ADVANCE New Zealand
A new political design for our economic future
MEDIA RELEASE
Date: Sunday, 19 August 2007
Who’s Telling Porkies?
How come all the financial commentators and politicians in NZ are parroting their US counterparts in singing the praises
of the strength and resilience of ‘the economic fundamentals’ – or are they simply pissing into a rapidly increasing
wind?
According to a Wall street journal/NBC News poll over 65 percent of Americans either believes the economy is, or soon
will be, in recession.
Three million manufacturing jobs have been lost, 5.4 million Americans have slipped below the poverty line, three
million have lost their pensions, home foreclosures are the highest on record, the personal savings rate is lower than
at any time since the before great depression (1929), income for a typical household has fallen $1300.00 since year 2000
and recent tax breaks has accelerated the gap between the haves and have-nots. Not mention the growing problems around
public infrastructure.
On CNN last week a comment was made that the problem with the financial markets was the amount of debt involved. There
is more than a grain of truth in that given about 97 percent of ‘money’ is created by the debt mechanism used to create
the foundation for virtually all economic activity.
When there is a loss of confidence in a system saturated with debt then it follows that economic activity is going to
take a hit. It also follows that since every country in the globalised economy is dependent on the ‘credit’ (debt)
created by the ‘money’ mechanism that the changed conditions will impact globally.
Until the three hundred year old mechanism of national/global debt creation is updated to accommodate 21st century
productive capacity, future generations will be burdened with the same periodic and highly disruptive events that have
been an unwanted part of people’s lives for the past 100 years.
END