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Top 10 at 10: RBA not timid on rate hikes; Path to hyper-inflation; Buell dumped; Krispy Kreme burger; Dilbert
Here are my Top 10 links from around the Internet at 10am. I welcome your additions and comments in the comments below or please send suggestions for Monday's Top 10 at 10 to bernard.hickey@interest.co.nz Our website hardly ever explodes in our faces... 
1. Not timid - Reserve Bank of Australia Glenn Stevens hit the right tone yesterday when he talked in Perth about how he had to be careful not to be too timid when putting interest rates back up, Bloomberg reported. I wish our Reserve Bank Governor was exhibiting a similarly non-timid streak. Stevens' talk was no doubt a factor in our own wholesale interest rates spiking up a full 25 basis points yesterday, helping trigger ASB's decision to hike mortgage rates today.
Australian central bank Governor Glenn Stevens's view that he can't be "too timid" in raising borrowing costs is stoking speculation the benchmark interest rate will be increased next month by the most in a decade.
Experience "counsels against" an approach where policy makers who cut rates rapidly in response to a threat become "too timid to lessen that stimulus in a timely way when the threat has passed," Stevens said in Perth yesterday.
The comments pushed Australia's currency to a 14-month high and prompted investors to triple bets policy makers will increase the overnight cash rate target on Nov. 3 by half a percentage point to 3.75 percent. Stevens became the first Group of 20 central banker to increase borrowing costs when he unexpectedly boosted the rate last week by a quarter point.
"Stevens has put 50 basis-point moves on the table," said Matthew Johnson, an interest-rate strategist at UBS AG in Sydney. "The safest time to raise rates quickly is when you know they are at the wrong level, and this is the first time a recession has ended with so little spare capacity.
2. Huge property bubble - Here is an excellent analysis of the Chinese property market by Stratfor's John Maudlin on Creditwritedowns. It is detailed and packed with juicy charts (my favourite!). I was surprised at how much of the Chinese economy was linked to real estate -- even more than the United States. Here's the gist of it.
The real estate market in China, particularly the residential side, is a burgeoning bubble that is growing bigger and more breakable by the day. Land and housing prices were already rising steadily when Beijing's stimulus package hit the sector in early 2009. Now prices are surging, with developers, bureaucrats and investors cashing in while urban Chinese "“ once encouraged to invest in home ownership by the central government "“ become less and less able to buy.
Since 1998, real estate investment in China has accounted for more than 10 percent of the country's gross domestic product (GDP), compared to only 3 percent to 5 percent in the United States. Such investment is also closely associated with many other industries, such as construction and finance, and it provides an abundance of jobs. Therefore, it is seen as a critical pillar of China's economy and enjoys favorable policies from the government and state-owned banks (more than 70 percent of real estate investment in China comes from bank loans). At the same time, real estate developers, local government officials and investors have escalated housing prices across the country by acquiring massive land holdings, limiting the supply and inflating prices, creating a real estate bubble that is not sustainable in the long run.
3. 'Fool's Paradise' - Former British Financial Services Authority chief Howard Davies, who has been out to New Zealand a few times, has warned 'the British people are living in a fool's paradise and have yet to understand the gravity of the economic crisis', the Telegraph reported. Sound familiar?
"The next six months are going to be extremely delicate in the UK", he told a gathering of HSBC clients in London. "It is very clear that something dramatic has to happen to control spending: but is the economy robust enough to survive fiscal tightening?" The Government is already running out of weapons to fight the crisis. While the fall in the pound has helped boost exports and proved benign so far, Sir Howard said that past experience handling sterling crises had taught him that the matters can turn ugly fast once confidence is lost. "The pound never stops where you want it to," he said. What is disturbing is that the British people seem unwilling to face minimal belt-tightening. Even professors in higher education are balloting to strike, demanding a continuation of boom-time pay raises. "You have the best minds in the country planning to go on strike for 8pc. People are miles away from understanding what is needed."
4. Toys out of the cot - Harley Davidson's profit has imploded and it has abandoned production of its Buell sports motorbike division, MarketWatch reported. HT Troy Barsten via email. It seems the US consumption boom is well and truly over.
Continuing hard times at Harley-Davidson came to something of a head Thursday with the announcement that the company was killing its Buell line of sport bikes almost immediately and actively looking for a buyer for its MV Agusta and Cagiva machines, the New York Times reported. Harley, which is based in Milwaukee, also disclosed continuing losses at its finance unit and a decline in sales of its heavyweight Harley-Davidson motorcycles. Overall, Harley's net income for the third quarter plunged by 84 percent from last year, which was also a down year for the company.
5. Rents falling - US inflation data out overnight shows deflation may not be the huge problem some feared, but it also showed rents are falling for the first time in 17 years, Mish points out at his GlobalEconomicAnalysis blog. He reckons the CPI data understates the extent of the deflation evident in the US economy. He cites a landlord correspondent below.
