|
Hi Bill (McGunnigle),
Yes, I believe you're right, Bill, we certainly
can't ever 'win' in our trading arrangements. Not with the 'flaw' in the
'price' system remaining uncorrected. No one can.
Canada traditionally has always done a lot of
trade with the USA, and has always been particularly vulnerable to American
'protectionism'. The Smoot-Hawley tariff in the 1930's literally wiped out
most of the market for BC lumber in the US, as the American government, quite
naturally and properly, moved to protect their own lumber industry and all the
jobs and other benefits it engendered.
The "Imperial Preference" trade agreements negotiated with
Britain and the other countries of the Empire literally 'saved the bacon' for
that industry in those troubled times. Britain became our number one
customer for lumber, as the "Imperial" tariff structure effectively excluded
much lumber coming into British markets from Scandinavia and the Baltic
region of northern Europe.
The Soviet Union however, operating under a different
system and 'exporting' for a different purpose, just lowered its prices and kept
its market share despite the tariff. Fortunately for BC, the Russian
lumber industry, like most of their industry under Communism, was not operated
very well and increasing volume shipped was physically difficult.
But it wasn't only with Britain that our trade increased
because of "Imperial preference". We 'captured' markets in Australia,
India, South Africa, and the Caribbean British colonies, too. All
places that had been previously receiving lumber from the USA .
After the War, a problem developed in that our trade with
Britain became increasingly unbalanced. They were not making sufficient
sales of British goods in Canada, despite devaluing the pound, (more than
once), to come close to what we were selling them.
Many of the things Britain made and exported to
other Empire countries, were also being made in Canada by that time. We
didn't need their motor vehicles, smaller ships, commercial and military
aircraft, etc. All those things were being made here, and could be in ever
greater quantities. If only we had some market other than our own to
absorb them all at the 'price' it cost us to make them. And therein seems to lie
the 'problem', or a very large part of it.
Regards,
Joe
----- Original Message -----
Sent: Saturday, December 22, 2007 6:02
AM
Subject: Re: [socialcredit] Re: Article
by Richard Cook
Hi Joe
thanks for correcting me with regard to Canada being outside the Sterling
area. It was a stupid oversight on my part, because Canada's major trading
partner has always been the USA, and hence used the same currency. ( I believe
at a fixed ratio set by the Canadian government). Canada was never in the same
position as NZ who at one stage had as much as 90% of its overseas exchenge
with Britain, but you are quite right when you observed that "Imperial
Preference" helped to bolster a considerable amount of trade between Canada
and Britain. After WW2 the loss of preeminence for Sterling as a trading
currency came about as a result of the "Bretton Woods" conference which, while
establishing the World Bank and IMF ostensibly to "stablise" trade, also
established the Dollar as the trading currency for Oil. This immediately
placed pressure on the Pound Sterling as a trading currency. The USA could do
this because it was still then a net exporter of oil and could control the
amount of oil flowing onto the world market. Western Europe, including
Britain, was a net importer and was vunerable to oil price fluctuations. The
US hierarchy recognised that oil would become the single greatest and most
important trading commodity after WW2. Having all oil trade dependant upon the
supply of US Dollars onto the world trade market has enabled the US to offset
inflationary trends at home by manipulating the oil supply. Price
increases demanding more dollars. The British government were not
unhappy with this arrangement because it took pressure off Sterling so that it
did not have to remain at a relatively high value with respect to other
currencies. Nevertheless Sterling is tied rigidly to the Dollar and the two
currencies support one another in International trading.
We, in new Zealand now have a very large
percentage of our trade with Australia now as a consequence of our free trade
agreement between the two countries. Trade with Britain has been reduced to
about 10% of our total trade now. Our major trading partners after Australia
are Japan, Taiwan, China, India, South east Asia, and the USA. This
leaves us vunerable to the machinations of the IMF and World Bank instead of
the Bof E. You can't win can you?
regards
Bill Mc G
----- Original Message -----
Sent: Saturday, December 22, 2007 3:31
AM
Subject: Re: [socialcredit] Re: Article
by Richard Cook
Hi Bill (McGunnigle),
Thanks again for shedding some further light on an
area that needs illuminating. My understanding is that Canada never
was in the 'Sterling area', as were most other
independent Dominions of the Empire, and most of the Crown
Colonies, etc.
