The real world carries on without that shit.

What I am saying is that the current fractional reserve system of banking is a ponzi scheme. The system is a mathematical impossibility. The ability to create money out of thin air, multiply it tenfold with a keystroke then lend it out at interest for the benefit of a few is nothing but theft. People throughout history have been put up against a wall for less. It should be in the control of the people, not a private industry.

Re the financial markets, most of the people who worked on Wall Street didn’t know what the fuck they were selling, all they knew was that they got paid commission for selling the shit.

“WTF did Lincoln know about modern banking?”

Obviously he knew the threat which is why he said what he did, a wise man who foresaw the shite we are in today because of thieving and greed by bankers. It will resolve itself, and not before time.

Sort of weakens your argument a bit doesn’t it…

Ok, this shows you dont know what you are talking about.

There were banks that were going to fail even though their own loan book was clean and they followed prudent banking standards. They would have failed because no-one was lending to them; everyone was panicking. The risk premium had spiked through the roof and the global credit markets had effectively shut down. No one was lending to anyone because everyones risk aversion had increased to ridiculous levels. The government guarantee allowed people to calm down and to start lending again.

I dont think the recent “recovery” is anywhere near as good as some people think, but I still think it would have been much much worse had the Australian and New Zealand governments not shored up confidence in the local banks.

As for the “Disney style financial products”, you obviously dont understand them either. They were real products. They actually existed. Even if it was just one “bettor” against another, they were still as real as any mortgage or credit card contract, and in some ways much more real than equities. Even sub-prime mortgage CDO’s were real products. It is just the pricing of them that was wrong, for however many and varied reasons you can think of.

Are you really saying that you think the government should monopolise banking and credit creation on the basis of what a long-dead American President said? WTF did Lincoln know about modern banking? LOLZ, get out.

I understand and I say bring it on. They are private businesses and have obviously screwed up, they should be allowed to fail.
Please explain to me why it would be so catastrophic if they did? Other than supplying a means of exchange (at a huge profit) they provide nothing of value. They don’t produce any of the actual essentials of life like food, building materials or fuel. The real economy would quickly find another method of facilitating exchange, we always have done before, why is now so exceptionally different?
Financial markets are now full of gamblers that feed on the real contributors in society. Financial markets make up Disney style financial products to trade as though they were real products, what a load of old bollocks! I have no objection to gambling, I like the odd flutter myself but not at the expense of the rest of society.

As for banks, get rid of them. Abraham Lincoln famously stated on money creation…

“The Government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the Government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government’s greatest creative opportunity. By the adoption of these principles . taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.”

The changes are coming, it is only a matter of time. The “recovery” being witnessed currently is bullshit. It is an illusion maintained with trillions of fake dollars being pumped into a corrupt system. More people are becoming aware of this every day. The system runs completely on faith, no better than any cult or religion, when enough people lose faith the whole ponzi scheme will collapse on itself.

Re left v right and “he said she said” politics, I am rapidly coming to the conclusion it is irrelevant which “side” is in power. Tell me what are the differences between the Key administration and Clarke’s?

It looks like the whole political system is nothing more than posturing to give the plebs some shred of hope that pollies will look after their interests first, as they are supposed to do. It seems that the powers that be only wish to maintain their positions of power and privilege in society and take turns in being in charge, paying lip service to the real issues at hand.

Ask yourself why the top ranks of the public service get substantial pay rises but nobody at the bottom? Didn’t National come to power on a promise of dealing to waste in the public service? They have done squat except put a cap on increases, the place was overblown by about 15000 staff and the best National could do was cap the numbers? WTF?

Tony Ryall’s weasel words on Newstalkzb this morning re the top dog pay rises made my skin crawl, “not our fault, was nasty Labour, nothing we could do about it”, he even said “we the taxpayers”! What utter shite, more looking after each other.

ACC needs an overhaul so targets the end users, the soft targets, not a whisper about any changes amongst the powers that be who are ultimately responsible for the present situation! I’m not saying the changes aren’t needed, far from it, I’m just pointing out a recurring theme. The power brokers never get touched, even though they are supposed to be where “the buck stops”? If the system is flawed then so are the people responsible for it. I haven’t seen any sackings in the upper echelons.

There is a structure of government and hangers on that are dependent on the taxpayer to maintain them. The problem is they always look after themselves first. Hence ever increasing taxes in their many forms. Vehicle registration, ACC, GST, income tax, levies for Africa on just about everything and others under different guises.
The reason there is more noise is because the tax base that they feed on is shrinking and people actually doing the paying are starting to squeal. The sad part is it won’t stop them, it never has in the history of mankind. Things just keep going until the system implodes. Read what backster wrote @ 5.08, a very astute piece.

To sort out our debt problems and systemic failures in our administration needs drastic measures. Nobody will do it, they want to stay in power so will do whatever it takes to maintain the status quo.

“the ETS” – the ETS doesnt mean the government is spending money, in fact it is sending private wealth overseas

“bank deposit guarantee scheme” – brought in by HC, and while the execution was bad, and the spillover was worse, you shouldnt think that the government guaranteeing banks wasnt in some way helpfull

“ACC” – again National is cleaning up after the last lot, cutting spending in the area is tricky, and political suicide

“WFF” – you gonna complain when they keep an election promise? It might not have been a promise to you, but it was to someone, and that person was one Key faux pas away from voting Labour

“benefits” – yes, they should all be costs

“perk” – otherwise known as non-financial remuneration, you will need to be specific here

But it wasnt just about flighty depositers, there was a real risk of banks going bankrupt because they couldnt borrow internationally (which was their bread and butter). The Australian guarantee was put in place expressly to allow their (and our) banks to borrow on the global markets. The NZ guarantee covered deposits as well, because that’s what HC announced. The silly cow probably didnt know what she was talking about, and because she was desperate for a sound bite to show New Zealand that she was DOING SOMETHING TOO you now have to worry about South Canterbury Finance.

Sure they are not pumping the economy full of cash to the extent of Australia or the US, but keeping the status quo in itself is shameful IMO Angus.

“you cannot carry on for ever squeezing the productive bit of the economy in order to fund an unprecedented engorgement of the unproductive bit. You cannot spend your way out of recession or borrow your way out of debt” – Daniel Hannan.

Absolutely kaya.
One thing I do note with huge irony is the left’s attacking of greedy banking practises and excess, and trying to smear it as the fault of “right wingers” and “unrestrained capitalism”. Yet at the same time you have the left bailing out these “greedy monsters”, and you have those on the right like Ron Paul urging Congress to let bad businesses fail and sticking up for the taxpayer.

BTW Kaya, if it is of interest, I am currently reading “Pillars of Prosperity” by Ron Paul that I downloaded from the Mises Institute, a good read.

They announced a policy to be seen to be doing something. Then they expected it to be enacted by lunchtime. If you two really want to scare yourselves, try and rustle up the original application form for the guarantee. It was one page and I shit you not, it was a joke. IIRC it may have asked for each Directors star sign!

Get the fundamentals right, the banking system, infrastructure, taxation. No fucking around trying to artificially maintain some impossible status quo (a la IOUSA). Then make it as easy as possible for people with the capital and the ideas to come here and set up shop.

It is sad that some investors, especially the elderly, have lost money in finance companies, but it is maddening that some now expect those with less to pick up the tab.