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- Govt eyes NZ$1.4b revenue grab 63
- English defends current account blowout 61
- 90 seconds at 9 am 51
- Budget 2012 reactions 45
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Most viewed
Top 10 at 10 to 1: The Lucky Country is too lucky for its own good; The real Fink; Dilbert
Here are my Top 10 links from around the Internet at 10 to 1. I welcome your additions and comments below or please send suggestions for Thursday's Top 10 at 10 to bernard.hickey@interest.co.nz We still have no goats at interest.co.nz
1. Man vs crowd - To his credit Aussie economist Steve Keen is still arguing that the Australian housing market is pumped up by hot air (credit) and will eventually deflate. Virtually no one in Australia believes him. More fool them. He details his case at (enormous) length here. He includes some cracking charts. How lucky can the Lucky Country be before it runs out of luck?
Here he shows just how out of whack Australia is with America.
He also points out the inevitability of debt deflation. It's just a matter of time.
This is why debt-deflation matters, and it's also why we are barely at the half-time mark in the GFC. Though government spending has countered the fall in debt-financed spending to some degree, that fall has only hit 40% of the level that applied during the Great Depression, even though debt levels are substantially higher (relative to GDP) than they were back then.
The process can be countermanded to some degree by the government running a deficit, which counteracts the fall in aggregate demand caused by private deleveraging. But the government deficit would need to be far higher than current levels to return us to prosperity if nothing is also done about the astronomical level of private debt.
With the deficits that are being contemplated today, I expect the outcome to be that the rest of the OECD will "turn Japanese" and enter a long-running, low level Depression. Actions that limit those deficits"“or even worse, force countries in crisis like Greece to impose austerity measures to reduce deficits back to zero"“will turn this from a drawn-out Depression into a sudden and deep one.
Related Topics
So the Australian gambit out of the GFC"“get back into debt as fast as possible"“may soon run its course. We should then find ourselves in the same situation as in the rest of the OECD"“deleveraging. The fact that we are taking the "hair of the dog" approach to a debt-hangover (get drunk again on debt the next morning) is readily apparent in this comparison of Australian and US private debt levels: Australia actually began to de-lever before the USA did, but just as they hit deleveraging with a vengeance, our aggregate private debt started to grow once more.
2. Chinese debt problem? - This is a new one on me. Of all the world's economies, I thought China was the one without a debt problem because of all the foreign reserves it holds and its high domestic savings rate. But apparently not, according to Professor Victor Sikh from Northwestern University who has studied lending to Chinese local government bodies. Bloomberg has the report.
The future of China's growth and how it handles any bubbles is crucial for New Zealand more than ever. Australia is benefiting from China's boom and we benefit from Australia's benefits. International investors are ignoring our own foreign debts of over 100% of GDP because we're right next door to Australia. What happens if a Chinese housing/lending bubble bursts and Australia's housing bubble bursts? Best not to think too deeply about it.
China's hidden borrowing may push government debt to 96 percent of gross domestic product next year, increasing the risk of a financial crisis in the world's third-biggest economy, Professor Victor Shih said.
"The worst case is a pretty large-scale financial crisis around 2012," said Shih, a political economist at Northwestern University in Evanston, Illinois, who spent months researching borrowing transactions by about 8,000 local-government entities. "The slowdown would last at least two years and maybe longer," the author of the book "Factions and Finance in China" said in a phone interview March 1.
Surging borrowing by local-government entities, uncounted in official estimates of China's debt-to-GDP ratio, is the key reason for Shih's concern. Harvard University Professor Kenneth Rogoff said Feb. 23 that a debt-fueled bubble in China may trigger a regional recession within a decade, while hedge-fund manager James Chanos has predicted a Chinese slump after excessive property investment.
By Shih's count, China's debt may reach 39.838 trillion yuan ($5.8 trillion) next year. His forecast for debt-to-GDP compares with an International Monetary Fund estimate for China of 22 percent this year, which excludes local-government liabilities. The IMF sees Spain at 69.6 percent, the U.S. at 94 percent, Greece at 115 percent and Japan at 227 percent.
