Oil can be bought and sold many times over, even before it comes out of the ground, but eventually oil will run out. Its scarcity factor can be managed simply by turning on and off the taps.
Other commodities have had their day in the sun but one by one are replaced by the next opportunity for speculation.
Money, on the other hand, is different in one key way - it can be created out of thin air at very little expense and will never run out.
Those who are in control of the money creation process have quietly gone about their business - Creating money; Turning the money taps on and off; Speculative buying and selling of money - for centuries.
Show Me the “Monetary Reform” David Cunliffe! Following Phil Goff’s release of Labour’s Finance Manifesto today, David Cunliffe has said in a New Zealand Labour Party press release : “Labour is backing the drive for more high value exports with monetary reform ...” I challenge David Cunliffe, Labour’s Finance Spokesperson, to front up and explain what he means by the term ‘monetary reform’. If he means replacing toxic debt-based commercial bank credit with social credit, as the sole means of money coming into existence and continuing to exist – issued in the public interest, to serve the common good - then I would endorse his definition. And if he accepts that it’s crazy for our government to borrow from foreign lenders, with interest, when we could use the publicly-owned Reserve Bank of New Zealand as an independent statutory monetary authority with the sole power to create, issue, and cancel New Zealand’s money, then I applaud his endeavours. But if Mr. Cunliffe thinks ‘mo
Comments
C H Douglas pointed out this dynamic when writing about what is value in "orthodox" economics, that being when the money system is mistaken for real wealth rather than its distribution.
Nick.
SOCIAL CREDIT OR BUST!
NEW ZEALAND DEBT MANAGEMENT HISTORY AS TOLD IN BOOKS OF FINANCE MINISTERS & PROFESSOR J.B. CONDLIFFE 1930.
FROM THEIR OWN MOUTHS - WHAT HAPPENED TO NEW ZEALAND IN 1980-2000
Researched and compiled by Iain Parker, List Candidate Democrats for Social Credit 2008
If you want a chronicle of New Zealand's debt history and its intricate connection with the International Money Club, you only have to peruse the following books to understand completely the impact of these dodgiest of institutes;
First, as a prelude, I will at this stage insert some Questions and answers I have put to and have had answered under the Official Information Act, that are very pertinent to the evidence presented below, especially the treasury advise that New Zealand was not in a debt crisis when Holyoake signed us up, without manifest, to the IMF and World Bank in 1961;
On the 13th May 2007, I asked these questions of Minister of Finance Michael Cullen;
Regards minister Cullen,
I am requesting for as long as records have been kept, an annual breakdown of the number of trust funds that have been investigated as to their legitimacy, the number of funds that were found to be shams, and the number of individuals who were prosecuted for setting up trusts as shams?
Also, to your knowledge Sir, is it correct to say that under the system referred to as "money creation" that the very rich and powerful privately owned banks that are stakeholders in the collective privately owned institutes US Federal Reserve and the Bank of England, have been entrusted with the ability to create money out of fresh air as bits on a computer, then lend it to governments and commercial banks as interest bearing debt, as long-term loans known as Bonds, which have the interest payable on this counterfeit principle secured against the future taxes of the nation?
yours
Iain Parker
On 11 June 2007 Received an e-mail from Raju Budhia Manager Assurance(Investigations) of the Inland Revenue;
Dear Mr Parker
Hon Michael Cullen, the Minister of Revenue, has referred your e-mail of 13 May 2007 to me for consideration and reply. You asked for "an annual breakdown of the number of trust funds that have been investigated as to their legitimacy, the number of funds that were found to be shams, and the number of individuals who were
prosecuted for setting up trusts as shams".
I advise that the Inland Revenue reviewed or investigated cases involving estates, foreign trusts, non qualifying trusts, and sick, accidents and death funds, for the period 1 July 1996 to 30 April 2007, as follows:
Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 30/4/2007
2,732 3,390 3,289 3,159 3,693 3,499 3,631 3,078 1,710 1,232 926
The data does not however identify or reflect whether the legitimacy of the trusts has been considered.
Therefore, in terms of section 18(e) of the Official Information Act 1982, I must refuse your request because the information requested does not exist, or cannot be found. Should you not accept this decision you may make a complaint to the Ombudsmen seeking an investigation and review of the decision under either the Official Information Act or the Ombudsmen Act 1975.
Alternatively, you may have the decision reviewed by an officer who reports directly to the Commissioner of Inland Revenue. Choosing the right of review does not preclude you from subsequently seeking a review by the ombudsmen should you be dissatisfied with the departments internal review. If an internal review is sought, please write to the Commissioner of Inland Revenue, PO Box 2198, Wellington, setting out the details of your complaint.
Thank you for your letter. I trust my comments have been of assistance.
Yours sincerely
Raju Budhia
Manager Assurance(Investigations)
On 15 June 2007 I also chased up Michael Cullen for his promised reply to questions asked 14 May 2007;
Regards MR Cullen,
I am still awaiting your explanation of the
international monetary lending system, especially confirmation that our Govt
Bonds are long-term loans from the private stakeholders of the US federal
reserve and the Bank of England, who have the ability to create the
principal of these loans out of nothing, that is the money is neither
created by labour, productivity or is convertible to tangible assets?
Thank you
Iain Parker
I then received a reply from Michael Cullen 19 June 2007;
Dear Iain Parker
In your email of 13 May 2007 you asked whether privately owned banks in the UK and US have the ability to create money in the form of bonds issued to their governments.
As I have no responsibility for any institutions in the UK or US I am unable to comment on the process of creating bonds in those countries. However, I am able to
explain the situation that applies in New Zealand.
In New Zealand, our central bank, the Reserve Bank, is wholly owned by the crown. Its institutional direction is explicitly set through the Reserve Bank of New Zealand Act 1989(the Act), and for monetary policy in an ancillary agreement between myself and the Governor of the Reserve Bank, known as the Policy Targets
Agreement. The act has limited the governments ability to finance expenditure through credit creation; in the past , governments borrowed from the Reserve Bank to finance a portion of their deficit. (This way of financing government expenditure persisted until a Labour government was elected in 1984). In effect, this meant that the government printed money to pay for its expenditure instead of raising taxes or borrowing from the private sector. While this method of financing can be used to pay for infrastructure or social services like health, ultimately the process tends to be inflationary. This type of borrowing was one of the main factors behind New Zealand's very high rates of inflation in the 1970's.
As a result, the Act sets out that the primary purpose of the Bank is to ensure stability in the general level of prices. More specifically, the Policy Targets Agreement states that the Reserve Bank Governor must keep inflation within a
band of 1-3 percent over the medium term. The main tool the Governor has to keep inflation within this band is the Official Cash Rate (OCR).
Issuing of bonds is an accepted method of financing investment. Regardless of where a bond originates, it is essentially a certificate of indebtedness. The New Zealand government, through the Debt Management Office, maintains a programme of bond issuance to finance its investment programme. There are no requirements on the Reserve Bank to purchase these bonds, although it may from time to time when necessary to meet its objectives. The financial reporting requirements of the Public Finance Act provides for the public disclosure of all financial transactions between the government, the Reserve Bank and the wider economy, and ensures that I and the Reserve Bank are accountable for the outcomes.
I trust this has helped to answer your question.
Yours sincerely
Hon Dr Michael Cullen
Minister of Finance
- I would like to add a foot note here. Michael Cullen states above - "The financial reporting requirements of the Public Finance Act provides for the public disclosure of all financial transactions between the government, the Reserve Bank and the wider economy, and ensures that I and the Reserve Bank are accountable for the outcomes". - yet if you read the State Sector Act 1988 then go to the website of the New Zealand Securities Commission, you will discover that the CEO of the Securities Commission has almost autonomous power to issue exemptions to multinational
corporations that circumvent our protecting financial regulations, including a disclosure exemption to the New Zealand Debt Management Office that makes a mockery of the above statement. At the time of printing, if you go to internet web address - http://www.seccom.govt.nz/notices/summaries/2004/ - then scrolled down to find - Securities Act (Crown Wholesale Debt Securities) Exemption Notice 2004 -
This exemption prevents the NZDMO from having to openly disclose that a bunch of privately owned foreign central banks have a monopoly on the issuance and on selling of our Government Bonds.
I sent this email to Minister of Finance Michael Cullen 4 September 2007;
Regards Dr Cullen,
1) I am seeking any information now eligible for release, regarding the
secret Memorandums of understanding, or Structural adjustment programs
imposed upon us by the IMF/World Bank during the restructuring of our(NZ)
nations debts or what was essentially liquidation, in 1961 and 1984?
2) To your knowledge, the money used by registered bond traders, who are
the only ones eligible to purchase the larger blocks of our govt bonds, all
of whom are the private stakeholders of what is referred to as the "Central
banking system", to your knowledge does this so called "Power money" have
any net tangible backing, or is it merely created as digital bits on a
computer, then loaned into the system as interest bearing debt, only given
its value by the promised repayment out of the future taxes of the nation.?
Yours sincerely
Iain Parker
I received this reply from the Acting Minister of Finance Trevor Mellard 2 October 2007;
Dear Iain Parker
Thank you for your letter which was received on 5 September 2007 concerning an Official Information Act request. You requested:
1) I am seeking any information now eligible for release, regarding the
secret Memorandums of understanding, or Structural adjustment programs
imposed upon us by the IMF/World Bank during the restructuring of our(NZ)
nations debts or what was essentially liquidation, in 1961 and 1984?
