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Money
And the NZ Economy
Slideshow
By Amanda Vickers
1
NZ Needs
Economic Growth !
Our economy
NEEDS
EXPONENTIAL
growth just like we
need oxygen.
2
We must Grow grow grow!
 Our whole monetary system is predicated on
continual exponential growth
 If we stop increasing ...
With the system at present
we cannot
have a thriving economy
AND
CHOOSE to stop growing if we wish
4
Which can lead to problems
It is estimated that we need 1.5 planet earths to sustain
our consumption (8 for America)
5
and
6
We can’t go on like this
“ Anyone who believes in INDEFINITE growth
in a FINITE world
Is either a MADMAN
Or an ECONOMIST ”...
Quotes:
“Sustainability cannot mean
sustainable growth”
Charles Eisenstein
“The world can supply man’s need but
not man’s ...
Why why why why why
9
MUST THE ECONOMY GROW
THEN?
1. To support
Population Growth
10
2. Our Money Supply must
continually GROW or our
economy CRASHES
11
Why why why why why
12
DOES THE ECONOMY CRASH IF
WE DON’T GROW?
Because, our monetary system
works like this….
 3% of our money is notes and coins
97% of our money is digital, electroni...
.
The electronic money is
created by banks
when we take out loans.
It is effectively a
Spendable IOU
14
Martin Wolf is Chief Economic Commentator for
the Financial Times
15
16
Student text books are misleading and out
of date
 “The way monetary economics and banking is
taught in many, maybe most,...
The way monetary
policy works now
 Money enters the economy when we take out loans
 Money disappears from the economy wh...
Interest payments must be found and paid
to the bank from the real economy
Interest must
be found from
new loans
which hav...
Therefore
Interest to pay new loans comes
from money in the real economy
The money in the real economy
comes from more new...
So, all money is debt.
21
Said another way (UK example)
22
That is why the monetary
system has been called
A game of musical chairs,
or
A ponzi scheme
And that is why when debts
bec...
Tomorrow must be bigger
than today
So, that is why our money supply must grow.
24
And because all money is
backed by debt
 Our debt must constantly grow: NZ Debt
25
26
Or said another way:
 MORE MONEY IN THE ECONOMY -> MORE DEBT
 LESS MONEY IN THE ECONOMY -> LESS DEBT
But we need
 MORE ...
28
Government borrows…
 Government and Local Councils borrow too.
Wherever this money comes from (eg bonds)
it is ultimately...
New Zealand Government Debt
(source Wikipedia)_
30
Interview with Bill English (Minsiter of Finance)
Question to Bill English: 60 billion debt is huge. Who will pay for
it a...
And we borrow too ….
(Green line is Private Debt)
32
 Increasing Gov’t or private debt adds money in to the
economy, creating our holy grail “economic growth”
 Our money sup...
Debt:GDP ratio
34
Warning Flags
In 2012, Our Total debt to GDP ratio was well over
100%
This is TOO HIGH to be easily manageable and
repayab...
Our options are:
 Taking money out of the economy to repay debt,
causing deflation and/or a deflationary recession.
OR
 ...
Debt Trap:
Desperate for GDP
 We are more dependent on overseas income through
trade
 Gov’t finds itself considering tra...
Solution
 We need to take back the power to create and control
our own money supply.
 We could have all or our new money...
39
.
40
What you can do and for more
information:
1. Join and support Positive Money NZ
www.positivemoney.org.nz
2. Write to your ...
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Money creation and the nz economy

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Money is created out of thin air by private banks. The effects of this on the NZ economy are discussed here, including interest, debt, GDP to Debt ratios and other repercussions. Monetary reform is suggested as a solution to the problems created by our debt backed money supply. www.amandavickers.co.nz

Published in: Economy & Finance, Business
  • Brilliant, thank you so much Amanda
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  • I love it, just one thing, is the Reserve Bank not owned by the Crown and included in the Crown accounts, not our national accounts?
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Money creation and the nz economy

