Windfall tax = Uncertainty writ large = polish up those plans for moving out of Canary Wharf to - well, almost anywhere else. In an Ugly Contest, least Ugly wins.

This won't end well for Britain. Tax on financial entities is a large % of the total tax take there, and yet, in the words of somebody whose name and URL I have completely forgotten, that sector is the most fungible and mobile. And the pervasive and interlocked nature of Brit entitlements (3 and 4 generations of welfare dependence...) guarantees that any attempts to wind back them back will be met with real resistance.

After all, look what the ACC kerfuffle has produced here this week, and that's only application of existing rules. Megaphones, braids, signs and a bit of name-calling. Tame, or what?

Just imagine new, much harsher rules, and a Brit soccer mob which has just lost some Cup or other.

Best viewed from afar, I'd say....

Oh, wait. We're borrowing $250 milly per week to spend on .... continuing entitlements (at least in part). Perhaps I'd better not break out the 2009 Schadenfreude just yet.

Spengler (David Goldman) surveys BHO and the Middle East with his usual cold magisterial eye:

"That is why the major players in the region resemble a troupe of manic Morris dancers in a minefield."

Well that restored my faith in Noddyland's soverign ratings.

Matt:
I remember back in the 80's, when people in Europe started to buy some gold considered to be a safe haven of value, rumors started to spread that many of the 1 oz coins are faulty.....so whom or what can one trust anymore?

Wouldn't that be about the last nail in the Uk coffin? MS. Bang! goes London as a financial centre of choice if banks are compelled to lock in their liquidity. Holding on to it at present is a matter of their own choice.

Re #9: Why aren't Moody's (and S&P and Fitch) management not in jail alongside Madoff. They are all as guilty of fraud as Madoff. I guess it all boils down to whether or not you have friends in influential government positions.

Bernard a very interesting piece in the FT re "Bernanke warns on imbalance risks" this an encouraging move or perhaps he is positioning himself so as to be able to say I warned you so.

http://www.ft.com/cms/s/0/b54963ee-bcc6-11de-a7ec-00144feab49a.html

many of the gold bars in NZ come via perth mint, you can trust these guys.

Ummmm.... @ Interested ...

"Perth Mint Fraud Revealed"

"http://www.24hgold.com/english/news-gold-silver-perth-mint-fraud-revealed.aspx?contributor=Jason+Hommel&article=1724909876G10020&redirect=False

MattS:

I really don't know if there has been officially a probe into this. Sorry.

What I know for sure, one could not even easily buy gold coins, was somewhat restricted back then to the occasional allowance of the odd gift coin (customary in Europe as gift for weddings and christenings). People had to have a good line to a bank, which were the only place to buy gold coins. So a mass hoarding of gold was not even possible, so the rumour could not have been to scare people off.

Steven,

Is this so called the US Art Of Currency War? Who shall be the big winner and loser?

@Grandy: heads NZ loses, tails everybody else wins...

:/

Man its looking so ugly........

regards

@Steven,

wow, head or tail.... got it...., ops, shouldn't see the outcome, ignore it and try again!

Why it's looking ugly, could you share your views? cheers.

MattS;
just found the link which has some explanation. To fake gold with tungsten is not so easy,
far too difficult for the normal criminal, besides the criminal could not create the necessary paper trail etc.etc.
So only a larger organization could pull off this fake.

http://www.kitkomm.com/showthread.php?p=817453

@Grandy: all the bad news....From the obscene profits of GoldmanS and the fact its not been fixed ie to big to fail, to tent city in the USA, proving in reality real economies are in a very bad even precarious way.

So, 1) GS etc seem hell bent on extracting gangster style and level profits from whats left of the real economy.

2) Commodities rising, which means ppl in the street ie real economy get hit their as well....

3) Then we see the talk of raising interest rates/OCR or removing support because some sectors are over-heating while others, the real earners bit are still damaged and declining...so ppl in the street get hit a third time....