2) To your knowledge, the money used by registered bond traders, who are
the only ones eligible to purchase the larger blocks of our govt bonds, all
of whom are the private stakeholders of what is referred to as the "Central
banking system", to your knowledge does this so called "Power money" have
any net tangible backing, or is it merely created as digital bits on a
computer, then loaned into the system as interest bearing debt, only given
its value by the promised repayment out of the future taxes of the nation.?
New Zealand joined the IMF and the World Bank in 1961. There was no financial crisis in New Zealand at the time and New Zealand did not restructure its debt as a result of joining. There are no secret memoranda of understanding and no structural adjustment programmes were imposed on New Zealand. All the documents related to the decision to join the two institutions are publicly available from Archives New Zealand.
In June 1984, New Zealand drew down its Reserve Tranche at the IMF. The Reserve Tranche is essentially a countries foreign currency deposit with the IMF and can be drawn on at any time for balance of payments reasons without requiring approval from the IMF board. There is no conditionality attached to such a drawing and so no structural adjustment programme was imposed. Once again, all relevant documents are publicly available at Archives New Zealand.
Accordingly, I have decided to refuse your request under section 18(d) of the Official Information Act 1982 - that the information you requested is or will soon be publicly available.
In response to your second question, registered bidders in New Zealand government Bond tenders purchase New Zealand government bonds using cash which they get from their shareholders, from profits on their operations or from borrowing against future income. Please note that bidders may purchase bonds on their own behalf or on behalf of other investors. The bonds are issued on behalf of the Crown by the New Zealand Debt Management Office (NZDMO). The Reserve Bank conducts the bond tenders as agent for the NZDMO. When the bonds mature, the Crown repays them with funding from a variety of sources, such as its cash surplus, revenue from taxation and other sources or by undertaking new borrowing. Interest on the bonds is paid from the same sources.
This fully covers the information you requested.
Yours sincerely
Hon Trevor Mellard
Acting Minister of Finance.
On the 5 October 2007 I sent this reply to Trevor Mellard;
Regards Hon Trevor Mallard,
could you please advise me, as to whether you researched and provided this answer yourself, thus are prepared to stake your present and future political reputation on it, or was it provided by one of the many State Sector advisers at your disposal. If
the latter is the case, could you please provide me with the name and
department of the author.
Thank you
Iain Parker
I then received on 10 October 2007 this reply from Michael Cullen;
Dear Mr Parker
I have received your email regarding the answer to your Official Information Act Request which was signed out by the Hon Trevor Mellard in my absence.
I am satisfied with the contents of the reply that you received from my acting minister. This request was dealt with under the standard procedures for replying to requests under the Act. In this case, the draft reply was prepared on my behalf by Andrew Turner, Head of Portfolio Management at the Treasury.
Yours sincerely
Hon Dr Michael Cullen
Minister of Finance
===============================================================
That concludes the emails, as you will see, the excerpts from the books below proves much of what is said in them to be completely misleading;
New Zealand In The Making, A Survey of Economic and Social Development, by Professor JB Condliffe 1930 - Chapter 4 Borrowing For Development;
Page 291;
It is not possible to estimate to what extent this decline is traceable to inflation of values due to excessive borrowing. So many factors are at work in the economic structure of the Dominion that the mere coincidence of heavier borrowing and falling productivity is not necessarily proof that the one causes the other. Both may be due, or partly due, to a common cause, such as the rising price level reaching a point about 1910 where speculation was encouraged to an unprofitable point. The fact that a similar check to productivity appears to have taken place in Australia under somewhat different conditions should call for caution in attributing the New Zealand phenomenon to purely local causes.
The whole problem affords an interesting example of what Stamp* has called "economic stimulus". The fact that productivity declined heavily in the only similar period of heavy borrowing and active speculation in New Zealand's history, the period of the Vogel boom from 1879 to 1880, leads one to suspect that there is a point beyond which an undue amount of stimulant decreases instead of increasing productivity. Economists in Australia and New Zealand have developed the theory of an "absorption point" beyond which immigration causes a disturbance of economic equilibrium. It is fairly obvious that there is a similar absorption point at which the importation of borrowed capital sets in motion forces of speculation and unsettlement which more than counteract the extra productivity to be expected from improved equipment. New Zealand has ignored that absorption point with unfortunate results in her two periods of boom, the years following 1870 and the years following 1910.
Stamp*- Sir Josiah Stamp, Director of the Bank of England 1928-41 The Bank of England, a collective of privately owned corporate banks, was heavily involved in New Zealand's early debt management. Sir Josiah Stamp, reputed to be the second wealthiest man in England at the time, is noted for making this rather informative quote;
"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in iniquity and born in sin. Bankers own the Earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough money to buy it back again...Take this great power away from them and all great fortunes like mine will disappear, and they ought to disappear, for then this would be a better and happier world to live in. But if you want to continue to be slaves of the banks and pay the cost of your own slavery, then let bankers continue to create money and control credit."
The Rise and Fall of a Young Turk, by Rob Muldoon 1974
page 53-54;
My first bit of "Young Turkism" was a solo effort. Shortly after the change of government the Prime Minister told Caucus that Cabinet proposed that we should join the International Monetary Fund and the World Bank. This was not in our 1960s policy and I had never been particularly keen for New Zealand to join.
The fact that New Zealand had not joined after Bretton Woods was due to an adverse vote in the Labour Caucus and there is no doubt that the then Minister of Finance Walter Nash, who had been at Bretton Woods, was disappointed, as he was on record as congratulating the chairman of the Bretton Woods conference on his achievements The Holland Government. did not join because Sid Holland was not happy about it. He had been a monetary reformer in the 1930s and had committed himself firmly, as had Sid Smith from Hobson, who had also been close to Social Credit in those days. Most of the others favoured joining but there were a group that remained unconvinced.
page 54;
There was no doubt that members of the fund incurred obligations, and my argument was that as long as we could do our official borrowing from in Britain without tags we did not need these institutions. While Caucus generally approved the introduction several of us remained unconvinced and we knew that Labour would vote heavily against us even though some of them favoured joining.
Harry Lake finally got his two experts. Noel Lough, from Treasury, now deputy secretary, and Bob Familton from the Reserve Bank, now in Washington on the staff of the World Bank, to come up and discuss detail with the dissenters. One by one they were satisfied, Percy Allan and Bert Walker being the last, but I was left unconvinced. In the process we all, the departmental officers included, learned a lot about the working of the two institutions. Finally the bill was passed by Caucus to go into the house and I had said I would vote against it. On the night of the Caucus I had one last long session with the officials and we agreed on the obligations of membership and finally agreed that in the long run, that international lending would more and more be channelled through these organisations and that we could probably not rely on Britain to supply our needs. A year or two later that proved to be so and we could generally only refinance maturities in Britain, not raise new loans.
page 55;
Fate later made me a Governor of the fund and I became closely interested in its work and a great friend and admirer of its managing director, Pierre- Paul Schweitzer. Even the Labour Party, after ten years of opposition to the fund, finally reversed there stand in 1972............. over ten years later I find that my speeches on the bill set out my reservations clearly and my reasons for supporting it. In the main however they were devoted to destroying the fallacious arguments dredged up by the opposition, who were prepared to use the most preposterous material in what was really a play for the monetary reformers who had moved to Social Credit........As Keith had no doubt planned, we joined the Fund and Bank and by the 1963 election the issue was dead.
page 68-69;
I studied the United States taxation system as one of my subjects on a three month visit to the USA in 1965 as recipient of a US State Department foreign leader grant. I regard these agents as some of the best money the United States spends. Each year they bring up and coming politicians and potential leaders from other fields to the USA for a visit of two or three months. They are not restricted but must nominate the subjects they wish to study, and arrangements are made for them to meet top people and organisations in those fields. As one of my fields of study was finance and taxation I spent several weeks in Washington DC and met leading figures in the US Treasury, the Federal Reserve, the Bureau of the Budget(the US equivalent of the Audit Department, and the US Mint.....
The political system formulated two hundred years ago is totally unsuited to the modern world. A system of checks and balances devised when the fastest means of communication was the horse and sail, is an anachronism in a world of instant crisis. The American political system today is based on favours given and received, and is hopelessly corrupt. Some parts are more corrupt than others, but it is almost impossible to be a successful politician in the USA and remain an honourable man. The USA is not alone in this of course, and parts of Asia and Africa are very much worse. The political darlings of our so-called "Liberals" are in many cases unscrupulous thugs who could give lessons in brutality and corruption to the Mafia.
page 70;
Where do they go from here? I do not know, but unless America throws up a number of men of courage and genius in the next twenty-five years I believe that the classical symptoms of the decline of a civilisation will turn into a reality.
The New Zealand Economy, A Personal view, by Rob Muldoon 1985
page 17-18;
It was during the 1930s that major changes occurred in the financial sector. The first trading banks in New Zealand were branches of Australian banks. Late in the 19th century the Bank of New Zealand was formed by local interests, but in 1894 the Government had to step in and save it from collapse and from that time the Government played a major role as shareholder until finally taking over compulsorily the whole shareholding immediately after World War 11.