Hi Mish, I'm a landlord here in NYC (as well as an avid reader of your blog) and I actually feel the 7-10% drop mentioned in the article understates the case somewhat. Based on what I'm experiencing, I'd say that rents are down 10 to perhaps as high as 20% from their peaks.
6. Tipping point? - This piece in Bearish News cites some research by economist Peter Bernholz on the issue of national hyperinflations and found that the tipping point is when any government's deficit exceeds 40% of spending. HT Troy Barsten via email
There have been 28 episodes of hyperinflation of national economies in the 20th century, with 20 occurring after 1980. Peter Bernholz (Professor Emeritus of Economics in the Center for Economics and Business (WWZ) at the University of Basel, Switzerland) has spent his career examining the intertwined worlds of politics and economics with special attention given to money. In his most recent book, Monetary Regimes and Inflation: History, Economic and Political Relationships, Bernholz analyzes the 12 largest episodes of hyperinflations "“ all of which were caused by financing huge public budget deficits through money creation. His conclusion: the tipping point for hyperinflation occurs when the government's deficit exceed 40% of its expenditures
Guess what? The U.S. will hit the 40% mark in 2009
7. Hyperinflation - This is a useful step by step guide in Marketoracle about how hyperinflation develops.
Is this spiral increasingly likely? Below are four important indicators:
- Commodity price inflation;
- Large debts, particularly government debt;
- Long-term low returns for savers;
- A source of new money "“ usually the printing press.
Related Topics
Unusually, they are all now pointing in the hyperinflationary direction.
8. Middle class woes - Larry Summers, the most senior economic advisor to Barack Obama, has said the unsayable: America's middle class has been done over time and again by America's financial elites, the WSJ's realtime economics blog points out.
"Despite the extraordinary depth of this most recent crisis, the pattern it followed "” a pattern in which instability emanating from the financial sector ultimately resulted in hundreds of thousands of middle class families who had nothing to do with the financial sector losing their jobs or much of the their savings "” is disturbingly familiar," he said at the White House this week. He then ticked off this list:
- The Latin American debt crisis of the early 1980s
- The stock market crash of 1987
- The savings and loan debacle of the late 1980s
- The Mexican financial crisis of 1994
- The Asian financial crisis of 1997
- The bursting of the dot-com bubble
- The collapse of the hedge fund LTCM in 2000
- The fraud and bankruptcy at Enron
- And now the financial crisis that began in 2007
"All too often," he said, "a financial system that is intended to manage, distribute, and control risk has, in fact, acted as a source of risk. Risk that has resulted in severe consequences for millions of taxpayers, consumers, and investors through little fault of their own."
9. Drip Drip Drip - The news about various major economies working on various measures to reduce their reliance on the US dollar as their main trading currency continues apace. Dow Jones reports that China and Russia are working on ways to eventually settle their trade with the Chinese yuan and Russian ruble.
China Vice Premier Zhang Dejiang said both sides should expand local currency settlement in their border areas, and that China and Russia plan to set up a bilateral currency deal. As part of such moves, banks in China will be encouraged to set up outlets in Russia, and Russian banks will be encouraged to do the same in China, Zhang said. At the same time, Russian Deputy Prime Minister Aleksandr Zhukov said Russia and China are working on using their own currencies to settle trade instead of using the dollar and euro, but that such a move would take a long time. Some trade on the Sino-Russian border is already settled using the yuan. China earlier said it plans to embark on a yuan-settlement trial for trade with Russia and Southeast Asia, but didn't provide a time frame. It has already started a similar trial for trade with Hong Kong.
10. Friday Funny - I will never eat another Krispy Kreme donut ever. Jon Stewart at The Daily Show reports...
| The Daily Show With Jon Stewart | Mon - Thurs 11p / 10c | |||
| Moment of Zen - Krispy Kreme Burger | ||||
|
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82 Comments
8. Great admission, fine examples
8. Great admission, fine examples - so now what's to be done? Here's their solution, also worthy of note from the article;
- Raise capital requirements
- Eliminate a system where financial institutions can choose who regulates them
- Impose rigorous standards and supervision to protect the economy and investors
- Establish resolution authority to ensure that no financial institution is too big to fail
- Create a unified, independent agency to protect the American consumer from fraud and abuse and ensure that people get the clear information they need about loans and other financial products.
Let's hope bullet 2. is aimed at the Fed. Could be very interesting.
