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Opinion: Deliberate US$ devaluation causing mounting global imbalances
By Neville Bennett In the last week two iconic manufacturers, within 5 miles of my home, have closed. These were NZ's only tire manufacturer and famous outdoor goods provider. They were victims of a high Kiwi dollar. They are not isolated examples but part of a virulent hollowing out process. The Kiwi has flourished despite official attempts to talk it down as well as poor fundamentals. New Zealand's woes are shared by many other countries. I started to write this column on Britain's current difficulties but when I researched the nature of its unemployed, the penny dropped; manufacturing was its largest casualty too. While most countries cause their own problems, a large part of the global malaise is caused by the US's selfish devaluation, which coupled with the pegged Yuan is causing mounting imbalances. Global trade is withering too and protectionism rising. Britain's Woes
Italy has overtaken the UK, making Britain the world's seventh largest economy (the Poms are suffering the cost of contraction for six consecutive quarters). There were declines in manufacturing and services, especially in distribution, catering and hotels. The economy has contracted 5.9% from its pre-recession peak. Government debt is projected to rise to ₤1.4 trillion, approximately 80% of GDP. Many British problems are self-inflicted, but the unemployed show that global context is adverse too. Contrary to received wisdom, financial services and white collar jobs have held up better than blue collar. Manufacturing has lost a massive 8.5% of jobs, financial services only 3.8%. Rather unexpected initially, the number of men in work has fallen by 3% because blue collar jobs are down. Women, who are disproportionately in education, health and government suffered only 0.8% more unemployment. The Midlands and Northern industrial areas are the worst hit areas. The UK is unlikely to grow even by 1% in 2010. I believe this implies further difficulty for the UK and NZ in creating jobs, while halting the haemorrhage in manufacturing jobs and battling improving terms of trade. Aviation Aviation is an excellent indicator of the real economy. IATA reported that August was slightly better than July, but traffic was down 1.1% y-o-y and freight 9.6% down on a year ago. International freight is still 16% below April 2008 when business slumped. Average fares had fallen about 20%. IATA's CEO said demand was improving "but profitability remains ever distant". The Asia-Pacific region was improving, boosted by massive government and central bank stimulus packages and fewer problems with consumer debt or bank balance sheets. Asia-Pacific has 44% of global freight, and is still down 9% on a year ago. Global Trade Down Global trade slipped in August revealing that the recovery is fragile and not necessarily gaining momentum. The Netherland's announced that global trade volumes fell by 2% in the month since July, and 13% compared to the previous year. The recession is hurting exports of countries like Japan, Germany and the UK, and has sparked some protectionism. The fall has occurred despite world leaders making more trade finance available. The IMF expects a fall in global trade of 11.9% in 2009, and modest 2.5% growth in 2010. Global imbalances are blamed for hindering growth. It is now commonplace for world leaders to call for the US to reduce is deficits and for Asian leaders to revise their currency and reduce their emphasis on exports: they are encouraged to develop their welfare and pensions systems rather than pile up surpluses. This situation is not easing: the US is adding to its deficit and China is letting its currency depreciate. Competitive devaluations: Yuan The Yuan is essentially pegged to the depreciating dollar. China's unwillingness to revalue its currency is causing harm around the world (including NZ and UK) because its increases competition to their exports and domestic producers. Its Asian neighbours like South Korea, Thailand and Malaysia are suffering. China's neighbours are at a critical juncture. To remain competitive against the Dollar and Yuan, their central banks have built massive reserves in US treasuries, but their reserves have been devalued to pre-crisis levels by the dollar's junking. At the same time the US, IMF and World Bank have been hypocritically urging them to allow their currencies to revalue, and to reduce their export focus by spending more domestically. It is unrealistic to expect these countries, in fragile recovery mode, to make sacrifices when no one else is. Since its March high, the US$ (and the Yuan) have fallen 24% against the Won, 10.4% against the Singapore dollar, 7.7% against the Baht, and 9.3% against the Ringgit. The Koreans, Thais and Taiwanese collective reserves are at an all-time high of US$ 720 bn. (China has US$2.27 trillion). Currency is part of imbalances There is a fallacious doctrine of immaculate transfer: that exchange rates have nothing to do with international imbalances. With a little help from Paul Krugman's blog, I will show that exchange rates are causing universal problems. Krugman's unacknowledged motive is to justify a devaluation, which, as the high priest of stimulus spending, he prefers to any inconvenience to the US public, especially its workforce. He says that increasing US exports would require one of three things: "(1) deflation in the United States (2) inflation in the rest of the world (3) a depreciation of the dollar against other currencies. Leave (2) aside, on the grounds that central banks will fight it. Then the choice is between (1) and (3)." He dismisses deflation as "hard (ask Spain), because prices are sticky in nominal terms". So "to narrow international imbalances, we need a lower relative price of US output"¦.by far the easiest way to get there is dollar depreciation". He acknowledges that otherwise "US relative wages, has {have} to fall". Krugman is part of the US policy elite which is playing its usual unilateralist game of putting its national interest ahead of the global good. The depreciating dollar is part of the international problem of imbalances. I began by suggesting the UK is the canary in the mine. Despite stimulus, its growth is faltering. My up-to-date data from Holland and IATA shows a precarious recovery, and one in which the devaluation of the US dollar and the Yuan is wreaking destruction, especially to manufacturers. I also believe that devaluation is a deliberate ploy. Ben Bernanke, Great Depression scholar, knows devaluation had good results for the US in the 1930's. ____________ * Neville Bennett was a long-time Senior Lecturer in History at the University of Canterbury, where he taught since 1971. His focus is economic history and markets. He is also a columnist for the NBR where a version of this item first appeared. neville@bennetteconomics.com www.bennetteconomics.com
49 Comments
Neville whilst I don’t necessary
Neville whilst I don't necessary disagree with many of your points a couple of observations the Bridgestone factory has been loosing money for years they have been quite open about this. No developed nation has ever gotten rich through devaluing its currency. All countries act in their own interests so the US is behaving just like everybody else. Yes things are bad in Europe and the UK the polices haven't worked any more than they did for Japan.
Neville : As ever ,
Neville : As ever , it is a treat to read your article . Now , we have always known that the US is the proverbial 800 lb. gorilla standing in the middle of the path . Question is , how to develop unique policies for us , in NZ , to mitigate fall-out from their shenanigans . A kind of neutral " Swiss of the Pacific " approach has been mooted . With China locked into a Chimerica embrace with them , many of us small fry risk being tsunami'd by whatever befalls them . Not good enough . We need like minded countries , and smart technologies , to develop niche industries . We need them to need us . But how ! ............ I have over-extended my brain cell....... Must sit under tree.........bag of gummy bears..........yummmmmmmmm .
I was just reading this,
I was just reading this, looks like we are not alone.
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/28/AR200910...
Europe looks to be in a tricky place
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6461568/...
AndrewJ - did you see
AndrewJ - did you see this response to the article:
"What we're currently seeing in the UK is a property boom based on 0.5% base rates ( yes I know it doesn't feel like any previous boom but a 0% increase YOY (to quote the great leader)is better than the 20% decrease we should be seeing)once base rates return to 'normal' say 5% watch those house prices fall.We're currently living in a fantasy land where huge amounts of tax payers money is being used to support the system it can't go on."
Yikes, "normal" is 5% - what will happen to our housing market here when our interest rates reach double that???
They may not have to
They may not have to rise that far, veedub. The Powers that Be issued warning after warning a few years ago that they would " do something about lack of competition to Telecom". - No ! They wouldn't dare! It's our largest and most widely held stock. Mums and Dads have their retirement savings tied up in it etc...And as we know ,THEY DID. It caused significant loss of faith and wealth.
Seems to me that the same sort of 'grace period' is coming to an end re tax reform, and that may head off the need to pump up interest rates.
veedub, look at what Stoneleigh
veedub, look at what Stoneleigh is saying. Interesting graphs
http://theautomaticearth.blogspot.com/
Credit bubbles are inherently self-limiting, proceeding until the debt they generate can no longer be supported. We have already passed that point and we are now two years into a contraction phase that is about to accelerate. As the aftermath of a credit bubble is typically proportional to the scale of the excesses that preceded it, we should be in for the largest economic contraction for at least several hundred years, and it will be global.
Real estate, which is a major focus of the mania, should do particularly badly in the coming years (in fact the coming decades or longer). There is still so much deleveraging ahead, and so many danger signals, such as the scale of the coming interest resets on US mortgages between now and 2012 (below). While the subprime resets are ending, Alt A and Option ARMs are just beginning.
Unlike inflation, which divides the underlying real wealth pie into smaller and smaller pieces, credit expansion creates multiple and mutually exclusive claims to the same pieces of pie. Once a credit expansion reaches its maximum extent, and contraction begins, these excess claims begin to be extinguished.
Unfortunately, the leverage is such that there are probably over a hundred claims to each piece of pie. While contraction begins slowly, as is the nature of positive feedback loops, it picks up momentum until a cascade point is reached, whereupon one can expect the excess claims to be extinguished in a rapid and chaotic process. This amounts to a rapid collapse in the supply of money and credit relative to available goods and services, which is the definition of deflation.