Chinese officials allowed lending to explode from late 2008 to fight off the effects of the global financial crisis. In 2009, new loans rose to a record 9.59 trillion yuan ($1.4 trillion).
3. Reform there too - The Centre for Independent Studies has released a report called "The Unfinished Business of Australian Tax Reform" which recommends the same medicine suggested by our own Tax Working Group. News.com.au has a cut down version of the report.
"The global financial crisis has strengthened the case for taxation reform," CIS senior fellow Robert Carling said, releasing a paper The Unfinished Business of Australian Income Tax Reform today.
"Boosting productivity growth should be top priority and personal income tax reforms of the right kind will support that objective."
He said policymakers must also seriously consider implementing a dual system where labour income is subject to a graduated scale, while capital income would be taxed at a flat rate. Under its proposal, those earning between $16,001 and $37,000 would pay a 15 per cent tax rate, between $37,001 and $80,000 would pay 27 per cent and above $80,000 would pay 35 per cent.
4. Anatomy of a crisis - The WSJ has done a nice 10 minute video explaining the Greek debt crisis. Worth watching. Lots of juicy detail and colour. The Greeks cry a lot... It seems Greece hid a bunch of debt with swaps to ensure it got into the euro zone. Anyone opening a business in Greece must apply for 49 licenses. The shadow economy is worth at least 30% of GDP. Here's the final warning from the EU's monetary policeman Olli Rehn.
"Either you get your debt under control or your debt starts controlling you." Lessons for us all.
5. The ultimate vicious cycle - So many jobseekers in America now have bad credit records that it has become a problem when employers do credit checks on potential employees. So now a bunch of states are passing laws banning employers from doing these checks, AP reports. Oh boy. This is a country in deep trouble.
State legislators in Illinois and 15 other states have proposed bills to ban credit checks on most job applicants, according to the National Conference of State Legislatures. Hawaii and Washington already have such bans in place.
"We are in the great recession and this creates a vicious cycle," said Maryland Delegate Kirill Reznik, who drafted a bill being considered in his state. "People lose their jobs, that naturally precipitates them getting behind on bills, their credit scores go down, they are trying to find a job to pay off the bills, and employers won't hire them because of their credit score.
Sixty percent of employers recently surveyed by the Society for Human Resources Management said they run credit checks on at least some job applicants, compared with 42 percent in a somewhat similar survey in 2006.
6. Here's a relevant Doonesbury cartoon on Wall St bankers and their ethics. Indicative of a mood of the nation.
7. Worth a read - Vanity Fair does some great long form financial journalism. I'm not sure this piece from Suzanna Andrews is, (because I don't really know that Manhattan-Washington nexus) but it certainly goes into a lot of depth about BlackRock maestro Larry Fink. It seems he helped invent securitisation, but rather than be killed by it, he is now more powerful than ever. BlackRock also has a computer called Alladdin that knows everything about US$9 trillion in funds under management. Sounds bigger than the one in Wellington that was used to make Avatar.
His giant BlackRock money-management firm controls or monitors more than $12 trillion worldwide"”including the balance sheets of Fannie Mae and Freddie Mac, and the toxic A.I.G. and Bear Stearns assets taken over by the U.S. government last year.
But BlackRock's enormous and growing influence and its sheer size"”too big to fail, some say"”has begun to raise questions. "It's like the Blackwater of finance, almost a shadow government," says one senior bank executive, referring to the mountain of government contracts awarded to the firm. Although others"”including the massive California-based Pacific Investment Management Company"”have benefited from the gravy train of post-bailout government jobs, none appears to have gained nearly as much as BlackRock.
8. Problem for Geithner - Could the deal done to take over AIG be illegal? This piece from Washington lawyer and think tanker David Jerushalmi at The American Thinker thinks that maybe it was.
