A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.
Opinion
As a student of Science, Technology, Engineering and Maths (they hadn't invented the term “STEM” in those days) I was familiar with the laws of Physics, including the well-known “Energy can be neither created nor destroyed” — it is simply converted or transferred from A to B.
At the beginning
of my career in industry I studied for a Diploma in Management Studies and sat an exam which included the question: “Wealth can be neither created nor destroyed — Discuss”. The crux of that matter was whether wealth is simply being transferred from one person's pocket to someone else's.
The matter on which I have been pondering for some time now is whether money can be created and destroyed, and I am forced to the conclusion that it can.
In order to pay for the consequences of the Covid-19 pandemic, the Reserve Bank has been creating money from thin air and showering it on the government in return for IOUs (otherwise known as Government bonds). We are told that this mechanism is different from simply “printing money” because it will have to be repaid eventually, in which case I presume it will be destroyed as easily as it was created, by a few taps on a computer keyboard.
But what if it were not to be repaid? What would be the consequences? Who would be any the wiser? The Reserve Bank could just tear up the IOUs.
