It is rathe r
rare for dastardly criminals planning to commit a crime to publicly disclose the ir forward thinking to the
appropriate authorities. I do so today in order to ensure the y have plenty of time to prepare a really nice
suite at the Milton Hilton (our
local jail) is available for me after sentencing. I hear that room service is
available along with free dental and health checks and the
gym is well stocked.
I hope that by admitting my guilt before the
crime is actually committed, the
judge will reduce the sentence he
would normally impose on someone who pleads guilty after committing the crime. Most criminals apparently regret the crime after being caught or just regret being
caught after the crime. Take your
pick.
And the
reason for my enforced stay as a guest at Her Majesty’s institution?
I intend to follow the
current fashion and print money. Some of you will say that is a heinous crime
deserving of the most severe
punishment. Counterfeiting after all destroys our monetary system. Society
cannot allow the private printing of
money just because the re is a need
for more cash. Society’s politicians however now promote printing our own money
to solve the world’s financial problems
so I figured “sauce for the goose...”
If our politicians believe that printing a couple of billion dollars annually
to pay for the ir pet projects is
such a good idea the n surely my idea
of printing a paltry few dollars more for my projects can’t do any harm.
As I have no wish to be found guilty of
plagiarism as well as counterfeiting, I must now acknowledge that the idea to print money as and when needed is not
new. Many years ago a Major CH Douglas thought it was such a good idea that he called
it “social credit” to legitimise the
printing of money if and when needed. Social Credit sounded so much better than
Money Printing. Expanding the money
supply as a need develops in New Zealand sounds like a really wonderful idea
and we patriotic people should answer the
country’s call and not just leave it all up to the
Government.
The good Major Douglas failed to notice
that if you increase the supply of a
product its value trends downwards. That applies to milk, lamb, beef, timber as
well as the actual money you are
printing so you have to keep printing and producing just to retain the status quo.
One well known advocate of this approach is
one Robert Mugabe from Zimbabwe where his printing presses simply couldn’t keep
up with the daily devaluation of the ir currency - but would have been great for the local paper mill, if only the y
could have printed enough money to build one.
Despite such obvious examples, this
unorthodox approach to monetary policy has caught on world wide by all manner
of people including those who are kept in something called a Federal Reserve in
the USA. One assumes this Reserve is
an institution for the criminally
insane who have an uncontrollable urge to print money. Insanity is defined as
doing the same thing over and over
again and expecting a different result.
Rathe r
surprisingly the idea of the good Major Douglas and the
not so good Robert Mugabe, is now fast becoming orthodox monetary policy
endorsed by no lesser political and economic thinkers as our very own Green
Party. This print and distribute policy has the
full backing of the ir MPs who have
obviously studied President Mugabe’s model and his commitment to printing money
as the simply way to pay off debt.
The sheer brilliance of the Green’s scheme is that interest rates for
borrowers will be zero and severely punish those responsible for the Global Financial Crisis - the
world’s savers. Those rapacious retired folk who had scraped togethe r a nest egg - deposited in the local bank to assist in the ir
retirement will get no return on the ir
deposit. I do struggle to understand how
this policy offers an incentive to people to save. One assumes this is all
about the word sustainability - with
an emphasis on sustaining (the
Greens) and less about ability. Meanwhile, it’s business and bonuses as usual
for Goldman Sachs and JP Morgan et al.
The printing presses are rolling as the international banking industry and politicians
now speak - not of Printing Money nor of Social Credit but of - “Quantitative Easing.”
This phrase sounds more like a description given to an old ewe about to give
birth to triplets rathe r than a
monetary expression but the re you
have it. All of which gave me the
idea to print my own money as if the
Feds can do it – if the Euro Zone
can do it why not me – or you. We just have to call it “personal quantitative
easing.”
Meanwhile I intend to call Russell Norman –
co leader of the Greens as an expert
witness for the defence in my trial.
His knowledge of finance should ensure I get a minimum sentence of twenty years
to life at a taxpayer-funded institution where I pay neithe r
rates nor tax and where healthy food is free. I will no longer have to work for
a living and underfloor heating ensures a comfortable life even in winter.
And all this because counterfeiting or
increasing the money supply for a
private benefit is illegal but increasing the
money supply by Government for public benefit and electoral advantage is not.
Both however have exactly the same
effect on savings and the purchasing
power of our dollar and both should be illegal. It is for me but not for him.
I go to jail and Mr Norman goes to
Parliament. So how does that work?
