03 June 2010

Two days of public hearings jointly held by the Standing Committee and the Select Committee of Finance have vindicated Prince Mangosuthu Buthelezi's misgivings on the nature and functions of the South African Reserve Bank, as well as my critical stance towards this dubious, secretive and deviant institution.

Public inputs reported and substantiated the widespread collapse of corporate governance, which was corroborated by an independent corporate governance rating agency. Allegations also emerged on the possibility that the Reserve Bank has transferred South African gold to the UK, generated its huge losses in order to absorb losses within the banking system, and used different parameters to favour wealthy and powerful clients when administering the Exchange Control Act.

The problem is that all the SARB's operations are conducted within a black box which escapes political accountability, public transparency and judicial review. The SARB operates above and beyond the law, as if they were the law.

The Bill before Parliament does nothing to redress this fact and, according of all considerate public submissions, increases rather than mitigates the problem. It will have the practical effect of packing the Board with people with no specific skills or understanding of the immensely complex modern money mechanics, while taking all the powers away from such inflated Board to move them into the hands of the Governor and a few members of staff operating within the impenetrable black box.

The Bill does nothing to address the issues raised during the public hearings relating to the independence of the Bank, not so much from Government, but also from the bankers and the international money trusts. Who does the SARB serve? The bankers or the public interests? This issue remains unaddressed and neither Government nor Parliament nor public opinion has any means to open the black box and see what really goes on in this institution which in its total discretion determines our money supply.

During the public hearings another fundamental issue already raised by Prince Mangosuthu Buthelezi was brought to the fore; why can't the Government print and use its own money? Why should we only borrow at an interest and use somebody else's money, namely the bankers' money in the form of banknotes? Why do we need to borrow money from the bankers rather than issuing Government notes from the Treasury as it has been done in many prosperous times of both recent and less recent history?

If the Government has no limits in deciding how much it can borrow, why should it not have the power to print any money it uses? Why should the country not own its own money? Why should money be debt-based and produced within the banking system at its own discretion, to the point that 95% of money is not even paper money but electronic money created within the Reserve Bank system? The public hearings pointed to the different direction of sound debt-free money issued by the Treasury rather than borrowed from the banks at an interest.

All these questions are not even touched on by the Bill before Parliament and must be brought onto a much larger debate for they are the questions of our age, on the resolutions of which hinge mankind's hope to emancipate itself from its perpetual enslavement under the present monetary system.

Contact: Dr Mario GR Oriani-Ambrosini MP, 082 556 0240.