4) Then the farmers in the US and Europe demanding help, which will hit ppl in the pocket again...

5) Debt to be paid back, so that's either higher taxes or inflation which hits ppl in the street again....

6) Peak oil, we are over it, so energy is going to for ever get more expensive, oh look ppl in the real economy get hit yet again....

7) ppl in the real economy are almost thankful they still have jobs let alone a pay increase to cover any one of the above, let alone all of them...

eight) Un-employment is getting high and probably higher, Govn's are hiding the real un-employment rates in fancy accounting....but ppl are not that dumb...some areas etc Birmingham (UK) have a nasty tendency to have a riot or two when things get pretty bad, which to me is now....or soon...and its not going to ease soon....

and ppl in the street are typically 70% of GDP. Anybody sensible is just going to curl up and ride this out, the in-sensible ones are already debt maxed out anyway.

So how is stag-flation or even deflation, and/or civil unrest etc going to be avoided?

To me that's ugly....

To counter-act all this, where is the good news?

regards

Surely the best rort is turning gold ingots into genuine nuggets! They sell for more because they are real nuggets and even better if they happen to look like Australia minus Tas! All good fun.

For goodness sake, the NZ mint and Perth Mint have absolutely no problems with sourcing and authenticating the gold they churn out as 99.99% pure and refined. It is not very difficult to refine gold. Their entire reputation depends upon their stampings to be accurate. Both test their own products regularly to ensure the highest standard. As for quoting Mr Hommel as you have Harriett, he is in no way questioning the purity of product of the Perth Mint. He was merely raising questions over whether or not the amount of product sold through their certificate program and stored on behalf by the mint was actually backed up by physical metal. When demand went through the roof last year, the Perth mint could not keep up with the demand for PHYSICAL gold, as it takes time to mint the stuff. They cancelled all their silver and non gold bullion product mintings to focus on just minting enough 1oz gold coins to meet existing demand. The NZ mint currently imports its silver coin blanks from Canada then stamps them here, and its bars come from Switzerland (PAMP). They used to import Perth Mint silver bars but stopped when the supply dried up earlier this year. If you want gold - dont buy nuggets. Stick with the tried, tested, refined, minted coins and bars and you cant go wrong.

@Troy,
Wow, where would the epic centre of this financial earthquake be?

Troy:

agree, there are more of us.

How many others are out there Harriet??? heheheee

It's crazy that " Symbiotic " is our word of the day . Alike most things , I havn't a clue what it means , yet I wish to slip into a symbiotic flow , with my fellow ( and fellow'ess ) bloggers . But nice of you to notice my perfunctory use of the word . I have few fans or followers , even the dog refuses to hump my leg . Good to welcome you aboard , crazy ............ left or right , which do you prefer ?

Shag ! .......... Double whammy , rejection , and the little s**t is after me gummys ............... Double symbiosis !!

Guys, it was me thinking back to school biology in my post this morning. Thankfully my memory hasnt gone completely ,yet.

The symbiotic relationship may be categorized as being mutualistic, parasitic, or commensal in nature.[3][4] Others define it more narrowly, as only those relationships from which both organisms benefit, in which case it would be synonymous with mutualism.[1][5][6]

Symbiotic relationships include those associations in which one organism lives on another (ectosymbiosis, such as mistletoe), or where one partner lives inside the other (endosymbiosis, such as lactobacilli and other bacteria in humans or zooxanthelles in corals). Symbiotic relationships may be either obligate, i.e., necessary for the survival of at least one of the organisms involved, or facultative, where the relationship is beneficial but not essential for survival of the organisms.[7][8]

I was trying to make the point that the Govt and its numerous hangers on need to be Symbiotic and not as at present parasitic.

Parasitism is a type of symbiotic relationship between organisms of different species where one organism, the parasite, benefits at the expense of the host.

