News

May 2017 Positive Money New Zealand issued a press release seeking clarity from the Reserve Bank on how our money is created.  They still refer to intermediation by the banks, which is not how our banking system works.

5th November 2016 An article in The Guardian newspaper in England argued that abolishing debt-based currency holds the secret to getting our system off its addiction to growth.

5th September 2016 KPMG released a report, commissioned by the Prime Minister of Iceland, titled "Money Issuance" The report looked at money created by the Government.

28 March 2016 Bryan Gould has agreed to be the Patron for Positive Money New Zealand.

Bryan is a respected commentator on economic matters, an author, academic and Companion of the New Zealand Order of Merit.

31 October 2015 A monetary reform group in Switzerland has enough signatures for a referendum on who creates their money supply.

14 October 2015 The Finance Commission of the Dutch parliament discussed monetary reform.

31 March 2015. The Telegraph in London reports on the Icelandic governments plan to have their central bank issue their money supply and calls it a radical plan.

22 November. The British parliament debated money creation last week, for the first time in 170 years. There was cross-party support for a proposal to set up a monetary commission

23 September. A new generation of young people, dubbed ''property orphans'' may be destined to be renters for life.

17 September. The Bank of International Settlements (BIS), the bank used by central banks, confirmed New Zealand houses are among the most "unaffordable" in the world compared to people's incomes.

6 September. Bruce Bisset of Hawkes Bay today reveals the true story behind the so called Rock Star economy.

25th April 2014 "Strip private banks of their power to create money”: says the Financial Times’ chief economics commentator Martin Wolf, who endorses Positive Money’s proposals for reform

15th March 2014 - In a historic move The Bank of England quarterly bulletin explains how money is created. Whenever a bank makes a loan, it creates a deposit in the borrower’s bank account, thereby creating new money. The bank says that this differs from the story found in some economics textbooks.

16th August 2013. The retiring head of the Financial Markets Authority apologised for the mistakes made saying “You were let down”.

 

Leo Tolstoy“Money is a new form of slavery, and distinguishable from the old simply by the fact that it is impersonal – that there is no human relation between master and slave.”

Leo Tolstoy, Russian writer

Manipulating interest rates

To encourage people to borrow more, the Reserve Bank reduces the base rate of interest or Official Cash Rate (OCR) . They then lend money to the banks at this rate of interest, and this interest rate generally feeds through into loans and  mortgages.

This method of ‘steering’ the economy using interest rates is another great cause of instability. It is a little like driving a car by stepping on the brake and the accelerator at the same time.

When the economy is ‘overheating’, the banks have their foot on the accelerator (creating more money as debt) while the Reserve Bank has its foot on the brake (raising interest rates to slow down the borrowing).

When the economy sinks into a recession, they swap pedals - the banks slam on the brakes (reducing lending) and the Reserve Bank steps on the accelerator by cutting interest rates to their lowest level. This encourages people to get into debt in order to stimulate the economy. 

This type of management of the economy will never lead to economic stability.

There is another huge social cost to managing the economy in this way. When interest rates are cut pensioners who were living off interest income from their savings are plunged into poverty.

 

 

 

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