out in 186o in Taranaki in consequence of the Government taking
possession of land which the Maoris contended they had not sold to
the Crown. The Government's legal advisers, Mr. Whitaker being
Attorney-General, held that the Crown had acquired title. Sir George
Grey, hurriedly sent back to New Zealand as Governor on the outbreak
of war, made inquiry into the matter after his arrival, and the
documents and plans produced showed that the legal advice on which
the Government had acted was definitely bad, and the Maori
contentions in accord with fact.<br /><br />This discovery was made too
late to quench the flames, and the blaze presently spread from
Taranaki northwards to the Waikato and other parts of Auckland
province. Ten thousand British troops were called in, and the
campaigns extended over ten years,<br />Pg 9<br />costing the colony
between three and four million pounds. The Hon. John Fortescue in
volume xiii of us monumental History of the British Army (Maeniillan,
1930) records that many Imperial officers were of opinion that the
military in these campaigns were being made use of for the purpose of
effecting decidedly sordid land-grabbing operations.<br /><br />Sir
George Grey in his earlier first Governorship had been against a
premature grant of representative government to the colony on the
ground that the excessive claims of various colonists to Maori lands
would lead to war between the two races; that to prevent the
settlements from being wiped out, Imperial troops would have to be
despatched: that the colonists had no means to pay the cost of any
such campaign; and "that, on the contrary, these expenses must
be paid by Great Britain, whilst the minority [of colonists] to whom
the new powers are to be entrusted will benefit largely from such
expenditure, and will have a direct interest in rendering it as great
as possible." (Despatch of May 3, 1847).<br /><br />In 1863 Mr.
Russell became Minister of Defence in command of the channels through
which the Maori war expenditure flowed. His partner, Mr. Whitaker, a
few months later became Premier, and the two carried on in office
until towards the end of 1864. Sir George Grey in a despatch of
August 26, 1864, described his misgivings as to the position in which
he found responsible government in New Zealand at this date. The
inhabitants of the various scattered settlements knew no more of what
was transpiring than Ministers thought fit to tell them. Of a
Ministry of five members, one was absent in England, two others
seldom at the seat of Government in Auckland, the remaining two being
"two partners who comprise one of the leading legal firms in the
town of Auckland". On the advice tendered him by these two
Ministers the Gov-<br />Pg 10<br />ernor was supposed to act in "affairs
involving largely the interests of Great Britain in the employment of
her military and naval forces, and the expenditure of their
funds."<br /><br />The Ministry thus composed floated New Zealand's
second loan—the first recourse to borrowing since 1856. The amount
authorised by Parliament was three millions for Maori war purposes,
and the first million of scrip was disposed of in London through the
agency of Mr. Russell's Bank of New Zealand, the Treasury netting
£810,000 in cash, and flotation costs absorbing not far short of 4/-
in the pound. The proceeds of this war loan appear to have passed
through the Treasury so rapidly that there was no time to keep track
of how the money went. The next Premier, Mr. Weld, is quoted in
Saunders' History of New Zealand as saying in a speech at
Christchurch: "Under the Whitaker Ministry a million and a half
was paid out without any details being recorded."<br /><br />One
item in the war expenditure was a contract for the supply of hay to
the Imperial troops. The contractor was a small farmer at Auckland.
who was brother-in-law to Mr. Russell, Minister of Defence and ruler
of the bank. The Weld Ministry cancelled the contract on the ground
that the price was excessive. It was then discovered that the
contractor had bought all the hay in the market (apparently having
ample financial resources) and the Cyclopaedia of New Zealand relates
that the Government was in the end obliged to buy from him at double
the original price. Following on this transaction, Mr. Russell became
sleeping partner with his relative in a property of about thirty
thousand acres in the South Island, of which the relative, being a
highly competent farmer, made a great success.<br /><br />This incident
is mentioned as, according to Mr. Larkworthy's memoirs, it headed Mr.