The Reserve Bank was established by the Coalition Government in 1933 with a considerable degree of independence and some private shareholding. In 1936 however it was taken over by the Labour Government and required to give effect to the monetary policy of the Government as communicated to it by the Minister of Finance. This remains the position today, and although the degree of independence that the bank enjoys is less than is the case in some other countries, two factors at least make that lesser degree of independence desirable. The first is the limited number and range of experience of the policy making personnel of the bank, even though supplemented by a Board of Directors of a high calibre, drawn mainly from the private sector, and the second is the sensitivity of the New Zealand economy to changes in the world economy because of the importance in our economy of our external trade. These factors make it desirable that the whole range of advise and experience available to the Government is concentrated, even on day to day issues, and that the final responsibility for decisions rests with the elected Government.
page 25;
A curious feature of the Holland Government was its failure to join the International Monetary Fund and the World Bank.
During World War 11 the allied nations had discussed the prospects for the world economy after the war. They were determined that that there should not be another great depression of the 1930s, with massive unemployment, poverty and competitive devaluations of various currencies. The idea of an international currency was discussed. All this came together at a meeting of nations called Bretton Woods in New Hampshire 1944. The discussion was dominated by the United States and Britain and it was the American view that prevailed.
There was no consensus on an international currency, but it was agreed to set up two institutions. The first, the International Monetary Fund, would have certain powers of supervision over the relationship between the various international currencies and also the ability to make short term advances at low rates of interest to countries that were in temporary difficulties. The second institution, the International Bank for Reconstruction and Development, or World Bank, was to operate in terms of its title and was essentially a means of mobilising funds, first for lending for post war construction, and subsequently for development generally.
Some years later it formed the International Development Association for soft loan lending to very poor countries, and the International Finance Association for lending to the private sector in the less developed countries. Membership to these bodies was by way of quota which determined the obligations to subscribe, partly in gold and partly in national currencies, as well as the amounts that could be drawn in times of difficulty from the fund. Borrowing from the bank was essentially project borrowing and limited to countries who were not classified among the wealthiest.
Membership of the fund clearly involved some loss of sovereignty although as voting in all of these bodies was related to quota, the wealthy countries were dominant and the United States in particular had a quota big enough to give it veto on matters of importance. The General Agreement on Tariffs and Trade resulted from the subsequent Havana Conference which was set up initially to do for trade what the Bretton Woods Conference had done for international finance.
Although Walter Nash had attended the Bretton Woods Conference in 1944 the Labour Party Caucus back in New Zealand was still a hot bed of old time socialist suspicion of international money power, indeed some Labour members were adherents of the Douglas Social Credit theories which had gained considerable support during the 1930s. The result was that Nash, then Finance Minister, was unable to persuade his colleagues that New Zealand should become a member of the Fund and the Bank, although we did become, curiously, a contracting party of the General Agreement on Tariffs and Trade.
At the very outset, in 1947, GATT was not supplemented by an international trade organisation, as perhaps by the time the Havana Conference met the fears for the post war economy that were apparent at Bretton Woods had subsided somewhat. a more enlightened attitude to international financial cooperation might have been expected from the Holland National Government, but the fact is that Sid Holland himself had been a monetary reformer in the 1930s when he first came into Parliament and felt, as so many politicians have done over the years on all kinds of issues, that a change in attitude would be politically damaging. There were others in his Government who were uneasy about the implications of joining the Fund and Bank, not the least Sid Smith, the member for the far north seat which has variously been called Bay of Islands and Hobson, and which for decades has been the principal home of the Social Credit theorists, Sid Smith himself being an adherent during the 1930s.
Keith Holyoake, however, was of a different view and in spite of the fact that it was not in our 1960 election policy we joined these organisations in 1961.
Page 33-34;
I well remember Keith Holyoake coming into Caucus in February or March of 1961 and the shock that it gave a brand new backbencher when he told us that the honeymoon was over and that we were faced with a serious situation, in respect of both Government accounts and our overseas transactions..............
In May 1961 we raised a sterling loan of 20 million pounds, a substantial sum for those days. In February we had gone on the domestic market for 10 million pounds and taken 13.7 million. We were on the market again in June for 15 million pounds. In March the Reserve Bank moved to reduce the level of bank overdrafts. We brought in hire purchase regulations and restrained public expenditure to the greatest possible extent. We put a restriction on the allowances for overseas travel and we tightened up import licensing. If the figures sound small today then the March deficit, which continued to increase for sometime, was a record at that particular time.
We announced that we would be joining the International Monetary Fund and the World Bank and a principal reason was that it would give us access to drawing rights. Although this had not been in our election policy, we carried out our policy by appointing various advisory bodies in the economic field, the principal one being the Monetary and Economic Council, a three member council with supporting staff which had the task of advising the Government on matters of economic policy, but most importantly, the right to publish its advice, in various forms, with various amendments to its composition and order of reference, the Monetary and Economic Council and its successors have continued up until the present time.
page 35;
In recent years the deliberate move to a more broadly based economy has provided part of the long term answer. One attempt by the Holyoake Government to help alleviate the problem was as I have mentioned to join the International Monetary Fund and World Bank. If Keith Holyoake had any idea of doing this prior to the 1960s election, and I believe that he probably did, then he gave no hint of it. It would have been highly controversial, politically, even within his own party.
Harry Lakes analysis of the move in his 1961 budget involved freeing up our gold reserves of 12.3 million pounds, most of which was pledged for a loan of $US34.5 million which it was proposed to repay in August 1961 two months early.
The use of gold as part of our subscription to the fund would give us a fund quota of $US125 million, and potential drawing rights of 55.8 million pounds at low rates of interest. A number of National Party members, of whom I was one, had not been convinced that we should join the fund with the consequent loss of sovereignty, so long as we could continue to borrow from time to time for temporary balance of payment reasons from Britain. Perhaps the writing was on the wall when Arnold Nordmeyer went to the United States for the US dollar loan in the time of the Nash Government and after earnest and detailed study the dissenting members became convinced that we could no longer look to Britain for our needs in all circumstances.
page 48;
The 1960s were a time of expansion for savings banks. In 1964 the Government introduced a bill to authorise trading banks, to establish savings banks. This was in response to representations from the trading banks that the proliferation of trustee savings banks which had commenced some years earlier, was likely to effect their business, and that if they were given the opportunity to operate savings banks, the total of small savings would be increased as had been the case in Australia, and in earlier years under similar circumstances.
page 49;
The history of trustee savings banks in New Zealand, although long, has been a chequered one. Generally it has been a story of success, in spite of the fact that their pattern over the years has very largely been in that dangerous area of borrowing short and lending long. Treasury has always taken the view that trustee savings banks are an inefficient method of mobilising savings and in the time of the Kirk/Rowling Government, the overseeing of trustee banks was moved from Treasury to the Reserve Bank by the Reserve Bank Amendment Act of 1973. On its return to office in 1975, the National Government did not alter this as the change had little effect on banks.
Trustee savings banks as a repository for workingmen's savings were authorised by a Legislative Council Ordinance in 1847. The Wellington Bank had in fact been formed in 1846, with Auckland following in 1847, and subsequently banks opened at New Plymouth, Lyttelton, Nelson, Napier, Dunedin, Invercargill and Hokitika. The Lyttelton branche bank moved later to Christchurch.
The establishment of the Post Office Savings Bank, which began operations in 1967, was a major set back to trustee savings banks; indeed, in the minds of some politicians it was intended to be just that. It impinged on the issue of centralism as against provincial Government and the centralists did not favour the local provincial nature of the trustee banks.
page 52;
The fact that even in good years we did not show an overall surplus on our external current account and had to borrow and even draw from the IMF was also of concern, so that we were forced to move to restrain not just consumption, but capital development as well.
page 61;
It was in 1967 that, as a result of the wool slump, we borrowed into the higher tranches by way of drawings from the International Monetary Fund and gave the fund a controversial letter of intent. The semantics of a letter of intent as debatable then as they are today when the Fund has some 40 such arrangements. When the leftwing politicians and academics claimed that the Fund had laid down conditions before permitting us to draw in the higher tranches, I insisted, as did the Fund, that it was up to the Government of the member country to indicate the policies that it would pursue in order to restore balance to its economy, while the Fund made its decision on whether or not to agree to the drawings in light of the policies that were proposed.
page 62-3;
In February 1985 at a seminar of the Association of Economists the academic economists from the universities attacked the Treasury colleagues for giving simplistic and indeed bad advice to the incoming Labour Government of 1984. Curiously they were saying what I had been saying since the time of the 1984 election. In reply the Treasury economists explained that where as in earlier years Treasury advice was Keynesian, they had gradually moved to new theories which were not, they claimed, simply monetarist, but which basically favoured an open economy, even though, in a move towards that economy, there would be some pain............ To blandly say, as the Treasury economists did, that, "we were formerly Keynesians, but we have now moved and support the mainstream of economic thinking," is an appalling admission. The truth is that in terms of the economic management of the New Zealand economy both theories are inadequate.
page 66;
In my 1968 budget I referred to the establishment by the International Monetary Fund of a new international reserve asset, the special drawing right(SDR) and the problem of smaller countries which depend for their export earnings on commodities, the prices of which fluctuate violently. I have spoken on that theme at IMF meetings and elsewhere ever since.
