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%.
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
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