Even though our trade with Britain and other Empire
jurisdictions was substantial, and protected due to "Imperial
Preference" trade agreements, we were in the 'Dollar area'.
Canada, for whatever reasons, perhaps to show we were
'independent' of British Government foreign policies, or maybe under
pressure from Washington, resisted efforts by Britain to form a more
cohesive intra-Empire trading 'bloc' after World War Two.
I believe that was something Winston Churchill was
pushing for, but Ottawa wouldn't go for it. It would be another one of
those interesting speculations to ponder "what if" that had
happened. For the Empire was physically even more internally
'self-sufficient' in regards to resources and markets than
America, or the Soviet bloc, or a united Europe. Doubtless ''financial''
considerations played a large role in scuttling that idea. Though the
personality and mind-set of Churchill and some of the other British
proponents might have been detrimental to the idea too.
I'll have to go through what you've written further,
Bill, and try to piece together how the 'competition' you mention fits into
it. Out of time right now.
Regards,
Joe
----- Original Message -----
Sent: Thursday, December 20, 2007
11:59 PM
Subject: Re: [socialcredit] Re:
Article by Richard Cook
Hi Joe
What you have postulated is essentially correct. However the BofE never
held substancial amounts of NZ currency. NZ pounds were changed
into Pounds Sterling in NZ by the NZ Reserve Bank.
NZ companies were required to purchase Sterling from the Reserve Bank in
order to undertake overseas purchases, thus NZ currency never reached
Britain. I believe the pressure from the Bof E was
from British Banks that, up until the advent of
the Labour government, had monopolised loans extended throughout the NZ
economy. They found themselves in direct competition with a government
backed bank that could afford to offer loans at 0.5-1.0%. Obviously they
could not allow any other British Empire "colony" to follow NZ's
example, because a substantial amount of Britains
overseas earnings came from Banking "investments" in the form of loans to
all Empire colonies, hence the pressure. I am sure something similar was
directed towards Canada and Australia to force them to remain within the
Sterling area prior to 1939.
The position of the Bof E acting
as the the holders of overseas exchange for Empire and Commonwealth gave
it a unique position as banker for the Sterling area. It could therefore
exert pressure on those countries by withholding the
exchange reserves it held in safekeeping for
Sterling area countries. I am sure the BofE would have acted in this way
no matter what, once it became apparent that the NZ government had
determined to become the master of its own currency and foreign exchange
rate. It was a necessary step for the Bof E to maintain its financial
control of NZ's developement against NZ government efforts to become
autonomous.
This is my interpretation of the
actions taken by the Bof E in 1938. Nevertheless I concede that there are
still too many "What ifs" and " If only's" in the whole senario. That all
the negotiations have been embargoed until 75 years after the event doen't
help matters either. Furthermore I suspect that once the time expires they
will be reembargoed for a further 75 years. This
seems to be a common factor in these
events.
regards
Bill McGunnigle
--- Original Message -----
Sent: Friday, December 21, 2007
3:29 AM
Subject: Re: [socialcredit] Re:
Article by Richard Cook
Hi Bill (McGunnigle),
Many thanks for providing the background details
in regards to the New Zealand experience.
Could it be that what your first Labour
Government was attempting was tantamount to a continual 'devaluation' of
the New Zealand pound? (I don't know the answer to that, quite
honestly, but it would seem to me that might be the
case.)
If that were so, then perhaps your main
trading partner, Britain, ran the risk that what had been acquired
by the BofE in New Zealand denominated funds through trade balance
settlements, (instead of a transfer of actual gold or silver), might
quickly become progressively worthless as effective demand for further
NZ goods?
If such were the case, and its holdings of foreign
exchange reserves in NZ pounds were substantial, wouldn't it be likely
that the BofE would naturally try to discourage the new found
'financing' method for Government infrastructure for that reason alone,
if none other?