Even more bad news on
Even more bad news on the Hyperinflation front, I did a very sobering analysis on just what that latest DOW $10,000 millstone means and it was very disturbing. Tyler Dryden over a ZH did a DOW analysis but he/she/they where a bit off the mark. The last time the DOW was at $10,000 was March 1999. If you look at what has transpired in the lost decade you can see that the latest DOW $10,000 isn't really that special. Standard CPI inflation says that the 1999 DOW is equivalent of DOW $13,000 today. But it gets worse. If you take the current Dollar index into account the 1999 DOW is suddenly worth $16,000 in today's dollars. That is a whopping 62% of devaluation. Now if we assume the CPI DOW $12,000 and use the true money supply which has increased an astounding three fold since 1999 from a reserve of $600 billion to well over $1.8 trillion USD then the DOW $12,000 geometrically increases to DOW $36,000!!!
So what is the true value of the 2009 DOW right now in 1999 dollars?
If we will assume that 1999 is a real benchmark we will first take the 2009 DOW $10,000 and divide it by the money supply increase. We see the current 2009 DOW is really only worth $3,000 in 2009 dollars. Now adjust that for inflation and we are left with a true modern 2009 DOW value of only $2,314.22 in 1999 dollars.
Wake me up when its over!
The Chinese have a long
The Chinese have a long history of property investment. There is a lot to be said culturally for NZ to join in an economic union with China. Long agricultural histories (though China's is longer an more impressive). Need for a weak currency. Love of property. The prevalence of SOEs and state sanction monopolies. A still intact family structure. And, in general, a slightly socialist mindset.
The risk of hyperinflation is real and the NZ government should be using the high NZD to stockpile strategic petroleum reserve as well as gold and other hard assets. Too few governments focus on future risk control. And too few are opportunistic.
my 2 yuan
If we can whack a
If we can whack a decent slab of Fonterrible's finest cheddar into those Krispy Creme donuts wrapped around a burger , and get 1.2 billion of 'em shipped off to China..........we'll be able to compete at last ! If you can't beat 'em , fatten them up to super sloth size .
#8 Not enough of a
#8
Not enough of a mea culpa from Larry Summers for my liking. He didn't apologise for the deregulation of the 1990s for which he bears significant responsibility.
Until proven otherwise I simply don't believe that Geithner and Summers intend to meaningfully hurt the profitability and risk taking on Wall Street. You don't give wall street 700 billion no questions asked, backstop the system to 23 trillion and then get tough on the regulatory front. I think its just hot air for public consumption.
I'm expecting stimulus Mark II - more money to bail out states, extend unemployment, extended home-buyer tax credits. The US also doesn't have any money to chuck the 3rd worlds way at Copenhagen meaning that there will be no concrete agreement so he will no doubt spend billions domestically on green related energy production as a distraction. This is all going to have to be borrowed and printed.
Marky Mark Seriously Summers is
Marky Mark
Seriously Summers is probably the least to blame. Blame Rubin too. Blame Basel II and Paulson who got the SEC to switch the capitalization rules in 2004 to Basel II.
ok ok I have a softer sport for Summers. But at least he is smart and adds in some way to the knowledge base of humanity
Lew Burton - "The risk
Lew Burton - "The risk of hyperinflation is real and the NZ government should be using the high NZD to stockpile strategic petroleum reserve as well as gold and other hard assets. Too few governments focus on future risk control."
Well put, but the reality is that we have a socialist govt which is hellbent on bankrupting us first. Strategic future thinking and "nest eggs" are not even on the radar for them. With all the snouts in various troughs (ACC, dole, etc, etc) and much more important things for John Key to focus on (like Maori TV and the rugby), I wouldn't hold my breath for such enlightened thinking. Our Reserve Bank has no gold either, so it's "print baby, print..!" for as long as we can....
Asians will not come to
Asians will not come to the rescue of the milk industry
http://www.raceandhistory.com/cgi-bin/forum/webbbs_config.pl/noframes/re...
7. Never before has a
7.
Never before has a hyperinflation occurred on a somewhat worldwide scale. DOW 10,000 may be being heralded by some as sign of recovery, but when the FED is creating funny money on the scale it is, huge sharemarket increases are almost meaningless. That is why more and more people are waking up to the fact that hard assets such as gold, silver and commodities etc. are the real safe havens to hold long term value - not the US dollar. As always, I encourage people whom have not been exposed to hyperinflation before to watch this video:
http://news.goldseek.com/GoldSeek/1253081100.php
$1070 US for gold will look so very cheap a few years from now.
Lew Burton – “The risk
Lew Burton "“ "The risk of hyperinflation is real and the NZ government should be using the high NZD to stockpile strategic petroleum reserve as well as gold and other hard assets. Too few governments focus on future risk control."
Interesting thought Lew, what would happen if a small debtor nation (that just happens to be outside missile range) printed/borrowed a whole heap of mulah and bought a huge pile of gold, thereby trashing their currency? Then introduced a new 100% gold backed currency.
