Democrats for Social Credit leader Stephnie de Ruyter
believes the Reserve Bank should issue no-interest
Otago Daily Times contributor Gerrard Eckhoff
(10.10.12) is not a man to let the facts get in the way of a
good story if his opinion piece on social credit is any
Here are a few basic facts to chew on. -A mere 2% (on
average) of New Zealand's money supply is notes and coins
which are printed by our Reserve Bank. The remaining 98% is
electronically generated credit (money) issued by private
banks and overseas financial institutions.
Private banks create credit.
Don't take my word for it: check out the RBNZ bulletin Vol.
71, No 1, March 2008 for a detailed explanation of the way
this is done.
New Zealand's money supply increased from $42 billion in June
1988 to $243 billion in June 2012, without printing more
The Quantative Easing (QE) measures employed in Europe, the
United Kingdom and United States will not work. Their central
banks are privately owned businesses; they create and lend
interest-bearing credit (money). Think about that ...
create money into existence, add interest, lend it out, rub
hands with glee as money that didn't exist before the loan
was created is repaid with interest that has not been
created. The effect of that is known as cost inflation.
Northern hemisphere QE is a licence for private banks to make
money, nothing more than that.
Mr Eckhoff is right: it should be illegal.
Our central bank is the Reserve Bank of New Zealand. It is
publicly owned. It's ours. The RBNZ can issue credit (money)
in the same way private banks do, but without interest. On
repayment the money can be re-lent, or cancelled. No
exponential expansion of the money supply involved.
Current government policy is to borrow $300 million of magic
interest-bearing money each week from overseas financiers.
It hasn't always been that way.
Remember when the Government owned the BNZ, the Post Office
Savings Bank, the Rural Bank?
Remember when the state-owned State Advances Corporation lent
to first home buyers at 3%?
And state housing, bridges, roads, and other infrastructure
projects built to lift New Zealand out of the Great
Yep, that was the RBNZ in action: credit created by our
central bank to facilitate direct government investment in
infrastructure to serve the public good.
Ignorance is not bliss, it's just ignorance. Social credit
• Stephnie de Ruyter is from Invercargill.