Now I don't have the answers to that, and maybe
I'm way off track even in considering the issue that way. And if I
am, I hope anyone with greater knowledge in these matters
will come in and set me straight. But at the moment, that's what
comes to mind.
If your first Labour Government could
have gone instead to some variant of the CPD mechanism,
which, in effect, makes each unit of NZ currency held capable of
purchasing 'more' in NZ goods and services, I wonder how the BoE
would've viewed that? Other considerations aside, wouldn't it be
possible you might have had quite a sudden 'trade boom' with
Britain and found funding infrastructure a lot easier?
It's always interesting to speculate what might
have happened when we ask "what if" or "if only" we'd done something
differently, but really, all things are so interconnected it would be
almost impossible to ever know.
Regards,
Joe
----- Original Message -----
Sent: Wednesday, December 19,
2007 9:12 PM
Subject: Re: [socialcredit] Re:
Article by Richard Cook
Hi Joe
Further to John Rawson's remarks on the use of Reserve Bank Credit for
infastructure building works by the 1935-1949 Labour government of New
Zealand, from my historical research into that
government, The Bank of England expressed
great disapproval of this method of financing New Zealand's internal
infrastructure developement. It, therefore, took the unprecedented step in late 1938, supported by the
British government, threatening to freeze all of New Zealand's
overseas exchange funds to which it had security rights, (New Zealand
was part of the Sterling area then) unless it discontinued the
practice. This put a temporary hold on the practice, but, in 1939,
with the outbreak of WW2, the Bank of England was in no position
to continue to hold that threat over NZ, because NZ was a reliable
supplier of essential raw material for the war effort. Consequently
despite the enormous amount of expense, relatively speaking, that the
war cost NZ, the bulk of the war debt for NZ was to its own Reserve
Bank at a nominal interest rate. NZ had a balance of payments surplus
during the war years because of this. Demand for NZ products after WW2
continued to exceed supply and it was not until the 1970's that NZ
started to experience balance of payment deficits. Significantly the
end of the 1st labour government in 1949 saw the downturn in the
balance of trade with the advent of a series of National governments
that steadily reduced the strict monetary exchange rules enforced by
the 1st Labour government. However, ironically, it was the 3rd Labour
government 1972-75 that removed exchange rate controls, and it
was from that point onwards that NZ began to experience serious
balance of trade deficits. The swing to the extreme right during the
1980's and 1990's completed the exchange rate "liberation", and NZ has
never been able to post an overall balance of trade surplus since
then.
I trust this amplifies some of the
detail around the question
regards
Bill Mc Gunnigle
----- Original Message -----
Sent: Thursday, December 20,
2007 9:48 AM
Subject: RE: [socialcredit] Re:
Article by Richard Cook
Thanks Joe.
The first parts remain theory either
way for me and I keep an open mind until someone comes out with hard
facts.
But your comment on NZ is wrong. There was no debt
attached to the use of Reserve Bank credit for Government
operations. It was new money issued for the purpose, non-repayable.
For local bodies and the Dairy industry, yes, you are right.
But the interest charged was only 1% and the finance probably would
not have been available elsewhere. Making this repayable meant that
more could be issued as it was returned, or alternatively made the
debt bearable if it was not. . This distinction is in accord with
our present party policy here.
I notice Richard has not replied
to your comment on inflation, so try this translation. "No
more inflationary than any other issue of new money from any
source." That would, of course, include money issued by a Credit
Authority as per Douglas recommendation.
The issue over
government use of new money has nothing whatever to do with (demand
pull) inflation. If it is confined to the amounts needed to balance
the prices of goods, there should be none under either system.
The critical point is that, in a dictatorship, Government spends all
new money into circulation and therefore determines what shall be
produced. We saw that in Soviet Russia., and to some extent in
Nazi Germany, both of which seem to have operated a form of monetary
reform. In a democracy, the public would be given at least
some of the new money to spend into circulation so that they get to
determine what goods shall be produced per economic democracy.
However, in the modern high taxation state, it would be ridiculous
to pass all new money to the public and then simply tax a large
proportion back from them before it could be spent.
It is a pity
if great ideas are made ridiculous by slavish adherence to totally
impractical concepts
Regards. John R.
