13/03/2024
The Financial Industrial Complex
In a speech of less than 10 minutes, on January 17, 1961, President Dwight Eisenhower delivered his political farewell to the American people on national television from the Oval Office of the White House. Those who expected the military leader and hero of World War II to depart his Presidency with a nostalgic, "old soldier" speech like Gen. Douglas MacArthur's, were surprised at his strong warnings about the dangers of the "military-industrial complex."
So along those lines let me use the same warning of the “Financial Industrial Complex!” You might be aware that in the last few weeks so many articles has been popping up about the Reserve Bank of New Zealand might or will increase the official cash rate again to contain inflation. As if New Zealanders have not had enough bad news and been experiencing a down trend in every sector. This news of a possible rate increase is the proverbial kick in the guts . But the question I have is what is the present government doing to help curve the fear and provide some hope to New Zealanders. People no doubt will face some difficult choices in the next 6 months to next year regarding their mortgages and loans on how they will be able to afford let along pay for it. Most councils in the country are increasing rates and if you noticed we had a major increase in electricity and water bills lately. So much for the 3 Waters saga and its pending repeal. What hope can we expect that things will definitely change for the better?
The Reserve Bank needs to do some soul searching about another increase. Its desires to control inflation might just be the very straw that breaks the camels back for many already suffering and even almost to be homeless Kiwi’s.
Desperate times requires desperate measures and our government need to pull all stops to solve this family killing move if the official cash rate does increase to place that will not only kill
Market confidence but destroy the very lives of those it was trying to protect. My plea is that the Reserve Bank not increase the offical cash rate and the government be brave enough to lower taxes to help stimulate our economy. It is a gamble, but what is the alternative, increase the water table and watch people drown?!
The government need to be austere, meaning our MP’s need to set the example by taking a pay cut and look at wasteful government spending that had supported pet projects that is sucking the life out of our economy. Their move of getting people back to work is going in the right direction, addressing also generational dependency on an already failing social welfare system.
It is showing (The National Government) some boldness but not bold enough to address high interest rates on credit cards and the possible proliferation of loan sharks that many might venture to in very hard times.
Maybe the government will be so bold to take out gst on basic commodities like milk, bread, eggs, etc! To at least on the
Interim to help in mitigating family needs to put food on the table.
And lastly to begin to explore our own energy sector to begin to mine existing sites and actively look for new ones. In case war (WW3) breaks out I wonder if NZ has enough fuel reserves to last a year or two, that is the kind of boldness we need! This kind of moves help mitigate fear and provide hope.
President Dwight Eisenhower warned in 1961 about the military industrial complex and if we are students of history we find the connection to the Financial Industrial Complex, that in this inflationary environment most banks are reporting record profits. How can this be? We suffer, while the banks records major profits, how does that compute!
Look I am not an economist and I will not pretend to know the answer, common sense dictates to ask the right questions and my hope is that somehow we shall arrive to the truth. Because the Truth shall set us free!