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DSC lodges complaint over grossly inaccurate TVNZ news item

14 July 2014

DSC lodges complaint over grossly inaccurate TVNZ news item

“A section of TVNZ’s 6pm news bulletin last Thursday about bank profits was a disgraceful piece of inaccurate and misleading reporting,” Democrats for Social Credit (DSC) Leader, Stephnie de Ruyter, said today. The piece has prompted a complaint to the Broadcasting Standards Authority and the Online Media Standards Authority.

The latter part of the item purported to show how banks make the majority of their profit by taking in money from depositors and lending it out at higher interest to borrowers.

“Not only was the graphic portrayal and accompanying commentary misleading but it was so grossly inaccurate as to call into question the competency of the programme’s producer and the Head of TVNZ News and Current Affairs.

“Banks do not make their profit by taking in money from depositors and lending it out at higher interest to borrowers. In fact they lend out money created out of thin.

“It’s not as if that fact is unknown. And recent reports have highlighted that fact even more.

“In August 2012 the International Monetary Fund published a report titled “The Chicago Plan Revisited.” The report got wide coverage in newspapers and other media.

“On page 11 it clearly states “private banks are almost fully in control of the money creation process.”

“On page 9 it states ”A realistic model needs to reflect the fact that under the present system banks do not have to wait for depositors to appear and make funds available before they can on-lend, or intermediate, those funds. Rather, they create their own funds, deposits, in the act of lending. This fact can be verified in the description of the money creation system in many central bank statements.”

“The Bank of England in its quarterly bulletin for the first quarter of this year confirms this - “the majority of money in the modern economy is created by commercial banks making loans. Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits.”

“And the Reserve Bank of New Zealand (Bulletin, Vol. 71, No. 1, March 2008) states “In a modern economy, money can be created either by the central bank (the Reserve Bank, in New Zealand’s case) or by private sector institutions – in practice, mostly registered banks. In practice, by far the largest share of money – 80 percent or more, …is created by private sector institutions (banks).”

“In almost every statement it has issued on economic matters in the past 12 months, the Democrats for social credit party has quoted these reports and has provided the links to them.

“TVNZ’s own Seven Sharp Programme in April 2013 featured the IMF report, and economist Shamubeel Eaqub - quote “This is what you learn in first year economics at university, this is how banks work and there is no great mystery to it” and former London banker Raf Manji – quote “the primary cause of the financial crisis was the fact the authorities had not restrained the ability of the private banks to issue and create the money supply”.

“TVNZ should apologise for its inaccurate reporting and devote at least the same amount of time, at prime news time, to a description of the truth – how banks make the majority of their a profit by creating money out of thin air and lending it to house buyers and businesses.”

The IMF report can be found here:- https://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf

The Bank of England Q1 Bulletin can be found here:-
http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q102.pdf

Reserve Bank of New Zealand (Bulletin, Vol. 71, No. 1, March 2008) can be found here:-
http://www.rbnz.govt.nz/research_and_publications/reserve_bank_bulletin/2008/2008mar71_1lawrence.pdf

ENDS

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