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Farmers oppose printing money

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Farmers oppose printing money

3News NZ

Federated Farmers says printing money, known as quantitative easing, would be "incredibly bad" for New Zealand

Federated Farmers says printing money, known as quantitative easing, would be "incredibly bad" for New Zealand

The country's biggest export sector is strongly opposed to the Green Party's suggestion that the Government should print money to bring down the value of the dollar.

The agricultural sector sells most of its products overseas and Federated Farmers says printing money, known as quantitative easing, would be "incredibly bad" for New Zealand.

Green's co-leader Russel Norman made the call on Sunday, saying the Reserve Bank should print about $2 billion and use it to buy earthquake bonds.

He says there would be immediate downward pressure on the exchange rate, which exporters are blaming for a string of recent redundancies.

The Government has rejected the idea and Federated Farmers president Bruce Wills says it would "set off an inflationary bomb that risks returning New Zealand to the dark days of double-digit interest rates".

Mr Wills says quantitative easing should be a "break glass in case of fire" policy option.

"New Zealand is nowhere near such desperate measures because our official cash rate is 2.5 percent versus 0.5 percent in the United Kingdom, 0.25 percent in the United States and 0.10 percent in Japan."

Prime Minister John Key said yesterday quantitative easing was a high-risk strategy that wouldn't necessarily bring down the exchange rate.

"We know it adds to inflation and it would put up the price of everything, like petrol and mortgages," he said.

Economic Development Minister Steven Joyce has described Dr Norman's suggestion as "well-meaning lunacy".

NZN

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12/10/2012 10:38:52 a.m.

Ian Sheen wrote:

Every government prints money. That's where our notes and coins come from. As an economy grows, it requires more money all the time to support the increasing level of transactions. The trouble with the incumbent system, is that the government has ceded the right to create money to the private banks. Banks can't print their own notes, but they do create new money digitally. In the last eight years, they have created $100 billion in additional New Zealand money [see the Reserve Bank M3 money supply data]. They create this money on their balance sheets, and sell it to us as debt with compounding interest. They don't borrow it from overseas or from their depositors - they create it out of thin air as an accounting entry. Supporters of the status quo seem blissfully ignorant of what money is, how it is created, and how much exists. Our M3 is now $240 billion, of which only $4 billion is in notes and coins. All the rest has been created as credit/debt by the private banking system. Creating $2 billion for essential expenditure wll not be hyper-inflationary. It's a drop in the ocean. Money has to be created somehow. Either the government creates the money and spends it for the good of the people, or it allows the banks to create it and sell it to us at twice the price. We continue to hug our chains, pay the cost of our own enslavement, and give Stockholm syndrome love to those nice bankers who create the numbers we use to trade real things with each other. The bean counters own and control our world, but hey, that's just the way things are and there's no possible alternative, is there?

12/10/2012 10:38:50 a.m.

Ian Sheen wrote:

Every government prints money. That's where our notes and coins come from. As an economy grows, it requires more money all the time to support the increasing level of transactions. The trouble with the incumbent system, is that the government has ceded the right to create money to the private banks. Banks can't print their own notes, but they do create new money digitally. In the last eight years, they have created $100 billion in additional New Zealand money [see the Reserve Bank M3 money supply data]. They create this money on their balance sheets, and sell it to us as debt with compounding interest. They don't borrow it from overseas or from their depositors - they create it out of thin air as an accounting entry. Supporters of the status quo seem blissfully ignorant of what money is, how it is created, and how much exists. Our M3 is now $240 billion, of which only $4 billion is in notes and coins. All the rest has been created as credit/debt by the private banking system. Creating $2 billion for essential expenditure wll not be hyper-inflationary. It's a drop in the ocean. Money has to be created somehow. Either the government creates the money and spends it for the good of the people, or it allows the banks to create it and sell it to us at twice the price. We continue to hug our chains, pay the cost of our own enslavement, and give Stockholm syndrome love to those nice bankers who create the numbers we use to trade real things with each other. The bean counters own and control our world, but hey, that's just the way things are and there's no possible alternative, is there?

10/10/2012 9:41:07 a.m.

Jim Seaview wrote:

QUOTE: "Green's co-leader Russel Norman made the call on Sunday, saying the Reserve Bank should print about $2 billion and use it to buy earthquake bonds. He says there would be immediate downward pressure on the exchange rate, which exporters are blaming for a string of recent redundancies." Another LOONEY GREEN PARTY IDEA from their leader Dr Russel Norman who says that PRINTING money will help our exporters?? REALLY?? Their idea has immediately been rejected by the Federated Farmers whose members are the countrys biggest exporters through hard work and they do not want to see domestic inflation rise into double digit figures and undo all their hard work. Federated Farmers response has just shown how out of touch with reality the Green Party is with their flawed logic of printing money, and to think that the Greens had Labour and the NZ First support means that we are developing (not by design) TWO political idealogies in New Zealand - National and the Rest. Something for the voters to ponder in the next 18 months.

10/10/2012 9:20:51 a.m.

Greg wrote:

Last research I saw was 70%, nz economic review i think, its the dominant market. The U.S. only has about 10% market input there.

10/10/2012 2:14:36 a.m.

RA wrote:

Federated farmers ......... biggest union in the country .

9/10/2012 8:17:38 p.m.

Mike wrote:

Fed Farmers also support working for a living, hence Aaron opposes working for a living.

9/10/2012 5:58:49 p.m.

Aaron wrote:

Well if Federated Farmers oppose it, we ought to support it. look at what these people do to the environment, and look at how they treat animals. If they don't like that should serve as a clear endorsement for decent folk.

9/10/2012 5:12:32 p.m.

Mike wrote:

Greg do some research, the amount Farmers export to china is small compared to the rest of the world.

Yes our exports to China are growing with greater access though our free trade agreement, but the majority of farm exports are still to other countries.

Printing money never works, and the way the Greens want to do it will add inflation and higher interest rates - neither good for NZ. Who will the higher interest rates go to? Overseas banks that the greens claim they are against, yet their policy intends to put more profits in tehir hands!

Lunacy indeed!

9/10/2012 3:12:21 p.m.

Greg wrote:

Farmers sell mostly to China, what does China pay us back in, Toxic US dollars.
Remove the NZD from the currency gamblers books.