page 69;
The early 1970s saw a changing world economy and those changes had a massive impact on a country so dependent on world trade as New Zealand. On 15 August 1971, President Nixon closed the gold window. In plain language, American dollars were no longer convertible into gold and the fixed price of $35 an ounce, which dated back to the 1930s was ended.. The date of this move can be taken as the date on which the Bretton Woods system of fixed but managed currency relationships finally ended.
page 70;
Immediately following the collapse of the Bretton Woods system, moves were made to bring together a new system and the concept of the Committee of Twenty, was devised. This was a committee based on the membership of the Executive Boards of the International Monetary Fund and the World Bank under which some 120 nations(nearer 150 today) were grouped together into 20 groups, each having some community of interest and a total quota of approximately a the same size. The effect of this was that the countries with the largest quotas formed a group of one, while the smaller countries were grouped in numbers that made up the approximate quota total and represented by one of their members. Voting on the Executive Board is by quota and in the manner in which the rules are drafted the United States has an effective veto because of the size of its quota on matters of major importance.........
page 71;
The first meeting of the Committee of twenty was held in Washington at the time of the IMF meeting of September 1972. We had high hope that it would bring together some new rules that would take the place of the former Bretton woods system. These hopes were not realised and some two years later, after the first oil shock, the committee changed its name Interim Committee enlarged it membership to 22 to admit Saudi Arabia and later China and continued as a policy making body which in the first decade of its existence did little that warranted its continuing operation
In particular, it made no progress on the establishment of a new set of rules for the worlds monetary system, although it considered and discarded several worthwhile initiatives mainly because of objections to each by the United States. One was the proposal that the SDR should be established as the major international currency by substituting it for externally held currencies, principally US dollars. This tripped over the requirement that the United States should give some kind of guarantee in respect of the dollars that were substituted, which they were not prepared to do. Another proposal which was not acceptable was 'symmetrical surveillance' that is to say, that the IMF should exercise surveillance over surplus countries as well as deficit countries, given that each dollar of surplus creates a dollar of deficit - atleast in theory, because the statistics do not add up by something of the order of $100 billion. It was held to be unreasonable that the whole burden of adjustment should fall on the deficit countries. The proposal was eminently fair and is an issue that I believe must be addressed again for it is inevitable that it form part of any stable system for world monetary relationships..........
New Zealand has a record that is second to none in its support of international institutions of which we have been members, and our willingness to obey the rules, both in letter and in spirit. We have been constantly disappointed however, by the fact that so many countries - and among them some of the most affluent - have for domestic political reasons been prepared to bend or even ignore the rules when it suited their purpose. The history of the IMF and its sister organisations since the break down of the Bretton Woods system has unfortunately been one were short term self interest has overridden long term wisdom. That this has now apparently been recognised can not alter the unfortunate history of the years since 1971.
page 109;
Following the second oil shock in 1979 the volume of petro-dollars increased but the position of the non oil developing countries began to look less attractive, particularly as some of the new industries that were being developed found that when they came on stream their products, and steel was an example, were facing, protectionist barriers in their natural markets in the wealthy industrialised countries, in some cases the very countries that had provided the loans to build the plants.
page 153;
The international institutions must be reformed with a mandate that fits the needs of the 1980s and into the 21st century. The immediate debt crisis must be dealt with, not as a bale out of either the heavily indebted countries or commercial banks but as a means of averting the collapse of the worlds financial system with a resulting world wide depression such as we have not had since the 1930s, a depression from which no countries economy would be immune.
Toward Prosperity, by Roger Douglas 1987
page 22;
I began talking to the Treasury officers seconded to the Rowling's office and the economists in Labours Research Unit. Between 1976-82 there was a group of them - Paul Carpenter and John Wilson, along with John Whitehead and Barry Saunders in the Research Unit. Barry later became one of Rowling's private secretaries. He had also been in PR before leaving that for senior positions with first the Manufacturers Federation and then the meat board, but he went beyond just being a journalist; he had a good economic knowledge. Outside parliament there were people like Murray Smith and Jim Holt to talk to. It was a good combination. There were the people like me who were largely self taught alongside those more formal economists. As we argued through the issues of economic and social situation at that time, I learnt more. And as my knowledge grew I became more and more dissatisfied with Labours fragmented and unrealistic approach.
page 23;
'To gain credibility Labour must convince the electorate that it is prepared to make the hard choices. Labour should not shrink from stating that the solution to New Zealand's problems will require that some groups take a cut in their standard of living or opportunities, at least in the short term.
' it should be stressed that along with any realistic economic package, Labour will be guided by a set of principles based on equity and natural justice. In other words, no New Zealand family should homeless or without adequate health care.'
page 27;
Of course I worked to do a good job in my constituency. It was automatic. If you are a member of parliament you are there to help the people who elected you with their housing, education, social welfare and immigration problems. I liked the work but, in a sense, I had always done it without thinking. What drove me in politics was my interest in global issues of economic direction.
page 29;
The informal group discussions on the economy and its direction became even more important to me after Doug's(Doug Andrews, Treasury Officer, seconded to 0pposition Leaders Office*) arrival. He shared a small room opposite Lange's office and I took the opportunity go up there and talk and discuss ideas more than any other Labour member of parliament. My ideas on how to shape the economic policy I believed Labour and New Zealand needed were crystallizing
Together with Doug Andrew and Geoff Swier, an economist in the opposition research unit, I put together a 'think tank' of people with whom we already had formal contacts. The group included several businessmen and several academic economists from Victoria University. Jim Holt, who had read drafts of the alternative budget and on whom I constantly tested my ideas, had come south from the history department of Auckland University as chief historian at the National Archives. He also attended one or two meetings.
The economy was plainly in bad shape. It was also clear to all of us that putting it right would not be easily or quickly achieved. A lot of trade offs would be involved, like being prepared to accept a certain amount of inflation initially when the wage and price freeze was lifted and we began to get balance between the different factors in the economy- factors which Muldoon had been treating for far to long as units isolated from each other. Some of these crucial steps would cause difficulty for many people in the short term. Yet the best route for long term improvement required the acceptance of a probable down turn in both output and employment in the early stages to achieve sounder growth five or six years on from that.
In the end the think tank ran down. It was never dismantled formally and Geoff, Doug and I continued to meet some of the participants in smaller meetings. As a large group we were not capable of reaching the same conclusions. What I did learn along the way was that a lot of academics have no flair for decision making. They qualified every statement and were not prepared to commit themselves to anything. Their particular profession does not insist on the practice of their theory. The real contribution to the formation of our policy came from those used to taking practical action - the business people.
* Added by author
page 35;
They were pretences, political window-dressing, which failed to face the real problems, but quite clearly not everyone in the Party would find the new principles easy to accept, particularly those who failed to understand the nature and depth of the economic problems which beset New Zealand.
page 42;
The day after, the Government announced its sixth overseas loan for the year(1984) - $NZ 50 million from the Netherlands in addition to the $135m in Yen, $140m in Deutschemarks, $216m in Sterling, another $100m in Yen and $62m from the Middle East, all raised earlier the same year.
page 45;
Meanwhile the secret memos, known only to a handful of top Government officials and even fewer people in Government, kept flowing. On 28 June(1984) Reserve Bank Governor, Spencer Russell, and the Secretary to the Treasury, Bernard Galvin, had jointly signed a memo to Sir Robert reporting a sharp acceleration in the removal of funds from New Zealand and forecasting even faster future movement. They wanted a meeting as soon as possible.
The next day Spencer Russell told Sir Robert that the Reserve Banks attempts to raise more money overseas were running into trouble. One banker had agreed to lend $30 million, but for only two months. A second insisted on a high interest rate, which was seen as a reluctance to lend. A third refused entirely, citing 'balance sheet reasons'.
page 47;
But there was even more bad news to come for both the Government and New Zealand. Next day the New Zealand Herald published another leaked paper. It was a confidential International Monetary Fund report to the Government prepared at the end of 1983 and completed in February 1984. The IMF staff, said the Herald, 'put much of the blame for the poor performance of the economy on the Governments policy of putting conventional economic instruments in abeyance during the wage price freeze. As a result, some major imbalances in the New Zealand economy had become more serious. The most notable of these was the growth of the internal deficit to about 9.25% of GDP for 1983-4, with the prospect of a similar high deficit this year. The deficits were so large they threatened to have a severe destabilising effect on the economy, either through high interest rates or high rates of monetary expansion. New Zealand had clearly joined the ranks of those countries with very high fiscal deficits, allowing room for only unattractive policy options.
page 48;
At its conclusion the IMF report listed some steps it felt the Government would have to take. A significant improvement was needed in the competitiveness of New Zealand industry. Changes in the value of the dollar should not be ruled out to assist the process. They would almost certainly be needed over the medium term to give room for the dismantling of protection and export incentives. The Government should speed up the liberalisation of import controls in the interest of domestic efficiency. The report regretted the Governments 'continuing extension of controls and intervention.....The process of freeing up the economy from the present multitude of controls offers the surest path to better economic performance'.
page 69;
In its very earliest days this Labour Government decided to reform the cabinet committee system to enable us to improve the quality of government and, in particular, the quality of financial management, Geoff Palmer was responsible for most of the work in restructuring. A key committee is the Cabinet Policy Committee with eight members - David Lange, Geoff Palmer, Stan Rodger, Colin Moyle, Russell Marshal and the three finance ministers. This committee is responsible for the Governments broad objectives and strategy - the frame work within which the Government takes the rest of its decisions. It enabled us to take an overview then give it priority.
page 83-4;
The civil servants were unhappy, they felt exposed and vulnerable. Sir Robert Muldoon was a member of the committee and so was Jim Anderton who shared his views. Muldoon did his utmost to run proceedings, both inside the committee and publicly. His style is such that the bureaucrats called before it could not answer in kind. He is a very good cross examiner, but he only allows people to say what he wants and then he cuts them off.
