Kiwibank: Its all ours
October 20th, 2008New Zealand is fortunate to have its own state backed (sort of) bank in Kiwibank. Promoted by Jim Anderton (who quietly understands the money system) it has come centre stage in the recent financial crisis.
With its NZ Post guarantee it had attracted huge funds from worried savers over the last 12 months. Now that all bank deposits have been guaranteed it is perhaps less attractive. Until today.
Winston Peters, the enfant terrible of NZ Politics, today proposed that Kiwibank handle all government business.
What a great idea. Why continue to pipe $4lbn odd in profits to the Australian banks?
Having domestic control of your monetary system is an absolute prerequisite for a properly functioning sovereign state.
Colonial invaders always replaced the local currency with theirs as soon as local administration was in place. Currency issuance is all about control.
If someone else is in charge of your money then you have limited control over the functioning of your economy.
I suggested in June 07 that the RB use the opportunity of the high NZ$ to buy as much foreign currency as possible whilst the market was hungry for NZ assets. Now with the NZ$ around 0.60 and our overseas borrowing binge fully exposed, the situation is less than favourable.
The lessons of Iceland show that sovereign control of the money supply is essential and as part of that a strong domestic banking system is a necessity.
Tags: banking, credit, financial crisis, kiwibank, money, new zealand