The scale of the problem has been temporarily concealed by a market rally and the shovelling of tens of trillions of dollars of taxpayer's money into a giant black hole of credit destruction. This has done nothing to reignite lending, but the temporary (and entirely irrational) resurgence of confidence has restored a measure of liquidity. As that confidence evaporates with the end of the rally, that liquidity will also disappear
Banks hold extremely large amounts of illiquid "˜assets' which are currently marked-to-make-believe. So long as large-scale price discovery events can be avoided, this fiction can continue. Unfortunately, a large-scale loss of confidence is exactly the kind of circumstance that is likely to result in a fire-sale of distressed assets. The structure of the credit default swap component of the derivatives market makes this very much more likely.
Neville - like yourself I
Neville - like yourself I too live in the ChCh area and I was very disappointed to read about the hundreds of manufacturing jobs lost in this area in the last week. Over the last few years I am experiencing an increasing sense of deja vu since I am emigrated to ChCh from an industrial city in the North of England in the mid 90's. The main reason that I moved from my place of birth was the massive loss of industrial employment caused by the closure of both steel works and coal mines. This led to a big drop in community spirit and a huge rise in criminal activity.
How ironic that at the same time that hundreds of relatively low paid workers in ChCh lost their jobs that the City Council announce that their CEO was given a $75,000 pay rise.
Andy Rodgers - The ChCh
Andy Rodgers - The ChCh council employs 3500 people, an 8% increase would be enough to replace the jobs lost at bridgestone. This number of employees deserves a well paid CEO.
@AndrewJ thanks for your comments
@AndrewJ
thanks for your comments and links, which I appreciate and enjoy reading.
Regards
I should comment more on
I should comment more on the ChCh council. I suspect the biggest employers in ChCh goes something like this
1 Health board
2 Council
3 Education board
4 Regional council
Is their anything wrong with my list???
Which Board does their property
Which Board does their property investment porfolio get managed by?! Oh....Maybe the Electricity Board, like the Dunedin City Council....
AndrewJ : Yaaaaaaaaaaaas : Spot
AndrewJ : Yaaaaaaaaaaaas : Spot the private enterprise .......... Oh dear . A socialist state we are . Jeepers !!!!!!!
yee god's, I forgot dept
yee god's, I forgot
dept social welfare and DOC
AndrewJ replied" The ChCh council
AndrewJ replied" The ChCh council employs 3500 people, an 8% increase would be enough to replace the jobs lost at bridgestone. This number of employees deserves a well paid CEO."
Andrew - it seems that your solution to replace the many jobs lost in the private sector is for the local council to increase its staff pro rata. With regard to a well paid CEO I certainly don't think a 22% pay increase in the current economic climate is appropriate.
Andy Fortunately I live outside
Andy
Fortunately I live outside the ChCh council rating district or I would be seriously pissed, instead Im winding ChCh ratepayers up ;-)
This is all becoming as
This is all becoming as much an obvious piss take and a commercial pyramid scam as Brian Tamaki's Destiny Church. I have had enough of procrastinating. I believe those that suggest there is time to wait until the next election to act, are wrong, I believe this National/ACT tag team will have used what they refer to as the " global syncronised debt crisis" to say we have no choice but to sell everything, privatise everything before the next election is held. I believe they dont give a flying toss if they get elected again, as their agenda will be complete and irreversable under the imposed regulations of the International Financial Institutions they have been taken in by or fully co-operate with. And, where will you find those responsible for our total economic incarceration, working for those they assisted to own us, thats where.
Time is of the essence to head off their sinister intentions.
The Captains of industry have had a " job summit", the "entrepenuers" have had a summit. I think it is about time the non-commissioned accademics or commissioned accademics that have a good knowledge of international banking and commerce get together and see if they can come to sufficient enough consensus that will allow us to mobolise to attempt to stop them returning New Zealand,which was one of histories greatest opportunities, once again into an overt caste class system of slavery. Tackle the debt monster!
Lets name a date for the Monetary Reformers Summit and see what comes of it, what ever will be will be?
Before x-mas or after x-mas?
How many days?
Venue, we have a lovely little cheap venue in Stratford, Taranaki called "Pioneer Village" which is a great slice of NZ history and somewhere I thought would be very apt for such a forum. Or, I am prepared to go where ever it takes, where ever a majority of declared participants think more suitable?
Anyone with adequate time to organise, if not I will volunteer?
How about a list of interested persons and suggestions right here, right now. I say its fast approaching the time of "speak up or forever hold your peace"
Despite what we are led to believe there are tried and tested alternatives to the status quo.