I think Muldoon saw it as a vendetta against Roderick Deane of the Reserve Bank, who had given Sir Robert advice on devaluation, and Treasuries Graham Scott, who was a member of Muldoon's 'think tank' and whose area was under attack.
page 112;
We faced economic circumstances more difficult than any since the great depression. Yet we went on to put through a program of unprecedented programmes of economic reform, and right through the hundreds of decisions involved in that the Party maintained a strength, energy and unity nobody expected of us in 1984. I think there were a number of reasons for this.
Firstly, the cynics underestimated the extent of the research and discussion behind the policy leaders consensus on a number of fundamental issues, including the economy. That consensus had been reached many months before the election was called. Secondly, there was structural factors to be taken into account. In opposition the caucus is all important because there is no true cabinet - everyone is a back-bencher, even though some may be more senior than others, it is caucus who formulates the whole of the Party's policy for attacking the other side, the strategy and tactics, and contributes considerably to the content of the policy the party takes on the hustings during an election campaign. The major shift in power only occurs after an election is won and caucus elects its cabinet. Then it comes down to a question of numbers. There are twenty ministers in the present Labour cabinet and when combined with six under-secretaries they have the capacity for a large block vote when they meet their back-bench colleagues in caucus.
All decisions in cabinet are taken to caucus before bills can be introduced into the house. Theoretically caucus can overturn a cabinet decision but in practice that is a very rare occurrence and, on the whole unlikely, ministers unlike caucus, have received detailed advice from all relevant government departments and may also placed the issue before a specialist committee of elected caucus members, who have worked through the detail again. They may have lobbied a considerable number of caucus in advance as well. There is close and continuous communication between the two groups in this Government. Finally ministers take collective responsibility for the decisions reached in cabinet and stand behind them when they go to caucus. The sole exception to this two-way consultation is the budget, where caucus's first briefing is 45 minutes before the document is presented in the house.
page 130;
Over the last decade their method of going back to first principles, and working out their arguments from there, has become much more apparent. Although it began much earlier with Henry Lang and Bernard Galvin who, on joining the department in the 1950s were the first of a new breed with highly developed analytical skills, in more recent years under Bernie's leadership, officers like Jas McKenzie, Graham Scott, John Chetwin, Roger Kerr, Bryce Wilkinson, Rob Cameron and others led the analytical development of the Treasury.
page 137;
The arguments in favour of financial deregulation had been going on for sometime. In 1966 a report published by the Monetary and Economics Council recommended financial reforms to improve competition and efficiency. By the time Labour was elected in July 1984 most of the work to enable a float to be put into practice had been done years before by officials in the Reserve Bank and Treasury. We did not need to spend time, as we did on aspects of tax reform, working out the detail. Government and the bureaucrats knew what had to be done.
page 140;
Other major changes in monetary policy began as early as 27 July when the Reserve Bank announced the Government stock tendering programme would resume. For hundreds of years governments have sold bonds to the public as a way of raising money for a variety of purposes. Investors loan their money to the government with negligible risk, for a set period at set interest rates. Before the changes in 1984 the bonds tendered locally usually offered very low interest returns and were largely brought by banks and financial institutions who had to hold a certain amount of their assets in government stock. One of the uses of government bonds is to keep the amount of money in the financial system in balance. Under previous administrations, when government departments spent more than the government received in tax , more money was injected into the banking system than was withdrawn by taxes. As a result there was more money to spend on the same amount of goods and services in the real sector and inevitably prices(inflation) rose. The financial sector is distinct from the real sector of the economy. The former handles the buying and selling of financial assets, the real sector produces, uses, buys and sells tangible items or services. Now by selling Government Stock and Treasury Bills at interest rates dictated by rates offered in the market, we ensured every extra dollar injected into the banking system would be taken out.
I've Been Thinking, by Richard Prebble 1996
page 95;
Countries call in the IMF when they cannot pay their debts. Repudiating debt for a trading nation is not a viable option: other countries refuse to trade with you. The IMF as a condition for providing emergency financial loans requires the recipient government to introduce a very stringent financial reform program. The UK had to do it. New Zealand was much closer than most commentators realised
page 96;
Increases in credit by the Reserve Bank greater than any increase in production in the economy in New Zealand has been very inflationary. When the Reserve Bank increased the M3 by double digit amounts, inflation went to double digits too. I noticed under
Muldoon that inflation rose to within one percent of what ever the M3 was the year before. Therefore I used the M3 figures to accurately predict every year in Parliament what next years inflation would be. Its still there in Hansard.
Helen - Portrait Of A Prime Minister - by Brian Edwards - Published 2001
Pg 166 - 71 - The in-Fighting led to a leadership spill which Rowling is said to have survived by one vote - his own. But the attacks on him continued and, not surprisingly, increased in intensity after the 1981 defeat.
David Lange - " That's about the time the Party decided two have two Labour caucuses and go-away caucuses and all these other things to avoid decision-making.
Caucuses were filled with overseas travellers who were going to do all sorts of derring-do. They'd say, 'yes, yes, yes! and they'd go away and plot. Remember that we'd increased the numbers by 1981 and the bigger the caucus the more likely that you'll get factionalism. And the chances of becoming an isolated minority become even stronger."
Pg 168 - 69
David Lange:
"I often said that Roger didn't have a secret agenda for many of the things he did, and that's true. He didn't plan huge income tax reductions. He certainly didn't plan GST. But in terms of their strategising to get control, that was clearly going on, I would say from 1979, when I was elected Deputy Leader. I was their hostage in that sense, right from way back. I was their boy. I was their man. I was their candidate. I worked very hard not to be pushed. When you look back on it now, its quite obvious that I was calculated to be the flag carrier for this particular homicidal attack, but I didn't actually fit there.
In a funny way I resented it. I considered by '81 that I was completely unfit to be leader. I was in some physical danger. And that's why I said "shut up, I'm not doing anything. I'm going to go to hospital. I'm going overseas.' And I called them off.
" I didn't have much to do with the philosophy, I didn't have much to do with Roger. I've never been to his house. I don't know where he lives to this day, I haven't seen him for four years."
Brian Edwards:
So David would be the front man for the Douglas faction, the acceptable face of Rogernomics. He would win the election, a feat which Rowling was patently incapable of, and take the prize. He would be the Prime Minister of New Zealand. Douglas's prize would be the Finance portfolio and the opportunity to realise his vision for New Zealand as a model of the market economy. Providing no one blew the gaff, everything was in place for the restructuring of New Zealand society, the like of which had not been seen since 1935.
With Lange's ascension to the Leadership of the Party, Labours fortunes at once began to improve. As front men go, he was without peer. His formidable intellect, unrivalled powers of oratory and searing wit made him more than a match for the politically ailing and increasingly inebriated Rob Muldoon. Whatever her personal views of the new leader, Helen could see that any hope which the Party had of revival now lay with the member from Mangere:
Helen Clark:
" unquestionably, the confidence of the Labour Party that it could win an election increased. But for those close to the action there was some apprehension about what an election victory might deliver."
Pg - 176
Helen Clark:
"The fundamental divisions within the Party would have been very obvious to anyone on the inside in '81 and '84, because we couldn't produce an economic policy. And in the end Geoffrey Palmer, who used to in fact run the policy council, went away and wrote a policy that could have meant anything, in order to satisfy
both sides. But everyone knew that we were going into an election where the Minister of Finance was eventually going to run the rampant."
Pg - 191
Bob Chapman:
"There was one thing that Helen and David did have in common - when they entered Parliament neither had a firm grasp of economics. That, and his ignorance of the details of policy may absolve Lange to some extent from the charge of complicity in the Douglas revolution. Bob Chapman says that David may have been "a sheep in wolves clothing."
Pg 222
Brian Edwards:
"If those who voted National in 1990 thought they were voting against 'Rogernomics' and in favour of a more caring and humane society, they must have been sorely disappointed."
Colin James:
" The National Party in government after 1990 acted out of character. Instead of conservatively managing the status quo bequeathed by Labour, it pushed on with reform, extending it into the social services and wages policy. In fact the first two years of the National government can be seen as almost seamless continuation of the policy revolution begun by Labour."
Pg 223-224
Helen Clark:
"What they did was deliberately unpick the architecture of New Zealand, which had been constructed by the first Labour government. The fourth Labour government had not done that in social policy. It had unpicked the regulated economy. Labour gets quite unfairly lumped in with National, as if somehow there was a seamless government that did these things. But the fourth Labour government was bloody good on social policy. Had I not become the Minister of Housing, had there not been David's "cup of tea", it could have been disastrous. But the reality was the Labour government did a fantastic job in housing and a pretty good job in Health and Education by and large. And it certainly maintained welfare spending. So on social policy, I think it was generally pretty good.