The IMF would go completely nuts of course but what else? Would investors with gold flock to the only non fiat system in the world? Thoughts anyone.
other have a ;0
Gee Roger and Andrew J,
Gee Roger and Andrew J, don't mention Fonterra, milk, cheese, butter, fat in the same sentence as lactose intolerance and obesity. People might start questioning the rationality of basing an entire economy on cows and the land they're raised on. Add in cow s**t, ecoli and nitrogen poisoning and you've got a public health problem or two.
David - absolutely brilliant!!! I
David - absolutely brilliant!!! I would nominate you to replace Alan Bollard - effective immediately - if I could...
really this is a selective
really this is a selective and useful informative post
i really thankful to you
and expecting similar posts
Avoid hyperinflation through purchases like
Avoid hyperinflation through purchases like this?
http://www.trademe.co.nz/a.asp?id=248155301
David, Do our holdings in
David, Do our holdings in gold have to match our money in cirrulation? Do we have to set a fixed value on an ounce of gold ? Do we confiscate all private holdings in gold?, that sounds odd but the USA did it in 1933. They paid cash for the gold in an attempt to maximise there holdings. Would we start a new gold rush? After all a National Geographic article of some months ago suggested there was only 166,000 tons of gold currently in exitence. Melt down those wedding rings , knock out those gold fillings and dig up those national parks for it's gold we're after. But wait , we would need resource management consent ,it's alright he comes my mate Rodney Hide and look he's wearing his gold jacket and we are all consenting adults, aren't we ........ excuse me I've might have had a few wines ............. why was that gold standard removed again?
Bernard You seem to be
Bernard
You seem to be promoting deflation as well as hyperinflation. You also seem keen on interest rate rises despite the deflationary threat. What's it to be? or do you just like to talk doomsday?
US foreclosures up 25% yoy
US foreclosures up 25% yoy for the third quarter.
http://www.rttnews.com/ArticleView.aspx?Id=1094111
That Jon Stewart is on
That Jon Stewart is on the nail......way too many times.
Can we not find a satirist??...(Sorry truth teller, disguised as humour) ...like him for our TV.
There is a ready supply of news and goodies to share...
Why do we need to see USA stuff all the time. I know he is good, funny, but...there is a common good needed here.
I like this blog, but a nightly TV program would really get to the MASSES.
Might actually make em think....yer Think.
Ever thought of it.... BERNARD.
Could call it "TRUTH HURTS...so LAUGH ALONG WITH BERNIE".
NAH...they would never believe it.
Re 8 - If Summers
Re 8 - If Summers is suddenly becoming so Humanist, maybe he could start a new trend among the worlds elitist's and be the first to start giving back his plundering's, which going on below evidence, are very considerable, my bet is anything Summers says is designed to coerce and herd the masses into the hands of the International Financial Institutions controlled by the private central banking network:
"Last month, a little-known company where Summers served on the board of directors received a $42 million investment from a group of investors, including three banks that Summers, Obama's effective "economy czar," has been doling out billions in bailout money to: Goldman Sachs, Citigroup, and Morgan Stanley. The banks invested into the small startup company, Revolution Money, right at the time when Summers was administering the "stress test" to these same banks....... Last month, it was revealed that Summers, whom President Obama appointed to essentially run the economy from his perch in the National Economic Council, earned nearly $8 million in 2008 from Wall Street banks, some of which, like Goldman Sachs and Citigroup, were now receiving tens of billions of taxpayer funds from the same Larry Summers. It turns out now that those two banks have continued paying into Summers-related businesses."
http://www.globalresearch.ca/index.php?context=va&aid=13813
Re 9, the Chinese and Russian's have decided Obama is more of the same, and have set about building alternative arrangements, question is what will the old top dogs do, and are the intentions of the new challengers to implement a new monetary system that serves humanity or just one that passes the baton of class caste system economic domination.
Evidence below would suggest not to expect anything different from Obama, he has either bailed out(pun intended) of his good intentions, or from the day Henry Kissinger hired him out of college, he may not of had any from the get go, just the same horse in a different coat:
" President Obama's plan to give the privately-owned and unaccountable Federal Reserve complete regulatory oversight across the entire U.S. economy, which is likely to be enacted before the end of the year, will officially herald the beginning of a new form of government in the United States - an ultra-powerful banking dictatorship controlled by a small gaggle of shadowy and corrupt elitists........However, as former chairman Alan Greenspan has most recently pointed out, given that the Fed is an independent entity, and therefore accountable to no one, it will have the power to simply reject and overrule any advice it is offered.