The brute fact that now standing exposed before us is the use of an invalid Trust structure to conceal the unlawful ownership and control over 77.9% of AIG's equity and voting rights by the FED. If Geithner knew he was breaking the law, then this just happens to be the definition of criminal money-laundering under Title 18, Section 1956. Secretary Geithner has some explaining to do to AIG's public shareholders. We suggest that he seek legal advice first -- but this time, from lawyers who actually know what they are doing.
9. Totally irrelevant picture - This is a gummy bear chandelier. Apparently it makes the light very soft... Especially for Roger Thompson.
10. Totally irrelevant video - Remember OK Go? They are the band who did the choreographed one-take treadmill song called 'Here it goes again' They've outdone themselves here with the most amazing domino one-take thing called 'This Too Shall Pass'. Watch to the end. You'll love it. Here's an equally excellent version of the same song involving marching bands. I prefer the music in this one. This is the band that took on its record company about not allowing embeds on its YouTube videos. Looks like they won.
47 Comments
Ah Bernard : And I
Ah Bernard : And I thought that you didn't care . A gummi bear chandelier for me . How sweet . Whatya think Walter , muti-colour , rather than your green light industry . So cool .............Ahhhhhhhhhhhh , yummy !
On a different tack ,
On a different tack , big guy , I heard Cameron Bagrie on RadioLive , with Andrew Patterson this lunch hour . He gave a thought provoking insight into the GFC , and his view of where we'll be in 2-3 years time .
Any possibility of getting Cameron to post an article here ?
It's nice to see the
It's nice to see the "Credit Check" prior to employment being challenged. I would like to see the mandatory drug screening be next on the chopping block. It was getting so bad I was just waiting till people are being denied a job on the grounds of pre-existing medical conditions. Corporations are given too much latitude in the amount of private information they can obtain and dossiers they are allowed to compile about employees. There isn't the same level of privacy scrutiny that exists here in NZ. As a result there is too much mishandling and potential for fraud.
1) further, Steve Keen's explanation
1) further, Steve Keen's explanation of why having debt as a high % of GDP is so bad is really interesting....ponzi scheme for sure...so the Q is why has it been allowed to get so bad? JK etc is a finance type.....surely he must be able to understand the poo we are in and getting deeper in....even if farmer Bill E does not.
http://www.debtdeflation.com/blogs/
"Why Debt-Deflation Causes Depressions"
"8><-------once debt becomes a significant fraction of GDP, and its growth rate substantially exceeds that of GDP, the economy will suffer a recession even if the debt to GDP ratio merely stabilises.
A debt-dependent economy has no choice but to record rising levels of debt to GDP every year to avoid a recession. Unfortunately, this makes a debt-servicing crisis inevitable at some point, especially when a large fraction of the increase in debt is financing Ponzi-speculation on asset prices, since this adds to debt without increasing society's capacity to finance that debt."
Well worth reading for the full explanations IMHO.
@Troy: "There isn't the same level of privacy scrutiny that exists here in NZ", yep, Im forever shocked when I come across aspects of American's lives that I just would not consider part and parcel of NZ life ie as moral or respectable behavior it should not be taking place. The so called "land of the free" seems awfully.....awful at times....
regards
"Gummi Bear Chandelier" Rogie, and
"Gummi Bear Chandelier" Rogie, and it is made in Switzerland - like me - huu.
By the way products of the "Green, Light Industry" can be very, very multi- coloured - real pieces of art matching with nature/ surroundings.
If you want to understand
If you want to understand why China's foreign reserves are not an asset that is useful to them in China read this.
http://mpettis.com/2010/02/never-short-a-country-with-2-trillion-in-rese...
and this
http://mpettis.com/2010/02/what-the-pboc-cannot-do-with-its-reserves/
That china has been allowed to continue building reserves to such a high level for such a long time is the crime of our generation. It's not just China to blame IMHOP this could not have happened without the facilitation and lobbying of Congress by Wall Street and their London cohorts. They wanted to keep playing their destructive games with this easy money as long as possible. Too bad about the possible fall out for the rest of the world.
