Reading Mr Eckhoff's letter makes me wonder how ACT ever got
a reputation for sound money policy. He is so hopelessly
wrong about everything that it is hard to know where to start
but let's try this:-
''I intend to follow the current fashion and print money". It
isn't ‘the current fashion'. The Bank of England has been
doing exactly that quite legally since it was founded as a
private bank in 1694. And a variety of other banks had been
doing it illegally for several centuries before that.
Is this counterfeiting? No, in the sense that the Government
of the day made it legal for the Bank to create money from
nothing. However, the private investors put up only half of
their agreed capital and printed the rest after they got
access to the printing press. That was surely counterfeiting.
And does this counterfeiting destroy our monetary system? Yes
it does! Haven't you noticed? But it's legal.
Quantitative easing as used in the USA (and the UK and Japan)
is not a good idea, but contrary to your prediction, despite
printing trillions (yes, trillions) of US $ it has not caused
rampant inflation! Please explain.
The reason that it is not a good idea is that the money has
been created from nothing, without any asset backing, by the
Reserve Bank, which is a cabal of the 14 biggest private
banks in the US. In different circumstances it could easily
cause inflation. If this infusion of blood into the US
economy has produced no response it's because its hard to get
a reaction from a corpse.
Monetary reformers such as Positive Money, Social Credit and
a whole host of economists do not approve of the present
quantitative easing. The common bond between these groups is
their belief that the right of private banks to create money
by a process called Fractional Reserve lending must stop;
that the State should create the nations money supply, at low
or no interest and that the money should be spent into
existence by the process of building our national
infrastructure (such as the Christchurch rebuild),
If Mr Eckhoff doesn't like this idea he might like to take a
closer at the unholy mess being made by this Government, in
Christchurch, using the existing solutions.
Dennis Dorney, Dunedin spokesman, Positive Money