Friday, December 9, 2011

EU now belongs to Goldman Sachs

 This is from news. I always like this stuff from mainstream sources as I feel that, for doubters and waverers, it carries more weight than stuff from the more "alternative" sources.

See the original article by Ian Dunt at Yahoo! Newsblog

Italy is no longer a democracy. It is a frontier outpost in the gradual takeover of governments by the financial markets. When technocrat Mario Monti was installed and filled the government with unelected administrators, it was not just a defeat for democracy, it was a victory for the banks.

Monti is Goldman Sachs' man. He was lifted out of academia by Berlusconi in 1995 to work at the Europe Commission, first in internal markets and then on competition. The bank spotted him and made him international adviser.

Something similar happened in Ireland, where Peter Sutherland, attorney general in the 1980s and former EU competition commissioner, became non-executive chairman of Goldman Sachs International and a non-executive director of Royal Bank of Scotland, until, you know, it collapsed, and we had to share the pain — but not, it goes without saying, his salary.

Mario Draghi, who recently became president of the European Central Bank, is a former Goldman Sachs man, as is Antonio Borges, who recently stood down from the IMF for personal reasons.

The banking lobby could not win its war in Greece, where creditors — the big banks of Europe - were forced to lose 50% on bonds. This was an unprecedented defeat, although not one which will save the Greek people from brutal and self-defeating austerity for a generation.

The banks made sure they won their other battles. The big fear, that they could lose out from the situation in Spain and Italy, will not be realised. The most important aspect of Merkozy's eurozone deal this week is that it rules out creditors ever having to shoulder a portion of future bailouts in insolvent eurozone countries.

Even the use of current IMF practise - that experts should decide on a case-by-case basis whether bondholder losses are necessary - is being negotiated, with a push for it to be moved from the text of the treaty to its preamble, where it would have no legal weight.

The idea that creditors should not suffer a loss when their investment goes wrong is the reason we are inflicting unparalleled economic and social misery on Europe. The austerity measures, the rescue funds, even the European Financial Stability Facility, derive from this principle, the principle that whatever happens, we must not penalise the banks. Every national bailout is in fact a bailout of the banks. Add it to the bill.

By cementing the complete subservience of European political life to the market, the Markozy deal does an extraordinary disservice to our continent and our society. But it doesn't stop there. The deal also suggests automatic sanctions on countries that allow a budget deficit of over three per cent of GDP and inserts a rule into eurozone countries requiring a balanced budget. Unlike creditor amnesty, this is at least a commendable economic and political principle - but it directly overrides the principle of national sovereignty.

Nicolas Sarkozy has been offered joint press conferences with Angela Merkel, complete with a torrent of barely-conscionable photographs of them kissing. But these presentations are merely theatre. Everyone knows France is an afterthought. We are seeing the takeover of European national sovereignty by Germany, which will effectively wield a veto against individual states' budgets. The national angle is easy to overstate, however. Germany is merely the handmaiden of the financial markets, which got us into this place and now sit like vampires turning their own catastrophe to their advantage.

The markets reacted with sluggish enthusiasm to news of democracy's acquiesce. Spain's ten-year bonds were down 5.2% while Italy's fell to 6.3%. With commendably comic timing, however, Standards and Poor intervened to put major European economies on watch. Only the best will do for the markets, you see. They won't be pacified until they have total immunity set in stone.

It won't fix the problem in the short-term, because it will kill demand and force European economies into a death-spiral. It won't fix the problem in the long term, because fiscal fetishism, while bafflingly politically popular, does little against what is, at heart, a balance of payments crisis made particularly acute by currency union. Actually, fiscal austerity makes us particularly vulnerable to cyclical downturns.

And what has David Cameron's response been to this dramatic turn of events? He has shown even more contempt for democracy than his counterparts on the continent. The left — a political designation Cameron spoke of as if it was contemptible during last week's PMQs - wants the public to be protected from the tyranny of the markets. The right wants some recognition of national sovereignty in Europe, some guarantee that their worst dreams of an ever-expanded, monstrous technocratic super-state are not being realised.

Both left and right are correct. There is plenty of scope for cooperation in preventing this disaster from unfolding. The idea that investors should be protected from the ramifications of their gamble is not a capitalist one — quite the opposite. The idea that the public should swallow losses and be denied profits is not capitalist either. Similarly, there is nothing right-wing about believing countries are entitled to make their own laws and their own budgets, without the arrogant intervention of other, more powerful, states.

Cameron has shown himself deaf to both concerns. He has ignored eurosceptic pleas to extract Britain from the situation and his only demand in exchange is that the City of London be protected from further regulation.

Paris and Berlin's desire for a financial transaction tax is self-interested, but that does not make it wrong. It is at least one small commendable action against the tyranny of the financial markets.

Opposing it is not, as Cameron says, in the national interest. The national interest would see Britain take action against a financial sector which has ruined its economy and now demands public austerity for its own mistakes.

The modest proposals for a financial transaction tax constitute one small ray of hope in utter darkness. It is one the British prime minister is intent on defeating. Not only will he support the dismantling of European democracy, he will do so on the basis that he can promote the market's dominance even further than the puppets of Europe would tolerate.

Thursday, December 1, 2011

Stuart Jane Bramhall -The Solution to the $100 Trillion Global Debt

I tip my hat to Stuart Bramhall!  I rave -on post after post about the debt crisis and the criminal banking system and here she wraps it up in one succinct post. Go to her original post and add her blog to your reading list - and don't forget to peruse her archive material too.
The Solution to the $100 Trillion Global Debt- by S.J.Bramhall

There seems to be broad agreement among both classical corporate economists and latter day non-corporate ones that the $100 trillion global debt is suffocating the world economy. The large amount of debt banks carry on their books severely restricts their ability to issue loans for the business creation and expansion needed to create jobs. At the same time consumers, who are losing jobs or taking wage cuts aren’t spending money. Because of massive drop in consumer demand, corporations are finding other uses for their record profits (CEO bonuses, for example), rather than reinvesting them in new factories or retail outlets.
Where the two economic schools part ways concerns the solution. Externalizing costs (getting someone else to pay for your messes) is a basic pillar of classical, corporate economics. In the case of the global economic system, the investment bankers who crashed the system through greed, fraud and speculation want the middle class, youth and the poor to pay for their recklessness. Although mainstream economists like Ben Bernanke agree that debt reduction and austerity cuts aren’t enough, they refuse to officially endorse “monetization” as part of the solution. This is why he calls it something else (QE1, QE2 and QE3 – which are short for quantitative easing) and fudges on the true amount of monetization that is occurring.
Ending Debt-Based Money, Perpetual Growth and Ecosystem Destruction
On the other side, most latter day, non-corporate economists (for example Ellen Brown, Steve Keen, Deirdre Kent, Thomas Greco, among others) call for an end to our debt-based monetary system and perpetual economic growth, along with a “downsizing” of the economies of the industrialized north in line with dwindling resources and rapid ecosystem destruction. They make a strong case that the citizens of western society are living beyond their means and must drastically reduce consumption if we are to preserve the human species. The problem is figuring out how to get there without creating an intolerable level of human suffering for disadvantaged groups who already struggle to meet basic survival needs. It’s much easier for mainstream corporate economists, who have already decided to reduce the global debt burden on the backs of the middle class and young people, dooming an entire generation to becoming a marginalized underclass. Instead of doing any belt tightening themselves, the richest 1% are using the economic crisis as an excuse to further increase their personal wealth.
Political Reform Must Accompany Economic Reform