"But the Nats came in and just chucked all that out. In the first flush of 'Ruthanasia' they cut spending quite ferociously. There was benefit cuts, cuts in health, cuts in education, cuts in pensions. Shipley was the Minister of Social Welfare. She was Mrs Benefit-Cut and then she added to that in the 'mother of all budgets' by cutting the super as well. There was disastrous changes. We saw the on set of poverty in New Zealand for the first time since the 1930s. It was a terrible period. Market rentals for state houses. The employments contract act. Dreadful. So the 'mother of all budgets' made it quite clear that tis really was a loopy right-wing government driven by Ruth Richardson, not by kind country Jim(Bolger)."
Brian Edwards:
"Observers of the political scene, as Bob Chapman notes, might have had a sense of deja vu:".....the incongruity of a kinder, more gentle policy coming down from the leadership, and Ruth Richardson's fire and brimstone in action. Bolger plays Lange to Richardson's Douglas, a Minister of Finance quite out of his control. Bolger looks benign, he often feels benign. But National has seen the light. Douglas had the answer and their Minister of Finance is there to finish the job."
Iain Parker:
Personal observation:
After becoming a Minister in the 2005 re-elected Labour government, Maryan Street wrote an article in her local North Taranaki Midweek paper telling how she expressed her surprise to Michael Cullen, at being appointed to the Commerce Select Committee, as she knew very little about commerce. She then told how Michael Cullen reassured her by saying not to worry, he didn't know much of commerce when he was first appointed either.
Pg 156 - 157 - Helen delivered her maiden speech to Parliament on 27 April 1982
" It is a tenet of my philosophy that a society can be judged on how it treats its weakest members - the sick, the disabled, the young and the elderly. Attacks on social provision for any of those can not be defended in any humane society. Labours concern has always been the poor, and for those struggling on the margins of society. We do not seek as our first priority to make the rich richer and the powerful more powerful. Those that believe that that is what the aim of Government should be, could not support us. Our party was founded on concepts of social justice and equality. It was founded by working men and women who could see from the experience of their daily lives the injustice of prevailing social conditions. They set out to change their society to ensure that the resources of the community were more fairly distributed, so that every member of the community could share in the wealth that the community had created."
In a segment of her speech that foreshadowed the economic debate that would tear Labour apart over the next nine years, Helen turned to the parties philosophy:
" The Labour philosophy sees the state rather differently from the way in which the conservative philosophy sees it. We believe that the state must act to correct the imbalances in our society, favouring the rich and powerful. The conservative position is
the laissez-faire posture. 'The less the government does, the better,' they say, and ' lets the market sort the matter out.' We know that if the market is left to sort matters out injustice will be heightened, and suffering in the community will grow with the neglect the market fosters. The law of the unregulated market is, in the end, the law of the jungle, where only the strongest can survive.
"My objectives for, and demands of the Government are relatively simple. They centre on the right to work and to be adequately housed, the need for better living standards, for access to health care at a price everyone can afford, for free and quality public education, for recognition of rights of minorities, and for tolerance and social peace within the community. All those objectives, though simple, seem very far from realisation for the people I represent. There is an immense job of social reconstruction to be done - a job that can begin only when a Labour Government, committed to social change
and equality, is elected." ..........My greatest wish is that at the end of my time in this
House I shall have contributed towards making New Zealand a better place than it is today for its people to live in."
===============================================================
INTERNATIONAL UNIVERSITY SOCIETY
Reading Course and Biographical Studies
- Section Two
Transcript of a speech on BBC radio 1942 - How Much Finance Matters - by John Maynard Keynes, recognised as one of histories leading authorities on the intricacies of international finance.
Pg 185 - 86;
Let me begin by telling you how I tried to answer an eminent architect who pushed on one side all the grandiose plans to rebuild London with the phrase "Where's the money to come from?" "The money?" I said. But surely, Sir John , you don't build houses with money? Do you mean that there won't be enough bricks and mortar and steel and cement?" "Oh no" he replied; "of course there will be plenty of that." "Do you mean" I went on "that there won't be enough labour? For what will the
builders be doing if if they are not building houses?" "Oh no, that's all right," he agreed. "Then there is only one conclusion. You must be meaning, Sir John, that there won't be enough architects." But there I was trespassing on the boundaries of politeness. So I hurried to add: "Well, if there are bricks and mortar and steel and concrete and labour and architects, why not assemble all this good material into houses?" But he was, I fear, quite unconvinced. "What I want to know" he repeated " is where the money is coming from." To answer that would have got him and me into deeper water than I cared for, so I replied rather shabbily: "The same place it is coming from now." He might of countered, but he didn't: "Of course I know that money is not the slightest use whatever. But, all the same, my dear sir, you will find it a devil of a business not to have any."
Pg 187 - 88
Now let me turn back to the other interpretation of what my friend may of had at the back of his head - the adequacy of our resources in general, even assuming good employment, to allow us to devote a large body of labour to capital works which would bring in no immediate return. Here is a real problem, fundamental yet essentially simple, which it is important for all of us to try to understand. The first task is to make sure that there is enough demand to provide employment for everyone. The second task is to prevent a demand in excess of the physical possibilities of supply, which is the proper meaning of inflation. For the physical possibilities of supply are very far from unlimited.
END
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“The banks do create money. They have been doing it for a long time, but they didn't quite realize it, and they did not admit it. Very few did. You will find it in all sorts of documents, financial textbooks, etc. But in the intervening years, and we must all be perfectly frank about these things, there has been a development of thought, until today I doubt very much whether you would get many prominent bankers to attempt to deny that banks create credit.”
- H. W. White, Chairman of the Associated Banks of New Zealand, to the New Zealand Monetary Commission, 1955.
===============================================================
In a process that dates back many decades, the central banks masqueraded as public serving institutes, IMF-World Bank etc... using them like Trojan horses, purposely lending you more of their counterfeit money than they knew you could ever afford to repay, then when the inevitable happened, they liquidated you, imposing structural adjustment programs(SAP'S) of financial deregulation that busted your civil protections, allowing in their myriad of multinational corporate subsidiaries, at the top of which you will find a privately owned corporate central bank, via nominee and trustee holdings, is the controlling stakeholder. These multinational subsidiary corporations then set about buying up the nations necessities and ramping the prices up, so that the average punter cant survive without nondiscretionary debt.
Their subsidiary finance entities then use the purposely flawed capital adequacy regulations and the power to create mortgages out of nothing but debt entries on a computer, to lend many times more of their counterfeit currency than they have cover for, causing hyper inflation due to the over supply of money to true value. It was during this liquidation process that many public servants privy to the "goings on" plundered their nations and its peoples like hyenas, buying their state owned assets at grossly undervalued prices, then selling their ready made monopolies on the global stock market a short time later for many times what they had borrowed to pay for them. They then followed the process round the world feeding off it like vultures.
It is claimed that our banking sector is predominantly owned by the major Australian banks, thus we have a joint banking regulation agreement with them, but if you study the shareholding structures, the controlling stakeholder of every Australian bank is one or more of the privately owned central banks. They often attempt to hide their holdings by way of trusts and nominee entities. Study further and it does not take long to realise that the controlling stakeholders in most oil multinational corporations are also controlling stake holders in the privately owned central banking network, I'll let you work it out.
The "sting" in their construed chain of events, is when the privately owned central banks claim they have to come to the rescue of their own debt stressed subsidiary commercial banking sector, propping them up with hundreds of billions of counterfeit currency to be paid back at some time in the future, with interest, out of the future taxes of the nation, as contracted by a government bond, it is that or have your money system thrown into chaos. They then portray that they themselves have suffered massive losses, remembering if you create something out of nothing, you cant lose, but they use this bogus excuse to constrict the money supply, by increasing interest rates, refusing to refinance and calling in the loans of now debt dependent populations, this brings the whole system to its knees, bankruptcies and foreclosures become ever present, returning the assets to those sitting cashed up from the last manipulated boom who buy them back at cents on the dollar, leaving the dispossessed with residual debt.
Then, if you have developed a true interest in social justice, research in depth, as I have done under the Official Information Act, the operations of the New Zealand Debt Management Office, and the work histories of the past and present members of the Debt Management Advisory Board.
Then research the lovely little exemptions granted to the NZDMO, and foreign banks, by someone that I allege it is hard not to conclude is a walking conflict of interest, that is Jane Diplock, CEO of the Securities Commission, an exemption that exempts the NZDMO office from disclosing who has the exclusive rights to bring into creation and sell our government securities into the secondary markets, you guessed it, the only registered bond dealers in the world are the privately owned corporate central banks.
While your at it you might want to have a look at the myriad of exemptions given to many subsidiary multinational corporations of the privately owned central banks, allowing them to circumvent the supposed protections of the Securities Act.
Every nation should have the right to "bring into creation" its own money supply, then spend, not lend, its money into the system by way of interest free money for public infrastructure and worthy community projects. This would create peace and stability due to a far broader distribution of financial dignity than the currently mythical "trickle down" effect. The International Money Club and their locally recruited co-operatives have gone out of their way to ridicule the Social Credit movement since its beginnings in the 1930's, that in itself should tell you they represent a civil threat to their slavery by cunning.
