THE ZOMBIES AGAIN STALKING THE LAND

A week has passed since the deranged Social Creditors pushed up their coffin lids and emerged with full page nonsensical newspaper advertisements. Then bugger me, last Saturday they did it again.

At the top of this latest advert is the ludicrous repeated assertion “Banks Create Money – Over $20 billion every year.”

Given that let them explain two things. First, if Banks can create money, why do they borrow it?

And second, given Banks ability to create money, why do some go broke?

The advertisement continues, “We’ll have the Reserve Bank do it instead,” this referring to creating money, followed by a lengthy list of things of the free urban transport, a pest-free New Zealand, a guaranteed minimum income, free chocolates to each household daily and other wonderous goodies a Social Credit government will deliver with their free money. They then emphasize the $20 billion free money they’ll provide each year will be “at no cost to taxpayers”. That being the case, why stop at $20 billion?

This latest advert finishes in bold type urging “Join us now to reclaim your future”.

Finally they’ve snared me with that appealing promise, namely time travel, after all we can hardly reclaim something (our future) we haven’t yet had.

Where do I sign?

There’s an interesting aspect to their re-emergence, namely they began nine decades ago at the advent of the Great (1930s) Depression. In such desperate times people clutch at straws. We’re on the cusp of a repeat so religion should do well in the years ahead. There’s an opportunity for budding entrepreneurs. Start one by first snapping up one of the numerous church buildings currently available.

7 Comments

Clutching at straws? The one promise God made in his word is that every man will die, then face a judgment. You won’t be able to buy a verdict, Bob.
Religion – faith – is a gift of God. If you haven’t received it, and don’t want it, forgive me if I suggest you stop banging on about it. Others do, and will receive it gladly.

Liked by 1 person

    markscreaminggoosearmstrong May 13, 2020 at 1:54 pm

    I have always wondered why the atheists, smug in their rejection of any god, see fit to waste their time and effort putting down the faithful.

    Why would they bother?

    Liked by 3 people

Bob,
You ask ..If Banks create money, why do they need to borrow it? and Why do Banks go broke ?
Seems like a paradox…. but yes , Banks do create a form of money , and they also need to borrow money. https://en.wikipedia.org/wiki/Inside_money
On the “moneyness” scale Bank credit is a form of money.
Banks borrow money because they are also financial intermediaries . They also have to borrow for liquidity reasons, in order to balance their books each day , thru the payments system. ( Credit creation is an IOU note… a claim on money ).

Banks can go broke due to solvency issues and/or liquidity issues. If people lose confidence/trust in a Bank no-one will accept their credit, and people will be exchanging credit for cash.
Throw in Bad loans, from imprudent lending and a Bank can quickly go broke.. ( RBS comes to mind… also the BNZ back in the 80s’ )
In terms of the economy, whether it is better for the Private banking system to increase the Money supply thru credit creation or the Reserve Bank to increase Money supply thru ‘money printing”, is open to debate. ( Are some of Social Credits’ ideas plausible ? )
Its not the money supply growth per se, but how it is used that determines if it leads to an increase of wealth. ( and wealth creation is, largely, a function of productivity , which is essentially a work ethic + innovation/creativity,… in my view )
I think most of NZs’ private sector debt is held by households ( Home mortgages.?? ).

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It would appear that there are two kinds of wackos in the woods today, the kind you describe above and the lot advocating a universal benefit. Neither, it would appear have even the slightest inkling of basic economics, supply demand and pricing.

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“after all we can hardly reclaim something we haven’t yet had.”

Not true at all.

Although it took centuries, the Juice reclaimed (stole) something they never had.

The Juice reclaimed (stole) Israel, a country they never had.

The Juice stole Israel, a country where the archaeological evidence from 2,000 years ago, shows that everyone spoke, and wrote Greek, and decorated their houses with aspects of Greek mythology.

Read all about it:

http://preearth.net/phpBB3/viewtopic.php?f=23&t=1175&sid

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You are right.
Its just worth posting to your site.
You win.

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There are three economic theories for what caused the Great Depression.
Lord Keynes argued that it was a collapse in demand. Hayek and the Austrian school argued it was a supply crunch, caused by 1920s mal-investment. Friedman argued that it was caused by a collapse in the money supply.
A collapse in either demand or supply will cause the other to collapse, ceteris paribus. This can cause a spiral of demand and supply shocks. However, it matters whether demand or supply collapsed first, because the policy response is different, depending upon the cause.
Suffice to say, in the case of the Great Depression, I believe Lord Keynes was correct. Supply was normal before the share market collapse in 1929. Confidence crashed. Buying stopped. The Dow eventually fell 90%. These demand shocks beget massive reductions in production. Of course, this production collapse was mirrored by the collapse in the money supply, but correlation does not prove causation. The monetary causes of the Great Depression are unlikely to be the main cause of this tragedy, in my view.
How does the Great Depression compare to the Corona Depression?
My thoughts are that this crisis is very different. We have the wholesale collapse of our biggest industry (tourism), which is more akin to a supply shock.
Yet the government are acting as if this is the same crisis as the Great Depression. They are throwing money randomly at the economy, rather than targeting the cash to the industry obliterated.
They are pumping up demand, but not targeting this demand at the sector where it was previously spent.
This will mean that we are much more likely to see inflation, as compared to the deflation of the Great Depression.

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