Do Not Resuscitate

Despite significant further turbulence in the US and global financial markets, Reserve Bank Governor Alan Bollard says the New Zealand banking system remains sound. Yeah, right! The New Zealand banking system is so sound, the Reserve Bank is gearing up a further back stop, just in case the financial pandemic reaches our shores. Yet the RBNZ medication may be too late - the contagion has already reached many of our finance companies. The current world economy, which most New Zealand banks and financial institutions are very much a part of, has suffered high fevers of speculation, money supply obesity and a paralysing inflation rate that is already damaging people’s lives and families. Overseas back-stops and bail-outs are at the expense of ordinary people, and do nothing more than provide life-support for a diseased financial system that ought to be allowed to die. It’s medical chart should say Do not resuscitate. New Zealand has the opportunity to thrive in a healthy economy that has no need of emergency financial services, or injections of liquidity that drive debt levels to fever pitch. Instead of the Reserve Bank sticking band-aids on a moribund financial system, I call for the establishment of a fresh, untainted and independent Monetary Authority for New Zealand. The New Zealand Monetary Authority would replace the debt-infected money supply of the old economy with a transfusion of the life blood our economy needs - New Zealand dollars uninfected by compounding interest. A vigorous new economic system in New Zealand could provide other countries with a prescription for better health and fitness.