Russell on to<br />Pg 11<br />his colossal land speculations in the North
Island--which speculations a benevolent Liberal-Labour Government at
the turn of the century spent ten years in liquidating as a liability
saddled by it on the backs of the taxpayers, there being no longer
any prospect of Further profit for Mr. Russell or his bank in the
ventures.<br /><br />This heavy military expenditure in the adjacent
portions of the North Island put the City of Auckland firmly on its
feet as a banking and commercial centre. An additional lucrative
branch of business not revealed in the official figures was the
supply of arms and munitions necessary to enable rebellious Maoris to
hold the field against the British military throughout this prolonged
period. The profits on the other side of the account being so great,
there was room for considerate treatment of the Maori in view of his
more restricted financial resources. The veil over the terms of these
transactions has never been lifted.<br /><br />Pg 12<br />CHAPTER
III<br />FRUITS OF VICTORY<br />Relations between Sir George Grey and the
Whitaker Ministry were never cordial. Breaking point came when
Ministers asked the Governor to approve a plan to confiscate eight
million acres of Maori lands, regardless of whether the local Natives
had been in arms against the Crown or not. Sir George Grey flatly
refused to agree, and the Ministry fell.<br /><br />A large but greatly
reduced area was eventually confiscated under the succeeding Weld
Ministry. This Ministry in 1865 gave way to one under Mr. Stafford.
Mr. John Bridges, acting-general manager of the National Bank, in
1875 deposed in evidence before a Parliamentary Committee that the
Weld Government fell following a decision by five members of
Parliament who were also directors of the Bank of New Zealand, that a
remittance urgently needed to pay interest on the public debt would
be given by the hank to a Stafford Government, but not to the Weld
Government. Mr Bridges said he was Wellington manager of the Bank of
New Zealand at the time, and he had personally conveyed the
decision to Mr. Weld. (The seat of Government had been removed from
Auckland to Wellington in 1865.)<br /><br />A rising star in the
political firmament at this time was Mr. Julius Vogel, a journalist
who had formed one of the numerous company of Jews which flocked into
New Zealand following on the discovery of gold in 1861. Establishing
in Dunedin the colony's first daily newspaper, Mr. Vogel presently
entered politics, and by 1869 was Colonial Treasurer, succeeding to
the<br />Pg 13<br />Premiership in 1873 and holding office for
three years. Friendly relations existed between Mr. Russell and Mr.
Vogel, warm discussion taking place in Parliament in consequence of
the Premier's unannounced departure for England in company with Mr.
Russell in 1874. Mr. Vogel was on the opposite side from Mr.
Whitaker, and from 1869 to 1890 when one was out of Cabinet the other
was commonly in.<br /><br />Mr. Bridges, in his evidence in 1875 just
referred to, said that for a period of years up to 1873 when he
resigned the Wellington managership of the Bank of New Zealand, Mr.
Vogel had had a private account with the hank there, with an
overdraft limit of £200, and that "frequently", "much
more than five or six times a year" as far as he could remember,
the limit would be reached, and the indebtedness thereupon wiped out
by transfer to the head office of the bank at Auckland. The bank sent
a letter to the Parliamentary Committee saying there was nothing
improper in this as Mr. Vogel had another account at Auckland; but it
presented no evidence, nor did the Committee re-examine Mr. Bridges,
whose charges it affirmed to be "absolutely unwarranted and
without foundation"—the usual termination of Parliamentary
inquiries touching the Bank of New Zealand.<br /><br />The law with
respect to the sale of the confiscated Maori lands after the war laid
it down that they must be offered at public auction at an upset price
of 5s. per acre. In 1876 the Vogel Government in face of this law
obligingly permitted Mr. Russell and some of his banking friends to
purchase the Piako block of over 80,000 acres, privately and without
competition, for 2s. 6d. per acre, the transaction taking place after
the Government had decided to build a railway through the middle of
the block. This property was presently floated off as the Waikato
Land Association, nominal capital £600,000, of which £300,000<br />Pg
14<br />was allotted to the vendors in fully-paid shares as payment for
their valuable property.<br /><br />The Patatere block of about 250,000
acres, south of the Piako, was presently acquired by Messrs. Whitaker
and Russell on similarly inexpensive terms, and in 1882 floated off
into the Auckland Agricultural Company, nominal capital £800,00. A
South Island provincial newspaper proprietor who had the audacity to
refer to this transaction in his journal as "another swindle",
was summoned to the bar of Parliament and also sued for libel by Mr.