<b>Walter</b> : Saw many of
Walter : Saw many of them on trip . Hokitika particularly has artistic talents ( glass-blowing / jade / gold / etc. ) . Enthralling for the tourists . Anecdotally I'd say more German visitors than Asian . Many bus-loads of Australian's too . One grizzle I had was that a feature , the glass blowing , had no one demonstrating the art on weekend . They work Mon-Fri & no public hols . Not in the spirit of entertaining and pocket-picking our guests . Also Ross was closed up early on a Saturday . In winter one could understand this , but in summer , at the peak of the tourist boom , we ought to cater more to their desires .
A bouquet to the Haast Information Centre : Superb building / parking / friendly staff / museum / displays ! Brilliant .
Yes, we like Hokitika too
Yes, we like Hokitika too - lovely "DriftwoodBeach" - very inspiring what nature creates -great place to stay for a few days.
It would be great having an annual 3 days meeting with artists and politicians in Hokitika, so each party could learn and understand each others. That would help to make changes in our economy. We use to do that in Switzerland Artists meet Managers a real inspiration.
I think the next 6 months and beyond are going financially very hard on artists "“ not enough sales.
Just to record Steve Keen's
Just to record Steve Keen's predictions....
"With the deficits that are being contemplated today, I expect the outcome to be that the rest of the OECD will "turn Japanese" and enter a long-running, low level Depression. Actions that limit those deficits"“or even worse, force countries in crisis like Greece to impose austerity measures to reduce deficits back to zero"“will turn this from a drawn-out Depression into a sudden and deep one."
So if there is a global austerity measure we will certainly dive into a "deep one" so if the US GOP insist on austerity measures at home....that would seem likely to send the USA into a "deep one".....a hole of their own making....which would I assume drag in the rest of us.
This wont be a black swan event....it would seem to logic and maths is well understood...and foretold...
regards
"I think the next 6
"I think the next 6 months and beyond are going financially very hard on artists "“ not enough sales."
Just six months?
regards
re artists....agree, there will not
re artists....agree, there will not be much left over in the average budget for purchasing
art. Pity, as making beautiful things is one of the things that distinguishes us from the animal. Lipstick and sad CD's evidently do well in recession/depression. Something small
to cheer one up...hmmm good business idea. Lipstick, heavily pigmented and moist with mutton bird fat.
Well Bernard, I listened to
Well Bernard, I listened to your latest vid and I have too say it was somewhat misleading and mis-informed along with a great deal of assumption regarding any relationship influence we may or may not have with Australia in the eyes of foreign investors. I just don't see it at all like that. Australia are far from ok, they put on a good show BUT the reality of their budget and banking is still funded from large foreign sources. Their bomb just ain't ticking as loud as others.
@justice: According to the RBA
@justice: According to the RBA figure the Aussie banks have $13 bio. of off-balance sheet business.
Tick,tick,tick.....
Just watched BBC World News
Just watched BBC World News business report extolling the wonders of the Aussie economy. lol
Australia has a total of
Australia has a total of one trillion dollars salted away in their compulsory superannuation funds . That inconvenient truth is seldom mentioned .
Coincidentally the mortgage debt across that great land [ girt-by-sea ] is of a similar figure .
Anyone know of the comparative figures for NZ , the accumulated total $ in KiwiSaver , and the total of our housing mortgage debt ? ............. Got a sneaky feeling it ain't a one-to-one ratio .
@RT: Also add in the
@RT: Also add in the Cullen fund $...
but even then...would be interesting to see what they are doing witht he BB bubble...
Roger, found this: http://www.rbnz.govt.nz/statistics/monfin/rbs
Roger, found this:
http://www.rbnz.govt.nz/statistics/monfin/rbssr/rbssrpartE/data.html
Looks like $162 billion residential loans in Jan 2010.
interest.co.nz have it graphed here:
http://www.interest.co.nz/charts/gallery12-90.asp
click on the 'amount' tab.
I'll see what I can find on KiwiSaver etc.
