Charismatic

I'm afraid I'm not a fully paid subscriber to that view.

The RBNZ issues currency and sets rates, policy etc. to control credit growth semi-autonomously. Government has to issue financial instruments and pay interest (or in some parts of Europe get paid interest ) to borrow if it spends more that the tax take.

There isn't a magic printing press that allows governments to produce money unfortunately. Governments can get into a position where they cant meet their fiscal obligations even with their own currency.

However at this moment many reserve banks need to get a bit of inflation and creating helicopter money (e.g. creating a 0 rate bond for government so they can spend without an obligation to repay) may be just the ticket. We are doing it incrementally anyway, why not grasp the nettle instead of enduring years of weak growth?

LoCarb

I can see you are well versed in the discredited Monetarist view.

It has been marvelous instrument for trickle-up economics and why the wealthy have successfully extracted so much from the poor.

However, after 45 years monetarism has run it's course and inflicted near permanent damage to the world's economy.

Central bank monetary policy has reached the end game with negative interest rates spreading.

Fortunately there is growing ground swell for an alternative view both politically and economically.

Step-up fiscal policy to the rescue! Now being advocated by the the IMF of all people


"Governments can get into a position where they cant meet their fiscal obligations even with their own currency."

Not true incidentally. Government can always meet it's obligations without question.
The government is sovereign, with a freely floating exchange rate and a non-convertible currency.

The world is not on a gold standard and hasn't been since Nixon abandoned convertibility in 1971.

jmh

I was referring to London - Most quarter acre sections in London were owned by the rich, unless of course you look at the post-war era when young East Enders had acres of cleared ground to play on - lucky buggers.

Charismatic

Actually that is true, governments have to put controls in place when they face financial difficulty (e.g. Iceland in '08) so it's also a moot point really.

In fact no reserve bank really operates a truly floating rate, most operate an implicit peg. So in New Zealand TWI weighs on the reserve bank when conducting monetary policy, they don't call it a peg of course...

LoCarb

Interesting. True and moot at the same time......

Is it a implicit peg or just wishful thinking. The markets are ultimately in control of where the exchange rate should sit.
Perhaps RB is not very good at affecting exchange rates by "conducting monetary policy" (that means changing interest rates for us non university trained types).

Graph of US/NZ exchange rates from 1971 to today.

http://cdn.tradingeconomics.com/char...=20161231&area


Notice how when NZ abandoned the peg in 1984 exchange rates to US dollar have varied from .39 to .87
Some control....or perhaps not.

LoCarb

Some of you might be interested in this video "Money Is No Object" with Stephanie Kelton.
Among others in attendance are professors Steve Keen & Michael Hudson.

Stephanie Kelton, Ph.D. is an Economic Advisor to the Bernie 2016 presidential campaign. She served as Chief Economist on the U.S. Senate Budget Committee (minority staff) and is Professor of Economics at the University of Missouri-Kansas City.

The presentation starts at the 3 min mark.
Best to watch it on Youtube so click the Youtube button.



There is also a slide presentation if you find the screen hard to read:

http://www.slideshare.net/MitchGreen..._Money_As_long

LoCarb

Some more reality....

Debunking The US [or NZ ] National Debt Hysteria.


https://www.facebook.com/ellis.winni...31500956908752

Norman Conquest

Kids playing in the streets is just the way things are done here and its not because they don't have gardens. In my street, the houses have big sections and there's a big park nearby, but the kids still play in the street sometimes. I have noticed that mothers tend to take their kids to and from school a lot more these days - too many creeps around - its not as safe as it used to be. Beggars are new to New Zealand. There's always been some tramps sleeping out and street kids are nothing new, but not beggars as such. I guess the money is spent on Reeboks.

Justcol

If they prevent bludgers, spongers and scroungers from milking the system and bleeding the rest of us dry
then they are doing a bloody good job, more power to em.

BEVS

I thought that read budgies at first glance.

LoCarb

I didn't realise bankers went to WINZ?

LoCarb

Can't come soon enough

You’re witnessing the death of neoliberalism – from within | Aditya Chakrabortty | Opinion | The Guardian

MrsFychan

mind you some don't help themselves.

living rough for 18mths, just had a baby and moaning her daughter will have no home to grow up in. Really should of thought about that 9mths ago before getting pregnant.

Norman Conquest

And the banks have been turned into government data collecting and spy agencies. (Counter-terrorism and Money Laundering Act) Just try to add a signatory to a company cheque account and you enter a bureaucratic minefield.

jmh

Interesting points to that story:

1. How come the hospital released the baby onto the streets (if indeed they did). In another story on the news, hospitals are keeping mothers and babies in if they are homeless which of course is costing the health service (see how cuts in services in one sector have a knock-on effect on others)

2. Note how they feared that the baby would be taken away from them if they mentioned it to Winz - perhaps there is genuine cause for their concern - is there more to this case than meets the eye.

3. While it might be desirable that homeless women do not have sex, perhaps they would be better helped with easy access to free contraception. Should a 15-day-old baby be punished because her mother had sex at the wrong time?