Whitaker, the jury unkindly returning a verdict for the defendant
newspaper. "Either Mr. Jones ought to be placed in gaol or I
should be turned out of Parliament," said Mr. Whitaker. Neither
event transpired.<br /><br />Mr. Russell also floated another large block
of 150,000 acres, east of the Piako, into the Thames Valley Land
Company, nominal capital £500,000.<br /><br />These ventures by no means
exhausted the interests of the partners. Mr. Russell at the time of
founding the bank had also played a leading part in the important New
Zealand Insurance Company. He and Mr. Whitaker were interested in
some 13,000 acres of coal-bearing land later floated off into the
Waikato Coal Company. Extensive Whitaker interests in gold-bearing
land at the Thames, and in timber properties, became the subject of
acrid debate in Parliament.<br /><br />Second only to the bank itself in
importance was the great New Zealand Loan and Mercantile Company
formed by Mr. Russell in 1864 with a share capital of half a million,
and with about two millions more raised by selling 4% debentures to
widows, spinsters, clergymen, etc., in England, the money so obtained
being loaned to farmers in New Zealand at from 8 to 10%, according to
statements in Parliament. The company was formed to take over the
accounts of farmers who had got so deeply into the books of the<br />Pg
15<br />banks as to have small chance of ever getting off again.<br /><br />These
loan companies held security over their farmer-debtors' possessions,
sold their produce, and supplied their farm and household needs,
paying over such cash balances as might remain from time to time
after deduction of charges levied at their discretion and interest
compounded as often as the law allowed. Farmers who got into the
hands of such concerns were apt to find themselves there for
life.<br /><br />Within a few years of its establishment about half the
banking in New Zealand was done by the Bank of New Zealand, and its
offspring the loan company had Farmers and sheep-station owners in
its debt from end to end of the colony. Criticism of the doings of
the bank was heard from time to time in Parliament in the first
thirty years of its existence, numerous inquiries were held, but
invariably the result was the same—complete exoneration of the bank
and the Government of the day. Now and then even the docile
Government majority on a Parliamentary inquiry would timorously add a
rider that although everything under inquiry was perfectly proper, it
was highly desirable that the same thing should never be done again.
Evidence was tendered at times showing the charges levied by the bank
for operating the Government account as of an exorbitant character,
and alleging that the other banks were never given opportunity to
tender for the account on level terms.<br /><br />When the Bank of New
Zealand, potent dispenser to industry of the means of payment,
desired a particular course of action to be followed, Parliament was
Seldom prepared to say it nay. An early instance of its power was in
the consolidation of the provincial loans in 1867. Floated at heavy
discounts and almost unmarketable, it was felt that these loans were
an injury to the credit of the colony. The Government had no
responsibility for the loans, but decided to get<br />Pg 16<br />them out
of the way by buying up the scrip at market price, finding the money
for the purpose by sale of Government stock.<br /><br />Mr. Russell
appeared before the Parliamentary Committee considering the Bill, and
presented it with another Bill, which new Bill was duly reported back
to the house and passed into law. The new Bill gave all holders of
provincial stock new Government stock to the face value of their
provincial stock, the Government stock being marketable at £106, and
the provincial down to £80 and less. Mr. Russell admitted that he
represented bondholders of upwards of £400,000, and the profit made
by the bank out of this transaction was estimated at from £50,000 to
£100,000. Although<br /><br />hotly denounced by a minority in
Parliament as a fraud on the colony and robbery of the tax-payers,
the Bill went through as desired by the bank.<br /><br />Mr. Saunders in
his history quotes Mr. Fox, who was several times Premier, as saving
of this enactment of the Stafford Government: "How it was clone
under the influence of a certain bank deeply interested in the
result, and by threatened expulsion from office of certain members of
the Legislature, is a matter of history, and little creditable to the
Government which forced the Act through the Assembly by such
illegitimate means."<br /><br />A book might be filled with details
from the public records of the numerous specific allegations of
misuse by the bank of its financial power to the public prejudice. `
Sir George Grey, living in retirement in the colony after his second
Governorship, entered politics in 1874 at the request of the people
of Auckland to resist the Vogel policies, and spiritedly denounced
bank control of politics. In Parliament the next year he said, with
reference to a certain incident:<br /><br />"I believe, for reasons
which I shall presently show, that it would be actually in the power
of one wealthy<br />Pg 17<br />establishment in New Zealand to have
any person they chose sent out here as Governor who would be likely
to support their interests" Sir George Grey had been five times
Governor in various' parts of the Empire, and knew what he was
talking about.<br /><br />Speaking in Parliament in 1883 during Mr.