Most latter day economists are committed to the principle that belt tightening is only tolerable if it’s shared equally. Here is where a discussion of solutions becomes really hypothetical. There is no political commitment at present for the ruling elite and special interests to share in the belt tightening. Thus true economic reform is highly unlikely so long as corporations continue to dominate and control western democracy. It’s possible that the economic and ecological crises that confront humankind can’t be fixed without dismantling capitalism itself, a view shared by many in the Occupy movement. Others believe that channels can be created (through constitutional conventions or similar national gatherings) to establish direct participatory democracy and make corporations accountable to local, state and national authorities. It’s only in this context that economic and monetary reform has any chance of being meaningful and effective.
Latter Day Economic Solutions to the Debt Crisis

Where there is political will to share the costs equally for fixing the financial crisis, there are a handful of straightforward policies which, if enacted together, could restore global economic stability within months. Monetization (the good kind, where new government money is spent directly into the economy) is a major one, but monetization alone is unlikely to be enough. As the Germans proved after World War I and the Japanese after their 1989 economic collapse, monetization on its own only makes things worse – either by creating hyperinflation or increasing debt and deflation. To work, monetization must be enacted simultaneously with other basic debt reduction measures:
  1. The world’s largest economy (the US) must end their deficit spending, not via austerity cuts, which will only worsen deflation, but by ending their deficit-financed wars in the Middle East, by repealing Bush’s tax cuts on upper income earners and by ending corporate tax avoidance.
  2. Western governments must require global investment banks to forgive the sovereign debt they have incurred by assuming their toxic assets (their valueless subprime mortgages). This extent of forgiveness (referred to as a “hair cut”) must depend on the amount of toxic debt these banks still carry on their books and the extent to which they have insured themselves via Credit Default Swaps. Banks that become insolvent in this process need to be nationalized, rather than bailed out, to protect depositors and pension funds with major bank shareholdings.
  3. World governments must agree to end the private debt-based monetary system and replace the Federal Reserve and other central banks with national government banks charged with creating and controlling the money supply.
  4. These national banks must be allowed to create and spend new money directly into the economy to create jobs and repair infrastructure, make good on depositors savings and repay unforgiven debt. To avoid incurring new debt (i.e. borrowing from future generations), it may be necessary to temporarily increase taxes (above 39% in the US) for millionaires and billionaires.

Tuesday, November 29, 2011

What about the "New Economics Party?"

I've seen a video courtesy of  Robin Westenra's blog:
-and seen their website
Still I can't get my head round their website, seems like a dogs dinner of vaguely populist ideas mostly adopted because of their acceptability to the disposessed without actually requiring them to get off their arses and become responsible for their own sustenance, i.e. we just adjust certain facets of the structure of the economy and all good things follow.
 The trouble is that any movement that is aiming to achieve prominence by collecting votes is doomed to populist policy. This party is clearly aimed at urban populations that don't own land, don't have access to land, dont want to work on the land but see land as a priviledge of the wealthy that can be taxed to provide an income stream to be given free of any commitment to do real productive work to those who have become unhealthily attached to their urban service sector "thinking rather than doing" lifestyle jobs that are in reality only possible because of the anachronism of a century of subsidy by cheap oil.
 These guys really need to understand the concept of distributism, which is a well thought-out concept of land use that is the only way that everyone is going to get fed in the post oil age. Unfortunately working the land is an abhorrent thought to the vast majority of those in Auckland or Wellington and that is where political power (and civil disorder danger) lies. For these populations, I'm afraid only the misery of an empty belly at some future time will be sufficient to cure them of their attachment to town life. See here my blog post on supply chain collapse for likely outcomes.
For a seriously plausible alternative economic strategy see Positive Money NZ.
Deirdre Kent of the New Economics Party replied:

There is nothing populist about our policies. We leave that to the Green Party to go for the middle ground and not campaign on the urgent issues of our time which are positively alarming. No one is going to argue that recommending a 4-6% decrease every year in our oil imports would appeal to anyone except those who know the reality and know we must face it.

If you think it is a "dog's dinner" by which you mean it doesn't fit any previous models (actually I meant it was a basketful of snippets from here-and-there) you are right. No other party wanting the whole world to have access to food, housing, water, health, education and social justice is currently recommending such a radical reversal of tax policy.

We say we need to tax unearned income not earned income. After all it was the banks in the early 20th century who demanded of our government that they impose income tax, we didn't have it in NZ up till then. GST is regressive and why should any government tax enterprise?

On the other hand, as Greens have pointed out for two decades, prices give the wrong signals because companies and individuals use water, land, oil, artificial fertilisers, pesticides and herbicides etc and society pays the price of clearning up the mess, (rivers, toxic sites and so on). The way to internalise costs is to charge an annual rent for the privilege of using that part of the commons you "own". Many industries today can only operate because their costs are externalised – an "I keep the income, someone else pays the costs" mind-set.

As Charles Eisenstein says in his book Sacred Economics "The price of a tank of fuel doesn't include the cost of the pollution it generates, nor the cost of the wars fought to secure it, nor the cost of oil spills."

Ours is a party that recognises that more people need to return to the land and to work the land. Just outside our major cities we watch as lifestylers commute all week and play on horses and ride-ons all weekend but don't use their valuable land for growing food. And meanwhile they watch their property value rise as community infrastructure round them is built by others while they gain unearned income. Here where I live I know a guy who bought his land on a river near a town which was growing. He bought it for $400,000 and it is now worth over a million while he has worked in Wellington and let the property decline and decline. And our council wants people to grow food on our good land! But without tax signals and rating on unimproved value they are relatively helpless. Ridiculous and unfair.

Our policies of imposing resource taxes rather than income tax and GST are designed to reward those who work to improve their properties. If they are not working the land they should sell it to someone who does.

