Category Archives: Eco monetary reform

The experiment with a flawed money system is coming to a sticky end and the priesthood is scrambling to maintain or confidence in marketing and banking after derivatives, quantitative easing and banks to big to fail being bailed out. How do we get a monetary system and banking system which works for Main Street, brings jobs, and gives us back our sanity?

What Greece needs is a land backed currency (and so does New Zealand)

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I have just been listening to the most informative and important interview by Adrian Wrigley of the Systemic Fiscal Reform Group in Cambridge, UK.  Here it is: http://podcast.3cr.org.au/pod/3CRCast-2012-02-22-19953.mp3

Karl Fitzgerald of Earthsharing Australia interviewed him on the radio station http://3cr.org.au on a programme called The Renegade Economist.

To address the problems of Greece, and for other reasons, Adrian is studying the economic history of Germany during the early 20th Century, and says it is tragic that Economic History has been dropped from economics departments of universities because in history lies a lot of wisdom and knowledge. He describes what happened leading up the period of hyperinflation in 1923 and then what the German government did to solve it. They banned the private reserve bank from issuing currency for profit, formed a new reserve bank which issued paper money backed by mortgages and this stopped hyperinflation really quickly. It was called the Miracle of the Rentenmark. However, (as with Gesell inspired currency in Wørgl Austria some ten years later), the banks quickly stepped in. The Rentenmark was a danger to the status quo. A land backed currency is the big danger for the ruling classes.

However, like the other miracle, Wørgl, it only lasted a very short time. Soon the banks stepped in to have their way.

This is quite a long interview but full of fascinating facts. Well worth the time out of your day. It makes me realise that noone who really cares about monetary reform can turn a blind eye to the fact that the owners of banks will do anything to squash land backed currencies and kill them instantly. It reminded me of a time when I was writing my book and discovered that land tax went out at the same time as the private banks insisted that the NZ government use income tax instead. Before then we were reliant on just excise taxes and land taxes. And since then we have assumed that income tax is normal! Our money system is backed by income tax, not by land. The private banks, creating money for profit, have got that windfall. No wonder they are falling over themselves to lend to farmers.

It also reminded me of the struggle within the complementary currency movement to invent a currency backed by land. Everyone has talked about it, but to my knowledge it has never been done. It remains a dream. Now I can see why.

I hope you enjoy the interview. A lot of history in it. It is great on Greece too.

 

We are working to combine our land tax policy with our monetary reform policy in a new way

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During the holiday season I have been talking on email and skype and phone to various people round the world and in New Zealand. One of our challenges will be to get sufficient government revenue and introducing an adequate level of land taxes is a political challenge of immense proportions. Many are implacably opposed to land taxes, although they see the importance of the type of monetary reform we propose on this site.

It seemed to me always that those involved in the Georgist movement for land value taxes have thought they had all the answers, while those involved in monetary reform thought they had all the answers. It was in 1996 that I visited the New Economics Foundation in London and had started to understand the money issue, and during that time also spent time at the Henry George Foundation or whatever it is called in London. A few years later I noticed that Margrit Kennedy, the author of Interest and Inflation Proof Money, also had the beliefs that the two reforms should come at the same time, otherwise there are problems.

I found in 2005 when I was writing my book, that the man involved with promotion of Land Value Taxes in NZ, believed there was nothing wrong with the money system and any reform to it would be terribly damaging. So I couldn’t communicate with him. I was also aware that promoting an adequate land tax would be fraught with political trouble, so I was motivated to find fellow travellers internationally and see if they had any solutions or suggestions. Land tax has to have exemptions and there are anomalies, opposition. Scottish Greens have got it through, but only as far as local authorities And what is the use of a land tax at a local authority level when a local authority can’t remove income tax or GST?

In my search for these potential colleagues I discovered that the LibDems in UK had a subgroup called ALTER and Chairman Dr Tony Vickers had written an excellent paper on the political strategies needed to introduce land value taxes (LVT). I emailed him and he replied to me, copying in his executive in the process. So it was wonderful to discover Robin Smith in London and his colleague Adrian Wrigley in Brittany and talk with them about their proposal for what they call a Location Value Covenant.

I was also alerted just before Christmas to an email to many leading figures in the international Georgist movement. It suggested there was heresy in the ranks and people should stick to the Georgist dogma, (yes it used the words heresy and dogma.) This flushed out more people, from US particularly and from the Occupy movement who were convinced on both issues so I started an ongoing skype chat (no audio, but easier to work with than emails) with those people. We paused for breath every now and then while we had one-to-one skype chats or small audio groups as we came to understand what they were talking about.

I can’t pretend we have completely arrived at a solution, because we are still in the process of collaborating on a document with the new proposal and what it can do. But I can say it is looking at private debt, at mortgages, because it is mortgages where the two issues intersect. I can also say I am very excited and there are others round the world who are equally keyed up. It is taking a bit of time to get this to a stage where the proposal is easily understood and clear and feasible. So please be patient, and if you want to talk about it, do give me a call. (Skype callers please post a message first!)

 

Money system transfers wealth from poor to rich

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Here is a letter Laurence sent to the Dominion Post on 18 Nov, 2011

Dear Sir,

Congratulations on your initiative to research the gap between rich and poor in New Zealand. The fact that the richest 5% own more than double the bottom 50% comes as no surprise because we have a money system which systematically transfers wealth from the poor (who are net borrowers) to the rich (who are net lenders).