In general, parasites are much smaller than their hosts, show a high degree of specialization for their mode of life, and reproduce more quickly and in greater numbers than their hosts. Classic examples of parasitism include interactions between vertebrate hosts and diverse animals such as tapeworms, flukes, the Plasmodium species, and scabs. Parasitism is differentiated from parasitoidism, a relationship in which the host is always killed by the parasite such as moths, butterflies, ants, flies and others.

By the way if the dollar doesn't collapse by X-mas you can kiss good by to the export sector. We are now in the trows of a complete collapse in Agricultural exports. It is so bad that cropping organisations are not even putting a plow in the ground. Apples and vineyards are getting destroyed. Beef farmers are facing huge losses.
We need to scream it out to the Govt, we are looking at a collapse that will take years to recover from unless action is taken to collapse the dollar and reduce costs immediately.
This is a crisis in Rural NZ,its very real and will soon be terminal.

AndrewJ, Bollard used the term "nuclear option" with good reason....it would incinerate the economy. Stuffed as it is, being nuked by a money printing scam would bring mass exodus, property price collapse past 50% BP and a banking sector collapse and a retail sector collapse and unemployment near 20% and ....oh what's the bloody point. The export sector has its good times....now it has its bad times. The lesson is to save when you can and not to borrow any bloody money from the bloody banks. Not ever!

Wally
I agree,however farmers will take the nuclear option. Cut staff, drop production and go into survival mode. I am talking debt free farmers here,indebted ones are poked but so far, thats a big secret. The quicker we stop the bullsh*t and admit we are stuffed the better. The cr*p that organisations like Dairy NZ are spouting about milk, could be up $2 a kg by next year dont help they are part of the problem , Denial.
I could post some info from the states about dairy but cannot paste graphs. They are asking, were are the sales, prices are up but sales are down,wheres all the milk hiding?

AndrewJ -- you are obviously very switched on to the figures for agriculture. We had a dollar at this level about 18-24 mths ago. Export prices are down for many commodities but what are the big increases in costs over the last couple of years? I'm aware of fertilizer costs but what are the others ? ( I'm an interested townie who firmly believes in the need for a strong export sector and therefore a strong agricultural sector )

Other states in the top 10 for total properties with filings were Michigan, Georgia, Illinois, Nevada and Maryland. Banking Details

AndrewJ - hang in there brother. When the next quake hits - anytime now according to Troy - and all the so-called investors out there run back to the USD (temporarily), we may see 0.50 again. Then, the USD will probably go down the toilet and every buck in town will head for cover - commodities being right up there in terms of destination. Dairy, meat, vege, PM, etc, prices are all out of touch with where they need to be, adjusted for real inflation. This has been the case for decades, not years. When the western govts and their central banks implode, look for primary produce prices to fly.

Ludwig
I hope you are right but I fear that when we look at the baltic index what we are looking at is a huge reduction in exports and we are an exporting country. Commodities may go up if the fed keeps pumping money into GS and Co to continue there speculative ways but in the real world consumption is down badly. Look at the 1000's of tonnes of pork being stored in Japan. Im afraid that agricultural products will catch a cold same as Toyota and GM.

Ross
Farm costs have been climbing at an average of over %10 for years,a %10 increase in rates when your rates are a $1000 is only $100. I talked to a farmer whose rates are now $50,000 %10 is 5k. After costs he made $150 on cattle last year, he has to run 33 more cattle this year and 33 + the year after just to keep up with council spending. This has gone on until we have reached the bottom of the barrel now we face the nuclear option or the survival one. Cut costs anyway you can, slash numbers and go to ground to survive.
There are farms around me completely empty, farmers are hoping to sell hay but hay has become so expensive to make its one of the costs being cut. There are few options and exports will plunge.
This is a big deal and if its goes much further its going to be a very big deal as it will takes years to restore production. i drove by an apple orchard in Hastings trees being ripped up big diggers mulching stumps. An orchard or vineyard costs 75k a hectare to establish an 5 years to production. The tax system classifies it as capital expenditure they wont be replanted in a hurry.
Talked to a bank manager, he thinks farm prices are back %20 below 2006 prices. bank believes prices will fall another %50 he wants to know how the hell he can lend to potential farmers when the banks own research unit expects land to half in value.