Pointing out the flagrant conflict of interest in empowering the Federal Reserve to essentially regulate itself, Professor of public affairs at the University of Texas at Austin Robert Auerbach writes, "The Federal Reserve has massive conflicts of interest that make it ill suited for its present regulatory functions and certainly for an expanded regulatory reach. The officials leading the Fed today preside over an organization that is run in substantial part by the bankers they regulate. Bank regulation begins at its 12 district Federal Reserve Banks, each governed by a nine-member board of directors, two-thirds of whom are elected by the bankers in the district."
http://www.globalresearch.ca/index.php?context=va&aid=14063
As for Gold, even those who have monopolised gold for 100's of years are dumbing it, my quess is they know that there is insufficient gold to back international commerce:
"After 261 years, N.M. Rothschild & Sons, the most prestigious bank in the City of London still owned by its founding family, shocked the financial world yesterday when it pulled out of trading in gold and other commodities.......The chairman, David de Rothschild, said: "Our income from commodities trading in London, including gold, has fallen as a percentage of our total income in each of the past five years. Following a strategic review of our activities we have concluded that this is no longer a core area of activity and have, therefore, decided to withdraw from the market.
"We remain committed to growing further our activities in specialist commercial banking, private banking and trust services, and objective relationship-based investment banking advice."
http://www.independent.co.uk/news/business/news/rothschild-the-bank-buil...
But the Rothchilds banking empire is a thing of myth, right? from their lovely website:
"Rothschild has been at the centre of the world's financial markets for over 200 years. Today, it provides Investment Banking, Corporate Banking and Private Banking & Trust services to governments, corporations and individuals worldwide."
http://www.rothschild.com/
Yeh, but they have never been in NZ, they're only in other countries, were the most transparent non-corrupted little democracy in the world, right?
Simon Allen
"¢Team leader of the ABN AMRO Rothschild team advising the Crown in the NZ$2.3 billion sale of Contact Energy Limited;
"¢Team leader for the Scoping Study for the sale of Contact Energy Limited.
"¢Team leader for ABN AMRO Rothschild's participation as International Co-lead Manager in the NZ$390 million initial public offering of Auckland International Airport Limited;
"¢Advisor to the Auckland Energy Consumers Trust on its investment in Mercury Energy Limited (now Vector);
"¢Adviser to Telecom Corporation of New Zealand Limited on its NZ$1.08 billion share buy-back, the largest buyback in New Zealand to date;
"¢Advising on the Independent Newspapers PLC takeover of Wilson & Horton Limited.
http://www.med.govt.nz/templates/Page____8857.aspx
Or this re one of John Keys main men:
"Two of Australasia's biggest investment banking names have joined forces.
New Zealand's Cameron Partners and Rothschild Australia - the Australian arm of the global Rothschild empire - have formed an alliance to extend their global reaches.
Rothschild Australia executive chairman and head of investment banking Trevor Rowe said it began looking to establish a presence in New Zealand two years ago because of the high number of Australian private equity players interested in New Zealand companies........Cameron said the relationship would also allow staff to move within the business to allow them to extend their experience and international training.
Cameron was this week appointed chairman of a new taskforce put together to develop New Zealand's capital markets."
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1052...
@Michael: Either is possible, if
@Michael: Either is possible, if we get a recovery thats probably going to mean inflation....if it tanks, deflation...it looks like a mine field to me.
rgerads
Iain ,i dont always comment
Iain ,i dont always comment on your comments but I alwaays read them, thanks.
Guys I've just read Bernards
Guys
I've just read Bernards op-ed piece on the Herald today and I am disgusted, this twit has gone from eco-babble (to much debt bawk, to much debt bawk) to now suggesting a panic driven firesale of our sovereignty for no other reason than to prove himself right.
The comes a point where as a 'commentator' you have to accept that your comments however well intentioned my prove to be wrong, there is no shame in this after all you are a 'commentator'....this is unless you fraudulently accept the accolade of 'economic genius' is which case the ego stakes are raised
Neven
"What is disturbing is that
"What is disturbing is that the British people seem unwilling to face minimal belt-tightening. Even professors in higher education are balloting to strike, demanding a continuation of boom-time pay raises. "You have the best minds in the country planning to go on strike for 8pc. People are miles away from understanding what is needed."
sounds a bit like the akld bus drivers.
People truly are still living in la la land, in the UK, here, everywhere
Green shoots? 10 architects at my friend's firm were made redundant just the other day.
Lots of firms have been trying to resist layoffs, they are going to keep coming as firms can only hold out for so long
Beyond a low interest rate driven mini housing boom, there is no substance to the very slight recovery in the NZ economy
Re: Bernard's op-ed - I agree with him to a point. I think we need to make it easier for Asian property developers to do business here. Developers here are stuffed, no mezzanine finance, bring in some capital rich Chinese developers to get our housing development going again. It will ensure another bubble doesn't develop and it will create plenty of work
Hyperinflation or deflation? Would someone
Hyperinflation or deflation? Would someone decide please.
Mike M - neither. Its
Mike M - neither. Its just scaremongering nonsense.
Very likely the world will just tick along at the usual 1-3% inflation range.
