MEDIA
Time to take heed of alarming statistics affecting NZ’s economy
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Urgent monetary reform is essential, writes Hessel Van Wieren
hanks to Colin James (ODT, 10.6.14) for pointing out what many commentators globally have been saying for some time: the global finance system not only needs a rethink, it needs reform. Just for the record, Democrats for Social Credit have not faded away. We are still here and still a registered political party. The main problem is that the wider media and population are starstruck by the unquestion‐ ing propaganda of especially this Government and its slick spin machine. The blatant need for monetary reform is no more evident than in the origins of the “global financial crisis” and its subsequent problems. Alarmingly, the contributing factors of a deregulated financial system and liberal bank lending policies are still evident, but the wrong controls are being used, such as quantitative easing propping up the banks overseas, and using the OCR here. The continuing massive property and debt‐ to‐income ratios have been rising over the last 10 years and yet only now do the alarm bells go off. The alarm bells were already ringing in 2008. There seems to be incompetence or just blatant blind adherence to a known flawed ideological monetary theory for a last ditch experiment to try to prove the “Chicago Boys” (refer Joseph Stiglitz’s book) right. Increasing numbers of commentators and economists tell us to “give it” up. An equal number of prominent people are concerned. Colin James mentions the report by Jaromir Benes and Michael Kumhof entitled The Chicago Plan Revisited. The report shows the model used since the 1930s is basically flawed. It proposes the separation of monetary and credit functions of the banking system. As Mr James mentions, central banks would finance government spending, make direct payments to citizens etc. This type of monetary reform the Democrats for Social Credit have advocated for 60 years. Joseph Stiglitz, former World Bank chief economist and a Nobel Prize winner, also is an archcritic of the current economic model. His book The Avoidable Causes and Hidden Cost of Inequality shows how the Chicago Guardian Political Review, Issue 65 - Page 24
School of Economics was given whole countries aided by the IMF on which to experiment. Roger Douglas didn’t dream up his massive revolutionary changes by himself. It was an experiment served up to him by these guys, in the IMF and Chicago School of Economics. Many will argue the success of this but there is ever‐increasing evidence of monetary problems. As Stiglitz puts it, the theory was the wealth would trickle down, but it rapidly found its way to the top of the pyramid.
Alarmingly, the contributing factors of a deregulated financial system and Liberal bank lending policies are still evident. In a recent article in The Economist, Mark Carney, governor, Bank of England, is quoted as saying that “market fundamentalism contributed directly to the financial crisis and the associated erosion of social capitalism”. He went on to say the banks operated in a privileged heads‐I‐win‐tails‐you‐lose “bubble”. His predecessor, Mervyn King, was also highly critical of the banking system and wanted changes.
debt and overpriced land values. China, which is showing signs of slowing, with its internal debt‐driven growth, i.e. total domestic credit, doubling from 2008 to now at $US23 trillion ($NZ26.5 trillion). Many concerning stats such as New Zealand’s position as having the fourth‐ largest household debt to GDP ratio, and that the Government’s overseas debt has tripled since 2008, should also be a source of debate and discussion, but Mr Colombo’s observa‐ tions were basically ridiculed by the media and politicians. Some blinkers need to be removed. Urgent monetary reform is essential and the only New Zealand political party that has the solutions is the DSC. As Colin James also observes, the global financial system is not stable and we are exposed to a variety of pressures. One extra of these is coming in October this year when the European Central Bank is conducting an invasive “stress test” on all European banks to determine whether the European financial system is “bust” or not. Also, from November 4, the ECB will be the Eurozone’s lead regulator, with powers that override individual banks’.
Another interesting development is that Martin Wolf of the UK Financial Times and a We, as voters and citizens, need to be leading economics commentator have informed of all that affects us so we make suggested private banks should be stripped of decisions based on something more than their power to create money. selective media spin. There are other reports that a preparatory • Hessel Van Wieren, of Cromwell, is the work on a study for monetary reform has southern region president of Democrats for been proposed for the Scotland Independ‐ Social Credit ence project. So many others, such as Thomas Piketty in his book on inequality, Capital in the 21st Century, and locally Max Rashbrooke, are prompting a rethink of current ideology.
(Otago Daily Times 'Opinion' 19 June 2014)
Recently, Jesse Colombo (Forbes.com) came out with many alarming statistics about New Zealand’s economy. These were very real and illuminate the other side of our economy that this Government tries to ignore in favour of selective favourable indicators. Of course, the Christchurch rebuild and dairying make us look good but both of these are premised on abnormal and temporary influences. The rebuild and Auckland are based on massive government borrowing from overseas banks with a huge interest burden, and dairying on the back of huge
Hessel Van Wieren