@Troy, mouse, what do you mean?

Troy
I think Ive found your little problem,its in here somewhere I think.

</blockquote

The Fed Bails Out The World

No, that is not an overstatement: had the Fed not stepped in, the rest of the world (which optimistic pundits tend to forget exists in their bubble view of the US market as the one and only) would have simply collapsed as the $6.5 trillion dollar funding gap closed in on itself, causing a indiscriminate selling off of all dollar denominated assets. The implosion of the basis trade would have seemed like a picnic compared to what was about to ensue had the Fed not stepped in to perpetuate the Fiat banking way of life.

The severity of the US dollar shortage among banks outside the United States called for an international policy response. While European central banks adopted measures to alleviate banks' funding pressures in their domestic currencies, they could not provide sufficient US dollar liquidity. Thus they entered into temporary reciprocal currency arrangements (swap lines) with the Federal Reserve in order to channel US dollars to banks in their respective jurisdictions (Figure 7). Swap lines with the ECB and the Swiss National Bank were announced as early as December 2007. Following the failure of Lehman Brothers in September 2008, however, the existing swap lines were doubled in size, and new lines were arranged with the Bank of Canada, the Bank of England and the Bank of Japan, bringing the swap lines total to $247 billion. As the funding disruptions spread to banks around the world, swap arrangements were extended across continents to central banks in Australia and New Zealand, Scandinavia, and several countries in Asia and Latin America, forming a global network (Figure 7). Various central banks also entered regional swap arrangements to distribute their respective currencies across borders.
And it gets worse: the Fed's printing press single handedly guaranteed the way of life for the UK, the Eurozone and Switzerland with unlimited funding! Whether the Fed was within its rights to bet the American way of life in order to mitigate the stupidity of Europe is a question best left to politicians. And politicians take note: the Fed's actions were to the benefit of "banks around the world including those that have no US subsidiaries or insufficient eligible collateral to borrow directly from the Federal Reserve System."
Why is this critical? We are now back at a time when the only gains in the stock market are at the expense of dollar destruction, with a concomittant funding for dollar denominated assets. In one short year since the collapse of Lehman we have gone back to the same dollar funding risk exposure as was on the books in these days before Dick Fuld's empire unravelled. While whether or not the Federal Reserve stepped beyond its bounds in practically bailing out not just Goldman Sachs, but as this paper has proven, virtually the entire world, is not up to us to decide. However, a critical topic is: have we learned anything from the implications of an unprecedented dollar funding gap, which is likely back to record levels once again? What is obvious is that the Fed's current policy of a weak dollar, contrary to its repeated lies otherwise, is simply enhancing the dollar funding moral hazard: and the breaking point will come sooner or later with disastrous consequences.

Global Witness (who were prime movers in the Blood Diamond expose) have just published a major report on the consequences of peakoil:

http://www.guardian.co.uk/business/2009/oct/19/oil-prices-rise-supply-wa...

"There is a train crash about to happen from an energy point of view. But politicians everywhere seem to have entirely missed the scale of the problem," said the report's author, Simon Taylor.

"We are all addicted to oil but if you look at the mathematics of the problem, they simply don't add up in terms of future supply and demand."

The full report is here:
http://www.globalwitness.org/media_library_detail.php/854/en/heads_in_th...