Whitaker's second Premiership Sir George Grey said "I
conscientiously believe that two or, three great' establishments, all
really under one directorate, do' exercise in the Legislature of this
country an undoubted and dangerous influence. I sincerely believe
that the existing Government is maintained in its place by those
bodies... I say that even among the voters it will be a long time
before that independence can come about which ought to prevail,
because I fear many of them are in some manner entangled with
engagements' which will place them at the mercy of those persons who
rule those different great bodies of which I speak.<br /><br />I go
further and say-and in saying this I know, of course, that I create,
and must create, a great many enemies-I firmly believe that the same
persons by monetary influence control a great portion of the press
"One great central power in New Zealand oppresses it from end to
end. That central power is moved by the Premier, and the Premier is
the solicitor of these great moneyed corporations. Is it just? Does
it give the people of New Zealand a fair chance? Is it not hard for a
man to know that if he cries for justice some debt upon his estate
may he made the cause of his ruin instantly? Is it right for us to
feel degraded by knowing that such is the case here? ... As long as
this continues I see' no hope for ourselves or our country."<br /><br />Pg
18<br />CHAPTER IV<br />MILLIONS WHILE YOU WAIT<br />In 187o New Zealand,
at the instance of Mr. Vogel, embarked on its policy of systematic
annual borrowing in London for public works purposes, which policy
sixty years later enabled international finance to dictate to its
Parliament the establishment of a Reserve Bank and a Mortgage
Corporation as parts of a twin network of world control.<br /><br />Mr.
Vogel dazzled the colony with a proposal to borrow ten millions over
a period of ten years. Three-quarters of this sum was to be spent on
building 1500 miles of trunk railways, a million on miscellaneous
works, and a million and a half on immigration. In addition it was
proposed that two and a half million acres of undeveloped Crown lands
to be opened up by the proposed railways should be set aside as an
endowment to help largely to defray the cost by ultimate enhancement
in value.<br /><br />At the time these proposals were made New Zealand
had a population of a quarter of a million, already laden with eight
millions of Government debt absorbing a third of the public revenues
in interest charges; and the individual colonists were also largely
conducting their affairs on borrowed money.<br /><br />Although a few
far-seeing men protested against the entire scheme as a snare and
delusion, Parliament swallowed it—hook, bait, line and sinker—by
45 votes to 7 against. To quiet criticism, Mr. Vogel announced his
readiness to modify his proposals in detail provided their "broad
features" were retained. The event showed that the chief broad
features to which import-<br />Pg 19<br />ance was attached were: (1)
borrowing money, and (2) spending the proceeds. The schedule of trunk
railways to be built was detailed in expounding the scheme, but was
completely absent from the legislation enacted, and the land
endowment (a great talking point) was left an optional matter of
which nothing more was ever heard in a practical way.<br /><br />At the
end of the ten years twenty millions had been borrowed, instead of
the projected ten, and about a thousand miles of railways had been
built, part of it unprofitable branch lines constructed for political
vote catching purposes. To-day some of the listed trunk railways
still remain incomplete, but this has not prevented the public debt
from climbing up to £290 millions.<br /><br />Having got his loan
authority, Mr. Vogel packed his bag and departed for London next year
to supervise flotation operations. Although New Zealand stock was
quoted at par at this time, colonists were somewhat surprised to find
the Treasurer had been obliged to float his loan at a discount of
four per cent. Another surprise was a bill by the Colonial Treasurer
for £3163 for travelling expenses in addition to salary: it was
noted that Mr. Vogel had done himself extremely well while abroad,
sporting a carriage and pair with footmen in livery carrying wands,
and living in "regal grandeur," as a country member put
it.<br /><br />In 1873 Mr. Vogel became Premier, and a few days after the
close of the session of 1874, without any announcement to Parliament
of his intention, he suddenly departed for England again, this time
in company with his friend Mr. Russell of the Bank of New Zealand.
Arriving in London, Mr. Vogel took the business of loan flotation
right out of the hands of the Crown Agents for the Colonies, and
despite their emphatic protests at the unwisdom of the course, traded
away to his co-religionists, the Messrs. Roths-<br />Pg 20<br />child,
£4,000,000 of New Zealand 4 1/2 per cent stock at a discount of
£352,000. Immediately following on this financial feat Mr. Vogel was
rewarded with a knighthood in recognition of his public services. He
did not return to the colony for sixteen months, recuperating from
his exertions at the Continental casinos of Hamburg and Wiesbaden.
The bill presented to Parliament for this unauthorised excursion was
£8390 for travelling expenses, on top of salary. After a
considerable amount of very plain speaking, Parliament slashed off
£2750 from the total, to the intense disgust of the honourable
gentleman.<br /><br />Half the proceeds from the four million loan (after
Messrs. Rothschild had finished with it) was placed on deposit in Mr.