Australia's housing stock is valued around 4 trillion, which makes 1 trillion debt not sound so bad!?? Ours is about 600 billion, so 162 billion debt is a similar ratio to Oz...
cheers
Re: 1&2 Australia's apparent dependance
Re: 1&2
Australia's apparent dependance on China's growth still worries me. The aus economy certainly has broken away from the "pack". Should they be concerned? Or maybe they really are lucky?
Good work <b>Murray</b> . Cheers
Good work Murray . Cheers .
My point to some ( above ) is that as scarey and bubble-like the Ozzie property market is ; that their economy is far better underpinned than ours . And a cool trillion in savings is the kinda underpinning I'd love for us to have .
KiwiSaver looks like just under
KiwiSaver looks like just under 5 billion
http://www.rbnz.govt.nz/statistics/monfin/C15/data.html
Cullen fund just under 16 billion
http://www.nbr.co.nz/article/cullen-fund-struggles-january-drops-2-119025
wee bit short of $162 billion...!
Excellent , <b>Murray</b> ! So
Excellent , Murray ! So as a comparison , Ozzie mortgage debt to super savings is roughly 1 to 1 . NZ figure is 8 to 1 . Guess which is the lucky country !
Love the Gummy Bear chandelier
Love the Gummy Bear chandelier - quite colorful ! Wish I had acdepted tha job offer in Australia in 2004 and bought a house back then !
That music video is fantastic
That music video is fantastic btw Bernard, thanks for sharing.
@RT: "that their economy is
@RT: "that their economy is far better underpinned than ours . "
Is it? look at Steve Keen's work its a fasinating read, its logical, unlike many....what he is saying is OZ is recovering because the Govn is about the only 1 to successfully reverse the debt decline...and quite sharply...this stopped a debt repayment death spiral....it kept confidence high, also without doubt the mineral boom fed to China helped not just with income but consumer confidence....so unlike the rets of the world oz debt started to increase again.
If you accept high govn spending was the only thing to do....I certainly agree OZ did the right thing in how it re-stimulated ie it gave ppl tax refunds and first time buyers $ directly....in that sense it "fixed" the ponzi scheme...
For me however its like shooting yourself in the foot then being the only one to apply a bandage properly so you dont bleed to death.......the reality is you shouldnt having been playing with a loaded gun (debt) and a blindfold (wonky neo-classical economic theory) in the first place.
regards
The saying used to be
The saying used to be that if the US Economy sneezed the rest of the world caught a cold.
If China sneezes then Australia will get pnuemonia
Steven - well put! One
Steven - well put!
One of the interesting things to note about recent times, is the weakness of our trend to specialisation.
Only a keen economist, will have 'genned up' on the Hubbert Curve, E.R.O.E.I., or Ghawar.
Only a keen physicist will have investigated fiat leveraging.
Few of either have read the droll warnings of Prof Albert Bartlett.
Those who have done the lot, number nearly nil - and in terms of our media - totally nil. Nobody is being paid to assimilate the different genre, which leaves it to us amateurs, who (predictably) aren't listened to because we aren't 'experts'.
Universities are the same; mutual respect between disciplines, and yet what's taught in theology and business, doesn't tally with what is taught in zoology, geology and physics. Nobody rocks the boat, nobody has the overview.
That's a 'fail'.
Maybe we're not as smart a species as we (lol) think?
Right then...who's for feeding the
Right then...who's for feeding the Elephant today...at 6%pa it must be at least 10.8 billion div by 365...what's that come to .........$29589041.oo....sheeeeeeeeeit. That's $414246575.oo a fortnight.....$828493150.oo a month....$4970958904.oo every 6 months.....we are stuffed...really reeeeeeally stuffed.
@RT: 9.32pm: "Australia has a
@RT: 9.32pm:
"Australia has a total of one trillion dollars salted away in their compulsory superannuation funds". My concern is, Roger :
Where would you guess that is salted away? Road, brigdes, schools, the ASX ( didn't they get' given' 30% Telstra to get it off the government's other books?), deposits with Aussie banks, CDO's, soverign debt etc... I don't know the mix; but isn't it just like owning a house? Fine if you don't need the cash, but utterly dependent on the value of the asset if and when you do. How many company superfunds have come to grief over the course of time? ( Maxwell's in your industry comes to mind). 1Trillion today is worth what tomorrow if the likes of AIG, RBS, GM can evapourate it overnight?