Iain - the only place
Iain - the only place for a concerted demonstration for Monetary Reformers is on the steps of Parliament. I think the idea would be to throw yoghurt at it, in commemoration of the Icelandic tradition once they were taken over by the IMF.
Visibility and civil disobediance is what you need - take a leaf from Hone Harawera's book.
The demonstration should be organised by NZMEA - if it's on - I'll see you in Wellington!
The comments from non-US places
The comments from non-US places that this (USD devaluing) cant go on are farcial IMHO...I take my indications from those that say it will devalue by 50%...I think its in-evitable....so to me businesses should have exit strategies ie close down, or export elsewhere or manufacture elsewhere etc etc...its pretty obvious that nothing can be done to contain the NZDs rise in the present situation...and probably for the long term....
Iain & Kate, Couldn't agree
Iain & Kate,
Couldn't agree more. Will get in touch with you Iain to see how I can help in my own small way with organising something like this!
By Neville Bennett "While most
By Neville Bennett
"While most countries cause their own problems, a large part of the global malaise is caused by the US's selfish devaluation,......."
Any of you guys actually listen, or read the US presidential Oath of Office?
It is ALL about THE US and THE US people, and to serve them in THEIR interests...
IF the US president does anything in international interests , another country's interest and it has a detrimental effect on the US people....like global warming, nukes, international fiscal crisis, entering a war, starting a war, any war...... the guy will get impeached.
The US because of this is just as Neville describes "selfish" that is the the constitution of the USA.....
About time people woke up to the reality of THE major world leader...and how and why it operates.
Kate, Treasury and the RBNZ
Kate, Treasury and the RBNZ are right across the street from each other, great place for a visible protest to inform some people of what they dont know.
See you online tommorrow night,
See you online tommorrow night, I have to get back to shearing my flock( 6 ) sheep for the very first time, thus it is taking quite a bit of time and effort, but nothing comes without hard work first, atleast for those of the realsector, not those that create credit out of freshair and lend it down the food chain at interest.
Cheers
Kate & friends--Sally & I
Kate & friends--Sally & I flew up from Invercagill to take part in the Fart tax Rally and are looking forward to your proposed Rally but think we might be in Australia for a while.
I will try and come,
I will try and come, not like tired farmer, I mean its not like Australia is the other side of the world. What shall I bring motorcycle helmet, Spray cans, some beer, Barbecue, Chops or steak? A friends ID maybe important.
I hope we were not
I hope we were not hoping to borrow the 40 billion from this lot.
http://money.cnn.com/2009/10/30/news/economy/fbop_failure/index.htm?eref...
Sore-loser : If you don't
Sore-loser : If you don't start shouting , I , as sure as hell-fire , will ! We don't have to borrow $ 40 billion If Bill and Jelly Key weren't so enamoured of following Michael Cullen's policies , we would not have such a mountain of debt , and debt repayments , facing us !
Kiddies : We are living beyond our means ! The " premium service " of healthcare / pensions / rail-way sets / air-lines / etc cannot continue . We will go bankrupt fast . Gumnut gotta cut its' cloth to suit the times . And this ain't no golden age . Scale back your expectations folks , no one wants our milk , and Jim Anderton allowed varroa mite to run loose in the nations bee-hives . Land of milk & honey ? Land going down the dunny !
Roger's point is quite valid.
Roger's point is quite valid. Trouble is, Key will not act to change the idiocy that is NZ govt. He is conditioned to continue the foolishness. The very best advice to young skilled Kiwi is to bugger off overseas. Treat Noddyland as a place to visit now and then. You will earn more overseas and still be entitled to a NZ pension when you return at 65. So why hang around here to be abused by one pack of idiots in the Beehive after the other. Youth unemployment is set to remain high for 40 years. That's your working lifetime!!!. If you have a job here you will be paying massive taxes to support the dumb govts. There is absolutely NO way taxes cannot rise much higher than they are. The 40 billion is going to cost YOU for your whole working life. Why stay?
Wally : What are they
Wally : What are they gonna do with the $ 40 Billion ? Into corporate coffers to maintain this ridiculous rate of spending that Labour built up ! Not projects and infrastructure , no productive endeavour : It's going into maintaining pensions / healthcare / education / civil servants ( $ 830 000 for a nincompoop to run TVNZ ! ) . It will be wasted . So why bother to borrow it in the first instance ? Why lumber us now and generations into the future simply 'cos Labour built Gumnut and expectations beyond reality ! C'mon , Sore-loser , join in the rant !!!!!!
Iain Parker's idea of a
Iain Parker's idea of a 'monetary reformers summit' has great merit. May not agree with him on some aspects of the solution to our current crisis - but struggle to disagree with his assessment that we are heading for debt enslavement.
