Money printing

The current situation where the Government is dependent on Adrian Orr printing money so that it can be thrown at every hole that appears in the fabric of society now has a name. The

Cronification of the Proletariat. Most of us would have suspected that each elected government has a bunch of cronies hanging on their shirt tails looking for handouts. Now 60 per cent of us are dependent on handouts to keep our jobs and living standards, and many businesses are looking at low or no interest loans to stay afloat. This process has created a whole bunch of cronies that are going to have to be managed very carefully.

If the Government decides that it is simply too expensive to keep kicking the can down the road until after the election then their popularity may well plummet. But paying for all this can kicking is going to hurt someone sometime. The dollars used are either borrowed or printed. Nobody got out of bed and created something to back up all this new money so there is no wealth backing it. That means we have more dollars spinning around but the same amount of goods. The classic definition of inflation. If the velocity of money slows enough then inflation can be held at bay but that would mean that some of us are going to miss out, creating another hole in society’s fabric which the government is going to have to fill by borrowing and printing. The dots have formed a circle which we know, has no end. Breaking that circle is, if history is our teacher, an extremely painful experience.

Especially for those that are already scraping the bottom of their respective barrels.

Geoff Orchard, Ohaupo