Russell's Bank of New Zealand, not being wanted for some considerable
time to come, the interest payable on the deposit being 2 1/2 per
cent., a rate equal to little more than half what the colony was
paying on the money actually received. The Crown Agents again
irritated the Premier by telling him that they considered it grossly
improper to place nearly two millions of public money on unsecured
deposit in a bank with a capital of no more than £600,000.<br /><br />By
1876 Vogelism had resulted in the annual charges on the public debt
swallowing up about two-thirds of the revenue, and bankruptcy was
imminent. Sir Julius Vogel saved the situation by abolishing the
provincial system of local government, and seizing the provincial
revenue from the sale and rental of Crown lands to balance his
budget. Thus the soil itself was being sold to keep the public
creditor quiet.<br /><br />In place of the nine provinces a multitude of
small counties was created, the number gradually increasing to over a
hundred. These counties ' were too small to stand on their own feet
financially and had to be spoon-fed with annual Government grants.
This immensely increased the Government power of patronage, and<br />Pg
21<br />members of Parliament thereafter became largely canvassers for
annual grants from loan moneys for works in their districts.
It became a recognised thing that constituencies returning
Government members had first claim to the plums in the annual
free-for-all in scattering around the latest London loan. A member's
value to a district was rated by what he brought home from the
scramble.<br /><br />From an early date the annual interest bill began to
climb up towards a level with the annual new loan, and inspection of
the two sides of the account shows by about 1885—fifteen years
after its inception—all benefits from the Vogel public works
borrowing policy had expired. As much thereafter was paid away on an
average in interest as was gained by new borrowings. During the past
half-century the country has simply been borrowing money to pay the
interest on what it was owing before. In other words, the public debt
has been compounding, and in this way rose from about £30 millions
in 1885 to £290 millions to-day. If we had owed nothing in 1885 we
could have paid cash for everything the Government has borrowed money
for from that day to this, and we would have required less
taxation—for we would have cut out all the waste of money in loan
flotation costs, (inversions and renewals, and the other charges
which come thick and fast around moneylending transactions. As it is
we have hung £290 millions of debt around our necks for very much
less than £30 millions of benefit, for even while we were borrowing
that £30 millions about half that sum or more had flowed away in
debt charges prior to 1885.<br />New Zealand's Parliament did its very
worst day's work in its history when it listened to the blandishments
of Sir Julius Vogel.<br />End excerpt</span></span></span><br />
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><span style="color: #222222;"><br /></span></span></span>
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><span style="color: #222222;"><br /></span></span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><span style="color: #222222;">Now
onto Ruth Richardson's explanation of her actions while New Zealand
Minister of Finance;</span>Pg 152-3-4 of – Making
A Difference – by Ruth Richardson 1995</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Pg
152 - But there were other economic levellers to be dealt with –
especially our estate duty and land aggregation laws. These two
pieces of economic envy owed their existance to the misguided notion
that people should not be able to accumulate too much
wealth........My father made a namefor himself at successive National
Party conferences during the Muldoon era, advancing passionate and
persistant arguments against estate duties.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Pg
153 – I encountered no such resistance during my time at Federated
Farmers to the idea that state duties should go. But it was was a
different story when it came to repeal of the land aggregation laws.
For every Federated Farmers conference delegate who was prepared to
make a case against the control of land aggregation there was one who
would stand up and deliver a vehement counter-argument. I knew no
government would dare move to repeal land aggregation laws if there
was such division in the ranks of the Federated Farmers itself.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Consequently,
both issues were consigned to the political 'to 'hard' basket.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">I
was determined to use my political influence to repeal both regimes.
The growth and development of New Zealand, by my reasoning, depended
upon both the accumulation of capital and the most inspired
investment of that wealth. Estate duties and the land aggregation
controls, besides being a barrier to wealth accumulation, created
substantial investment distortions as people as people arranged their
affairs to avoid the impact of the respective regimes. I believed
that New Zealand suffered from a shortage of capital, that we could
ill-afford second-best investments, and that our reliance on
foreigner's savings to fund our growth and development was all the
heavier for the fact that domestic policies penalised domestic
savings.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">The
fate of death duties was squarely within my finance portfolio,
whereas land aggregation responsibilities lay in the hands of others.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Round
of my repeal campaign had involved getting the caucus and the party
to sign up to a manifesto commitment to repeal , among other things,
estate duties. While privately very pleased to have to have secured a
formal manifesto commitment, I deliberately never made much of it
publicly.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">I
was only too aware of egalitarian sensitivities.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">In
office, making good the promise was esentially a matter of timing.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Pg
154 – Implementation in the first year, dominated by the need to
make major fiscal savings, was clearly out. Action in the third year
would, in my judgement, have unnecessarily inflamed election tempers,
so I set my sights on the second year.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">The
obvious vehicle for the announcement of the repeal of estate duties
was the budget. That did not, however, with my sotto voce strategy.