ROGER.... I couldn't possibly comment..as
ROGER....
I couldn't possibly comment..as SIR HUMPHREY used to say.
NINCOMPOOPS it was only an ACT of restraint to retain the BEST....ha ha..(WEEP)
My wife has me.................. WORKING.
But we need entertainment and enlightenment, might actually turn on a bulb in the pinhead of STATE.....so here goes.
A few observations from this MOURNING.
(We all should be in that STATE).
A million here or there is Nothing to these "spendthrifts"....
(SPEND AND THRIFT IN THE SAME WORD...GET IT...they do.... way too often.).
A parlous STATE indeed...... 40 Billion for maintaining idiots....in their LAP of genteel luxury, whilst a few of us actually paying TAXES, sink into the mire they created.
Here goes...
I like to give credence where it is due.
A wonder kin lady from Bradford, who is a beneficiary of our Wonderful Social Welfare State we voters like to call Parliament (and before actually come to think of it)......., does not agree that we have an explosion of too many sick and injured people here in NZ...without a war....and the Road TOLL is down, mainly cos they shut so many Level Crossings in her tenure, so it cannot be that. (Gasp).
We bought the RAILWAYS and closed even more lines, also an Airline, so we can let MP's have cheap travel, so it cannot be any Governments fault, even BUY omission...... as they are wont.
This beneficiary, ex-PARTY member (as so many rich people are), also does not agree we have too many people under-employed for such a small nation, who are actually killing their children.
It is because we all like SMACK-ing and so on.... go figure...so LEGISLATE away in my KIDS interest...it is called NOT ...WORKING FOR FAMILIES.....and we get the BILLs, yet again......and I do not mean ENGLISH.
A new developmental from HELL-ens truely wonderful Social Welfare Engineering problem resolution PARTY, PARTY, PARTY.
(then they have the GALL to run away from the consequences overseas)........ we cannot simply afford her or it........but still do...go figure...about 40 billion.
Personally I never had TIME or the money......so it is actually all my fault..it seems.
Must have an expensive REFERENDUM (TWICE or more...??)...to justify retaining it.
Talks Cheap. Ever seen these PARLIAMENTARIANS waffle between trips overseas and GANG meetings.
I have yet to get to grips with that as I shake my kids....hand...far too vigorously.
He might even end up on the SICKNESS benefit...praise de lawd.
Many agree that KEY is our SAVIOUR, I read it yesterday...who needs HERALDS at court, when you have your own team.
At least they spelt out who has been in the ACT of lapping at the TROUGH too.
It is a NATIONAL OCCUPATION and HARD LABOUR for others too. (I WISH).
I know he is Generous with YOUR money, so can we ALL be BENEFICIARIES, instead of just SUM PAYING and BORROWING for houses.
Actually I would rather be working, but I cannot afford to. (ANY.....MORE).
It seems strange to me why my debt is none, but I keep paying. (I digress).
Back to the RANT...
ACT-ually Rodders...and you might all get a laugh at this....I spent 4 months overseas in UK & FRANCE this year to escape the WINTER of our DESPAIR and guess how much it cost for BOTH my dear wife and I.
About a quarter of what I and others PAID for you and your DEAR lady...........RODDERS....for a week or TWO.
You must have EXPENSE----IVE taste.
It is surprising what you can do if you know how...
That is......if it is ACT-ually using YOUR MONEY....
And my dear wife likes to SHOP too. But I make her use her MONEY.
(It produces FISCAL RESTRAINT, so it is not so DEAR)
I would like to TAKE the SAME OPTION with the various SNOUTS in the TROUGH here in NZ.....
BUT we do not like to RESTRAIN the SPENDING in the NATIONS vast INTEREST.
I must get back to the LAWNS. I like a LEVEL PLAYING ....FIELD...
TALKING OF FIELDS.
WE ARE STILL PAYING FOR THAT ONE TOO, wasn't he a POLLY wanna cracker too? with delusions of GRANDURE.
Is there NO END to this RANT, I could WRITE for years, but never put NZ... RIGHT.
PS...
An old saying...with a new twist..
Someone turn out the LIGHTS in AUCKLAND and the NORTH, and NZ.....when we cannot pay the POWER ...BILLS.
Not funny.....OH he did...with a simple FORK-LIFT.....a disaster waiting to happen to OUR infrastucture miss-management.
NON-PRODUCTIVE & Overpaid idiots,one and all. Don't get me started.
Just THINK what I could come up with...if only I had time......
A nice leisurely , well
A nice leisurely , well constructed rant , for a sunny Sunday afternoon . And good to know that I'm not the only moaning Minnie around the joint . Cheers , man !
PS... A little more humour..
PS...