When credit is created by banks as interest-bearing debt one of the many horrible consequences is that the gap widens. The principle is created but the interest isn’t. So there is never enough money in the system at one time for everyone to pay off their debts, and the losers must borrow again. It’s like a game of musical chairs ­– with each new round there is a loser. And overall debt continually increases.

Equality will never arrive in the Age of Usury. Our party advocates benign multiple currencies, a means of exchange created interest-free as a public utility.

Laurence Boomert
Candidate for Wellington Central
New Economics Party
https://neweconomics.net.nz

Kim Hill interview with Raf Manji

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You can listen to this excellent fifteen minute interview on the money system here.

This is a very clear exposition of the monetary system and fractional reserve banking.
He also touches on timebanking and other form of alternative currencies as well as the Occupy movement
Raf Manji is a former London investment banker who moved to Christchurch and founded the independent policy development space, the Sustento Institute .

Thoughts on the Occupy Movement and Bank Transfer Day

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I have just read the most wonderful piece of prose on the Occupy Movement by Charles Eisenstein, author of Sacred Economics. And today I have been interviewed for Planet FM on the world’s Problems so I am thinking about the Occupy Movement.

I think they will eventually win and suspect it will take years. It was so inspiring to read the Dominion this morning and see that St Paul’s Cathedral in London was letting the protesters camp there and that the Anglican church is launching a fierce attack on greedy bankers, accusing them of having “slipped their moral moorings.”

Nov 5th was Bank Transfer day, the day people are called on by the Occupy movement to transfer their bank accounts to a credit union. Credit unions didn’t go down in the Global Financial Crisis of 2008 and have excellent facilities for changing automatic payments. They have ATM machines round the country. A good choice if you don’t mind going without a credit card. They are financial co-operatives where the customers own the bank so you can go to their AGM and stand for their board. They don’t deal in derivatives.

Very recently the PSIS has managed to acquire bank status with the Reserve Bank and is now rebranded as the Co-operative Bank. Up to now their cheque books had to have the Bank of New Zealand them, presumably because BNZ did their credit clearing overnight. So you can change your account to them, but remember to keep a close watch on how they change. Will they deal in derivatives? They have the right to. Will they deal in shares and bonds and their derivatives? Will they get into insurance or wealth management services? They shouldn’t. Banks should be prohibited by law from doing anything but banking (the Glass Steigel Act in USA) and we had a similar prohibition before Roger Douglas deregulated the banks in the 1980s. Yes old fashioned banks were doing what old fashioned banks did best – taking in deposits and lending them out.

 

 

 

Christchurch currencies needed for reconstruction

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Media Statement

4 Nov 2011

Let Christchurch City Council issue a Christchurch dollar, says candidate.

According to Laurence Boomert, Wellington Central candidate for the New Economics Party, the best thing the government could do to help Christchurch recover to allow them to create a range of interest free local currencies.

“Here we have a cost of up to $30 billion for the Christchurch rebuild. It is time to think outside the square,” said Boomert.

The Council could reduce its expenses in NZ dollars, and if local businesses play their part, then the labour part of local infrastructure repairs could easily be paid with a local currency. Boomert said there is a huge component of local labour and there should be no need to use precious national dollars for that.

CERA, the Canterbury Earthquake Recovery Authority needs to play its part. It is already empowered to override any existing legislation, so that should also be true for the legal tender law. CERA could declare the Christchurch Earthquake Dollar legal tender, and then have the City Council issue the money by spending it into circulation. He said it would involve legislating to ensure that the Christchurch dollar would be acceptable for paying rates.

It would be essential that the Chamber of Commerce and other business associations should be on board and we call on them to do so. Since local businesses are hurting as a result of the earthquake, anything that increases turnover should find their support.

Boomert said the Council could persuade locally owned businesses to accept the Christchurch Earthquake Dollar and in this way money could be kept in Christchurch.  The notes could have pictures like the old cathedral and other landmark buildings on it.

“A local currency keeps money in the area and usually circulates faster, doing more good,” said Boomert.

For further comment Laurence Boomert  03 525 8229/027 258 8807

 

 

ANZ records $1billion dollar profit from New Zealand

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ANZ Auckland. None of the directors lives in New Zealand

Not a single director of ANZ is a New Zealander. Today it was announced that ANZ made  $1 billion profit and of course it was sent to Australia.

So looking at their website we find their board comprises seven men and one woman. Two live in Sydney, four in Melbourne, one has homes in both Sydney and New York and one lives in Singapore. They have backgrounds in law, accountancy and one was an ex Reserve Bank of Australia Governor. No surprises there. And of course they are on the boards of other companies like CocaCola and one was an advisor to Goldmann Sachs.

Bernard Hickey was on Closeup TVNZ tonight explaining how their margins have widened. People are paying higher mortgages and investors are getting lower returns. But this isn’t all. A look at their website shows they are dealing in derivatives like spots, options and forwards. Then there are spot minors, forward majors etc. All sorts of “financial instruments”  that not even bankers understand themselves sometimes. This calls for a financial transaction tax.

And of course there is the small matter of fractional reserve banking and the fact that private banks create and control the money supply. No wonder their buildings are the biggest in each city. No wonder they make record profits when the country is in a recession.

Our policy is that “We would require corporations that choose to operate in more than one country to charter an independent local subsidiary in our country with majority ownership here.”

The TV item said that 95% of profits from our banks now go overseas. How can we maintain any national integrity when we are controlled by overseas owned banks? This issue must be a priority of any self respecting government.