Originally Posted by: Strider 
Originally Posted by: goldtimer Originally Posted by: Strider
I'd imagine you would still have Fractional Reserve Banking post revolt. It is a key fundamental of how banks work. Without it, economic growth would be a lot more difficult to achieve.
Secondly, in my opinion, you want your central bank to be independent of the government. Politicians for the most part aren't economists.
As Lammerlaw has correctly outlined, the current monetary system is a sham. New Zealand cannot get back in the black. It is impossible, as almost all of the money in circulation has been borrowed from banks, not created for the people.
Firstly:
The problem with this is, that we are charged interest on the money that our government borrows from overseas. It is not possible to pay back the borrowings plus interest. There is simply not the money to do this. Also, If the government were to somehow pay off all of the debt, you would see deflation (as the value of the remaining currency rises) and a nasty recession.
Secondly:
Why does the government not take the advice of Ganesh Nana, and print $NZD to pay off our debt? Economists will tell you that inflation is the reason. Yes, inflation would increase. BUT the reason for inflation increasing is the multiplier effect of fractional reserve banking. Say that the Govt. prints $5 and gives it to you for cleaning their toilets. You put it in the bank. The bank can now (perfectly legally) lend $15 to the dairy farmer down the road who wants another farm. This is the cause of inflation. Fractional reserve banking. If you can see through all of the economics gibberish and fancy models, you will see that the banking system is an outright fraud.
If we got rid of fractional reserve banking, NZ printed its own money, inflation would not be an issue, and we would not need to pay taxes to keep the whole moneygoround spinning, as the created money could be used for public works. No need for privately run central banks.
Hope this helps
Hi Goldtimer, I politely disagree with some of what you state.
- Getting rid of fractional reserve banking and our current banking structure is a euphemism. If you were to do so, you would create mass deflation due to the decrease in money supply and not only turn the NZ economy into turmoil but also kill net exports by inflating the kiwi dollar.
- Your counter to this as suggested would be to print more money. That I agree with but perhaps for a different reason.
- If we first face the reality that NZ is not going to abolish the fractional reserve banking system and analyse the current economic situation, you will realise that NZ's inflation rate has been approx 1% over the last 12 months compared to Australia's 2.4%. Why is this relevant? Because until very recently Australia was our main export destination and over the last 12 months the NZ dollar has appreciated approx 10% against the Australian dollar mainly due to the inflation rate differential and the narrowing of each other’s Official Cash Rates.
- This means Net Exports are going fall significantly and NZ'ers are going to be poorer. So in this instance a bit of inflation caused by printing money may actually help the situation.
- We are hamstrung in cutting the OCR due to our hot housing market......
We are digressing though from the topic Oroplata started so I will leave it there.
Totally incorrect as Fractional Reserve Banking is an evil beyond comprehension and it is explained in 'Janet and John' terms, in other words laymans language. for anyone to read and digest and actually understand in several publications and videos.
Basically it could be said that for every dollar loaned to us by off shore bankers and most certainly controlled by the Federal Reserve we pay back nine and when we cannot pay back the nine they reloan us that nine to be paid back under the same system - thereby bankrupting us.
Of course New Zealand will not abolish the Fractional Reserve system as the decisions of the politicians are dictated by their masters - the bankers and until such time as the people of New Zealand wake up and get rid of the politicians and revue and restructure the political system then Fractional Reserve will hold sway.
We need politicians who will look at the International bankers and tell them that we have already paid back many times what we have ever borrowed and enough is enough...not one cent more.
Inflation by printing money as suggested above would NOT help anyone in the long run but merely makes things a great deal worse. Annex ALL mineral exploration into State control or restricted to New Zealand interests and ensure that all mineral wealth becomes property of the State or in the case of private miners they can only sell to the state or within the country at spot price after assay. Guys who wish to sell gold on trademe or privately may do so but the mineral wealth cannot leave New Zealand so that it remains here as a form of security.
We should trade with countries who have goods and produce which we need and in turn we have goods and produce they need. We should basically return to the system that DID exist sixty years ago where you could not trade willy nilly offshore as the outgoings had to balance the incomings. When we created the Welfare State by borrowing under Fractional Reserve THEN we got into trouble
We need to review the entire monetary system of the Western world - destroy the banking system and take it completely out of the hands of any and all private interests - the banking system should belong to the State and to no one else but also be run independently of the politicians who merely decide what is best for the country and then the banking system advises on how best to govern the finances to achieve the best for the country.
Private ownership of the banking system is undesirable and is good for NO ONE EXCEPT THE BANKERS. If the people of the country own the banking system of that country then the banking system is working for them and not the owners of the bank - no brainer really! In truth when Macraes gold goes offshore then OUR monetary wealth in the form of gold is actually being stolen from the people. As I said Gold and mineral wealth should belong to the country in which it is found and in our case that gold can be a great security against debt but instead the very ones who hold the mortgage take our gold freely and without paying for it...a double whammy and the people are sucked in.
We should also be saying NO to ALL mineral wealth leaving this country and using that mineral wealth as a back up to our own financial system so that the financial system is based on Gold and backed up by gold.
Any person has to be exceedingly shallow to actually think that the present financial system has any value as it is a manipulated system based on paper so tha tthe money itself need not exist. Obama wants to have more money so what does he do? He prints bonds on worthless paper and sends them to Federal Reserve - this gives federal reserve the right to 'create' money out of thin air!
There will be more of this in future as people see through the system and note well the comment that 'The Fractional reserve System is unconstitutional'
First National Bank of Montgomery Vs Daly
An attorney named Jerome Daly was a defendant in a civil case in Credit River Township, Scott County, Minnesota, heard on December 9, 1968. The plaintiff was the First National Bank of Montgomery, which had foreclosed on Daly's property for nonpayment of the mortgage, and was seeking to evict him from the property.
Daly based his defense on the argument that the bank had not actually loaned him any money but had simply created credit on its books. Daly argued that the bank had thus not given him anything of value and was not entitled to the property that secured the loan. The jury and the justice of the peace, Martin V. Mahoney, agreed with this argument. The jury returned a verdict for the defendant, and the Justice of the Peace declared that the mortgage was “null and void” and that the bank was not entitled to possession of the property.[1][2] The Justice admitted in his order that his decision might run counter to provisions in the Minnesota Constitution and some Minnesota statutes, but contended that such provisions were “repugnant” to the Constitution of the United States and the Bill of Rights in the Minnesota Constitution.
The result
The immediate effect of the decision was that Daly did not have to repay the mortgage or relinquish the property. However, the bank appealed the next day, and the decision was ultimately nullified on the grounds that a Justice of the Peace did not have the power to make such a ruling.[3]
This nullfied case and its reasoning have nevertheless been cited by groups opposing the Federal Reserve System and, in particular, the practice of fractional-reserve banking. Such groups argue the case demonstrates that the Federal Reserve System is unconstitutional. Because the Credit River decision was nullified, the case has no value as precedent. A U.S. District Court decision in Utah in 2008 mentioned half a dozen such citations, noting that similar arguments have "repeatedly been dismissed by the courts as baseless" and that "courts around the country have repeatedly dismissed efforts to void loans based on similar assertions."[4]
Edited by user Saturday, 8 June 2013 2:32:43 PM(UTC)
| Reason: Not specified
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