For centuries syphilis was a huge killer, especially after the First World War. Then in 1928 the Scottish virus researcher Sir Alexander Fleming, accidently discovered penicillin, the world’s first and still most used anti-biotic. At last it seemed the scourge was over. But alas, not so for it subsequently re-emerged and annually kills up to 200,000 people.

I thought about this recently when out of the blue, full page newspaper advertisements appeared across the land by the mad Social Credit movement, the syphilitic element of our political history. Every time we think we’ve stamped them out a few years go by then as with syphilis, up goes their coffin lid and zombie-like, they stalk the land again.

That said in their heyday, circa 1981 when traditional National voters, dismayed by Muldoon but who couldn’t bring themselves to vote Labour, ticked Social Credit and they rose to 21% in the polls.

They were all stark raving mad. The movement became a sort of social misfits organisation. I could tell so many funny stories about them.

In the late 1970s Truth (then our largest sales newspaper) political staffers demanded and received danger money to attend their national conference, and not without reason.

But now they’re back again, with full page advertisements quoting various economists to support their free money theories.

They include Shambles Eaqub, forever being quoted and who comes across as a nice enough fellow, and Bernard Hickey, noted for his gloomy economic forecasts.

Both made headlines, from recall about 2012, when they forecast a massive Auckland house price crash. So they sold up and shifted to Wellington whereupon almost overnight Auckland house prices began a boom unprecedented in history.

Also, getting an airing was Bryan Gould, who wrote a highly amusing contribution in the NZ Herald a couple of years back, asserting the Bank of England claims trading banks create money. The Bank of England said no such bloody thing. Gould doesn’t know the different between cash and credit.

If trading Banks can create money why do they borrow it and why do they go broke? Such elementary questions plainly never crossed Gould’s mind.

Economist Bryce Wilkinson gave them a roasting in the press following this latest emergence, reducing to tatters their propositions. But it won’t stop them. Decades will pass and then one dark and stormy night, up will go the coffin lids again. It’s whack a mole territory.

Their basic proposition is it’s silly to borrow abroad when we’re perfectly capable of printing our own money. And so we are so why not print enough to give everyone say $20million each?

Now there’s a good idea.

After all, the other commentators they quote in their advertisement argue a simple proposition. That is print our own money and cut out the middleman (the foreign lenders) and give it to the government to spend.

To be consistent, why not then cut out that government middleman and give it direct to the public? That’s perfectly feasible. $20million each ($25m for maoris naturally) and everyone’s rich.

But instead of taking the piss, here’s an elementary question I’d like the economists who’ve been quoted in the Social Credit advertisement, to answer.

Your proposition is, I’m sure you will agree, fairly elementary and hardly above anyone’s head. That being the case, explain why you think the whole world and not just New Zealand, has never implemented it?



Well, I had a look at the Social Credit theory, for the first time in my life.
“Douglas noticed that the weekly total costs of goods produced was greater than the sums paid to individuals for wages, salaries and dividends.” [wiki]
Debits = Credits. Demand = Supply (at equilibrium).
These are tautologies, so are true by definition. So why doesn’t his equation add up?
His equation won’t add up because he ignored the profits (or losses) that were retained by capital. These would presumably get deposited into the bank, then later lent out by said bank.
Not all profits (or losses) are distributed as dividends.
I think he wants to print money relating to the “lost” profits that weren’t the subject of dividends. But these monies are deposited then lent out by the banks.
In this case, all his money printing would do is create inflation – more money would chase the same number of goods.

“That being the case, explain why you think the whole world and not just New Zealand, has never implemented it?”

Oh, but they have dear Watson.

It’s called inflation. And it is everywhere.

For lots on the Covid-19 Hoax see:


The kind of money printing that the referenced commentators talk about is only really sustainable in the US where the dollar has enough stability and confidence and demand globally for QE to make less of a dent than expected. It would kill us if we took the recommended QE infinity approach. Even the current 60 Billion in the works freaks me out.

If I remember correctly about the Gould fiasco, wasn’t that just a case of him severely dumbing down how fractional-deposit credit creation works? I’d probably just say they print money in order to explain it to a gender neutral NPC on the Clapham omnibus.

