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”.

 

The Earl of Caithness“… our whole monetary system is dishonest, as it is debt-based… We did not vote for it. It grew upon us gradually but markedly since 1971 when the commodity-based system was abandoned.”

The Earl of Caithness, in a speech to the House of Lords, 1997.

 

Letter or Email to send to MP's or those you wish to enrol in our campaign

 

Title of email: Cut the benefits to Bankers out, not the things we care about.

Dear

Our current banking system started out in Britain in 1694 and is totally unsuited to present day life.  The Governor of the Bank of England Lord Mervyn King said in 2010 “of all the many ways of organising banking, the worst is the one we have today.”

My name is ____ and I would like to draw your attention to one simple act that could revitalise the New Zealand economy: stop overseas private banks from creating our money supply and place that privilege in the hands of the New Zealand Government. 

The problem:

  • Common belief is that banks lend out people’s savings, acting as intermediaries – they do not.
  • Banks operate under a risk based system where they need only hold 8% of the money they lend out.
  • Banks create the loan out of thin air by simply entering numbers on a spread sheet.  They then loan that money to you and me at compounding interest which we pay for from our hard earned income.
  • There is no enabling legislation to allow the banks to do this.
  • Similarly, banks do not have the money they lend to Local and Central Government for infrastructure projects
  • New Zealanders, its Government and local bodies pay interest on money the banks do not have and the money paid in interest (real money) then disappears overseas as repatriated profits, creating a huge hole in our balance of payments.
  • Our level of debt (personal, Government and Local Body) is rising and our discretionary spending is contracting.  We have less money to spend on essentials as money is syphoned off to service debt.
  • Because local and central government are paying interest on money the banks do not have, our taxes and local body rates are higher than they need to be.
  • This privatised money system encourages banks to lend more money because the more money on loan, the more profit. Our money supply doubled in 10 years.
  • No money is created to cover the interest due. This is the reason we experience scarcity. When every dollar carries compounding interest, more money is required so that people can earn and pay the interest. This is the reason the system is likened to a Ponzi scheme.

The solution

  • The Government needs to cut out the banks and introduce money directly into the economy. This will save $4 billion a year in taxes and a further $1 billion a year in rates in interest payments alone.
  • This is not a new proposition. Money was injected into the economy in 1936 by the first Labour government to finance the construction of state houses. As a consequence, tangible assets were created, people were employed in meaningful work and New Zealand emerged from the Great Depression sooner and in better shape than many other countries.
  • Under this solution, there will still be a role for banks, but they will only be able to lend out the money they have on deposit. This will eliminate the potential of runs on the banks as well as the boom and bust cycles.

Following are links to supporting articles that expand on the problem and the solution:

  1. An extract of the August 2012 IMF Working Paper titled "The Chicago Plan Revisited". The paper endorses the approach I suggest and describes the current practice of money creation by private banks as “an extraordinary privilege that is not enjoyed by any other business” (Page 5).  I suggest you read the first eight pages.
  2. The November 2011 edition of New Zealand Investor magazine devoted its front page and editorial to the practice.
  3. The July 2012 edition of New Zealand Investor has an article by economist Raf Manji devoted to direct stimulus, where the Government introduces debt free money directly into the economy, using the rebuild of Christchurch as one such opportunity.
  4. Seven Sharp also featured the issue and the seven minute clip went viral and was seen around the world

For more detail check out the Positive Money New Zealand website.

 

 

 

 

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