Date: Tue, 18 Dec 2007 20:03:47 -0500
From:
thomsonhiyu@shaw.ca
To: socialcredit@elistas.com
Subject:
Re: [socialcredit] Re: Article by Richard Cook
(John Rawson wrote:-) So the whole reform
constitutional argument is based on the clause "To coin
money"? It could be claimed logically that, since coinage
was the only form of money then, this was intended to cover all
money?
(Joe replies:-) But it wasn't the only form of
'money' then, John.
(John Rawson:-) I note again your reaction to the
Guernsey story, but you have never given hard facts for your
attitude. So far there appears to be more evidence for
this event than against.
(Joe replies:-) That story was thoroughly vetted on
here, or the predecessor list, quite some time ago. The
''States Notes", if I recall correctly from what was
determined in examining the issue then, were redeemed by
import duties. They weren't 'debt-free' money.
(John Rawson:-) After all, why should anyone invent
such a happening in such an unusual place otherwise?
(Joe replies:-) There was a lot of
propaganda put forth by various 'monetary reformers',
John. BC's own G. G McGeer, a former Vancouver Mayor, who
was later a MLA, a MP, and finally a Senator, was one latter day
one. He was aided and abetted by still others who'd
previously created 'facts' out of fiction to further their own
ends. The myth might grow and grow, but it's still
myth.
(John Rawson wrote:-) And would you argue
that the actions of New Zealand's first Labour Government in
funding much of infrastructure, state housing for homeless, and
the dairy industry with Reserve Bank credit at 1% is a
myth?
(Joe replies:-) They 'primed the
pump' with deficit financing. That's all they
did. It relieved unemployment, and stopped the
deflationary spiral that you were in.
In a deflation it's hard to sell
anything other than essentials, for why would you want to buy
anything today if you felt you could get it cheaper
tomorrow? And when prices have to be lowered below
financial cost to move existing product, there's no inducement
to produce any more.
So your government turned that
around, and when prices started to come up, then there's
an inducement to buy before they go higher. It's a quick
fix, but it doesn't really solve the problem. And when
it's carried on for any length of time you'll get an 'inflation'
that'll negate its benefits. It is a crummy substitute for
Social Credit properly applied.
---------------------------------------------------------------------
Some introductory materials to the discussion topic of this list are at
http://www.geocities.com/socredus/compendium
You're subscribed to this list with the email johngrawson@hotmail.com
For more information, visit http://www.eListas.com/list/socialcredit
Express yourself instantly with MSN Messenger! MSN Messenger
---------------------------------------------------------------------
Some introductory materials to the discussion topic of this list are at
http://www.geocities.com/socredus/compendium
You're subscribed to this list with the email wmcgunn@maxnet.co.nz
For more information, visit http://www.eListas.com/list/socialcredit
---------------------------------------------------------------------
Some introductory materials to the discussion topic of this list are at
http://www.geocities.com/socredus/compendium
You're subscribed to this list with the email thomsonhiyu@shaw.ca
For more information, visit http://www.eListas.com/list/socialcredit
---------------------------------------------------------------------
Some introductory materials to the discussion topic of this list are at
http://www.geocities.com/socredus/compendium
You're subscribed to this list with the email wmcgunn@maxnet.co.nz
For more information, visit http://www.eListas.com/list/socialcredit
---------------------------------------------------------------------
Some introductory materials to the discussion topic of this list are at
http://www.geocities.com/socredus/compendium
You're subscribed to this list with the email thomsonhiyu@shaw.ca
For more information, visit http://www.eListas.com/list/socialcredit
---------------------------------------------------------------------
Some introductory materials to the discussion topic of this list are at
http://www.geocities.com/socredus/compendium
You're subscribed to this list with the email wmcgunn@maxnet.co.nz
For more information, visit http://www.eListas.com/list/socialcredit
---------------------------------------------------------------------
Some introductory materials to the discussion topic of this list are at
http://www.geocities.com/socredus/compendium
You're subscribed to this list with the email thomsonhiyu@shaw.ca
For more information, visit http://www.eListas.com/list/socialcredit
|
Re: Re: Article by
Reply to this message