Hey NA...you don't spose we
Hey NA...you don't spose we could convince the ockers to invest their super loot in Noddyland do you....I mean if we got them drunk first....is it possible???
Fedding the Elephant is set
Fedding the Elephant is set to be a....let's see...250 billion @ 6%pa...that's...holly cow...$15ooooooooo a year just to feed the bugger...every friggin year....who will be doing that?....all the smucks who borrowed the bundles of poo to buy the homes and be in debt to you know who. Oh and all us smucks who will have thieving govt fingers in our pockets stealing the 'govt' share needed to feed the bloody Elephant. Wanna stop the circus ride and get orf?.....gotta pay back the $250ooooooooo. Anyone got any spare cash....I say.....hellooooo
Hi Bernard, what do you
Hi Bernard, what do you think of Steve Keen's numerical example of the effect of no longer increasing total debt every year? Seems valid to me. Any ideas how the numbers look for New Zealand?
Your link, Robert, is answerd
Your link, Robert, is answerd by Wally's above it.
I fear that we have arrived at the point that any addict eventually does. Dead if they stop, dead if they don't.
Wally, Nicholas - is it
Wally, Nicholas - is it that bad?? Residential mortgages total about $162 billion, which would cop an interest bill of about $10 billion per year. Correct me if I'm wrong, but I think there's roughly 1.4 million houses owned by about 900,000 owners. So each owner has an average interest bill of $11,000. Less than half of one minimum wage....
NA- but in this case
NA- but in this case there's no 'fix'. :)
Nicholas A. said....I fear that
Nicholas A. said....I fear that we have arrived at the point that any addict eventually does. Dead if they stop, dead if they don't.
That in a nutshell is it....Globally.... The Greek tragedy plays on ... the players are method acting.... the crowds are in disgusted disbelief... the writers and directors are spurned by thier peers.... the underwriters leap from the windows.... the show must go on...... and all await closure.
On a lighter note ...perhaps the Melbourne community could send money home... or the powerful AUD could form a new currency say something like ...The Astro dollar... that's got a nice ring to it...
@ Murray :So that's about
@ Murray :So that's about $200 mio per week in residential housing loan interest that we are paying? Sound pretty close to the $250 mio per week that the government has to import to keep us afloat. That's the problem as I see it. We aren't earning enough to pay our way; let alone for our housing loan interest. Our assest aren't being used productively; they're all tied up in housing.
Only 1in5 Families spend more
Only 1in5 Families spend more then third of income on debt repayments, which is considered risky, and 0.5% are at very high risk/debt. So, almost 80% of NZ families are not considered to be at any risk due to high level of debt. This according to Treasury report. What's so scary about it?
The boat aint afloat...sinking to
The boat aint afloat...sinking to the bottom...on the way down you will see Key and Co jump ship loaded with booty and knighthoods for doing such a great job. The aim of the game is to make sure the rotten hulk hits the bottom on an even keel..where she can sit and grow weed and coral and be a playground for the fishywishees. SS Noddy will in time become a tourist dive attraction...a dive in the South pacific!
Well done those pollies....thirty years of your greedy stupidity and grossly myopic management...you really did the country well...may you all rot in hell.
Sur Geon Key......that's got a
Sur Geon Key......that's got a lovely ring..!
well Sur Geon could you tell the patient in 45 South he's going to die...
Wally - you'll have to
Wally - you'll have to convert to gummy seahorses.
Alen - Treasury at are the extreme end of the nonsense. Never believe anyone who quotes you percentages as if linear, never listen to anyone comparing us with the OECD, and never listen to anyone who thinks we only have to increase productivity. Efficiency, by all means, but that's a different thing.