5 comments:
Nice satire, Gerry.
Very witty Gerry but as usual, when it comes to discussions on QE or Social Credit, like many others, you run to extremes to argue something you obviously understand little about.
You and others are correct, to a certain extent. As it is operated now, QE does create debt when this new money is introduced into the financial system. That does not mean QE is bad, it just means it has to be performed in the correct manner and by the correct amount, to have the desired, not disastrous effect.
The way around that is to distribute this newly created money directly into society through a national dividend (perhaps Gareth Morgan's Universal Basic Income?). Like most aspects of life,there must always be balance and QE should only be done when it is needed and by the scientifically calculated amount required to produce the desired results. It should also be free from political intervention as we all know how politicians love to spend other peoples money for their own political advantages.
A problem rarely, if ever, considered by Ministers of Finance and Reserve Bank Governors is the cost of creating new money when it enters the financial system (not to be confused with quantitative easing). The money supply of a country usually needs to expand as the amount of goods and services in a country expands, so that there is enough money to purchase these good and services. This is a fine balancing act, too much money in circulation leads to inflation (Nazi Germany; Zimbabwe), but too little also leads to deflation (the world during the Great Depression). However, as this money comes into circulation through government open market operations and consequently the money multiplier effect of the banking system, it enters society as an interest bearing debt. This cost has a compounding effect on debt and must certainly create an unnecessary cost to society.
If more money is required to keep the wheels of our financial system greased, then governments need to find a way to inject this money into society without this cost. Perhaps there is an opportunity here for a small country like New Zealand to lead the way to show the rest of the world how the international monetary system can be improved?
The Labour/Green idea is not a silly idea if it is done with moderation and does not involve creating a government debt alongside of the creation of this new money. New Zealand simply does not need to print money at the same rate as the USA because we are a much smaller country, but expanding our money supply (within reason and by a scientific analysis) will allow our export market to remain competitive. At present the USA and the EU are devaluing their currency to make their exports more competitive, this is little different from the usual beggar they neighbour policies of the past.
Very witty Gerry but as usual, when it comes to discussions on QE or Social Credit, like many others, you run to extremes to argue something you obviously understand little about.
You and others are correct, to a certain extent. As it is operated now, QE does create debt when this new money is introduced into the financial system. That does not mean QE is bad, it just means it has to be performed in the correct manner and by the correct amount, to have the desired, not disastrous effect.
The way around that is to distribute this newly created money directly into society through a national dividend (perhaps Gareth Morgan's Universal Basic Income?). Like most aspects of life,there must always be balance and QE should only be done when it is needed and by the scientifically calculated amount required to produce the desired results. It should also be free from political intervention as we all know how politicians love to spend other peoples money for their own political advantages.
A problem rarely, if ever, considered by Ministers of Finance and Reserve Bank Governors is the cost of creating new money when it enters the financial system (not to be confused with quantitative easing). The money supply of a country usually needs to expand as the amount of goods and services in a country expands, so that there is enough money to purchase these good and services. This is a fine balancing act, too much money in circulation leads to inflation (Nazi Germany; Zimbabwe), but too little also leads to deflation (the world during the Great Depression). However, as this money comes into circulation through government open market operations and consequently the money multiplier effect of the banking system, it enters society as an interest bearing debt. This cost has a compounding effect on debt and must certainly create an unnecessary cost to society.
If more money is required to keep the wheels of our financial system greased, then governments need to find a way to inject this money into society without this cost. Perhaps there is an opportunity here for a small country like New Zealand to lead the way to show the rest of the world how the international monetary system can be improved?
The Labour/Green idea is not a silly idea if it is done with moderation and does not involve creating a government debt alongside of the creation of this new money. New Zealand simply does not need to print money at the same rate as the USA because we are a much smaller country, but expanding our money supply (within reason and by a scientific analysis) will allow our export market to remain competitive. At present the USA and the EU are devaluing their currency to make their exports more competitive, this is little different from the usual beggar they neighbour policies of the past.
Steve - did you really need to post your nonsense twice? Increasing the money supply automatically devalues the existing currency in the same proportion, and we have had enough fairly recent experience of runaway inflation to want to avoid that like the plague!
Steve I inhabit a different world.'Creating credit with no increase in assets or security backing that credit - has created the GFM. If a Govt/country creates a little bit or a large dollop of money when they need it, the rest of the world naturally devalues their currencyvs their own. What of the purchasing power of a retirees nest egg. Do they not matter?
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