Interesting read, AndrewJ, but I'm not sure anyone 'gets it' yet.
Bollard said the dollars (presumably US) lost, would stretch to the sun and halfway back.
I say they never existed. If you got a re-valuation of your house in the mail (say it was 100k more than before) went to the bank with it, sprang a mortgage, and invested it - what exactly did you invest? Same house, same peeling paint, same leak in the spouting. Whoever held the parcel when the music stopped.......
Since Bretton Woods, and particularly since 1970/Nixon, underwriting has been smoke and mirrors.
When the music stops - and post peak-energy it has to stop for good - there aren't enough chairs anymore. I saw this coming 30 years ago, and I've been sitting down ever since.
The question is: can a fiscal system requiring growth, survive in a powerdown world?
Answer? Not in it's present form.
The Bard had it right: "neither a borrower or a lender be".
Pound of flesh, anyone?

Troy is right, it feels like we are close to a turn in the markets.. Everything is screaming out for a crash. Warning signs are flashing everywhere.

But you know its all too convenient, its just what everyone is expecting.. too much like a trap for my liking.. But when it does crash (and I mean when not if), it will be at the time when people are least expecting it.

Troy
Im running into problems posting,I think the answer lies in the summary of the link i Posted,a bit scary to say the least.
</blockquote

The Fed Bails Out The World

No, that is not an overstatement: had the Fed not stepped in, the rest of the world (which optimistic pundits tend to forget exists in their bubble view of the US market as the one and only) would have simply collapsed as the $6.5 trillion dollar funding gap closed in on itself, causing a indiscriminate selling off of all dollar denominated assets. The implosion of the basis trade would have seemed like a picnic compared to what was about to ensue had the Fed not stepped in to perpetuate the Fiat banking way of life.

The severity of the US dollar shortage among banks outside the United States called for an international policy response. While European central banks adopted measures to alleviate banks' funding pressures in their domestic currencies, they could not provide sufficient US dollar liquidity. Thus they entered into temporary reciprocal currency arrangements (swap lines) with the Federal Reserve in order to channel US dollars to banks in their respective jurisdictions (Figure 7). Swap lines with the ECB and the Swiss National Bank were announced as early as December 2007. Following the failure of Lehman Brothers in September 2008, however, the existing swap lines were doubled in size, and new lines were arranged with the Bank of Canada, the Bank of England and the Bank of Japan, bringing the swap lines total to $247 billion. As the funding disruptions spread to banks around the world, swap arrangements were extended across continents to central banks in Australia and New Zealand, Scandinavia, and several countries in Asia and Latin America, forming a global network (Figure 7). Various central banks also entered regional swap arrangements to distribute their respective currencies across borders.
And it gets worse: the Fed's printing press single handedly guaranteed the way of life for the UK, the Eurozone and Switzerland with unlimited funding! Whether the Fed was within its rights to bet the American way of life in order to mitigate the stupidity of Europe is a question best left to politicians. And politicians take note: the Fed's actions were to the benefit of "banks around the world including those that have no US subsidiaries or insufficient eligible collateral to borrow directly from the Federal Reserve System."
Why is this critical? We are now back at a time when the only gains in the stock market are at the expense of dollar destruction, with a concomittant funding for dollar denominated assets. In one short year since the collapse of Lehman we have gone back to the same dollar funding risk exposure as was on the books in these days before Dick Fuld's empire unravelled. While whether or not the Federal Reserve stepped beyond its bounds in practically bailing out not just Goldman Sachs, but as this paper has proven, virtually the entire world, is not up to us to decide. However, a critical topic is: have we learned anything from the implications of an unprecedented dollar funding gap, which is likely back to record levels once again? What is obvious is that the Fed's current policy of a weak dollar, contrary to its repeated lies otherwise, is simply enhancing the dollar funding moral hazard: and the breaking point will come sooner or later with disastrous consequences.

loop the poop powerdownkiwi !
Anyone know what the trading bank leverage position is....1:20 or 1:10 ...????
What impact would an across the pigsty asset devaluation of 10% have?....how about 20%....??
An economy built of hype and BS, floating on a seas of debt in the path of a Typhoon cat5.