Hyperdeinflation..............Hype !
Hyperdeinflation..............Hype !
Matt, Now that I have
Matt, Now that I have overcome my earlier wine consumption issue I would like to ask why you feel growth in our economy is the answer to our problems?.Growth has become a propaganda tool to measure apparent success of any modern government.
Methods of measuring this "growth" have been engineered over many decades through manipulation of economic imformation like inflation ,GDP and unemployment.If you want to undertake a little research into the impact of imputation and hedonics on GDP you will appreciate an understanding into my point. We live in a world that has a finite capability (Earth). Growth potential must eventially run into realistic limitations even with creative accounting . Time to think of sustainability, status quo, our planets physical limitations, call it what you may. Sadly the Human condition of always wanting more will become our greatest hurdle as decades pass and our population increases.Time for our politicians to finally think beyond the next election, have they the calibre world wide to achieve this or does this have to come from the people?
Ian P. very informative as
Ian P. very informative as usual, thanks.
Matt in Auckland: Surely you
Matt in Auckland:
Surely you don't believe that?
Here's a good quote.
"The true pessimists of our time are those who assume the current pattern will simply continue indefinitely." - Martin Weiss
Ian P 'my quess is
Ian P
'my quess is they know that there is insufficient gold to back international commerce"
Please explain the logic of this statement. Seems to me that, if appropriately valued, gold could back any level of commerce up to the level of infinity - 1.
I think the real driver behind arguments against gold, even from people with motives as laudible as yours, is the desire to have power over the creation of fiat currency. I flat out dislike that - the potential of that power to corrupt even the finest among us has proven irresistable throughout history.
Krispy Kreme burger? How about
Krispy Kreme burger?
How about Fried Coke
Check out Bill Maher http://bit.ly/LWPmA
FYI here's my views on
FYI here's my views on the budget and the clash of the generations on BFM in audio form
http://www.scoop.co.nz/stories/HL0910/S00157.htm
cheers
Bernard
Justathought, re gold standard. I
Justathought, re gold standard. I don't think we'll see a return to a global gold standard in any circumstances short of a complete and final collapse of the present arrangement.
The gold standard did work with an expanding economy right through the 19th century, and it may be possible for a small number of small countries to establish a national precious metal backed currency. Probably be a huge benefit to them given that paper money seems headed towards it's intrinsic value - zero. Our money has lost about 95% of it's value in 40years, how long do you think the remaining 5% has got?
I favour a commodity (minerals, fuel, food, precious metals) backed international reserve currency as a modern alternative to a gold standard. Governments and the banksters would hate it - too honest - so it probably won't happen either.
We've supposedly had forty years of technological improvements and strong economic growth but strip away the debt and we're no better off. The middle class have been systematically robbed, even Larry Summers admits it!
Just to be clear. I
Just to be clear. I don;t run wit the tin-hat crowd. While I might suggest NZ buys gold, I don't advocate returning to a gold standard.
Similarly I have issues with the types of people writing at www.globalresearch.ca which Iain Parker quotes from.
I am not here to defend Larry Summers but accurate reporting matters. The real money flow is like this:
Lawrence H. Summers, one of President Obama's top economic advisers, collected roughly $5.2 million in compensation from hedge fund D.E. Shaw over the past year and was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations. . . .
Financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form.
So the Quantum of money is totally misreported by these sensationalist writers. Who knows? Maybe he is the root of all evil, but I like to stick with accurate data when doing my analysis. DE Shaw is a very different kind of organization, and speaking fees are chump change and at market price.
Justathought - I totally agree.
Justathought - I totally agree. A fundamental paradigm shift is required. So many still think we will be able to revert to the old ways of 02-07, load up on excessive debt, binge on housing and comsumerables, party on! We live in a world driven by the concept that eternal growth is good. You hear it in the companies we work for. Strategies driven by growing X% on an annual basis. "You need to grow your team boy" they say to me, as if growth is a universal truth. You grow your team in the boom times then the bad times arrive, you have to cut away staff,etc., maybe the company should have been fussier with the work it took on in the boom times and not loaded up with so many staff? Boom bust boom bust and so it continues.
I think we need to focus much much more on the quality of business and growth, and its sustainability (environmental, economic and social) rather than the quantum of growth
Matt in Auck, maybe you
Matt in Auck,
maybe you might like to have a read of
http://researchbank.swinburne.edu.au/vital/access/manager/Repository/swi...
And an observation about the difference between France and Australia with respect to a growth lobby
(I wonder how many bites that quote will get...)
Gibbler I agree. With the
Gibbler
I agree. With the debt so polarised in farming many now have zero equity. Id imagine many in residential and commercial real estate may find themselves in a similar position soon. The only ones benefiting from foreign investment and immigration will be the Australian banks.