Actually when an Australian NGO called Earthsharing Australia did some research on land values they found that the biggest concentration of land value was in the centre of the cities. A land value tax is the way to stop speculators sitting on valuable sites and waiting for them to appreciate. As the 2009 Tax Review stated a land tax will bring in income from overseas owners where before they didn't pay tax.

And our policy is that those who contribute back to the commons should be monetarily compensated. This includes farmers who remove land from production to provide ecological services like carbon sequestration, water and soil conservation or provide habitat for plants insects and fish.

With land value taxes and the removal of the incentive to speculate on land and resources the cycle of boom-bust is evened out. The price of land remains more even and doesn't rise exhorbitantly.

The Greens in their campaign seem to have one resource tax – the tax on the commercial use of water. This is a good start. Capital gains tax will never do it for land though.

 Kevthefarmer Replied:
I have to say, re-reading the website there is nothing in the NEP that I can disagree with apart from the Land Value Tax, which I find perverse and offensive in every way, and which provoked my snarky blogpost.
"But income is a poor predictor of someone’s ability to pay. Their wealth is a much better predictor, and much of their wealth is often tied up in property."
 Cursory examination shows this to be untrue. All farmers (and most people will be a farmer in the not-to-distant future) -are capital-wealthy and cash-poor.  You (or someone) use the phrase "tied up", which indicates lack of liquidity- which is exactly the case with land holding, whereas income is a liquid asset and is easily available for taxation purposes. This whole passage is an oxymoron. The perversity is that a person using the land for a productive purpose rather than speculation runs the risk of being driven off their land by the Valuation Officer. This happened to some fairly smallscale (few hundred acres) farmers in Golden Bay (Laurences turf so he should know) because the V.O.realised they had "million dollar views" of the mountains and sea!  Land Value Tax is popular with government book-keepers because you can"t export or hide the land. therefore it is easy to charge. That is its only "advantage".
Death duties and capital gains tax do work well for a wealth tax, given certain exemptions such as first dwelling house and land farmed in-hand. Community Land Trusts and the State could be exempted
Do you realise that land based industry only accounts for 5% of GDP in NZ, whereas service sector is 70% and manufacturing is 25%. how do you propose to extract a significant proportion of the more-or-less 40% of GDP that the state requires for its purposes from a sector that only accounts for 5% of GDP?

There is more- Let me join the discussion at your website!

Regards, Kev.

Predatory Banks Target NZ Farmers Again.

Well I just started to write a snarky bit of Agribiz-knocking invective but I thought I'd stop myself and take a bit of a different tack and bash the banks, which is really boring because that's what I do all the time. This article in -Business Day entitled "Banks need to be choosier lenders"  gets the point completely backwards. The fact is that farmers need to be choosier borrowers, in fact, like the rest of us they need to not borrow but to pay down their debt as fast as possible- there will be no debt write-offs for those holding physical assets such as land -not even the however many of them that are sitting in parliament on the National government benches. Good point actually -can you be a sitting MP and a bankrupt at the same time? Perhaps we won't have to endure the full three years of this government after all.
The author of this article so wants to not take sides, be everyones friend. Why not tell us about the bullshit "audits" the banks offered farmers, totally slanted to encourage the taking of loans- I know about these things- I have a farming insider down in South Canterbury tells me, though anyone with a pulse ought to know intuitively that's what these sharks do for a living.
"The insinuation was that anyone over 50 is too old to be farming". More like too old to be intimidated / bamboozled into signing on the line eh?

Monday, November 21, 2011

Let's not pussyfoot around with the banks

21 November 2011

Let's not pussyfoot around with the banks

Andy Wimbush Tony Greenham of the New Economics Foundation
Head of Finance and Business
A closer examination of money creation shows the need for major banking reform.
Originally posted at London Loves Business.
There is a simple fact about the UK banking system that is both profound and mundane. It is also little known, and yet the source of much hyperbole. What is this simple fact?
Commercial banks create new money.
This statement often seems to have a strange effect on people, either sending them down to St Paul’s with a Guy Fawkes mask and a tent, or backing away from you in horror as if you had just blasphemed in front of the Pope.
I really don’t know why, because it is merely a description of how fractional reserve banking allows banks to expand “broad money”, or bank deposits, when they create new credit. This is really the whole point of fractional reserve banking. Indeed, the ability to create new money in this way to finance investment and growth in consumption was arguably a major factor behind the successful industrialisation of nations, the UK being first and foremost among them.
So if you are not happy with the statement “banks create money” I hope you will read our new book Where does money come from? which has been endorsed by Professors Charles Goodhart and David Miles, former and current members of the Bank of England Monetary Policy Committee respectively.
The real questions should be: “Is this a problem? And if so, is there any sensible alternative?”
I think it has become a problem. The proportion of the money supply created in this way has shifted considerably over the past decades to reach 97 per cent, while the Bank of England’s control over this process is in reality minimal, or at least ineffective.
The result is asset-price inflation and a highly unstable financial system. The system reinforces booms, leading inevitably to credit bubbles, and reinforces the subsequent bust, leading to a credit crunch in particular for SMEs.
Another nasty consequence is that the creation of new money is privatised, but its exchangeability is guaranteed by the state – that’s you, the taxpayer of course – leading to the calamitous moral hazard spoken of by Mervyn King, and the inevitability of publicly funded bail-outs of private losses.
So what can be done to improve matters?
One approach is to go the whole hog and properly privatise money – broadly speaking the approach of the Austrian school of economic thought represented by Hayek.
There would be no state backing of bank deposits or banks, who would compete on their creditworthiness and reputation to ensure that their bank deposits were accepted by other banks.
Theoretically this should get taxpayers off the hook and, one would hope, restore market discipline to bankers. However, it is not clear that it would stop the boom and bust cycle.
Everyone seems creditworthy in a boom.
And as the credit crunch demonstrated, everyone looks like an unacceptable risk in a banking crisis. In this event, would it be credible to imagine that the central bank could sit by and watch large swathes of banks close their doors imposing potentially huge losses on their customers?
Another approach is to properly nationalise the control of Sterling. Give the central bank not just control over interest rates, but closer control over the quantity of new credit created by banks and its sector allocation – a sort of Project Merlin with teeth. This should improve the Bank of England’s control over inflation and stability. Credit control, or sometimes less formal guidance, is a feature of many country’s monetary systems including the UK up to the 1960s.
A more radical variation is to remove credit creation powers from banks entirely. Banks would then offer two sorts of account.
First, a payment and safety deposit account (think paypal, but backed by the Bank of England).
Second, an investment account where funds are actually transferred to borrowers (think Zopa or stockbroker). This is sometimes referred to as “full-reserve banking”’.
Key to this would be an acceptance by customers that if the bank’s lending was poor, that they could actually lose money on their investment account. Radical perhaps, but surely the alignment of risk with reward is at the heart of a free market system, so why should we expect risk free returns on our savings if they are being lent to businesses or individuals who might never repay?
Finally, we could have a multi-currency world where Sterling is used alongside local currencies issued and controlled by local banking institutions. Local currencies increase the local money multiplier effect that can support jobs and business is less wealthy areas. National and international currencies would remain the payment medium of choice for national and international transactions.
Pie in the sky? Not really, because each of these four suggestions have more or less operated successfully around the world in the past, including in the UK. As we watch the continuing debacle of chronic financial crises unfold, isn’t it time to ask some more fundamental questions about our money system?

