But wait a minute, I KNOW I create more value than my neighbour, so maybe I should have my own currency, and (of course) my own bank to issue it!

Go to several countries, (for instance Scotland) and you will find their currency is issued by a local commercial bank (Bank of Scotland, Standard Chartered Bank are just two examples of banks that issue specie).

We have a global currency right now, it’s called crude oil, and the settlement is done in measures of US$ backed only by debt. Hence the high/low price depending on the traders’ (barrow boys) view of the relative value of your currency to the US$

Fiat money - Oh yes I remember Fiat money! I even remember the speech that announced its production, or at least one phrese from it . . . . . .
The pound in your pocket will not be worth less. (I looked at the prioned version later to make sure I’d got it right, as I though he’d said “worthless”. It wasn’t “worthless, but it sure was “worth less”.

I still believe in Mr. C Dickens’ definition of financial health ….
One pound income, nineteen shillings, eleven pence and three farthings expenditure - heaven is yours
On pound income, one pound and one farthing expenditure - hell is your home and the workhouse your accommodation.

I listened to Mr Cullen at a function last night, he sees that position exactly, which is why he has made sure, despite his personal beliefs to the contrary, that there is no money left to spend without putting the country into the workhouse.

it requires a global central bank which in some way is accountable to the people (of the world) but that shouldn’t be a problem

The problem with a world currency would be it would make the operations of a sector that has probably the most impact on the global economy even less accountable than it currently is, when even now it is far too unaccountable and opaque to most of us.

“…extensive trade between the various regions of nz might be a good idea, but separate currencies make that harder.”

Not if it were designed right. I’d take inspiration of John M Keynes proposal of the establishment an international clearing union and trade currency and adapt it for nation rather than international use.

His intention for the establishment of an international clearing union and trade currency was to ensure that international trade was balanced where noone was in surplus or in deficit through an ingenious mechanism that forced countries to revalue their currencies relative to the bancour by imposing penalties if they were in deficit or surplus. So if one region was in deficit (Auckland) it would be forced to devalue its currency to make its products cheaper and if another region were in surplus (Christchurch) it would be forced to revalue its own currency in order to make its products less attractive.
http://mondediplo.com/2007/01/03economy

“Under this system, exports earned bancors and imports spent them. The point was to keep the two in balance so that at the end of the year a country’s accounts with the ICU would be neither in surplus nor in deficit but “clearedâ€? — close to zero. Every country’s currency would be assigned a fixed but adjustable exchange rate relative to the bancor. Keynes’s original thinking perceived that nations with too many bancors would disrupt the system just as much as those with too few— that creditors were just as dangerous to stability and prosperity as debtors.”
http://mondediplo.com/2007/01/03economy

SleepyTreehugger Says:
May 22nd, 2008 at 4:09 pm
I’m believe in small decentralized government with more direct participation in governance by the people whose power is limited by a constitution of course and where every region has its own distinct currency. Why should Cantebury have a trade surplus yet suffer the same consequences as Wellington and Auckland who have massive deficits?

ideally the whole country should be run without significant surplusses or deficits over the medium or longer term anyway. but the smaller & less diversified the economy is, the greater the chances are that there will be.
extensive trade between the various regions of nz might be a good idea, but separate currencies make that harder. i’d go in the opposite direction & say ultimately there should be a single global currency.

turnip28 Says:
May 22nd, 2008 at 3:15 pm

Strings don’t even get me started on fiat money. Of course NZ MP’s love fiat money since they can print money to pay for things instead of raising taxes. The wonderful hidden tax called inflation.

i’m afraid you might have mistaken nz for a country where monetary policy is set according to the whims of elected politicians. we have the reserve bank act, which binds the reserve bank to a low inflation target, which has only been raised by a nearly insignificant amount since it was first set.

pyramid scheme

since the years beween 65 and 75 are less than those between 25 & 65, and natural population attrition means there will be less people in that age bracket than in any earlier 10-year bracket, there will always be more workers than pensioners in a stable population. it isn’t a pyramid scheme. although an increasing population does make pensions a proportionately smaller drain on the government budget, it also makes education, family support etc more of a drain.

The whole American social security and health systems are effectively bankrupt as succesive administrations have emptied the “lolly jar” as a means to cover their profligate spending.
http://tinyurl.com/2zfhkg

Although I’m opposed to som of Ron Paul’s more conservative views I considered him to have been the most credible candidate in the U.S. elections as all the others were as usual indoctrinated into the neoliberal and corporatist agenda. He definately knew how the whole fraudulent monetary system works and he even wanted to bring the troops home.
Its no wonder the MSM made a point to neglect covering his campaign attempt.

