Articles by Frank Greenall
Frank has a Masters in Adult Literacy/Numeracy and N.C.A.L.E (NZ), both Educational and Vocational. He has written several books and has had a long career in the arts and media, including freelance writing and cartooning. He is a regular columnist for the Wanganui Chronicle.
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Making a mint out of interest
April 27th, 2017
Recently, rugby star Sonny Bill Williams' anti-BNZ logo gesture has invited a closer look at the role of banks and usury in contemporary society.
NZ Herald contributor Bryan Gould was one to take an interest.
Now Gould's no economic slouch -- a Kiwi by birth, he ended up in Britain
In his comment last week, he referenced deregulated banks' ability to create money for loans and mortgages "out of thin air", allowing banks to increasingly clip the interest ticket, and helping fuel such dynamics as housing booms.
That's not to say these loans are not without fiduciary obligations on both parties. Unfortunately for the borrower, though, the loan may not be repaid in the same currency - namely, thin air - in which it was created.
Governor of the Bank of England, Sir Mervyn King ruffled establishment feathers in the City by publicly conceding what many other contemporary economists similarly assert -- that banks create money the instant they action a loan.
The loan is entered as an asset in the bank's ledger, while the same amount is simultaneously entered as a deposit (in the same customer's name) in the ledger's liabilities. In other words, banks have no need to wait for customer deposits to roll in before lending out - deposits themselves are created by nifty double-entry book-keeping every time a loan is made.
Although certain legal constraints may apply, this is all mainly done with electronic entries in the bank computer.
When - and if - the debt is finally discharged, the "money" disappears as though it never existed, and, in the meantime, the bank has handsomely clipped the ticket with unremitting interest charges..........
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Milksops captives to banks
July 11th, 2019
We’re big on trumpeting our mainly grass-fed dairy herds – the most efficient in the world, and all that - leaving aside for the moment the wee matter of serious downstream water and soil degradation.
Dairying rolls us in the clover when it comes to export sales: it’s our champion, our dollar machine, our sugar daddy. Yet we have the flagship of one of our major dairy producing areas on the verge of being flogged off into foreign ownership - overwhelmingly voted for by the farmers themselves!
Westland Milk Products has apparently turned sour. A cash cow gone terminal. How so?
Well, it’s complicated, but successive management regimes seemed to be a sandwich short of a picnic when it came to certain strategic decisions.
But a constant factor in the mix was the highly expensive cost of borrowing from off-shore banks to finance company operations. Bank executives naturally wish to be maintained in the manner to which they’ve accustomed themselves. But what the heck was Westland Milk Products doing borrowing off them in the first place?
NZ First’s Winston Peters and Shane Jones and Labour’s Damien O’Connor have tut-tutted about ownership of this key infrastructure going off-shore, but the only intelligent take I’ve heard on the whole affair has come from Chris Leitch, Social Credit Party leader...........
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Banking on a miracle
April 20th, 2017
It seems very appropriate that the master of the off-load -- Sonny Bill Williams -- has pulled a big off-load on the banks by taping over the BNZ logo on his Blues jersey.
As Chronicle editor Mark Dawson observed in Monday's editorial, perhaps he's doing us all a favour by reminding us what banks are ultimately all about - - making money off debt, the bigger the better.
This is the very dynamic which came within a whisker of bringing the whole financial system crashing down around everyone's ears just a few years ago.
Usury is a rather conflicted term, these days usually referring to charging exorbitant interest on loans, but in days of yore often applied to charging any degree of interest at all.
With Easter just past, let's not forget that just a week before the events that kicked the whole resurrection thing off, Jesus was kicking the moneylenders out of the Jerusalem temple for clipping the ticket on their little transactions.
Luckily for our modern New Zealand banks, the Son of God doesn't appear to be monitoring their activities, which are essentially the exact same by nature as the original temple tellers.
The bank only holds a small proportion of the original deposits in cash, but is allowed to make loans worth many times more than these deposits at the mere press of a computer button.
Incredible as this notion may seem, it can be easily proved by all the customers of, say, the BNZ, turning up tomorrow and wanting their deposits paid out in folding stuff.............