Skip to main content

Reserve Bank facility needs to be extended

A news release, issued by the Reserve Bank - 21 August 2008 - has Toby Fiennes, the Head of Prudential Supervision, saying ‘Purely as a precautionary measure, the Bank has put in place a facility where it will accept Residential Mortgaged-Backed Securities as collateral for cash, giving institutions an additional funding avenue.’ I say well done Mr Fiennes, now the Reserve Bank has this facility in place they should focus their attention on providing a similar facility, for our Governments – both national and Local – to develop the infrastructure needs of our nation. The Reserve Bank’s decision to make this facility available - if times get difficult - now makes it obvious that in easier times it would work as well and likely to be even more effective, especially if the interest rate charged covered costs only i.e. less than 1%.

Comments

Popular posts from this blog

Show Me the “Monetary Reform” David Cunliffe!

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

The Reserve Bank of New Zealand

New Zealand's Central Reserve Bank is STATE owned. Despite that, instead of being used for the benefit of its owners, the people of New Zealand, successive Governments have: Allowed the foreign-owned trading banks to create and issue nearly all of the nation's money supply and claim it as their own. Notes and coins make up less than three percent of the money in circulation. Ninety seven percent of our money supply is on loan to us at interest from those banks. Actively encouraged banks to charge "rental" for this money at some of the highest interest rates in the developed world. Used high interest rates as a blunt lever to control inflation, while agreeing to exclude the resultant costs from the Price Index, so that their cost-inflationary effects do not allow pensions and awards to compensate for these. Deliberately used interest rate fluctuations to maintain an unemployed "pool" of about four percent of the workforce in order to hold down wage rates. Fa

Capital Gains Tax - So Last Century

The Labour Party’s desperate capital gains tax plan, so far from being bold, will do nothing for the economy or the country. The USA has had a capital gains tax for many decades, but it has not stopped housing bubbles or redistributed the tax burden more fairly. Taxing capital gains is a complicated and costly exercise in futility, a last century concept along with the National Party’s asset sales and other out-dated ideas. What New Zealand needs is a 21st Century tax system that is truly fair and takes advantage of modern technology. There is a growing call for a Financial Transactions Tax (FTT), around the world and here in New Zealand. FTT is a tax with no loopholes, so that those high income earners that currently avoid paying tax will at last contribute to Government revenue. FTT is entirely cost-effective. Banking software already exists to collect withholding tax, so there is no need to re-invent the wheel. An effective FTT rate, one that will both slow rampant speculation and