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I don't know about Russian debts, John, but so far as I'm
aware, the fall of Communism hasn't greatly improved the methods of
operation in the Russian lumber industry. Old habits die hard,
apparently, and their lumber industry is still ''badly
worked''.
Considerable used, and generally obsolete, lumber
mill machinery has been exported from BC to Russia in recent years. I think
China is the main export market for their Siberian lumber, while
Japan still takes their logs. I don't believe there's been very
much imported into North America from Siberia to
date.
There is a tree parasite, a type of gypsy moth,
so I understand, that infests much of their Asiatic forests. And a
considerable concern that this pest might enter N.A. via Russian logs or lumber
and get into our forests. I've read there are some rather
expensive treatments that have to be applied before entry of their forest
products is permitted.
The situation may be a bit different in some of their
former satellite countries. Latvia, for instance, exports pine
lumber to the US, and is more up to date and business oriented in
their milling operations.
Regards,
Joe
----- Original Message -----
Sent: Saturday, December 22, 2007 5:10
PM
Subject: RE: [socialcredit] Re: Article
by Richard Cook
Interesting point on Russia, Joe. Prices for export logs
here are "the pits", presently attributable to USA housing decline. But
before that a drop appeared to be due to a lot of Siberian lumber coming out,
probably simply wastefully cleared. One could construe that the debts
Russia has accrued since the change from Comunism have resulted in a repeat of
a former situation?
Regards.
John R.
Date: Sat, 22 Dec 2007 09:46:04 -0500
From: thomsonhiyu@shaw.ca
To:
socialcredit@elistas.com
Subject: Re: [socialcredit] Re: Article by
Richard Cook
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.
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