  1. 1. Money And the NZ Economy Slideshow By Amanda Vickers 1
  2. 2. NZ Needs Economic Growth ! Our economy NEEDS EXPONENTIAL growth just like we need oxygen. 2
  3. 3. We must Grow grow grow!  Our whole monetary system is predicated on continual exponential growth  If we stop increasing GDP for too long we get a recession, then a depression and then…A CRASH ! 3 Which means …
  4. 4. With the system at present we cannot have a thriving economy AND CHOOSE to stop growing if we wish 4
  5. 5. Which can lead to problems It is estimated that we need 1.5 planet earths to sustain our consumption (8 for America) 5
  6. 6. and 6
  7. 7. We can’t go on like this “ Anyone who believes in INDEFINITE growth in a FINITE world Is either a MADMAN Or an ECONOMIST ” Kenneth E Baulding 7
  8. 8. Quotes: “Sustainability cannot mean sustainable growth” Charles Eisenstein “The world can supply man’s need but not man’s greed” Ghandi 8
  9. 9. Why why why why why 9 MUST THE ECONOMY GROW THEN?
  10. 10. 1. To support Population Growth 10
  11. 11. 2. Our Money Supply must continually GROW or our economy CRASHES 11
  12. 12. Why why why why why 12 DOES THE ECONOMY CRASH IF WE DON’T GROW?
  13. 13. Because, our monetary system works like this….  3% of our money is notes and coins 97% of our money is digital, electronic funds ….. 13
  14. 14. . The electronic money is created by banks when we take out loans. It is effectively a Spendable IOU 14
  15. 15. Martin Wolf is Chief Economic Commentator for the Financial Times 15
  16. 16. 16
  17. 17. Student text books are misleading and out of date  “The way monetary economics and banking is taught in many, maybe most, universities is very misleading”- Prof David Miles, Monetary Committee, Bank of England  “ (the money multiplier model) should be discarded immediately”- Professor Charles Goodhart CBE, FBA, LSE, ex monetary policy committee, Bank of England  “Macroeconomics text books are largely silent on the role of banks and creators of money, and on the potential importance of the aggregate balance sheet level of resulting debt”-Lord Adair Turner, ex chairman of the financial services authority 17
  18. 18. The way monetary policy works now  Money enters the economy when we take out loans  Money disappears from the economy when it is repaid.  And the interest ……. ? 18
  19. 19. Interest payments must be found and paid to the bank from the real economy Interest must be found from new loans which have been spent in to the economy 19
  20. 20. Therefore Interest to pay new loans comes from money in the real economy The money in the real economy comes from more new loans The result is that the cycle must keep going and tomorrow must always be bigger than today. 20 Musical Chairs
  21. 21. So, all money is debt. 21
  22. 22. Said another way (UK example) 22
  23. 23. That is why the monetary system has been called A game of musical chairs, or A ponzi scheme And that is why when debts become too great, and defaults start to ripple through the system, banks fail. 23
  24. 24. Tomorrow must be bigger than today So, that is why our money supply must grow. 24
  25. 25. And because all money is backed by debt  Our debt must constantly grow: NZ Debt 25
  26. 26. 26
  27. 27. Or said another way:  MORE MONEY IN THE ECONOMY -> MORE DEBT  LESS MONEY IN THE ECONOMY -> LESS DEBT But we need  MORE MONEY IN THE ECONOMY AND LESS DEBT  Within our PRESENT system we can’t have both! 27
  28. 28. 28
  29. 29. Government borrows…  Government and Local Councils borrow too. Wherever this money comes from (eg bonds) it is ultimately traced back to debt. All money is debt.  Every dollar Gov’t spends on interest payments is a dollar of tax or rate money not spent on education, health and infrastructure  Government and Councils spend millions of our hard earned money servicing debt. 29
  30. 30. New Zealand Government Debt (source Wikipedia)_ 30
  31. 31. Interview with Bill English (Minsiter of Finance) Question to Bill English: 60 billion debt is huge. Who will pay for it and when? And how did we manage to go from 10 billion to 60 billion over the last 6 or so years? Bill English reply: “The increase in debt has been driven by $15 billion funding required for the Christchurch rebuild and expenditure running higher than revenue for the last five years because we decided not to slash Government spending but to borrow the money to continue to support families and the economy. But now we have to start paying it back. That's one reason surpluses are important” 31
  32. 32. And we borrow too …. (Green line is Private Debt) 32
  33. 33.  Increasing Gov’t or private debt adds money in to the economy, creating our holy grail “economic growth”  Our money supply goes up, and our Gross Domestic Product (GDP) goes up and our debt goes up  However, note that since 2008 our debt has gone up much faster than our GDP 33
  34. 34. Debt:GDP ratio 34
  35. 35. Warning Flags In 2012, Our Total debt to GDP ratio was well over 100% This is TOO HIGH to be easily manageable and repayable. Once (total) debt exceeds GDP it is almost a one way spiral. “Anything over 100% GDP is a major warning flag” Nicole Foss. 35
  36. 36. Our options are:  Taking money out of the economy to repay debt, causing deflation and/or a deflationary recession. OR  Keeping the GDP up, continuing growth and keeping the economy going with more debt 36
  37. 37. Debt Trap: Desperate for GDP  We are more dependent on overseas income through trade  Gov’t finds itself considering trade deals which promise a small increase in GDP – at a huge cost and burden to New Zealanders and the environment. (For example, the Transpacific Partnership Agreement, or TPPA. For more info see www.itsourfuture.org.nz)  In many ways, we start stealing the future, selling it today and calling it GDP 37
  38. 38. Solution  We need to take back the power to create and control our own money supply.  We could have all or our new money created by the Government via the Reserve Bank and spent in to circulation by the Government, debt free  We did it to build state houses back in 1936 and we can do it again to rebuild Canturbury and the New Zealand economy. 38
  39. 39. 39
  40. 40. . 40
  41. 41. What you can do and for more information: 1. Join and support Positive Money NZ www.positivemoney.org.nz 2. Write to your MP and preferred political party and bring this information to their attention. 3. Tell everyone you know about this. Use Facebook, Twitter, talk, gossip and spread the word! It is the people that need to call for this change. This is about our children’s future. 41

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