A little more humour..
http://www.interest.co.nz/ratesblog/index.php/2009/03/31/analysis-how-jo...
This is how we make our money.....by commissiions...and omissions. Not buy work.
Lucky we needed to borrow some more...now...eh...
HERE's JOHNNY...as they used to say on the CARS-ON show.
Cometh the hour...cometh the MAN.
Trouble is we got too many of em.
Would have been nice if we didn't need em at all....EH.
I never did....
Here is a funny story...but true....
30 odd years ago...and they have been odd, I was BOUGHT into the PUBLIC SERVICE...yes a CIVIL SERPENT, cos you had to get into NZ with a JOB then.....GO FIGURE...and they were the only ones with my skills hiring.
Took 18 months of rigmarole...from INTERVIEW to stepping foot on these UN-FAIR shores.
Situation turned out to be a nightmare...snouts in the trough and JOBS for the BOYS....
Sound familiar.
Guess what...not being that TYPE of person, I used MY money to BUY myself out of the BOND I had signed for 3 years indentured servitude as an IDIOT.
Was part of the DEAL in those days, the BOND bit...not the IDIOT...that was me..
(My first lesson in poor money management and reading the fine-print).
TOOK a years salary in savings....and luckily I wasn't poor then either.
Since then I have steered my way through the mor-ASS that is NZ over the past 35 ODD years.
I have worked alongside some of the biggest idiots in their FIELD.
Funny how a lot are in prison, or should be.
Finance, Biggest Business, yes...DAIRY...., Real Estate (getting my father-in-law out of the 87 Crap, with no reward...after an overseas stint).
Corporate life, and so on....not necessarily in that order.
I will not bore you with all the details....Suffice to say "BUSINESS CONTINUANCE" was the aim, though I was never a CON-SULTANT I hasten to add..
Took months, sometimes years off in between. I came here for lifestyle after all.
There is a big WORLD out there....just as STUPID.
Had to see for myself.
Always on MY money...RODDERS......etc....GO FIGURE....still is..
Even paid for my kids UNI and Schooling...no interest free loans in them days....
We always had a great lifestyle educating them too.....but not a greedy, self indulgent one at someone else's expense, like today's Snouts.... a simple outdoor sustainable life you might say.
Thinking ahead....always.
It was getting worse as LABOUR is not WORKING took hold...our DESTINY is and was a problem years ago, thinking they were GODS.
GODS all want someone else to PAY as I keep pointing out. IT IS THEIR RIGHT...
YEAH RIGHT.
You cannot stop idiots completely. First rule of Business Continuance, spot the problems...
RE-TIRED at 54....there were too many....way too many idiots with delusions...we breed em.
Now JUST tired. ...and having a sustainable simple life-style...I hope.
Cannot beat these deities....but still trying...to manage MY overheads in my BUSINESS.
How I wish they would stick to theirs.
It takes a previous one to KNOW one...as the old saying goes.
A joke eh...
Still THINKING...though.
I feel that NZ is
I feel that NZ is going to be taken to such a bad place that there will be an opening when the normally politically ignorant or financially illiterate will open their eyes and ears a little further than normal. It is at this moment that the politically interested and the financially literate, if sufficiently well versed and co-ordinated, might be able to make something of what maybe our last chance for a longtime to come. Thus, I believe we need a conference before any further action is taken. Some of us may disagree on the solutions required, but I feel most regulars on this forum now comprehend the core problem and the lack of knowledge of that problem, thus we need to make sure that we are atleast on the same page when it comes to taking our limited opportunities to inform the masses of the flaws of the current banking system and their predatory lending practices.
Who knows, at such a conference sufficient enough motivated people might reach sufficient enough concensus to start a fresh party in politics?
Iain : Nice thoughts !
Iain : Nice thoughts ! But I guess that < 1 % of Sheep Land's population even know this website exists . London to a brick , > 50 % were tuned into TV1 tonight , still wishing for a return of Selwyn Toogood and " It's In The Bag ". Some still buy " Bonus Bonds " . Even Winston Peters still registers on the " Preferred Prime-Minister " polls . ............ . We are a simple people , the common clay of the South Pacific , you know , morons !
Iain, Rodger, All: You are
Iain, Rodger, All: You are probably correct that <1% of the population are aware of this site, but I think it would be a mistake to think that figure is indicative of its influence on the Sheepish. Much of what I read here is unintelligible to yer average tradesman, but through reading your debates I am more informed than almost anyone I know, and I refer this site, or quote it, or argue based on what I have learned from it almost daily.