Tuesday, November 15, 2011

The World is Drowning in Debt, and Europe Laces on Concrete Boots

 Thanks to Robin Westenra at Seemorerocks for forwarding this one. 

Tuesday, 15 November 2011

The World is Drowning in Debt, and Europe Laces on Concrete Boots

by Charles Hugh Smith
14 November, 2011

Three metaphors describe Europe: drowning in debt, circular firing squad and trying to fool the money gods with an inept game of 3-card monte.

The world's major economies are drowning in debt--Europe, the U.S., Japan, China. We all know the U.S. has tried to save its drowning economy by bailing out the parasite which is dragging it to Davy Jones Locker--the banking/financial sector-- and by borrowing and squandering $6 trillion in new Federal debt and buying toxic debt with $2 trillion whisked into existance on the Federal Reserve's balance sheet.

It has failed, of course, and the economy is once again slipping beneath the waves while Ben Bernanke and the politico lackeys join in a Keynesian-monetary cargo-cult chant: Humba-humba, bunga-bunga. Their hubris doesn't allow them to confess their magic has failed, and rather than let their power be wrenched away, they will let the flailing U.S. economy drown.

Europe has managed to top this hubris-drenched cargo-cult policy--no mean feat. First, it has indebted itself to a breathtaking degree, on every level: sovereign, corporate and private:

Germany, the mighty engine which is supposed to pull the $16 trillion drowning European economy out of the water, is as indebted as the flailing U.S.

Second, the euro's handlers have already sunk staggering sums into hopelessly insolvent debtor nations, for example, Greece, which has 355 billion euros of outstanding sovereign debt and an economy with a GDP around 200 billion euros (though it's contracting so rapidly nobody can even guess the actual size). According to BusinessWeek, the E.U. (European Union), the ECB (European Central Bank) and the IMF (International Monetary Fund) own about $127 billion of this debt.

Since the ECB is not allowed to "print money," the amount of cash available to buy depreciating bonds is limited. The handlers now own over 35% of the official debt (recall that doesn't include corporate or private debt), which they grandly refuse to accept is now worth less than the purchase price. (The market price of Greek bonds has cratered by 42% just since July. Isn't hubris a wonderful foundation for policy?)

In other words, they have not just put on concrete boots, they've laced them up and tied a big knot. We cannot possibly drown, they proclaim; we are too big, too heavy, too powerful. We refuse to accept that all these trillions of euros in debt are now worth a pittance of their face value.

When you're drowning in debt, the only solution is to write off the debt and drain the pool. The problem is, of course, that all this impaired debt is somebody else's asset, and that somebody is either rich and powerful or politically powerful, for example, a union pension fund.

Third, the euro's handlers have set up a circular firing squad. Since the entire banking sector is insolvent, the handlers are demanding that banks raise capital. Since only the ECB is insane enough to put good money after bad, the banks cannot raise capital on the private market, so their only way to raise cash is to sell assets--such as rapidly depreciating sovereign-debt bonds.
This pushes the price of those bonds even lower, as supply (sellers) completely overwhelm demand from buyers (the unflinching ECB and its proxies).

This decline in bond prices further lowers the value of the banks' assets, which means they need to raise more capital, which means they have to sell even more bonds.

Voila, a circular firing squad, where the "bulletproof" ECB is left as the only buyer who will hold depreciating bonds longer than a few hours, and all the participants gain by selling bonds before they fall any further. This is the classic positive feedback loop, where selling lowers the value of remaining assets and that drives further selling.

As many have noted, soaking up all the Greek debt--a mere sliver of the eurozone's impaired debt-- would essentially wipe out the entire EFSF "stability" rescue fund.

The "solution" to the cargo-cult crowd is "obvious"--print, baby, print, and use that new paper to buy 3 trillion in mostly-worthless bonds. But that is just another circular firing squad, as Nobel prize winning economist Thomas Sargent noted: "There's a fundamental truth that everyone has to understand: what the government spends, the public will pay for sooner or later, whether in taxes or inflation or having their debt defaulted on." (Source: BusinessWeek 11/20/11)

The 3 trillion euros comes of somebody's pocket, one way or the other; there is no free lunch.

Even worse, debt is the only engine of "growth" left in the developed world. This chart shows how America's "growth" since 1980 has been fueled by debt that expanded by 136% ($30 trillion) beyond actual economic growth. The same is also true of Europe, where Italy, for example, borrowed 1 trillion euros over the past decade or so in return for essentially zero growth.

This reveals the key dynamic of the past decade: the diminishing productivity of debt. What happens when an economy is so burdened by the friction of inefficiency and indebtedness that borrowing a trillion euros just keeps the economy barely above water? The next trillion won't even keep "growth" at zero, and the economy sinks beneath the waves.

The world has reached the point of debt saturation. Creating more debt no longer generates "free lunch" growth, even in China, though the central bank in China is still playing as if shifting debt off-balance sheet into a "shadow" system will fool the money gods. It won't.

Everybody in Europe is playing the same sort of games, hoping to fool the money gods and keep the "free lunch" economy "growing." While everybody focuses on the circular firing squad in Italy, untold billions of euros of impaired private mortgage debt in housing-bubble-popped Spain still sits on the books of Spanish banks at full value, lest a sneeze of reality send Spain's entire banking sector to Davy Jones Locker.

Though no official publicly admits it, nobody really knows how much debt there is in Greece, or who even holds it. Here's the fig leaf confession: "Scarce data makes estimates difficult." Yes, I'm sure it does. So the true size of Europe's debt is unknown because everyone with a stake in the charade is trying desperately to keep the true scope hidden. (Ditto in China.)

The debt will get renounced, and debt as the "engine of growth" will also be renounced.

Europe is an inept 3-card monte player attempting to swindle the money gods. The gods aren't fooled by such shallow shuffling games, in fact they are greatly annoyed that humans even dare to attempt such flimsy tricks. Their wrath is building, and human hubris will only make the reckoning worse.

Friday, November 11, 2011

Attempting to Turn a Shed-Full of Used Toilet Paper into a Perpetual Meal-Ticket.