Just before Christmas 1992 proved to be the ideal time. With little
fanfare and little comprehension from the talkback hosts and
chattering classes, the repeal was announced, to the huge approval of
those who have the compacity to move capital and generate growth in
the economy.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Rescue
on the land aggregation front came from a different and unexpected
quarter in 1995 – a private member's bill promoted by David
Caygill. Sensibly, Caygill appreciates that the only interests
advanced by the land aggregation laws are those of the lawyers who
charge plenty to arrange the tortuous legal escape route from the
legislation. If Caygill's bill goes through, it will be quite an
irony that a law owing so much to socialist cant should be overturned
by a parliamentarian ostensibly hailing from the centre-left.</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">End
excerpt</span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">I
would like at this point to add an article written by David Gaygill
admitting his confusion of the 1980's financial system reforms he was
a New Zealand Labour Party flag bearer for; </span></span>
</div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Reform
confused me – Caygill</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Dominion
post 10 Sept 1991</span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Opposition
MP David Caygill admitted yesterday much of Labour's reform of
financial management either passed him by or confused him when
finance minister.</span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">In
a speech to the Society of Accountants in Wellington, Mr Caygill said
the Public Finance and State Sector Acts were two of Labour's most
important reforms. Both made changes of such far-reaching
significance that many aspects were not apparent at the time, “even
to their proponents”, he said.</span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">As
minister in charge of the Public Finance Bill's passage through
Parliament, he tended to explain just two changes it made: a change
in governments financial year and introduction of accrual accounting.</span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
“<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">But
for a long while, much of the rest of financial management reform
passed me by,” he said. “The destinctions between mode A and mode
B, let alone mode B net and mode B gross, I found confusing.”</span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Gradually
a broader picture emerged and familiarity reduced the awkwardness of
the new technology.</span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">He
said many ministers were unprepared for the changes and the demands
on them to specify their requirements in their contracts with chief
executives.</span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
“<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">This
crucial control is probably still not being used to its full extent
that is possible and desirable but the potential is their if
ministers are prepared to think through their priorities,” he said.</span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
“<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">In
my view, the two acts provide a powerful set of controls and
accountabilities which focus attention more clearly than in the past
on what the public sector is doing and what it is costing.”</span></span></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">end</span></span></div>
<div style="margin-bottom: 0in;">
<br /></div>
<div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">I
then ask of the repeal of the land aggregation laws displayed below
that occurred in Land Amendment Act 1998 and what has happened since
– has it again opened the gate peasant tenantry in New Zealand at
the hands of foreign financial free raiders and a handful of local
co-operatives?</span></span></div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<a href="http://www.legislation.govt.nz/act/public/1998/0066/latest/whole.html?search=ta_act_L_ac%40ainf%40anif%40aaif_ac%40bn%40rn_25_a&p=1#DLM427220" target="_blank">http://www.legislation.govt.nz/act/public/1998/0066/latest/whole.html?search=ta_act_L_ac%40ainf%40anif%40aaif_ac%40bn%40rn_25_a&p=1#DLM427220</a> </div>
<div lang="en-NZ" style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">Repeal
of restriction on acquisition of land</span></span></div>
<ul>
<li><div style="margin-bottom: 0in;">
<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">The
following provisions are repealed:</span></span></div>
<ul>
<li><div style="margin-bottom: 0in;">
<span style="color: black;"><span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><span lang="en-NZ">(a)Section </span></span></span></span><a href="http://www.legislation.govt.nz/act/public/1998/0066/latest/link.aspx?search=ta_act_L_ac%40ainf%40anif%40aaif_ac%40bn%40rn_25_a&p=1&id=DLM253219" name="DLM253219"><span style="color: blue;"><span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><span lang="en-NZ"><u><span style="background: #ffffff;">175</span></u></span></span></span></span></a><span style="color: black;"><span style="font-family: Times New Roman, serif;"><span style="font-size: medium;"><span lang="en-NZ"> of
the principal Act:</span></span></span></span></div>
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<span style="font-family: Times New Roman, serif;"><span style="font-size: medium;">(b)Section
4 of The Land Amendment Act 1952.</span></span></div>
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Public Credit or Busthttp://www.blogger.com/profile/16432028615849944153noreply@blogger.com0