Being the select group of regular contributors that you are, I guess it is easy to get the impression that you are talking amongst yourselves or just LETTING OF STEAM, but you do have an audience of lurkers. The more clearly you state your case, the more often that you can summarise the BIG PICTURE as you see it (with fewer nudges and winks PLEASE people), the more insightful visions of the possible/probable ENDGAME, the greater contribution you will make to bringing about a critical mass of awareness then ACTION out there. No doubt some of you are here for a bit of a natter, some for meaningful debate, and some who are motivated to make a difference. Whatever the reason, this must be the most mainstream and widely read financial blog in the country, so you all play a part in informing popular opinion.
Sometimes you anticipate civil unrest as competition for declining resources and/or anger at lost 'wealth' hots up, and this anger/fear needs to be WELL INFORMED - the sooner the better. The Sheepish need to be SCARED by the FACTS so they run in the right direction. Quick, before Winston beats you too it...
THANK YOU.
As many of you have
As many of you have had an awakening about debt enslavement this has been carefully staged and planned dont be fooled by John Key his is a globalist and works for the bankers ,this country is on its way down all the way to china town....I may sound blunt or at times uneducated but I am not fooled by this last lot of pollys that strut about . we are looking down the barrel of a depression that we have only read about in history books etc please stop going on about house prices etc its a waste of time
just get prepared.
Baz
Tough luck Iain, Roger's right
Tough luck Iain, Roger's right again! This is a land of spud brains and always will be. Get your message onto a soap and you might get through to the spuds. Can't say they will be listening though, too busy stuffing takeaways down.
It's ture Iain, I remember
It's ture Iain, I remember protest marches in 2004/05 against the then minister of Ed - Bill English - that the interest rate on student loans was unsustainable (then 7% from day of draw down - imagine the compound over a 3 year degree). It all fell on self interested deaf ears. Your intentions are good but I seriously doubt anything has changed apart from the fact that the category of so called 'whingers' has now expanded to included the whole of the productive economy. NZ has no history of struggle - just an ever increasing silenced minority.
A rally or conference out
A rally or conference out of the blue as it were is less likely to have much impact than something with a fulcrum.
That fulcrum could be the outcomes, report from the Labour Party banking inquiry, and we'll also be closer to knowing what the TWG recommends and gov. is likely to implement by budget time next year. More leverage possibly, for a well thought out CIR that would have a useful communication campaign associated with it. IMO a good few might be clearer on the what's and why's, more than they are the how to fix aspects, however, for me the bottom line is to drop the left v. right battling and strict adherence to the 'neo-lib cult' and instead choose between what is right and wrong for NZ. That might indeed imply a new party specifically focused on economic transformation, or maybe Labour might take the lead on the back of their inquiry, or, gov. may surprise with the outcomes from the TWG and other work groups. Personally I'm not holding my breathe on either of the latter two options, however flinging some yogurt about at the Beehive doesn't seem very useful, at present, especially without some strong context brought about by strong communication.
Spuds we maybe, but even spuds have eyes - it's how they are opened that is going to count.
Cheers, Les.
sharonv : I have a
sharonv : I have a sneaky feeling that Bill English was not minister of education in 2004/05 . Helen Clark seemed obverse to having Tories in her cabinet ! ........Mean so and so .
Iain, Rodger, All: You are
Iain, Rodger, All: You are probably correct that <1% of the population are aware of this site, but I think it would be a mistake to think that figure is indicative of its influence on the Sheepish. Some of what I read here is unintelligible to yer average tradesman, but through following your debates I am more informed than almost anyone I know, and I refer this site, or quote it, or argue based on what I have learned from it almost daily.
Being the select group of regular contributors that you are, I guess it is easy to get the impression that you are talking amongst yourselves or just LETTING OFF STEAM, but you do have an audience of concerned lurkers. The more clearly you state your case, the more often that you can summarise the big picture as you see it, the more insightful vision of the possible/probable endgame, the greater contribution you will make to bringing about a critical mass of awareness, then action (or at least support for your action). Whatever the reason for your participation, this must be the most mainstream and widely read financial blog in the country, so you all play a part in informing popular opinion.
Sometimes you anticipate civil unrest as anger at our lost 'wealth' hots up, and this anger/fear needs to be informed rather than confused - the sooner the better. The Sheepish need to be scared by the facts so we run in the right direction. I am sure Winston would be glad to get on board - he needs a biggie for his next run. Oh, I forgot, you have Bernard.
