The $695 MIL is made up of only small part fees charged for banking services - but in the main from soliciting loans for larger global banks up the discount interest rate chain - that is domestic internal lending institutions solicit loans at a higher rate of interest than they know they can refinance at a lower rate with larger foreign banks - thus the liabilities they bring upon the nation are even greater than the margin that they cut for themselves. The kicker is - most of internal domestic lending institutions are also majority shareholder owned by the larger global banks - who have some very extraordinary privileges - explained here; Give you any ideas at the 2013 Labour Party conference working out how to afford anything in what seems like an impossible funding puzzle! Hands up who thought this was already the case? New Zealand Labour Party 1933 manifesto wanted the state to be sole authority for the issue of credit and currency and in 1935 MP John A Lee wrote The Labour Party affirmed that the government should have the sole right over the issue and control of new credit 1954 Labour Party manifesto stated Labour will take immediate and effective to ensure that the state will become the sole authority for the issuance of credit and currency. The public credit will be used to the fullest extent compatible with the public good 1964 Labour Party manifesto stated Labour believes that measures taken before credit is issued are more effective than restrictions afterwards. But New Zealand instead somehow ended up with this foreign controlled private pyramid scam; Former New Zealand Reserve Bank Governor 1988-2002 Don Brash has said; (Nov 1996 reply to information request letter to David Coote) Commercial bank deposits are created by banks’ lending. When a bank makes a loan, it will, in the first instance , deposit the proceeds to the borrowers account. Of course, the the borrower invariably raises funds to spend them, so the proceeds (deposit) typically will end up in a bank account of someone other than the borrower – often at another bank than that which made the loan. However, it remains that bank loan transactions ultimately lie behind the deposit balances that banks hold. By influencing interest rates, the Reserve Bank is able to influence the rate of growth in bank lending and hence the rate of (bank deposit) money growth. (Feb 2012)“ Every form of recognised money today is the obligation of some central bank” (April 2009 ) “Banking crises are not new of course – they have been a recurring feature of the economic landscape for many decades, indeed for centuries. There have been scores of banking crises even since 1945, though of course none with such far-reaching impact as the present one.” “There was also a failure to understand the complexity of, and risks involved in, many of the products which were widely traded in recent years. This failure was almost certainly widespread both in senior management and on bank boards.” Dr Alan Bollard Governor of the Reserve Bank of New Zealand 2002 - 2012. Excerpts from a book Alan Bollard published 1 Sept 2010; Crisis: One Central Bank Governor and the Global Financial Collapse Pg 20 Banking practices differ around the world, but we ensure ours meet international standards. These are set by a somewhat shadowy group called the Basel Committee on Banking Supervision. Comprised of representatives of large countries( not including New Zealand ), the group meets in Switzerland at the Bank of International Settlements (BIS). Pg 183 “In self-interest, banks may encourage New Zealanders to take on more debt than is good for them individually or deliver more external liability than is good for the country.” Pg 157 “Another governance worry related to the power and competence, or lack thereof, on the part of banks chief risk officers and risk committees. These officers assess the possible outcomes from any deal and decide whether the risks are acceptable under the banks mandated policies. We were now hearing about cases where risks had been miscalculated, procedures bypassed and officers overruled, all in the race for higher earnings.” John McDermott Deputy New Zealand Reserve Bank Governor said 5 May 2011; “The crisis had also prompted a revival of interest by central banks in money and credit, whereas in previous decades central banks had paid less attention to monetary and credit aggregates” “Overall, there has also been a recognition that credit growth over the past decade was excessive and a potential risk to financial stability given the build-up in leverage and rising asset prices that accompanied it. We are continuing to build our understanding of money and credit at the RBNZ, and its inter-relationship with both sectoral financial decision making and potential risks for the banking sector.” New Zealand Prime Minister and former international investment banker John Key 17 November 2012; “Our debt to GDP levels by then will top at just under 30 percent, in other words, um, well be relatively lowly indebted compared to countries like America and Europe, but I put it to you we are a small open economy, we have high levels of private sector debt, we, mum and dad have borrowed that debt effectively from foreigners because their local bank has sourced that from foreigners.” Mr. Alan R Holmes was Senior Vice President, Federal Reserve Bank of New York. Mr. Holmes had worked for 33 years at the Federal Reserve Bank of New York, where from 1965 to 1979 he was manager of the Federal Reserve System Open Market Account. In that position, he was responsible for the creation of money in the United States. Excerpt from 1969 speech – Operational Constraints On Stabilization of Money Supply; The idea of a regular injection of reserves-in some approaches at least-also suffers from a naive assumption that the banking system only expands loans after the System (or market factors) have put reserves in the banking system. In the real world, banks extend credit, creating deposits in the process, and look for the reserves later. In answer to a letter from Byron Dale in 1982 John M. Yetter Attorney-Advisor Dept. of the U. S. Treasury said; “Money that one borrower uses to pay interest on a loan has been created somewhere else in the economy by another loan.”
Posted on: Fri, 01 Nov 2013 11:28:18 +0000
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