The Social Credit movement has internationally flown its flag from the mast without deviation for over seventy years and quite simply it is becoming all to obvious to any financially literate person of integrity, that it is Social Credit or Bust! for man and environment, it is that simple. Every elected body needs a Social Credit agent between them and the Treasury vault or the foxes will forever remain guarding the chicken house.
The corruption of the social intent of money has been the common denominator in most every upheaval since recorded human history and if we don't soon develop some learned behaviours of common decency from what has gone on in the past, the International Money Club and their locally recruited co-operatives will forever prefer we be stuck with our self destructive animal instincts, as war has thus far been the most profitable industry in history.
Compiled by
Iain Parker
List Candidate Democrats for Social Credit 2008
Extracts from history:
Famous Quotes about Government & Banking Control and the New World Order
The following is a four page list of quotes by famous individuals that reflect their knowledge of Government, Banking, Military, and Media control - or otherwise known as the "New World Order."
"The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson."
- U.S. President Franklin D. Roosevelt in a letter written Nov. 21, 1933 to Colonel E. Mandell House
“If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations.”
- Andrew Jackson
“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
"We can't be so fixated on our desire to preserve the rights of ordinary Americans."
- Bill Clinton, USA Today on 3/11/93, page 2a
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
- Henry Ford
"Today, America would be outraged if U.N. troops entered Los Angeles to restore order. Tomorrow they will be grateful! This is especially true if they were told that there were an outside threat from beyond, whether real or promulgated, that threatened our very existence. It is then that all peoples of the world will plead to deliver them from this evil. The one thing every man fears is the unknown. When presented with this scenario, individual rights will be willingly relinquished for the guarantee of their well-being granted to them by the World Government."
- Henry Kissinger, Bilderberger Conference in Evians, France, 1991
"The drive of the Rockefellers and their allies is to create a one-world government combining super capitalism and Communism under the same tent, all under their control.... Do I mean conspiracy? Yes I do. I am convinced there is such a plot, international in scope, generations old in planning, and incredibly evil in intent."
- Congressman Larry P. McDonald, 1976, killed in the Korean Airlines 747 that was shot down by the Soviets
“Some even believe we (the Rockefeller family) are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that's the charge, I stand guilty, and I am proud of it.”
- David Rockefeller, Memoirs, page 405
"It is the system of nationalist individualism that has to go....We are living in the end of the sovereign states....In the great struggle to evoke a Westernized World Socialism, contemporary governments may vanish....Countless people...will hate the new world order....and will die protesting against it." - H.G. Wells, in his book, “The New World Order”, 1940
“Bankers own the earth; take it away from them but leave them with the power to create credit; and, with a flick of a pen, they will create enough money to buy it back again... If you want to be slaves of bankers and pay the cost of your own slavery, then let the bankers control money and control credit.”
- Sir Josiah Stamp, Director, Bank of England, 1940.
"We are on the verge of a global transformation. All we need is the right major crisis and the nations will accept the New World Order."
- David Rockefeller
"We are grateful to the Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years... It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is now more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries."
- David Rockefeller, Bilderberg Meeting, June 1991 Baden, Germany
"The few who understand the system, will either be so interested from it's profits or so dependent on it's favours, that there will be no opposition from that class." - Mayer Amschel Bauer Rothschild
“Give me control of a nation's money and I care not who makes it's laws."
- Mayer Amschel Bauer Rothschild
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavour to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands, and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.” –
Abraham Lincoln - In a letter written to William Elkin
"In the next century, nations as we know it will be obsolete; all states will recognize a single, global authority. National sovereignty wasn't such a great idea after all."
- Strobe Talbot, President Clinton's Deputy Secretary of State, Time Magazine, July 20th, l992
“The money power preys on the nation in times of peace, and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes.” - Abraham Lincoln
“A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the Nation and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the world - no longer a Government of free opinion no longer a Government by conviction and vote of the majority, but a Government by the opinion and duress of small groups of dominant men.... Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the U.S., in the field of commerce and manufacturing, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.” –
Woodrow Wilson - In The New Freedom (1913)
“The fact is that there is a serious danger of this country becoming a Pluto-democracy; that is, a sham republic with the real government in the hands of a small clique of enormously wealthy men, who speak through their money, and whose influence, even today, radiates to every corner of the United States.” - William McAdoo - President Wilson's national campaign vice-chairman, wrote in Crowded Years
“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.” - Thomas Jefferson
“The system of banking [is] a blot left in all our Constitutions, which, if not covered, will end in their destruction... I sincerely believe that banking institutions are more dangerous than standing armies; and that the principle of spending money to be paid by posterity... is but swindling futurity on a large scale.”
- Thomas Jefferson
“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a moneyed aristocracy that has set the Government at defiance. The issuing power should be taken from the banks and restored to the people to whom it properly belongs.”
- Thomas Jefferson
“... To take a single step beyond the boundaries thus specially drawn around the powers of Congress is to take possession of a boundless field of power, no longer susceptible of any definition. The incorporation of a bank, and the powers assumed by this bill [chartering the first Bank of the United States], have not, been delegated to the United States by the Constitution.”
- Thomas Jefferson - in opposition to the chartering of the first Bank of the United States (1791).
“We have stricken the (slave) shackles from four million human beings and brought all labourers to a common level not so much by the elevation of former slaves as by practically reducing the whole working population, white and black, to a condition of serfdom. While boasting of our noble deeds, we are careful to conceal the ugly fact that by an iniquitous money system we have nationalized a system of oppression which, though more refined, is not less cruel than the old system of chattel slavery.”
- Horace Greeley - (1811-1872) founder of the New York Tribune
“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time, a legal system that authorizes it and a moral code that glorifies it.”
- Frederic Bastiat - (1801-1850) in Economic Sophisms
“The powers of financial capitalism had (a) far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland; a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.”
- Prof. Carroll Quigley in Tragedy and Hope
“In a small Swiss city sits an international organization so obscure and secretive....Control of the institution, the Bank for International Settlements, lies with some of the world's most powerful and least visible men: the heads of 32 central banks, officials able to shift billions of dollars and alter the course of economies at the stroke of a pen.”
- Keith Bradsher of the New York Times, August 5, 1995
“The Federal Reserve Bank of New York is eager to enter into close relationship with the Bank for International Settlements....The conclusion is impossible to escape that the State and Treasury Departments are willing to pool the banking system of Europe and America, setting up a world financial power independent of and above the Government of the United States....The United States under present conditions will be transformed from the most active of manufacturing nations into a consuming and importing nation with a balance of trade against it.”
- Rep. Louis McFadden - Chairman of the House Committee on
Banking and Currency quoted in the New York Times (June 1930)
“Nothing did more to spur the boom in stocks than the decision made by the New York Federal Reserve bank, in the spring of 1927, to cut the rediscount rate. Benjamin Strong, Governor of the bank, was chief advocate of this unwise measure, which was taken largely at the behest of Montagu Norman of the Bank of England....At the time of the Banks action I warned of its consequences....I felt that sooner or later the market had to break.”
- Money baron Bernard Baruch in Baruch: The Public Years (1960)
“The Federal Reserve Bank is nothing but a banking fraud and an unlawful crime against civilization. Why? Because they "create" the money made out of nothing, and our Uncle Sap Government issues their "Federal Reserve Notes" and stamps our Government approval with NO obligation whatever from these Federal Reserve Banks, Individual Banks or National Banks, etc.”
- H.L. Birum, Sr., American Mercury, August 1957, p. 43
“[The] abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.... In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holdings illegal, as was done in the case of gold.... The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.... [This] is the shabby secret of the welfare statist's tirades against gold. Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”
- Alan Greenspan in an article he wrote in 1966.
“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.” – James Madison
"I am concerned for the security of our great nation; not so much because of any threat from without, but because of the insidious forces working from within."
- General Douglas MacArthur
“In March, 1915, the J.P. Morgan interests, the steel, shipbuilding, and powder interest, and their subsidiary organizations, got together 12 men high up in the newspaper world and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press....They found it was only necessary to purchase the control of 25 of the greatest papers. "An agreement was reached; the policy of the papers was bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies, and other things of national and international nature considered vital to the interests of the purchasers."
- U.S. Congressman Oscar Callaway, 1917
"The invisible Money Power is working to control and enslave mankind. It financed Communism, Fascism, Marxism, Zionism, Socialism. All of these are directed to making the United States a member of a World Government."
- American Mercury Magazine, December 1957, p. 92
"The world is governed by very different personages from what is imagined by those who are not behind the scenes."
- Benjamin Disraeli, first Prime Minister of England, "Coningsby, the New Generation", 1844
"I believe that if the people of this nation fully understood what Congress has done to them over the last 49 years, they would move on Washington; they would not wait for an election....It adds up to a preconceived plan to destroy the economic and social independence of the United States!"
- George W. Malone, U.S. Senator (Nevada), speaking before Congress, 1957
"The United Nations will spearhead our efforts to manage the new conflicts (that afflict our world)....Yes the principles of the United Nations Charter are worth our lives, our fortunes, and our sacred honor."
- General Colin Powell, 4/21/93, receiving the UN-USA Global Leadership Award
“The real menace of our Republic is the invisible government which like a giant octopus sprawls its slimy legs over our cities, states and nation. At the head is a small group of banking houses... This little coterie...runs our government for their own selfish ends. It operates under cover of a self-created screen...seizes...our executive officers...legislative bodies...schools... courts...newspapers and every agency created for the public protection.”
