"Financial Institutions ... create credit" - so sayeth Michael Reddell and Cath Sleeman in their joint article (Some perspectives on past recessions) in the latest Reserve Bank of New Zealand Bulletin, June 2008 vol. 71 no.2.
The full quote on page 14 is as follows:
"Deregulation gave financial institutions the freedom to create credit, without much experience in actually doing so. A significant portion of the new credit, fuelled by the inflows of foreign funds attracted by New Zealand’s relatively high interest rates, was used to finance speculation in the share market and the property market."
Imagine the benefits which could be gained if a financial institution had made such new credit available for productive purposes. And imagine yet again the further benefits that could've been gained, if that financial institution had made the new credit available at its cost of production - a mere 1% or less.
New Zealand's Central Reserve Bank is STATE owned. Despite that, instead of being used for the benefit of its owners, the people of New Zealand, successive Governments have: Allowed the foreign-owned trading banks to create and issue nearly all of the nation's money supply and claim it as their own. Notes and coins make up less than three percent of the money in circulation. Ninety seven percent of our money supply is on loan to us at interest from those banks. Actively encouraged banks to charge "rental" for this money at some of the highest interest rates in the developed world. Used high interest rates as a blunt lever to control inflation, while agreeing to exclude the resultant costs from the Price Index, so that their cost-inflationary effects do not allow pensions and awards to compensate for these. Deliberately used interest rate fluctuations to maintain an unemployed "pool" of about four percent of the workforce in order to hold down wage rates. Fa
Comments
The Connection Between Overseas Bank Bailouts And The recently Publicised Events In New Zealand
Researched And Compiled By Iain Parker June 2008
List candidate Democrats for Social Credit:
1)British government commits taxpayers to bailing out the banks.
(See full comments: http://blog.johnpemberton.co.nz/html/ipbg.html)
2)Reform Of The Reserve Bank of New Zealand’s
Liquidity Management Operations.
(See full comments: http://blog.johnpemberton.co.nz/html/iprrb.html)
3)Government increases T-bill tender.
(See full comments: http://blog.johnpemberton.co.nz/html/ipgtbill.html)
4)RBNZ readies to shore up banks.
(See full comments: http://blog.johnpemberton.co.nz/html/iprbsub.html)
5)GOVERNMENT SECURITIES TENDERING
IMPORTANT CHANGES IN TENDERING OPERATIONS.
(See full comments: http://blog.johnpemberton.co.nz/html/ipgst.html)
6)Westpac to offer world bank notes.
(See full comments: http://blog.johnpemberton.co.nz/html/ipwp.html)
7)Current account deficit soars.
(See full comments: http://blog.johnpemberton.co.nz/html/ipcads.html)
8)DOLLAR DECEPTION:
HOW BANKS SECRETLY CREATE MONEY.
(See full comments: http://blog.johnpemberton.co.nz/html/ipdd.html)
9)The Reserve Bank, private sector banks and the creation of money and credit.
(See full comments: http://blog.johnpemberton.co.nz/html/iprbpsmc.html)
10)Excerpts from the New Zealand Bankers Association 2006 - Banking In New Zealand Fourth Edition
PAGE 18 - THE CREATION OF MONEY AND CREDIT.
(See full comments: http://blog.johnpemberton.co.nz/html/ipnzba.html)