News

16th May The Pope calls for ethical financial reforms saying "Money has to serve, not to rule,".

8th May.  Dom Post article titled "Credit Unions a viable alternative"

9th April Positive Money NZ provides a submission on the Treasury's macroprudential plans

8th April A government-funded retirement researcher predicts, in a draft policy report, that more of today's young New Zealanders will be trapped in rental accommodation all their lives.

26th March There was a very good interview with Rod Oram on National Radio. The conversation focussed on the Open Bank Resolution. We recommend that you start listening at the 5 minute mark. It goes on for a further 15 minutes and keep listening right to end - as there are good points made

17th March The euro zone struck a deal with Cyprus for a bailout worth 10 billion euros (NZ$15.8 billion), but demanded depositors in its banks forfeit up to 10 percent of their savings to stave off bankruptcy despite the risks of a wider run on savings.
This is theft, pure and simple said a pensioner.

1st March Standard and Poors says there is a significant risk of a property crash in New Zealand.  Such an event would have a flow on effect on New Zealand banks.  This follows on from the January IMF paper that warned that our banks were vulnerable - given their high exposure to overpriced real estate.

7th February An article in the US edition of Reuters comments on Adair Turners speech, calling it a breakthrough speech on monetary policy.  This commentary is an easier read than the 46 page speech by Turner.

6th February A truly historic speech on monetary policy is delivered by Adair Turner, head of the UK Financial Services Authority, and one of the most influential policy makers in the world.  Turner speaks in favour on newly created money being handed out to citizens or Governments of countries that are mired in stagnation. 

7th February TV One's 7 Sharp programme features co-founders of Positive Money New Zealand, Don Richards and Sue Hamill.

25th January IMF Working Paper titled “New Zealand Banks’ Vulnerabilities and Capital Adequacy” issued January 2013 raises concerns about NZ banks.

23 January Dom Post article titled "Making money dance to a new tune can work" looks at the Chicago plan and the IMF paper.

3 December The new Governor of the Reserve Bank, in his first appearance at the Finance and Expenditure Select Committee, misled Parliament on bank profitability.

6th November Bill English writes to Positive Money NZ saying he is “in no doubt that our monetary and financial system is sound, well designed and well regulated and is playing an appropriate role in promoting New Zealand’s economic growth."

8th October 2012 Dom Post article.  Russel Norman Co Leader of the Greens recomends the Government print money to bring down the value of the New Zealand dollar and stimulate the economy.

20th July 2012 A IMF Working Paper The Chicago Plan Revisited (PDF 1mb) endorses the idea of 100% reserve backing for deposits and a separation of the monetary and credit functions of the banking system.

23rd June 2012 Raf Manji's article in the July issue of NZ Investor (PDF 1.7mb) on direct government injection of debt free money into the economy - bypassing the banks.

21st June 2012 Interest on Wellington City Council (PDF 1.26mb) debt tops $420,000 a week.

5th June 2012 Chris Trotter in The Christchurch Press writes Creating money out of thin air

 

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Abraham Lincoln"The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity"

Abraham Lincoln

Why should I worry about the New Zealand Banking System?

The impact of increasing debt levels may be lost on a lot of people.  If you can locate yourself in one or more of the following categories, this may be your future:

I am a student leaving university:

  • You find jobs scarce in a contracting economy.
  • Your student loan takes longer to pay off in a low wage economy.
  • You must contribute to “Kiwisaver” as National Superannuation may not be available in 2040.
  • You have little money left over to save for a deposit on a house and pay for the basics let alone “luxury” items.
  • You will be trapped in the debt cycle for most of your life.

I am a looking to buy my first home

  • Even if you have the luxury of two incomes, you must borrow heavily.
  • Raising the money for the deposit in a low wage economy will take you a long time while property prices keep rising.

I have bought a home in the last five years.

  • House prices are so expensive that you may only be able to service the interest on the mortgage.
  • A modest increase in the interest rates of 1% on a $250,000 mortgage will mean an extra $2,500 per year in interest payments, diverting money from other commitments.
  • After paying interest on a large mortgage you will have little discretionary money for basics: food, heating, doctors’ visits, a reliable car, maintenance on the house, your children’s education and welfare.
  • You have no money for “luxury” items.
  • Your wages do no not rise at the same rate as outgoings (rates, heating, food etc.) and you become poorer.
  • You are trapped in the debt cycle for most of your lives.

I am renting

  • You find rental properties scarce and there is intense competition.
  • You are locked into longer term leases to secure accommodation.
  • Your landlords are servicing large mortgages and have less discretionary income for repairs and maintenance.
  • Your wages do no not rise at the same rate as outgoings (rent, heating, food etc.) and you become poorer.

I am a retailer or a service provider

  • An ever increasing chunk of your customer’s discretionary income goes into servicing debt and there is less money spent on goods and services.
  • Luxury items only move during sales and there is a permanent reduction in margins. 
    Your income does not rise at the same rate as outgoings (rent, rates, insurance etc.) and you become poorer.
  • Retailers close up shop.

I am a homeowner, I have paid off my mortgage and I have children under 30

  • You may need to use the equity in your house to assist your children to purchase their first home.

I am a tax payer

  • The New Zealand government is currently paying $4,000,000,000 each year on interest payments alone.  This money could be better spent on education, health and infrastructure projects such as rebuilding Canterbury.
  • As more tax revenue is diverted to repaying debt and the accruing interest on the remaining debt, the government seeks to increase revenue through raising GST, selling off productive state assets, mining in our National forests, fracking and off shore drilling for oil.

I have paid off my mortgage, I do not have children under the age of 30, I am not in retail and the service sector and I am comfortable paying higher taxes.

  • The New Zealand economy limps along and spending on infrastructure declines.  The roads and services deteriorate and over time New Zealand sinks into “Third World” status.
  • More people fall below the poverty line as wages do not keep up with outgoings.
  • There is a loss of sovereignty as our money supply is held by private Australian banks who are in turn majority owned by American and British interests.  Should any one of these three economies fail then New Zealand’s liquidity would be jeopardised.  This almost happened during the 2008 Global Financial Crisis.

 

 


 

 

 

 

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