Oh to be UK Prime Minister George Osborne. Today we heard the happy news that thirty of the City’s leading lights had been kind enough to get in touch – how helpful, that in this time of global economic turmoil, a friendly troupe of business leaders knows exactly what’s to be done.
"An early removal of the temporary 50 per cent tax rate would attract wealth generators to the UK and support the entrepreneurs we need to help us grow the economy and provide jobs.”

Any statement that includes the notion "return to growth" is specious nonsense. The era of growth-model economics is over, due to resource constraints. Many hundreds of academic and lay articles have been written about "reaching limits to growth". It beggars belief that at least a significant proportion of the "city investor" types don't know this, therefore one must conclude that this constant hum of "return to growth" is merely "soft soap" to lull the public into complacency while the evil-doers carry on scheming.

The "scheme" if I may digress, is to convert the toilet-paper "assets" into real wealth -physical assets. The so-called "complex financial instruments" that represent the output of twenty years of deregulated banking have no more real worth than toy money. They used to have a "value" as the institutions traded them among themselves in their fantasy game in order to inflate the book-value of their businesses upon which their salaries were based, but now they are worthless. A child knows you can't take toy money to the shops and buy lollies, but for the bankers, the governments of the world are playing "toy-town bank" swopping their used toilet-paper for real spendable money and in turn running up unsustainable sovereign debt and the "promise to pay" of taxpayers for generations to come -no wonder nations credit ratings keep sliding! A happy result of this, for the bankers, is that the resulting sovereign debt creates the conditions for sell-offs of capital assets -Crown land, public utilities, water rights, proprietorship of which enables the new owner to collect rents. This is the planned perpetual meal-ticket for yesterdays "city investor" -being a neo-feudal overlord in a new dark age. splendour for the one per cent, squalour for the common herd.

Our choice? force the institutions to acknowledge the inherent worthlessness of their toxic assets -put the used toilet-paper into the appropriate hygenic disposal place. I am reminded of a very funny situation many years ago when a friend was carrying his two year-old daughter in his arms. She was grumpy with a cold and her nose was streaming with green snot. Her father had her blow her nose into a tissue, after which she screamed at him "Give me back my bogie"! The city financier types will just have to get over it like my friends daughter got over the loss of her bogie.
The present banking system can only function in a state of more-or-less permanent growth, That phase of human economic development is now over. We must institute a banking system not based on creation of money as interest-bearing debt, and properly regulated against speculative scheming, as detailed at the  Positive Money Website so that banking can serve the economy, not the other way round. The G20 nations foolishly resolved in 2008 to back the banking sector to the bitter end with no significant concessions toward banking reform. It is now time to take heed of the "Occupy Wall Street" movement and its many spin-offs and reverse that folly to stop being complicit in our own enslavement.

Thursday, October 27, 2011

Phil Goff's Election Time Suicide Gaffe.

What the hell does Phil Goff think he's doing being drawn into engagement with National on the raising of the pension age a month before the election? This is a mid-term issue for an incumbent government- why should anyone vote for a labour party whose policy gurus are so intellectually retarded they invite the electorate to kick them in the teeth on election day by raising it now? John Key knows this is a vote loser and will be totally irrelevent before the timescale the changes are proposed over has even begun. Key knows that in the radically polarised world he anticipates forty years hence, the common herd are unlikely to even have a life-expectancy of sixty-seven years so he can play this issue as as pure piece of electioneering politik. My heart is filled with despair at the ineptitude of the parties of the opposition in the face of this cynical, sinister man and the fawning cronies that surround him.

There was a little gem that came out at the time that Standard and Poor's downgraded New Zealands credit rating that, had National continued with the taxation policies pursued by the previous Labour government, then the credit rating would not have been lowered. Labour could have jumped on this and ridden it all the way to the election. Allied to this is the fact that, by failing to raise enough tax revenue, they have deliberately taken the country into deep sovereign debt in order to create the pre-conditions, as provided in the European economies by bank bale-outs, for future cuts in public services and the sell-off of publicly owned assets. Where did you hear the opposition parties raise this? Nowhere. Instead, Labour are effectively buying-into Nationals vision of the future world by addressing the "affordability" of future pensions in this way.

Wednesday, October 19, 2011

Tasman District Council declares war on Lifeboaters.

Tasman District Council is on the warpath against lifeboat-builders.

Tonight at a meeting called by the Motueka Valley Association in the tiny settlement of Ngatimoti, 140 residents of the District from as far away as Golden Bay and Rotoiti came together to voice their support for Valley residents caught up in a recent trawling exercise by the TDC to seek out and enforce against property owners who have entered into "irregular" living arrangements on their rural properties. One such owner has allowed individuals and families to live rent-free in yurts and straw-bale buildings that have been erected without consents and building regulations in return for the "tenants" help in creating a self-reliant and resilient community. It seems there has been no complaint at-all from neighbours regarding these "irregularities". prompting one commentor to suggest their be a policy of "no enforcement actioned without a bona-fide complaint", which idea was sniffily dismissed by the council officers present.

One commentor from the floor raised the issue of the world sovereign debt crisis and the likelihood of a "collapse" causing a mass exodus of the urban population into the rural hinterland in search of the means to produce their own food. The concept was lost on the councillors and officials present (and, frankly, on most of the lay-attenders too) who seem unable to view the issue in any other light than that of "lifestyle choice". Personally, I doubt whether many actual "lifestylers" (as opposed to true smallfarmers) would volountarily enter into such arrangements on their "play-farms" with members of the "great unwashed" without coercion or a full-blown crisis prevailing. Instead, the focus seemed to be on suggesting that the council revisit the "Rural Management Plan" to see if those desiring alternative living arrangements could be accommodated.

Guess what? guys- while you are waiting for the sloth that is local government to pontificate (and most likely find against you), the global sovereign debt crisis is going to knock you from arsehole to breakfast-time!

In any case, one of the major issues, which the officials were at pains to emphasise is out of their hands as it is governed by national legislation, is that the building regulations wouldn't allow people to live in these type of structures because they are not "code compliant". Makes you wonder how in the quarter of a million years of human evolution we survived the first 249,950 without these "heroes" to protect us from ourselves! Don't you think?

It will come as no surprise to those familiar with the antics of public officials to know that, having turned a blind-eye to minor irregularities in the valley for years, this new found zeal for detection and enforcement is happening during the time leading up to the proposed but ill-concieved Nelson City / Tasman District amalgamation. With the threat of the loss of 60-70 jobs from a combined council, officers will be running around trying to fill the case-book with anything to keep themselves looking busy and indispensible for the months and years to come. They percieve this issue as a "soft target".

