Letters to Editor: Stop international debt slavery

Stop international debt slavery
 Your editorial of Saturday, August 6, raised several issues about the health of the global financial system and finished with unanswered questions regarding indebtedness of nations and where the money lent comes from.
Money has been and is being created from nothing by central banks around the world. This may surprise many people. The Federal Reserve (FED) in United States and the Bank of England (BOE) are examples.
They create money using the Fractional Reserve Lending Principle whereby they create from nothing money that is then issued to other commercial (lending) banks within their financial system.
Additionally and similarly, when customers deposit money in local commercial banks, the local bank does not need to retain all of the deposit as reserves before lending to other customers at interest; they only retain a fraction of the deposit.
Because they only retain a fraction of the money as a "reserves", money expands throughout the economy at around eight to 10 times as it is lent out by commercial banks, so they make huge profits on-lending money time and again but only hold a fraction of it as a "reserve" back-up.
Central banks "appear" to act on the wishes of governments to supervise commercial banks but what most people don't realise is that the FED is a privately-owned bank with private (unstated) shareholders, among them the wealthiest individuals and families in the world.
The same applied to the BOE, privately owned by Europe's elite until it was nationalised in the 1946, however many people believe little has changed in terms of how the BOE operates. Central banks are charged with the issuance of currency in sovereign nations.
While the FED is pseudo-endorsed by the US government to also deliver price stability, and protect the integrity of the financial system, just as in the UK with the BOE, it has failed miserably and you then have to now ask questions about the motives of the shareholders.
In the US the FED now appears to all intents and purposes to act in close collusion with Goldman Sachs. Goldman Sachs has become, due to taxpayer bailouts forced through Congress in late 2008 by Henry Paulson former head of Goldman Sachs and "special adviser" to the US government, the most powerful of "investment" banks in the United States.
Should we be worried? Hell yes! Some of the financial instruments such as Credit Default Swaps that were created by Goldman Sachs and other Wall Street bankers, now in play all over the world, are among the most sinister and dangerous financial obligations. We will hear more about these as Europe unravels.
Additional to this collusion was the creation of the Bank of International Settlements (BIS) based in Basel Switzerland and the World Bank based in Washington DC, arguably the most powerful bank in the world. The BIS is also privately owned and has as its members the major central banks (like the FED and BOE) and provides services only to central banks or to international organisations like itself. Importantly, it is not accountable to any national government.
Owners are probably the wealthy family dynasties of Europe and USA. Currently the BIS is in the process of (announced) "reform" of commercial banks around the world under the new Basel 3 agreement, whereby commercial banks globally will have to lift the fractional reserves they hold to continue in business.
This will be affected by 2017 and appears to me to have the effect of reducing money and therefore lending around the world. The consequences of this are threatening and disturbing.
The World Bank and its associated intuition, the International Monetary Fund, were created under Bretton Woods in 1944 again with the USA and UK predominant in its creation. Both these organisations appear to advance loans from created money.
Finally the reason that many wars over the centuries have occurred has been due to politicians trying to rein control over the money lenders. Napoleon Bonaparte and Abraham Lincoln are examples, maybe we should include Jesus Christ; the only time he apparently got angry is when he tried to overthrow the money lenders. The future may not be any different. The indebted (enslaved) state of western democracies and governments should be understood by every one of us.
The consequences of allowing populist politicians "promising the world" to spend in the now as well as mortgage the future by incessant borrowing in the public name is something we all should resist at the polls.
Malcolm Eves, Havelock North
Saving for ourselves
We should all thank our politicians for their guidance on where not to invest.
They are pledging to make it compulsory, KiwiSaver that is, and you can be sure if they make it mandatory it will be a dud investment. That has, after all been their strength over the years: Picking duds (for example, the purchase of Kiwi Rail from Toll Australia) makes me wonder if they all got bribed.
John Key made his money from currency exchange rate speculation, not from allowing so-called experts to invest his money for him.
The general public are not financial idiots; they invest in the roof over their head - at risk of global financial crises, bird flu, land tax, capital gains tax, governments strapped for cash who will super-tax KiwiSaver if things get tight and bankers who take their bonus in cash on paper profits and share markets which crash, etc.
November 5, Guy Fawkes night, could be a good date for us all to vote for a man willing to put a stop to this compulsory stupidity with a bang.
I feel sure he would poll well.
Jon Philip Smith, Havelock North