Gibbler? Is that a Gibber
Gibbler? Is that a Gibber thats started to dribble?
Andy Point taken. My typing
Andy
Point taken. My typing and grammar are slipping at the same time.
LOL, no worries AJ -
LOL, no worries AJ - we were in Hopgoods the other night - still excellent - they won the Cuisine award for best non-metropolitan restaurant the other week.......
Bernard, Enjoyed listening to that
Bernard,
Enjoyed listening to that radio bit. Have posted to all my friends. The logical path is so obvious, but when it aint being followed follow the money.
re the Bill English / John Key rift, is this speculation or have you heard rumours? I must say I have been majorly disappointged by John Key. But then hasnt he been a player in an industry that created this mess, profited from it, then passed the carnage on to the tax payer, and now is profiting from it again??? Can we expect him not to favour debt based speculation / corporate welfare??
Re; John Key - I
Re; John Key - I was under no illusions, so have not suffered any disappointment. We have passed from one vacuous administration to another, the only apparent difference being that the new Prime Minister shatters fewer camera lenses compared to the previous incumbent.
Aren't gibblers , baby turkeys
Aren't gibblers , baby turkeys ( gobblers ) ? Forgive my grammar , she is an annoying old bird ! W.Kunz is right , that the sooner Wild Bill ousts Jelly Key , the better . Can we wait another 2 years , until after the 2011 election , before tax and finance reform begins ? That should've started immediately after the 2008 result . After we finally biffed those wastral incompetent corrupt socialists out !
An interesting cnbc comment this
An interesting cnbc comment this morning from one guest. The Fed might well start raising its rate rapidly to give the dollar a boost and he expects it to reach 7.5 in 2010.
Now that would blow things wide open. The US$ would do an about face and the Kiwi drop. Sound good!....don't forget it would drive our rates on govt borrowing above 7.5% and mortgage rates above 10%. The cost of financing the deficit would leave the govt no room to fudge. The cuts to spending would make Ruthless Ruth look so sweet. I wonder......stranger things have happened.
Liked the SCOOP link Bernard....
Liked the SCOOP link Bernard....
Tell it like it is.....Keys am D problem, just like all his predecessors....HELL-EN...etc...
Where else in the World penalises their best talent and forces em overseas and recompenses layabouts...and shon-KEY Politicians.
Been the same problems ever since I saw this Fair-ISLE 30 odd...and I do mean ODD years ago.
We do not all want to be JUMPERS...or even Farmers and Speculators, but we do want a FAIR DEAL.
Look where it has got us with the idiots in charge..
As you know I do not always agree with your ideas, but that is a Democracy for you.
However, we are not even living in a democracy now...it is an AUTOCRACY...or whatever it is called. MISS-MANAGED to their own AGENDA.
WELCOME BACK to Sunny New Zealand.
However we/they don't all want to go overseas full time....
I go for 4-5 months periodically to escape winters and idiots.
(As you suggest I/we should write a note each time.).
I never expect a fair deal here in business. Too many crooks in the Finance and Property line......and look where it has got us.
The Sharks are circling whilst we speak. The Devil is in the details...to come.
I am FED up with the situation just like you appear to be.
So are many of the BLOGGERS.
However, it is the PUBLIC who need to WAKE-UP.
It's hyper-inflation of necessities and
It's hyper-inflation of necessities and deflation of luxurious goods - which equals the overall inflation rate fitting nicely within the reserve banks target band.
He also mentioned that Paul
He also mentioned that Paul Volker ( then, Fed. Chairman) ramped rate up to the 20% level, briefly, to strangle inflation. If that eventuates, could be your 20% prediction for us here is short of the mark, Wally!
Why should we be so
Why should we be so surprised that we are so poorly governed and led as a nation and economy, when such low quality of same is seemingly intrinsic in so many of our institutions?
1) Brian Gaynor: Hopes for Uruguay dairy farms sour
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1060...
"It was also clear that the company's poor performance is primarily due to the board because they were far too optimistic and didn't anticipate the risks associated with investing in a foreign country.
The dismal performance of NZS is particularly frustrating for shareholders because they have had all the downside while the management company, which is owned by PGG Wrightson, has done particularly well.
These related party agreements, conflicts of interest and poor board governance issues continue to be the bane of the sharemarket with shareholders in the PGG Wrightson, Pyne Gould Corp and NZ Farming Systems Uruguay group of companies suffering particularly badly."
2) Education governance plan fails.
http://www.stuff.co.nz/the-press/news/2973419/Education-governance-plan-...
3)... x
4)... y
etc.. z
etc.....
http://www.businessspectator.com.au/bs.nsf/Article/UPDATE-1-US-b
http://www.businessspectator.com.au/bs.nsf/Article/UPDATE-1-US-budget-ga...