“That being the case, explain why you think the whole world and not just New Zealand, has never implemented it?”

Oh, but they have dear Watson.

It’s called inflation. And it is everywhere.

For lots on the Covid-19 Hoax see:


    Tin foil hat warning! The link is to hate site that Jews are responsible for everything bad in the world. I thought it was just us nasty Chinese these days?

Actually, these joke celebrity “economists” (Lincoln University? – maybe if you’re a farmer) rile me.
Whenever the Prime Minister psycho-babbles some nonsense about “kindness”, my mind does drift to the wisdom of great economists of the past. Try this one:
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”
I suspect the Prime Minister would be disgusted by that, but she probably doesn’t appreciate the following:
“…by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.”
Nailed it, Adam.
The huge gains civilisation has made over the past 100 years could be squandered by people who don’t understand the basics….

    So what you are saying is that , unwittingly , personal greed or even corporate greed is actually a driving force bringing about change for good or the betterment of society ?
    Each to their own I suppose.

      The quotes were from “An Inquiry into the Nature and Causes of the Wealth of Nations”, published in 1776, by the father of economics, Adam Smith.
      He states the foundation of capitalism – the invisible hand.
      I am not sure what you are disagreeing with?
      He did not mention greed – he discussed self-interest.
      Do you believe that the butcher, the brewer or the baker make you dinner out of kindness, or with regards to their own self-interest (they get paid)?
      If you accept the latter, do you not think that the sum of these capitalist endeavours does not promote society?
      Living standards have gone up rather substantially in capitalist economies since 1776…

Can the Akismet moderators not just ban any references to this “preearth” conspiracy theory website?

For people like social credit and the current labour government it looks like money for free which is great. Interestingly non of them will admit to printing money rather they talk about quantitative easing and refuse to explain what this is
Instead of the promised saving of the economy it usually ends up in property price inflation down the track and a currency that’s worth very little

I’ve been teasing Hickey for ever about his house price collapse forecasts and Eaquab is just as bad. Perhaps the only worse house market forecasters have been Reserve Bank Governors.

Obviously none of them have ever tried to build anything.

I have no axe to grind re Bernard Hickey but I am afraid every time I hear him I instinctively frame him in my mind as “Bernard-house-prices-will-fall-by-40%-Hickey”, because of his comments back in those GFC days.

Ok.. credit is a claim on money. Credit spends like money and is fungible so, one can never know if they are paying or receiving money or credit (I’m thinking of electronic transactions ).
Broad money supply statistics includes credit. Monetary inflation, in regards to broad money supply growth, is essentially credit growth. ( Private Banking system creates credit)
Money and credit are the two main components of our modern Fiat Monetary system, with the $US as the Global reserve currency.
Are you being just a little bit disingenuous in expressing your view..?
One might argue that the modern credit based ( IOU notes ) money supply is just as much “funny money”.
Of course, it is a fanciful idea that printing money is a free lunch and equates to “wealth creation “. ( Its essentially a Tax )
The reality is that credit creation is kinda underwritten by central Banks, as everytime we have a credit crisis Central Bank print money ( QE ) , once other means are exhausted, to counter the deflationary forces of credit contraction.
As much as Credit creation facilitates Capital formation so can Money Printing. ( thou not with pigs at the trough, a la animal farm )
I look on them both as forms of taxation and wealth redistribution..
This is not a criticism… I love reading ur stuff… Just adding to what you have written.

There’s a little bit of Mugabe in every government! Money, no longer backed by gold, functions like tokens.

More tokens in society doesn’t raise living standards, but more products do.

Assess government policies on whether they increase tokens or products!

i.e. does the RMA increase or restrict supply of that basic human need: shelter. Does AML / OSH etc etc etc make it quicker or slower to supply goods and services?

and, yes inflation is a tax – paid by savers, generally given to property investors funnily enough. gst + paye + inflation + petrol tax + rates = basically working for 6 months for government. Imagine if that was forced labour instead of direct debits!

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