Money doesn’t grow on trees or so they say

They also say that money makes the world go round…well metaphorically it does. It oils the wheels of commerce and enables us to transact with each other and exchange our goods and services.

But how does money actually grow? There always seems to be more of it around. Who creates it?

You probably assume your local central bank does because only they can print notes and coins. That much is true but that’s only a bit of the story. Currently only 2-3% of the total money supply is created in the form of notes and coins that we keep in our wallets and purses.

The rest? Well as JK Galbriath noted the way in which most money is created is “so simple that the mind is repelled”. The private banking system simply create the balance of new money by issuing new loans.

That’s it. For those of you who thought banks lent out money you have deposited with them i’m sorry to inform you that this is not the case.

If you deposit $1000 in the bank, they now have the ability to lend out (and in the process create new money) up to $10000. Of course they charge interest on that loan which is where they make their huge profits from.

I’ll give you an example:

In New Zealand the money supply has increased 101% in the last 8 years. So the total money stock has more than doubled in 8 years!! In that time house prices have risen 143%.

But the official measure of inflation has only risen 20%. Hello…..what is going on here? Yes it is a complete mess.

It is not the central bank or government printing money and causing huge (but unmeasured inflation). It’s the private banks who are doing it! The ones who scream and shout if governments ever think about reclaiming their right to issue money interest free on behalf of their citizens.

It is one of the greatest swindles of in history.

It requires that people sit up, take notice and look hard at what is happening around them. In the US especially the system is starting to creak…..look at the housing market and the lenders that operate in it.

Please see the following sites for more information. Once you learn about this life will never be the same

US: www.monetary.org

UK: www.monetaryreformparty.org.uk

Can: www.comer.org

Aus: www.peoplesbankparty.org

As my old history teacher said read, learn and inwardly digest.

Parliamentary Officers – Keeping the Long View

A few weeks ago in New Zealand we celebrated the 20th Anniversary of our Parliamentary Commissioner of the Environment. This is an office of Parliament and therefore independent of the government of the day. The Commissioner reports to the Speaker of The House and the officers of the Parliament Committee.

This is an incredibly important position. Government is hamstrung at the best of times by short term considerations such as re-election and the constant sniping from the lobby brigade. The Commissioner on the other hand can afford to take a long term view and can criticise the government freely and ultimately acts as a guardian for the environment.

 The only other country to have such a position is not a country but a province of Canada. Ontario passed an Environmental Bill of Rights back in 1994 which was a very forward thinking piece of legislation and this is monitored by the Environmental Commissioner of the Environment.

 Canadians and New Zealanders both live in spaces of outstanding natural beauty and wonder. And yes we rely on the land for our food, energy and shelter but we are also aware that it cannot be pillaged without due thought for the consequences.

 These officers provide a balance to the me-now culture that dominates courtesy of a society drunk on credit and the growth imperative that follows. Whilst i am not a great fan of bureaucrats Parliament (or similar legislature) is the representation of the people and the common good and more countries could use this type of model.

 In Europe there are several Sustainable Development Commissions. Their job is to be an independent voice also and often are appointed by the Prime Minister with a mandate to be objective and critical. Of course their powers are limited to an advisory role whereas an officer of Parliament carries more weight.

 Democracy is in a fragile state these days. We don’t respect our politicians, the election process is more and more about money and people feel disenfranchised. Officers of Parliament can bring more respect as they work on behalf of the people and the institution that represents them.

 It’s time to rescue our political institutions before they become completely corporatised. Let them take the long view without interference and let’s leave short term-ism to the business sector.