- John F. Hylan, Mayor of New York, Mayor, 1918-1925
"The Trilateral Commission is intended to be the vehicle for multinational consolidation of the commercial and banking interests by seizing control of the political government of the United States. The Trilateral Commission represents a skillful, coordinated effort to seize control and consolidate the four centers of power--Political, Monetary, Intellectual, and Ecclesiastical."
- U.S. Senator Barry Goldwater, his book "No Apologies", 1964
“From the days of Spartacus, Weishaupt, Karl Marx, Trotski, Belacoon, Rosa Luxenberg and Ema Goldman, this world conspiracy has been steadily growing. This conspiracy played a definite recognizable role in the French Revolution. It has been the mainspring of every subversive movement during the 19th century. And now at last, this band of extraordinary personalities from the under- world of the great cities of Europe and America have gripped the Russian people by the hair of their head and have become the undisputed masters of that enormous empire.”
- Winston Churchill to the London press in 1922.
“The governments of the present day have to deal not merely with other governments, with emperors, kings and ministers, but also with the secret societies which have everywhere their unscrupulous agents, and can at the last moment upset all the governments' plans."
- British Prime Minister Benjamin Disraeli, 1876
"For some time I have been disturbed by the way the CIA has been diverted from its original assignment. It has become an operational and at times a policy making arm of the government."
- President Harry Truman
"The idea was that those who direct the overall conspiracy could use the differences in those two so-called ideologies [Marxism/fascism/socialism v. democracy/capitalism] to enable them [the Illuminati] to divide larger and larger portions of the human race into opposing camps so that they could be armed and then brainwashed into fighting and destroying each other."
- Myron Fagan
"From the earliest days, the Rothschilds appreciated the importance of proximity to politicians, the men who determined not only the extent of budget deficits but also the domestic and foreign policies..."
- Niall Ferguson
"By remaining behind the scenes, they (the Rothschilds) were able to avoid the brunt of public anger which was directed, instead, at the political figures which they largely controlled. This is a technique which has been practiced by financial manipulators ever since, and it is fully utilized by those who operate the Federal Reserve System today."
- G. Edward Griffin
"Lord Rothschild had access to all manner of leaders and experts. He was responsible only to the Prime Minister and answerable to neither the electorate nor the civil service chiefs."
- Derek Wilson
"The division of the United States into federations of equal force was decided long before the Civil War by the high financial powers of Europe. These bankers were afraid that the United States, if they remained in one block and as one nation, would attain economic and financial independence, which would upset their financial domination over the world. The voice of the Rothschilds prevailed… Therefore they sent their emissaries into the field to exploit the question of slavery and to open an abyss between the two sections of the Union."
- German chancellor Otto von Bismarck
"Throughout the first half of the nineteenth century, the (Rothschild) brothers conducted important transactions on behalf of the governments of England, France, Prussia, Austria, Belgium, Spain, Naples, Portugal, Brazil, various German states and smaller countries. They were the personal bankers of many of the crowned heads of Europe. They made large investments, through agents, in markets as distant as the United States, India, Cuba and Australia." - G. Edward Griffin
“The bank hath benefit of interest on all moneys which it creates out of nothing.”
- William Paterson, founder of the Bank of England, 1694.
“All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation.”
- John Adams, letter to Thomas Jefferson.
“The money power denounces, as public enemies, all who question its methods or throw light upon its crimes.”
- Democrat Presidential candidate William Jennings Bryan.
"Whoever controls the volume of money in any country is absolute master of all industry and commerce."
- US President James A. Garfield
“This Federal Reserve Act establishes the most gigantic trust on earth. When the President (Wilson) signs this bill the invisible government of the Monetary Power will be legalized.”
- Hon. Charles A. Lindbergh, Sr.
"Banks lend by creating credit. They create the means of payment out of nothing."
– Ralph M. Hawtrey, former Secretary of Treasury, England.
“The process by which banks create money is so simple that the mind is repelled.”
- John K. Galbraith, in “Money: Whence it came, where it went”, p. 29.
“You have to choose [as a voter] between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold."
- George Bernard Shaw
"I have never seen more Senators express discontent with their jobs....I think the major cause is that, deep down in our hearts, we have been accomplices in doing something terrible and unforgivable to our wonderful country. Deep down in our heart, we know that we have given our children a legacy of bankruptcy. We have defrauded our country to get ourselves elected."
- John Danforth (R-Mo)
"We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people."
- Daniel Webster
“Most Americans have no real understanding of the operations of the international moneylenders... the accounts of the Federal Reserve have never been audited. It operates outside the control of Congress and ... manipulates the credit of the United States”
- Sen. Barry Goldwater (R. –AZ)
“Nothing but widespread suffering will produce any effect on Congress... Our only safety is in pursuing a steady course of firm restriction - and I have no doubt that such a course will ultimately lead to restoration of the currency and the re-charter of the bank."
- Nicholas Biddle
“The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots and the bankers went anew to grab the riches. I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it to systematically corrupt modern civilization. They will not hesitate to plunge the whole of Christendom into wars and chaos in order that the earth should become their inheritance."
- Otto von Bismarck
"There cannot be stable money within an environment dominated by ideologies hostile to the preservation of economic freedom."
- Ludwig von Mises
"The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it."
- John Kenneth Galbraith
"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."
- Daniel Webster
"Every circulating FRN (Federal Reserve Note) represents a one dollar debt to the Federal Reserve System."
- Money Facts, House Banking and Currency Committee
"Neither paper currency nor deposits have value as commodities, intrinsically; a 'dollar' bill is just a piece of paper. Deposits are merely book entries."
- Modern Money Mechanics Workbook, Federal Reserve Bank of Chicago, 1975
"The governments alone are responsible for the spread of the superstitious awe with which the common man looks upon every bit of paper upon which the treasury or agencies which it controls have printed the magical words legal tender."
- Ludwig von Mises
"Those who create and issue money and credit direct the policies of government and hold in the hollow of their hands the destiny of the people."
- Reginald McKenna, former Chancellor of Exchequer, England
"When you or I write a check there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money."
- Putting It Simply, Boston Federal Reserve Bank
"How pale is the art of sorcerers, witches, and conjurors when compared with that of the government's Treasury Department!"
- Ludwig von Mises
"We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it."
- Congressman Louis T. McFadden in 1932
"If you increase the quantity of money, you bring about the lowering of the purchasing power of the monetary unit."
- Ludwig von Mises
"Money is the most important subject intellectual persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it is widely understood and its defects remedied very soon."
- Robert H. Hemphill, former credit manager, Federal Reserve Bank of Atlanta
"Thus, our national circulating medium is now at the mercy of loan transactions of banks, which lend, not money, but promises to supply money they do not possess."
- Irving Fisher, 100% Money
"Without the confidence factor, many believe a paper money system is liable to collapse eventually."
- Federal Reserve Bank of Philadelphia, Gold, p. 10
The director of the Prussian Treasury wrote on a visit to London that Nathan Rothschild had as early as 1817: ".., incredible influence upon all financial affairs here in London. It is widely stated.., that he entirely regulates the rate of exchange in the City. His power as a banker is enormous".
Austrian Prince Mettemich's secretary wrote of the Rothschild's, as early as 1818, that: "... they are the richest people in Europe."
Referring to James Rothschild, the poet Heinrich Heine said: "Money is the god of our times, and Rothschild is his prophet."
James Rothschild built his fabulous mansion, called Ferrilres, 19 miles north-east of Paris. Wilhelm I, on first seeing it, exclaimed: "Kings couldn't afford this. It could only belong to a Rothschild!"
Author Frederic Morton wrote that the Rothschilds had: "conquered the World more thoroughly, more cunningly, and much more lastingly than all the Caesars before..."
As Napoleon pointed out: "Terrorism, War & Bankruptcy are caused by the privatization of money, issued as a debt and compounded by interest "- he cancelled debt and interest in France - hence the Battle of Waterloo.
Lord Rothschild (Rockefellers and Rothschilds' relatives) in his book - The Shadow of a Great Man - quotes a letter sent from Davidson on June 24, 1814 to Nathan Rothschild, "As long as a house is like yours, and as long as you work together with your brothers, not a house in the world will be able to compete with you, to cause you harm or to take advantage of you, for together you can undertake and perform more than any house in the world."
The closeness of the Rothschild brothers is seen in a letter from Soloman (Salmon) Rothschild to his brother Nathan on Feb. 28, 1815, "We are like the mechanism of a watch: each part is essential." (2) This closeness is further seen in that of the 18 marriages made by Mayer Amschel Rothschild's grandchildren - 16 were contracted between first cousins.
Nathan Rothschild said (1777-1836): "I care not what puppet is placed on the throne of England to rule the Empire. The man who controls Britain's money supply controls the British Empire and I control the British money supply."
"Give me the control of the credit of a nation, and I care not who makes the laws." The famous boastful statement of Nathaniel Meyer Rothschild, speaking to a group of international bankers, 1912: "The few who could understand the system (cheque, money, credits) will either be so interested in its profits, or so dependent on its favours, that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests." The boastful statement by Rothschild Bros. of London.