For the time-being, the law is on the side of the council. However, under the present circumstances right, and plain common-sense, are on the side of those building resilient communities.

Credit must be given to TDC's planning policy chief, Steve Markham for his enthusiasm for the ability of the public to initiate change to the Rural Management Plan, although this scarcely helps those already ensnared in the enforcement process, and the process is obviously too slow to help with the effects of the unfolding global crisis.

The deplorable attitude of dinosaur councillor Trevor Norris is also noted. Cllr Norris seems to bristle with self-righteous zeal at the prospect of the enforcement process being used as a blunt instrument to beat down those who don't subscribe to his archaic view of rural land use. Wake Up! Cllr Norris!

Wednesday, October 12, 2011

A History Lesson on the Absurdity of the Banking System

Sorry to all for the lack of original content at the moment, the time of year demands full attention to farming matters. Please forgive!

Thanks to commentator Lautturi over at The Automatic Earth for this history lesson.

A note from history books:
January 24, 1939, Robert H. Hemphill, credit Manager of the Federal Reserve Bank of Atlanta said:

If all the bank loans were paid no one would have a bank deposit and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous: if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture the tragic absurdity of our hopeless position is almost incredible, but there it is. It (the banking problem) is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.

Saturday, October 1, 2011

Jerry Mataparae is the Wrong Man to be Governor-General

A bit of a worry, really, having this man as Governor-General. I suspected, when Mataparae was made director of GCSB (the government spy agency, effectively, under the ANZUS treaty, a proxy for U.S. intelligence gathering) after retiring as head of the armed forces that this was a man who's ideology was absolutely compatible, although possibly not complicit, with John Key's vision of hegemony to the interests of financial elite of which Key himself is an agent and cadet member, and that has already completely captured the U.S. body politic. Mataparae has already shown lack of understanding of the requirements for the position as demonstrated by his breach of protocol with his comments regarding Nicky Hagar's allegations concerning the role of NZ forces in Afghanistan and elsewhere.

Despite my personal leanings towards devolved autonomy for individuals and communities I have always held a candle for the constitutional monarchy and particularly the role of the Governor-General, as the legal commander-in-chief of the armed forces, police and so-on, as an insurance against the siezure of power by a political faction. Despite the fact that these powers are, by convention, never used they are nevertheless very real and pertinent in times of constitutional crisis. It seems that the present political faction have managed to foist "their man" into the position at just such a critical time. I believe that during the next five years, we will see some kind of "end game" played out and the last thing we need is a Governor-General who is a poodle of the cabal that seeks to destroy the sovereignty of the crown as representative and guardian of the common-wealth of the people.

Thursday, September 8, 2011

More TPPA Treachery

The Trans-Pacific Partnership Agreement (TPPA) is a “free trade” agreement currently under negotiation between NZ and eight other countries, including the U.S.  The countries want to complete negotiation by the end of 2011.

Trade is only a minor part of the agreement, that’s just a clever branding exercise. A TPPA would be an agreement that guarantees special rights to foreign investors. If these negotiations succeed they will create a mega-treaty across nine countries that will put a straight jacket around what policies and laws our governments can adopt for the next century – think GM labelling, food security, foreign investment laws, price of medicines, regulating dodgy finance firms, NZ content on TV etc.

The New Zealand Human Rights Commission has declined a request for a scoping study on the human rights implications of the proposed Trans-Pacific Partnership Agreement (TPPA), saying it doesn’t have the resources. It would be more accurate to say they can't comment because they're not allowed to see the draft!
….no surprises there, then. You can almost taste the desperation of John Key to get this one in the can with the minimum of disruption.

There is a petition opposing the agreement

To sign the petition GO HERE

“The negotiators themselves say this is not an ordinary free trade agreement."
 “ why are they scared to release the draft text and open it to scrutiny?” (Prof. Jane Kelsey, Auckland University)

 Absolutely this is not even a free trade agreement or even a treaty in the normal sense as has been understood since the middle ages. The TPPA  promoting itself as a free trade agreement whilst shrouding itself in secrecy is essentially like a pirate ship of old flying a false flag in order to engage its intended victim by deception, that is to say  to secure a binding agreement behind the backs of the citizens of sovereign nations.

 It would not even be true to say this is about the Americans trying to pull a fast one on smaller nations. Essentially the agreement is designed to make international capital the sovereign power within nations with precedence over the elected assemblies that are presently considered to be sovereign. The incumbent leadership of the nations involved are attempting to tie the hands of future generations of elected representatives who may choose to make decisions based on their "national interest" rather than the interest of the worlds elite.

 Arguably, the financial elite see the writing on the wall for the future of their ability to dominate the worlds economic activity. As the global financial bubble deflates, as it is doing right now and will continue to do so at an accellerating pace over the next few years, future governments and communities will need to pursue initiatives of relocalisation that will severely reduce the elites ability to make profit through trade, commerce and industry. The elites plan for the future is to use their present wealth (before it deflates to nothing in the financial meltdown) to capture resources (such as land, water, minerals) and enforce intellectual property rights so as to maintain their wealth and position through "rent-seeking"

 The TPPA agreement is a "traitors gambit " and should be exposed as such at every possible occasion.
To sign the petition GO HERE

Tuesday, September 6, 2011

A Jute Rennaisance?

According to the BBC, there’s a resurgence of jute cultivation in Bangladesh.

Jute Renaissance? Could it be that the clever Bangladeshis see a great future in the attire of  “sack-cloth and ashes” in these times of austerity in the western nations?

Wednesday, August 31, 2011

NZ online petitions for your consideration.

Firstly, against the Trans-Pacific Partnership Agreement (TPPA)


We the undersigned citizens and permanent residents of New Zealand call upon the Government of New Zealand

• to cease negotiations on the Transpacific Partnership agreement; and

• to not sign this agreement; and

• to cease work on any other in-progress or proposed international trade and investment treaties containing clauses which limit or abrogate New Zealand's sovereign and democratic right to make and enforce laws and regulations and provide services which differ from those of other states or transnational organisations.

 Next, Against the Food Bill 2010, Which, as drafted, will make the trading of foodstuffs, including fresh fruit, vegetables and seeds, a privelege regulated by ministerial discression rather than a right. This will apply across the board for smallholders, home gardeners and community gardens, not just to corporate producers.

