There is a growing conviction around the world that something is fundamentally wrong with the economic system. Money, once a convenient means of exchange, has become a commodity like oil or wheat or coffee. It can be bought and sold, through hedge funds, futures and other money market casino games. Like any other market, demand drives price, and our red-hot NZ dollar is considered the Reno of currencies as it goes up and down in value.
It may not seem important to ordinary people that currency raiders use software to buy and sell money several times a second, making fortunes in tiny increments. But it is vitally important, because while that money is tied up in speculation, it’s not available for investment in the real economy of goods and services. It is easier and less risky for money to make more money, than to actually produce things. But it makes it much harder for our exporters, who never know what their costs will be, even day to day.
Meanwhile, as Wall Street and it’s counterparts around the world stagger on through booms and busts, banks foreclose on mortgages and pension funds disappear down the gambling black hole, the power to create money rests with the commercial banks. And the banks only create money to lend it. In fact, you can’t get new money without borrowing it - at interest.
Every currency in circulation today is made of debt. If you gathered up all the money and used it to pay off debt, you would notice two things. One, you’d have no money. Two, there would still be debt, made up of interest and other charges. Does that sound wrong somehow?
What makes the system even more wobbly is the use of technology - like that cute software the currency raiders use, and the digital banking that allows debt money to be created simply by typing on a keyboard. Plus, there is ample evidence to suggest that each bust cycle is carefully managed so that any real assets are gathered into fewer and fewer hands.
You can see how it starts looking like a pyramid, with us poor dumb schmucks sitting at the bottom. We’ve been royally hoodwinked into thinking this is the right way to run an economy, that there is no other way.
Democrats for Social Credit (DSC) know there is another way, a dangerously simple way to reform the economy. New Zealand has the rare advantage of a publicly owned Reserve Bank, and given the political will, our Minister of Finance could direct the Reserve Bank to create our own money supply. You could call it ‘printing money’, but in fact that is just what the Treasury already does - it prints (and mints) and sells cash to the banks.
But that’s only notes and coins, less than 2% of the money supply. What if all the money needed to build and maintain strategic assets - schools, hospitals, stadiums, public transport, green industry - could be created by the Reserve Bank instead of borrowing it from overseas?
This is the vital issue this election, one that underpins every other issue. Where is the money coming from to do the things that most people agree need doing? How can we ensure children don’t go hungry to school? How will local bodies avoid selling our precious water to huge corporations? How can we keep our power companies in public hands? How can we rebuild Canterbury?
And the $64,000 question: why do we have to wait for permission from insurance companies before we start to clean up our beaches after Rena, the worst environmental disaster in New Zealand history? And where are the expert navigators who are supposed to pilot these foreign vessels through the shoals of our coastline? Hanging out with the mine inspectors no doubt, all of them out of a job due to short sighted ‘cost-saving’ government policy.
The rage in the Bay of Plenty must be white hot.
As long as we continue with the current dodgy finance system and its smiling frontman, we will be slaves to the corporations, the banks and the insurance companies. Key can smile because he’s made his pile, and the devil take the rest of us. Re-elect him and his mates, and we will face ‘austerity measures’ for sure. The numbers of unemployed and working poor will grow still larger, and the price of basic foods will rocket. We could have riots, as we’ve seen in other countries. Demonstrations have already started.
DSC calls for a complete reform of the finance system in New Zealand, before it’s too late. We advocate the public ownership and control of our money supply, in order to restore economic, social and environmental justice. We demand an immediate halt to overseas borrowing, and a halt on plans to sell our assets. With our own money, we can buy back and rebuild strategic assets, such as the railways and the power companies.
Someone might whisper in your ear, “Printing money causes inflation!” Let me point out that we already have inflation. We get cost inflation by borrowing from banks and having to pay back interest as well as principle. We get inflation when the Government in its wisdom hikes the rate of GST. We get inflation when indebted councils raise our rates in order to pay off loans. We get soaring inflation when insurance companies decide that although everyone else will lose after a disaster, they will still make a fat profit, so their premiums double and triple. Step off the economic treadmill and we will have none of those things.
It’s time to stop depending on money from overseas. Investment in this country should come from our own Reserve Bank, not for quick profits to be whipped offshore, but for the future prosperity of all New Zealanders. Instead of selling our birthright to the highest bidder, we should be building our asset base with our own money supply.
DSC maintains that where we have the skills, the resources and the public demand for any project, there should be money provided to get the job done.
- contributed by Katherine Ransom, DSC Vice-President