I know it's not there in the media - they all quote economists the way mediaeval (notice? media-evil) cryers used to parrot priests.
The problem is doubling-time, scarcity, and finiteness. A good start is to google: Prof Albert Bartlett. Then think a lot.
At this point, all bets are off; we're simply, globally, into uncharted territory. Some - like the Maya - have been here in micro form, but the tablet-scribes seem to get a little incoherent as societies start crapping out. Odd that.
Maya 2012 - I might
Maya 2012 - I might have to find another prophecy/conspiracy theory......
KW- try exponential economic growth
KW- try exponential economic growth ad infinitum on a finite planet.
Who needs more nonsense after that?
I'm joining a sect that
I'm joining a sect that guarantees space travel to Alpha Centauri.... not long now.
Idle dribble from me PDK... ignore.
Off to check the spuds...how long will they keep?
The charts on interest.co.nz suggest
The charts on interest.co.nz suggest that the rate of increase of mortgage debt has gone from about +$18b/year during the boom to +$10b/year now; business credit has gone from +$10b/year to -$6b/year now; agriculture credit (I think this might be already counted in business credit) has gone from +$5b/year to 0.
Following Steve Keen's argument, debt growth was adding $28b/year to the total spending in our economy, now only $4b/year. The drop is about 13% of GDP.
Can that possibly be right?
Correct me if I'm wrong,
Correct me if I'm wrong, but REAL GDP growth, rather than headline GDP is GDP minus inflation. In most countries, including NZ, it has been negative for years, even allowing for the fact that govt's have an interest in inflating GDP figures and minimising inflation figures. Its like owning a business and seeing your turnover growing but your costs growing even faster and your profit going down or going negative. NZ and most other countries have been trading while insolvent for years. When the overdraft reaches its limit and/or the interest payments overwhelm cashflow you're bankrupt.
Steve Keen has made the most sense for years. But like the others who have been warning us for years of the problems of debt, he has been ignored by the financial media. Instead we have to listen to bank economists and the RB, champions of the very industry that is providing the drug. Can someone (hint Interest .co.nz) sponsor him or arrange a sponsor to get him over here for some public debates outside of academia?
Spuds recycle indefinitely if your're
Spuds recycle indefinitely if your're above a certain height - I think it's 800 ft. Below that, they are vulnerable to viruses, and 3 years is the best you should go for, recycling your stock.
Maybe there will be a new generation of folk heading for the hills, planting high and hidden. I can see it all - booby traps and trip-wires, helicopters in the growing season
:)
Wikipedia is useful sometimes! How
Wikipedia is useful sometimes! How can any nation improve if its constantly measuring and comparing the wrong things? Comparing ourselves constantly to Australia or anyone else is futile.
http://en.wikipedia.org/wiki/Gross_domestic_product
Even the Austrians agree:
Austrian economist critique "“ Criticisms of GDP figures were expressed by Austrian economist Frank Shostak.[22] Among other criticisms, he stated the following:
The GDP framework cannot tell us whether final goods and services that were produced during a particular period of time are a reflection of real wealth expansion, or a reflection of capital consumption.
He goes on:
For instance, if a government embarks on the building of a pyramid, which adds absolutely nothing to the well-being of individuals, the GDP framework will regard this as economic growth. In reality, however, the building of the pyramid will divert real funding from wealth-generating activities, thereby stifling the production of wealth.
Austrian economists are critical of the basic idea of attempting to quantify national output. Shostak quotes Austrian economist Ludwig von Mises:
The attempt to determine in money the wealth of a nation or the whole mankind are as childish as the mystic efforts to solve the riddles of the universe by worrying about the dimension of the pyramid of Cheops.
Simon Kuznets in his very first report to the US Congress in 1934 said:[23]
...the welfare of a nation [can] scarcely be inferred from a measure of national income...
In 1962, Kuznets stated:[24]
Distinctions must be kept in mind between quantity and quality of growth, between costs and returns, and between the short and long run. Goals for more growth should specify more growth of what and for what.