GUEST BLOG: Chris Leitch – Social Credit is talking about debt piling up

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So, Richard Prebble, the man who toured the country proclaiming he was going to save rail and was then instrumental in selling it off to an American corporate that asset stripped it and caused taxpayers to have to rebuild it with money that should have been used for hospitals and schools thinks the country is using Social Credit.

The former Labour cabinet minister clearly doesn’t understand what the first Labour government did under Prime Minister Michael Joseph Savage – use Reserve Bank credit (Social Credit) to fund a massive state house building programme.

What he also appears to have missed is that Quantitative Easing has been going on for a long time outside New Zealand without any of the dire consequences he is trying to conjure up.

The European Central Bank announced in March it would be doing 150 billion Euros of QE (money creation) immediately, buying government bonds from banks and pension funds. It had already been doing 35 billion Euros per month in QE for several years prior to this.

The QE programme before the Covid crisis by the Bank of England had been 435 billion pounds since 2009, and the Federal Reserve, 4.5 trillion dollars but both have done vastly more since. China’s central bank pumped 1.2 trillion yuan into its economy in February, 1,589 billion in June and 1,785 billion in July. 

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Despite derogatory comments about ‘funny money’ Social Credit always advocated that the Reserve Bank could create new money and make it work for the economy. 

It’s been proved right on money creation, but what’s happening now is not Social Credit.  

The Reserve Bank is digitally creating up to $100 billion dollars but that is going into the pockets of rich investors, overseas pension funds, and commercial bank shareholders – the very people who are most likely to support ACT, the party Richard Prebble deserted Labour for, to become one of its cheerleaders. 

A Social Credit government would use the Reserve Bank’s money creation capability to provide money directly to the government for it to spend into the economy on things like a better healthcare system and an education system funded by the government rather than student loans and the sale of university space to overseas students. 

The country’s infrastructure would not be in such dire need of replacement and development because a Social Credit government would have poured some of that Reserve Bank money into building those assets for the country. 

The one thing Mr Prebble was right about is his quote from Walter Nash, who made it after having been summoned to the UK and told by British bankers that if the Labour government, in which he was Finance Minister, didn’t stop using the country’s own credit to build assets, Britain would stop importing New Zealand’s farm produce.

Despite pressure from John A Lee and others, Nash capitulated.

Apparently the rise in discussion about the Social Credit idea of the government using its own bank to benefit New Zealanders is concerning Mr Prebble and his friends at the New Zealand initiative who appear to prefer a continuation of the massive inequality that has eventuated from the implementation of their economic dogma.

If that’s the case, more discussion on ideas like Social Credit is something we should all be very happy about.

 

Chris Leitch is the leader of the social Credit Party

13 COMMENTS

  1. Excellent plan to use our own bank to benefit our reconstruction of our “essential services” thank you very much for the common sense policy that we heard from Winston Peters when he attended a pre-election ‘rail restoration meeting’ just before the 2017 election as Winston Peters advocated using our own reserve bank to restore the broken down Gisborne rail again, “as Winston said it was just common sense”

  2. You are correct in identifying that much of the money created out of thin air by central banks ends up in the bank accounts of executives of corporations and other parasites. Probably why arch-traitor Prebble likes the idea so much.

    It is ‘interesting’ that the entire Ponzi global financial system is now on its last legs and headed for the biggest crash in history, as a consequence of the inequities, frauds and inconsistencies. Infinite growth on a finite planet was never going to work long term.

    Pushing down interest rates and ‘printing’ ever more money has held the Ponzi scheme together for years, but even that game is coming to an end.

    ‘Another month, another divergence – the bigger the (record) auction size, the lower the (record low) yield.

    Moments ago the Treasury sold $52 billion in 2Y paper, the largest auction notional size on record, following the $50 billion sold in August.

    And while the auction size hit a new record high, the yield once again dropped, sliding from 0.155% last month to 0.136% the lowest yield on record, even if it tailed the When Issued 0.134% by 0.2 bps’

    https://www.zerohedge.com/markets/another-record-big-2y-treasury-auction-another-record-low-yield

    If, by some remarkable chicanery, the powers that be manage to stave off the long-overdue meltdown for political reasons (i.e. the biggest crash in history is not a good look so close to the presidential election) we can be sure we will enter 2021 in a far worse state than we entered 2020.

    • Me too we need Government to think hard about switching to financial instruments the actually benefit our people not foreign banks; as it is a common sense policy our trading partners use too; so why not us?????

    • Absolutely @David.
      TBH, Soc Cred would get my vote if it wasn’t for the fact I am: (1) grateful to JA for the way the Pandemic has been handled and (2) after 9 years of Key I don’t want to entertain even a slim chance of another Nat pyschopath in charge of the country. A shame really – some would call me a coward for voting out of fear and obeisance but….well, the alternative is too scary a prospect and a risk with wasted votes.

      @Chris Leitch. Really like your ideas. Have you read “The Deficit Myth” by Prof Steph Kelton, and does it mesh well with Social Credit philosophy?

  3. David – Me too we need Government to think hard about switching to financial instruments the actually benefit our people not foreign banks; as it is a common sense policy our trading partners use too; so why not us?????

  4. “told by British bankers that if the Labour government, in which he was Finance Minister, didn’t stop using the country’s own credit to build assets, Britain would stop importing New Zealand’s farm produce.

    Despite pressure from John A Lee and others, Nash capitulated.”

    I didn’t know that. But if that was the case then that’s shocking. It’s hard to blame Nash for capitulating under the circumstances. (Though a similar threat to Benjamin Franklin with respect to the colonies’ issue of ‘continental notes’ was a major factor in bringing about the American revolution.)

    If running a deficit brings about an inflation then it’s the the deficit itself that is the problem, not the method of financing it; ie whether by borrowing, or by ‘fiat’ money.

    • Colonel Gadaffi colected up about 140 tons of gold (which has dissapeared) to set up an Africa bank as a peoples bank for African nations. That is probably why Libya and he were destroyed. President Assad in Syria runs a sovereign banking system which is actually why his country is in the state it’s in. Not because a sovereign banking system is not in the best interests of the country but because it is , It just isn’t in the best interests of the world’s banking organisations based in wall st and in the city of London.
      It isn’t so much that one small country’s economy matters so much to the banking monopolies , but if allowed to operate so that money creation works in the interests of the nation and it’s people the result would be so sucessful that every population in the world would demand that their government coppied it. The Banking establishment once had the might og the British Empire protecting it. Now it has the might of the Americand military industrial complex serving the same purpose.
      D J S

    • One wonders whether it was the greenback that cost Abe Lincoln his life. And there was also JFK who apparently was planning to issue dollars backed by a quantity of silver held by the US Treasury.

    • Nash may have been put under other pressures and personal threats also. His responses after coming back from London were very confused.

      John A Lee led a group of Labour thinkers who dominated Savage and he was afraid of Lee.
      Lee got State housing underway and also changes in the banking structure here.
      Over the years Lee has been minimised and misrepresented by several “new historians”

  5. You know it was John Albert Lee the MP for Grey Lynn who got the housing program up and running! Labour just like telling the truth.
    The ozzie PM Savage just took the credit for it.

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