Saturday, August 27, 2011

A Taxation Programme to Address New Zealands Own Debt Crisis

Since the Election of November 2008, the National Party have deliberately pursued a treacherous programme of unnecessary bale-outs and unaffordable tax cuts designed to bankrupt the country in order to facilitate the outcome of the sale of sovereign assets- power, water, other state-owned enterprises and the very land itself. We see New Zealand wantonly reduced from a position of strength relative to the economies of  the USA and european  nations that were more afflicted by the banking crisis for reasons of pure ideology.
Their ideological basis for this is their fundamental lack of belief that all humans are of equal worth and worthy of equal representation and consideration in a sovereign nation. They would probably fantasize about a system whereby an individual was represented in direct proportion to their wealth, say, one vote per $100,000 of wealth, with corporations viewed as "legal persons" for electoral purposes or at very least the reinstatement of the "property qualification" for voters.
Realising that such views are utterly unconscionable in modern society, the next best thing for them is to remove (sell off) the assets of  the nation so that although we have universal suffrage, the body politic has very little bearing on public access to or dominion over things that we have come to consider  as human rights- food, water, shelter, warmth, health etc. This is the perverse logic behind the governments present seemingly disastrous course of action.
Regular readers will know how much I deprecate the so-called "left" in modern politics, including the New Zealand  Labour Party, for pandering to bureaucracy and for statism. This is because the public service and the businesses that derive their income from state spending is where Labour's core electorate lies, rather than "breeding them in South Auckland" as the knuckle-draggers of the National Party rank-and-file would have us believe.
Having said that, I have to say that I endorse the programme outlined in the Youtube presentation below, my caveat would be that the revenue raised be dedicated to the paying-down of the debt and preservation of a reasonable level of services rather than being used to further "big government" schemes.

Wednesday, August 24, 2011

Iceland's Ongoing Revolution

Why Iceland Should Be in the News, But Is Not
By Deena Stryker

An Italian radio program's story about Iceland’s on-going revolution is a stunning example of how little our media tells us about the rest of the world. You may remember that at the start of the 2008 financial crisis, Iceland literally went bankrupt.  The reasons were mentioned only in passing, and since then, this little-known member of the European Union fell back into oblivion.

As one European country after another fails or risks failing, imperiling the Euro, with repercussions for the entire world, the last thing the powers that be want is for Iceland to become an example. Here's why:

Five years of a pure neo-liberal regime had made Iceland, (population 320 thousand, no army), one of the richest countries in the world. In 2003 all the country’s banks were privatized, and in an effort to attract foreign investors, they offered on-line banking whose minimal costs allowed them to offer relatively high rates of return. The accounts, called IceSave, attracted many English and Dutch small investors.  But as investments grew, so did the banks’ foreign debt.  In 2003 Iceland’s debt was equal to 200 percent of its GNP, but in 2007, it was 900 percent. 

The 2008 world financial crisis was the coup de grace. The three main Icelandic banks, Landbanki, Kapthing and Glitnir, went belly up and were nationalized, while the Kroner lost 85% of its value with respect to the Euro.  At the end of the year Iceland declared bankruptcy.

Contrary to what could be expected, the crisis resulted in Icelanders recovering their sovereign rights, through a process of direct participatory democracy that eventually led to a new Constitution.  But only after much pain.

Geir Haarde, the Prime Minister of a Social Democratic coalition government, negotiated a two million one hundred thousand dollar loan, to which the Nordic countries added another two and a half million. But the foreign financial community pressured Iceland to impose drastic measures.  The FMI and the European Union wanted to take over its debt, claiming this was the only way for the country to pay back Holland and Great Britain, who had promised to reimburse their citizens.

Protests and riots continued, eventually forcing the government to resign. Elections were brought forward to April 2009, resulting in a left-wing coalition which condemned the neoliberal economic system, but immediately gave in to its demands that Iceland pay off a total of three and a half million Euros.  This required each Icelandic citizen to pay 100 Euros a month (or about $130) for fifteen years, at 5.5% interest, to pay off a debt incurred by private parties vis a vis other private parties. It was the straw that broke the reindeer’s back.

What happened next was extraordinary. The belief that citizens had to pay for the mistakes of a financial monopoly, that an entire nation must be taxed to pay off private debts was shattered, transforming the relationship between citizens and their political institutions and eventually driving Iceland’s leaders to the side of their constituents. The Head of State, Olafur Ragnar Grimsson, refused to ratify the law that would have made Iceland’s citizens responsible for its bankers’ debts, and accepted calls for a referendum.

Of course the international community only increased the pressure on Iceland. Great Britain and Holland threatened dire reprisals that would isolate the country.  As Icelanders went to vote, foreign bankers threatened to block any aid from the IMF.  The British government threatened to freeze Icelander savings and checking accounts. As Grimsson said: “We were told that if we refused the international community’s conditions, we would become the Cuba of the North.  But if we had accepted, we would have become the Haiti of the North.” (How many times have I written that when Cubans see the dire state of their neighbor, Haiti, they count themselves lucky.)

In the March 2010 referendum, 93% voted against repayment of the debt.  The IMF immediately froze its loan.  But the revolution (though not televised in the United States), would not be intimidated. With the support of a furious citizenry, the government launched civil and penal investigations into those responsible for the financial crisis.  Interpol put out an international arrest warrant for the ex-president of Kaupthing, Sigurdur Einarsson, as the other bankers implicated in the crash fled the country.

But Icelanders didn't stop there: they decided to draft a new constitution that would free the country from the exaggerated power of international finance and virtual money.  (The one in use had been written when Iceland gained its independence from Denmark, in 1918, the only difference with the Danish constitution being that the word ‘president’ replaced the word ‘king’.)

To write the new constitution, the people of Iceland elected twenty-five citizens from among 522 adults not belonging to any political party but recommended by at least thirty citizens. 

This document was not the work of a handful of politicians, but was written on the internet. 

The constituent’s meetings are streamed on-line, and citizens can send their comments and suggestions, witnessing the document as it takes shape. The constitution that eventually emerges from this participatory democratic process will be submitted to parliament for approval after the next elections.

Some readers will remember that Iceland’s ninth century agrarian collapse was featured in Jared Diamond’s book by the same name.

Today, that country is recovering from its financial collapse in ways just the opposite of those generally considered unavoidable, as confirmed yesterday by the new head of the IMF, Christine Lagarde to Fareed Zakaria. The people of Greece have been told that the privatization of their public sector is the only solution.  And those of Italy, Spain and Portugal are facing the same threat.

They should look to Iceland. Refusing to bow to foreign interests, that small country stated loud and clear that the people are sovereign.     

That’s why it is not in the news anymore.

Sunday, August 21, 2011

Understanding the International Monetary System

A recent "conversation" I had with Steve Baron at his blog "Better Democracy"
Understanding the International Monetary System 
 Steve has recently graduated in political science and economics- congratulations! Steve.


