There are days I despair more than others and coming from me that says a lot as some of my readers may know.
Yesterday Russell Norman, a man who should not be anywhere near politics as his rampant ignorance on matters finance proves to me (mind you I could easily say the same for most politicians both left and right), announced that we should have a “Round of Quantitative Easing” to help rebuild Chch.
He argued that creating credit to buy bonds would devalue the dollar, reduce overseas borrowing, fund Christchurch rebuild and re-stock Natural Disaster Fund.
So in order for my readers to understand why my despair level rose a multitude of rampant, here are the next words for your banksters dictionary:
Quantitative Easing (QE)= The central bank buys bonds or financial instruments to make money the central bank printed out of thin air available to the banks who sell these instruments. The theory behind this is that banks will lend this money to real world people who need it to run their businesses creating demand for their products hiring people and thus stimulating the economy. Here is nice video from Investopedia about QE
Russel Norman argued that QE will not lead to inflation and therefore not raise prices which would debilitate those of us with a fixed income or stagnating wages.
Well.. it could be argued that Russell Norman is right… because not a lot of the money transferred to the banks needing liquidity ended up on mainstream where money is desperately needed to help businesses starved of funds to continue their trading thus masking the real world effects of QE.
For example at the moment more then a 100 million people are without work in the US alone. That is about 30% of it’s entire population. The amount of people on food stamps is about 12 times the entire New Zealand population which would equate to 1.3 million people in New Zealand.
But while the masses got poorer, lost their homes ( there are 5 empty homes for every homeless person in the US) and jobs (which have been outsourced even more in the last three years then ever before) and are living rough or on the verge off, inflation reared it’s ugly head in some strata of society: It appeared in the world of the 1% of the most wealthy people on the globe.
You see, the money that went to the banks wasn’t used to help the real world economy, it was used to continue the trade that started the financial instability in the first place: The Derivatives trade.
And with the derivatives trade was what paid the banksters huge bonuses and that allowed them to spend ever more outrageous sums on houses, paintings, cars, yachts and other luxury items. Here is Michael Sniders take on QE and what it will do to the global economy.
What is causing prices for food and fuel to rise is not so much direct inflation but the speculation of the same people getting the bonuses for trades in Derivatives, in future harvests and fuel production.
So with that in mind I hope that you will understand why James Henderson, guest writer for the Standard when he tries partake in the great global finance debate showing his utter ignorance spiked my despair several notches and if that was not enough here are some more reasons.
In promoting QE, Russell Norman shows that he has no concept of the historical background of QE, the international banking system, Fiat money, the Reserve system and the inevitability of the collapse of the entire financial system because the concept is unsustainable.
What is even more worrying is that websites such as the Standard and Tumeke, in their jubilation about the Greens coming out ahead of Labour with this incredibly ignorant policy, show once again that they too have absolutely no concept of what is about to hit us in the very near future and that no amount of QE will stop the inevitable global meltdown of the entire fraudulent fiat currency based system.
For those of you who feel lacking in the Financial knowledge department and who want to get up to speed with what is coming, here is Cris Martenson’s Crash course and here is Money as debt explaining how money is created and why the system is unsustainable.
Aotearoa: A Wider Perspective 
If only Norman had 1/40th of the intelligence he thinks he does.
Still, he is a very reflective example of the depth of comprehension & responsibility involved in the ‘Green’ agenda’s politics as per that small section of human nature in populations so often utilised by the Masters of that world.
Hold on .. don’t knock it without giving it some thought. While he has promoted it as “QE”, I hope the detail is more interesting. I think that the reserve Bank should buy EQ Bonds. This would mean that money would be created (as Chris Martenson and Michael Hudson and others would explain) and then spent on Chch rebuild. So this is expansionary.
QE in US is just giving more money to banks, who have noone to lend to (mortgagors are all deleveraging) so they use it for more speculation and more profits.
So I hope that Norman’s QE is not like QE in US.
Marty,
The whole Reserve system is on the blink, that’s the problem. The reserve bank of the US is privately owned and so is ours. The whole system of them buying bonds and giving us money which we have to repay with interest is the scam!
Check your facts. The US Federal Reserve is privately owned BUT the RBNZ is still publicly owned.
Hi Stephnie,
High praise indeed to know you are reading my blog. Here is my take on the reserve bank system.
While I agree with you that the Federal Reserve Bank of New York is a privately owned institution to most Americans the “Federal” reserve bank is a Federal institution, meaning it is a public institution.
To most New Zealanders the Reserve bank of New Zealand is a public institution BUT here is why I argue that it’s not.
1/ the Reserve Bank answers to the Crown and while to many the Crown equals the New Zealand Governmenthere is a site which argues that it’s not and it makes a good case as far as I am concerned.
2/ On the website of the Reserve bank in the FAQ list the question of who owns the Reserve bank is answered in an obtuse way which allows for different interpretations and it is my experience that if this is the case there are indeed multiple ways to interpret the text and while most New Zealanders will think that it is owned by them I content that it is not.
3/ The “Crown” likewise is also open to multiple interpretations and it is my educated interpretation that here the Crown is the Corporation City of London/Royal family of England.
4/ The close connection with the Reserve bank of New York was also shown in the fact that in the utmost secrecy the New Zealand Reserve Bank received $ 9 Billion in the 2008 financial Crisis and with the Choice of the new Reserve Bank Governor being Graham Wheeler who is very much a global banker insider it will become vastly more clear how much the Reserve Bank of New Zealand is not owed by us but by the international Global elite.
I concede that my opinion about who owns the Reserve Bank of New Zealand is just that for now but for many years G Edward Griffin was touted as a madman for even suggesting that the Federal Reserve System in the US was a privately owned monopoly. I should have asked his opinion about the Reserve Bank when I had the chance but instead I chose to ask him his opinion about John Key in March 2008 when I had the opportunity to speak with him. It was the first time I was exposed to the whole Reserve bank/ Fiat money issue and I just didn’t catch on quick enough. He predicted John Key’s behaviour to the second by the way.
Regards
Travellerev
Oh Norman! what are you thinking/