I don’t think that the problem is the fact that inflation is a natural part of fiat money its just that the wealthy people feel entitled to a monetary return merely for not spending money so they “invest” it in goods that are perceived to have more value than holding it in the bank. Inflation is merely an imbalance between consumption and production so it stands to reason that inflation occurs when people would rather invest in speculation rather than production or efficiency measures.

I’ve actually read alot about banking history, monetary systems designs and their alternatives.

I’m actually working at a Policy Institute in Christchurch and the director is a former banker in the City, but he was made aware of the fraudulent nature of the system when he attended several meetings with monetary reformers in the UK. Neither of us are particularly convinced re. the rationale of the Gold or Silver Standard nor the free banking that occured before the establishment of the Federal Reserve, because both were prone to frequent periods of crisis and extensive fraud and manipulation.

Heres his opinion on the matter and which I firmly agree with.

“Well yes that does seem to be a problem. I’ve touched on this before when looking at how the Bank of England experienced several runs just after it was formed. Why? Because they printed way more paper than they had in reserves of gold. So gold or no gold, there is nothing to stop authorities or private banks printing paper or more accurately filling up spreadsheets with lots of numbers.

I’m ambivalent on this gold business. Storage issues, never mind the horrendous process of digging the stuff out of the ground, present problems as do the ability to carry it safely but really its a confidence thing.”
http://sustento.org.nz/paper-or-solid-gold/

Where we differ is his belief in the Nation State whereas I’m believe in small decentralized government with more direct participation in governance by the people whose power is limited by a constitution of course and where every region has its own distinct currency. Why should Cantebury have a trade surplus yet suffer the same consequences as Wellington and Auckland who have massive deficits?

Sorry I misread your posting on youth. And I broadly agree with you about baby boomers, though since I was born in 1963 I am still technically at the tail end of them.

Kevyn

I chose slavery as an example because I wanted to be honest, and I know that the transition to a slave free environment did take a while and was not problem free. Though it certainly did not “kill” the US sounth. Transitions are not easy, but they are possible and when we are dealing with a major evil like slavery or massive animal exploitation, then they are morally obligatory. In the end it is a moral question, which is more important, short term comfort of a few, or humans, animals and the environment being better off for the long term.

Abolition of slavery was also pretty much forced on the confederates after a war, but in the case of the UK, the transition was far less violent, and the effects far less traumatic. I am hoping that a similar non-violent transition could take place here.

This year in the US presidential race we had Ron Paul trying to explain the hidden inflation tax to people. If you understand that fiat money is bad then I take my hat off to you as you are a very intelligent human being.

Mind you I don’t think I have heard any of the green MP’s stand up in parliment and say that the NZ fiat currency is a very bad thing.

Hey how come the green party supports fiat money?
Where is green party policy seeking to take NZ to a commodity standard? Why do the greens not support the NZ backed by real value?

Maybe I should post something over on the private green member forums.

Oh yeah fiat money isn’t some new thing invented by 20th century economists the chinese tried it a very very long time ago and guess what it didn’t work. The fiat money rule is that eventually the value of fiat money = the cost of the paper its printed on.

NZ removed the 1 and 2 cents then the 5 will go and then the 20 and then the fifty and then the 1 dollar and so on.

In the US last year they made it illegal to melt down US coins. Why? well the US have destroyed their currency so much that the metal in the coins is worth more than the coin. Thats right if I exchange 1 dollar into 100 cents and then melt those cents down and sell the metal I will be left with more than 1 dollar.

How many people have read “The creature from Jekyll Island”
Isn’t John Key one of them didn’t he work at one of the reserve banks in the US, all I can say is watch him he is very very shifty.

See Strings you got me started on fiat money now I’m ranting and raving to my girlfriend about how bad fiat money is.

Hey Strings just like you had a little book I get a statement every year from the US social security admisinstration services telling me how much i have paid into this system, so lets say i receive a statement from them and it says you have paid $40,000 in total to social security. You must understand their is NO box in the social security administration building
that contains $40,000 dollars with my name on it (i’m a non-citizen anyway so I can’t receive the benefits anyway). These statements and books like what you had, created a false idea in the minds of the worker this helped pull the wool over people’s eyes so they didn’t see the truth which was that they were part of a great big Pyramid scheme.

The law has also been very weak on worker contributions to social security systems, I think German courts ruled that the workers contributions were not tax but were property which meant if the worker paid in money during their working life they were guaranteed to receive it and the government couldn’t change the rules since that would be a constitutional violation. That argument wont work in NZ or Britian since we don’t have constitutions.