Gas Fracking in New Zealand

Thanks to Robin Westenra at his blog Seemorerocks for bringing this to my attention:
Until recently I operated under the illusion that fracking was limited to North America!
Josh Fox, director of Gasland a documentary which exposes the health impacts of Fracking or horizontal hydraulic fracturing where a mixture of water, sand and chemicals is injected at extreme pressure to crack open rock, boosting gas flow; Russell Norman, co-leader of the Green Party; and Bernie Napp, a policy analyst for Staterra the umbrella group for the New Zealand resource sector (which includes mining and exploration).

 If the Taranaki Regional Council were, in the course of fulfilling their duties to environmental protection, to find against the use of "fracking" by the gas industry in the region, they would be putting themselves in the same position as Environment Canterbury did over the issue of water quality in relation to intensive dairying in their region, and to face the threat of suspension and the imposition of commissioners. Is it any wonder then that we find TRC regurgitating verbatim the gas industries platitudes concerning the integrity of wells when we hear that one in twenty is compromised by casing failure. Here we see again the conflict between what the government wants- facilitation of penetration of the interests of commerce and industry- and the Regional Councils' foremost duty- to protect that most basic of human rights, the security and safety of the drinking water supply.
  Russel Norman says that the Taranaki Regional Council have economic development objectives that may bring jobs to the area as well as those of environmental protection and these are of course potentially conflicting. This true but in my view this is deliberately avoiding the above mentioned "elephant in the room". I believe the parliamentary Greens are anxious not to unduly rile the National party as they are mindful of the possibility of an arrangement with the Nats following the election in November.

Friday, August 19, 2011

Role models from the riots?

This article is wierd. It seems to be mostly a clumsy vehicle for the handful of links incorporated within it. Of course most young people didn't riot, but then how many came out onto the streets to face-off or protest against the rioters. Not many- perhaps those three young asian men killed in Birmingham were the only ones? does this mean that most were silently approving / disapproving, scared, or just plain complacent.
 There has been a concerted effort to frame the recent events within the realms of "mindless criminality". Is the lack of obvious political context at-all surprising when for the last several decades all effort has been directed at the de-politicisation of the populace-at-large, young people being particularly affected.- Nevertheless the context is there for all who care to see it. Television and all the other banality of what passes for "culture" in the present age and the very tedium and lack of gravitas in modern political process have all contributed to this, not to mention the obvious complicity of the political class in the scandals referred to in the links within the article. The idea is fostered that politics is too "complicated" for ordinary people to be engaged in and is best left to the "experts". Now that ruse has come back to bite them in the backside, but then, how much easier to denounce this unrest than if it had been overtly political?
 I don't like the tone of this article, and the two previous comments with their empty plaudits raise my suspicions. I note that Mike Harris has only been at NEF for two months and that his profile page details put him firmly in the "political elite" camp in my view. I know that NEF is not a radical organisation and tries to bring along as broad a spectrum of followers as possible, but these factors together make me suspect that what I am seeing is an example of "gatekeeping". The board of NEF should be very circumspect about what this means for the credibility of the organisation.

Thursday, August 4, 2011

Threat to rights to trade food and seeds in New Zealand

Reposted from Robin Westenra's blog, Seemorerocks.

If you have just seen the report of the raids on an organic store in the USA and think it couldn't happen here, think again...

If this Bill is passed it could compromise everything all of us in Transition Towns and the sustainability movement stand for.


New Zealand Food Security

Hello all.

It seems that you're concerned about the Food Bill, which will turn the basic human right to grow and distribute food into a restrictive, government-authorised privilege that can be revoked.

The website has been set up to illustrate the problems with the bill and highlight the solutions. Please tell as many people as possible about this, so we can remain well-fed.

The bill will breach the Treaty of Waitangi by interfering with traditional cultural values (growing and sharing food). It will also breach it by restricting the usages of taonga species - which the Waitangi Tribunal says are "species beneficial to humanity" (WAI 262) and fall under the "full authority" of the natives of this country.

Now, you're a native if you were born here. You can exercise your authority accordingly. Please approach your local marae, and discuss this bill with the local kaumatua and kuia (elders). Even if it is passed, it can be overridden with information available via

Please also visit, and leave feedback.

Thank you for your time.

Food Bill: threat to seed saving and natural medicines? Guy Ralls (Organic NZ, July/August 2011 Vol.70 No.4 Issue)

The Koanga Institute’s directors say the Food Bill is a “significant threat” to heritage seed saving networks, and that “any bill saying people can’t exchange food and plant material is fascist in intent.”

The Food Bill, which went through a submission process late last year, is likely to have its second reading in Parliament in the next few weeks.

Bob Corker and Kay Baxter spoke out following confirmation by lawyers that the Food Bill will criminalise people who exchange seeds, plant material or home-raised produce – even by giving these away – if they cannot afford or are otherwise not granted a government licence to do so.  MAF says that the Bill covers only food for sale for human consumption, and not seed (unless it were for human consumption); and that the definition of ‘sale’ includes bartering but not giving away.

“New Zealanders are losing their basic right to barter and exchange food and plant material,” says Corker.  “That’s crazy.  How are they expected to put up with that rubbish?”  Baxter also condemns as “laughable” the fact the WWOOFing would be outlawed.  The Bill could also affect the sale or exchange of rongoa – medicinal herbs.

“We now need to seriously look at its position in relation to seed sharing,” says Bob Corker.  “Our practices may need to be protected in a Claim of Right or even Maori Sovereignty.  This Bill is in breach of human rights.” (

What can you do?

Share this information, write a letter to the editor, approach your MP or marae.
Kevthefarmer wrote:
The fact that this bill is being brought in to bring NZ into line with WTO / Codex Alimentarus standards gives us a clue to it's true purpose. WTO/Codex exists to further the aims of corporate farming, corporate food processing and corporate retailing.

For years now the compliance sector have pursued this agenda, using "one size fits all" compliance models to advance corporate penetration and at the same time as a "town-hall job-creation scheme" to employ the low-grade graduates that can't get a job in real science and who's sense of entitlement precludes their engagement in "dirty hands" productive work.

A fine example of the collusion between bureaucracy and corporate sector to disempower and parasitise both the small business sector and the general public good.

Here's the subsection that means that small producers that use Wwoofers will not be eligible for exemption from the registration requirements requirements of the Food Act.

Small scale businesses:
95(5) Without limiting anything in this section, a person who may be granted an exemption under this section includes someone
(a) produces in his or her own home any food for sale; and
(b) sells the food to a consumer only; and
(c) does not employ or engage any other person to assist in the production or sale of the food; and
(d) does not otherwise sell or distribute the food.

Note the use of the words "might" and "may". In legalese, these mean that any exemption is entirely at the discretion of the minister and thus might never even come into being, and if it does, could be revoked at any time.

Disgusting. In my opinion a treason worthy of our utter contempt.