Sharnonv - I suspect this
Sharnonv - I suspect this time 'it is different' because we are looking down the barrel of the destruction of the middle class, on whom participatory democracy has always reposed. The question for New Zealand, like Britain, is whether we survive as a sovereign nation or whether perpetual 'debt enslavement' under a new world order is our destiny. I have great reservations about the British National Party (my own family contains various ethnic minority members) but they have done what most people believed to be impossible - they have shaken the British establishment to its core! The coming need to default on debt - either honestly through liquidation - or dishonestly through hyperinflation - will alter the political landscape in ways few people have yet contemplated. The great danger is extremism - when the coming 'crisis' will actually offer the opportunity for a much more rational society - in which the fruits of our labour are ours and not the bankers via their debt money and usury.
RT apologies, you are correct,
RT apologies, you are correct, it was 94/95. Time flies when you are in debt.
Malcolm I hear you. Many
Malcolm I hear you. Many small business owners here have seen the writing on the wall. The last eighteen months have been eye watering for any one brave enough/forced to hold their eyes open. We are bringing forward our plans to move from Britain and the West's misguided belief on their 'entitlements' in general. A window of opprotunity is presenting itself as a recovery - yeah right!. Go East young people, the demographics say it all.
Excellent article Neville, very clear.
Excellent article Neville, very clear. For some reason we get annoyed with the selfishness of the US, I'm not sure why we expect otherwise.
As you are doubtless aware the price of US help to Britain in WW2 was the transfer of all British gold reserves and free access to all military technologies (think radar, sonar, computers, nuclear). The US has done well since WW2 partly as a result of that ransom.
I love your historical perspectives. Surely there must be pressures building within China to force a revaluation of the Yuan at some point. I saw an article recently showing Shanghai GDP was over 50% construction. That surely is not sustainable indefinitely is it? It makes Spain look quite sensible.
Where is George Soros when you need him?
Cashtration (n.): The act of
Cashtration (n.): The act of buying a house, which renders the subject financially impotent for an indefinite period of time.
Hi to Andrew J. Would
Hi to Andrew J. Would love to come back from Perth (Australia) for the Rally if it eventuates------will await clearance on travel prerks for my self and better half before I commit myself on that one.
Hopefully the NZ$ will continue the latest trend though things don't look so good for a great many of our companies.--- Winding down for tougher times I suspect.
Neville - Stimulating article as
Neville - Stimulating article as always. A few points I would like to contribute.
First, manufacturing in high-cost countries can only succeed if it is integrated with sophisticated design and engineering. Even then it is tricky: for example Mercedes Benz manufacture in over 20 countries, largely because Germany's too dear.
Second, the fundamentals of NZ support a high Kiwi. There is an increasing population who are determined to borrow offshore to fund their lifestyle. Yes, it is a bubble but how many years will it take to burst? Add to this the fact that NZ has kept control of its money supply and has not engaged in quantitative easing or large scale foreign currency purchasing, and we must expect a high Kiwi.
Italy is only the sixth largest economy because they include protection fees and bribes as part of their GDP.
It is good to see that you and others on the thread are aware that while the US might eventually do the right thing, it is only after they've tried everything else. (WC)
Ian, I think nothing short
Ian, I think nothing short of a revolution of sorts is going to change what seems like the inevitable demise of NZ as a properly independent state. That can only happen when people choose to be properly aware of what they're being led into and react quickly and decisively without self interest. On past experience I imagine they'd rather put their hands over their ears and hum rather than make any effort beyond going to the fridge for another beer.
I think the Maori's are the only people in NZ's history to show anything like the bottle required to stand up to those wielding the power. The Treaty of Waitangi might actually turn out to be one of the few things that can stop wholesale takeover of NZ.
Something I saw recently made me want to scream...the talk of ditching MMP in NZ. I remember so clearly arguing the case against that obnoctious form of PR at the time, advocating SVP instead. But the 'sheep' were all just sucked in by the massive media campaign by those in favour of MMP. You saw nothing but MMP mentioned in the media then and their plan worked. I think those in power now are so confident of the apathy of most people in NZ that they'll arrogantly do what they like without even feeling the need to explain it.
The sign-ups to the awful GATT agreements were a classic example....people didn't bother to understand how invasive they are and how it's almost impossible to extricate ourselves from them without massive penalties. The blood suckers were given a free shot at our bare arses when we signed up to these.
This all really started in 1984 when NZ was on the brink of default and had to go to the IMF. Ever since then we've been guinea pigs for all manor of crazy economic and social stunts. Jane Kelseys book 'The New Zealand Experiment' is very enlightening on this bit of our history.
Maybe rather than a rally a proper campaign of education would be more effective. An internet site might be best, like the one to get overseas NZers to vote. Essentially a clear picture of how NZ will look in future needs to be painted...as Neville has done so effectively here, but maybe faced by someone who gets attention. It wouldn't be easy as the first reaction would be from those who want to sell-out NZ and it will be furious and resort to character assasination of anyone involved.