Re: discussions if inflation or
Re: discussions if inflation or deflation:
May be we get the worst of both - STAGFLATION!
http://www.washingtontimes.com/news/2009/jun/28/why-stagflation-is-coming/
Yep, we sure is heading
Yep, we sure is heading for one humdinger event. For sure the Fed won't give a stuff about Noddyland. Why should they when our own politicians have done such a grand job of building the economy into one giant housing ponzi scheme, eternally dependent on immigration wave after immigration wave. I'm trying to recall just how fast the rates rose toward the 20% mark in the 70s Harriet. Was it just weeks? Those were the days.
Rudd and the other socialists across the ditch are throwing another $8000ooooooau into the property sector...borrowed loot of course....mind blowing madness from idiots playing games with other peoples lives. Oh...we must be about due to see the Cabinet raise the 'welcome home to greater debt' loan limits again...!
Wasn't it pleasing to discover
Wasn't it pleasing to discover the fatcat beaurocrats, the state serpents as another has rightly termed them, will not do their job properly unless they get a bonus! What other interpretation can be arrived at. If the bonus is reward for doing a great job, what are they paid to do...a poor job? Are we to see the evolution of a 'super bonus' so those who do a better than great job, can get a better than normal bonus? What a huge pile of dung. Bet the buggers are lining up for their knighthoods.
john.key@parliament.govt.nz
john.key@parliament.govt.nz
When Bill doesn't sack John
When Bill doesn't sack John over the weekend Hell.en should - both on Monday.
Heads of Govt departments and
Heads of Govt departments and SOE's are like the top layer of execs in the private sector - over paid with a sense of entitlement and a greedy bonus culture.
I have no problem with the owner of a private company paying himself whatever he/she likes - they carry all the risk and should reap all the reward. The top people in the government sector and in listed companies take all of the upside and accept none of the downside - they have no skin in the game apart from stock options. I bet you could fire all of them tomorrow and find replacements at a fraction of the cost who would do as good if not a damn site better. The way Reynolds and Fyfe are treating their staff, and getting paid bonuses for it, is grotesque. I'd like to see Rob Fyfe performance graded everyday like his flight attendants are on every single flight.
NZ must also stop the disease of consultants in its tracks as well. Ex politicians, HOD's and CEO's lining up to put their snouts in the public trough again and again. Instead of getting young graduate policy analysts on $40,000 to do the research, the government is paying these "consultants", often with vested interests, fees of $100-1000 per hour. Tell them to take a 75% pay cut or take a hike. There are thousands of young bright people coming out of NZ universities every year that can give better, less biased research. If vested interests want to make submissions to government, let them do through the select committee process like everybody else. Otherwise the cronysim and secret lobbying is going to lead us down the same road as the US - neo fascism. Oops, might be here already.
"Fascism in America won�t come with jackboots, book burnings, mass rallies, and fevered harangues, nor will it come with black helicopters or tanks on the street. It won�t come like a storm�but as a break in the weather, that sudden change of season you might feel when the wind shifts on an October evening: Everything is the same, but everything has changed. Something has gone, departed from the world, and a new reality will have taken its place. All the old forms will still be there: legislatures, elections, campaigns�plenty of bread and circuses. But �consent of the governed� will no longer apply; actual control of the state will have passed to a small and privileged group who rule for the benefit of their wealthy peers and corporate patrons.
To be sure, there will be factional conflicts among the elite, and a degree of debate will be permitted; but no one outside the privileged circle will be allowed to influence state policy. Dissidents will be marginalized�usually by �the people� themselves. Deprived of historical knowledge by a thoroughly impoverished educational system designed to produce complacent consumers, left ignorant of current events by a corporate media devoted solely to profit, many will internalize the force-fed values of the ruling elite, and act accordingly. There will be little need for overt methods of control.
The rulers will act in secret, for reasons of �national security,� and the people will not be permitted to know what goes on in their name. Actions once unthinkable will be accepted as routine: government by executive fiat, state murder of �enemies� selected by the leader, undeclared wars, torture, mass detentions without charge, the looting of the national treasury, the creation of huge new �security structures� targeted at the populace. In time, this will be seen as �normal,� as the chill of autumn feels normal when summer is gone. It will all seem normal."
--Chris Floyd, November 10, 2001 Moscow Times (English edition)
Andrewj and andy hamilton... Three
Andrewj and andy hamilton...
Three definitions to choose from at urbandictionary.com
http://www.urbandictionary.com/define.php?term=gibbler
I am more comfortable with andy hamilton's definition.
Any discussion that the Federal
Any discussion that the Federal Reserve will raise rates rapidly is pure BS, to reassure foreign buyers of T Bills. The Fed talks about a willingness to boldly exit from stimulus with an increase in interest rates, but the magnitude of unemployment and underemployment, homes underwater or treading water, commercial real estate and consumer debt make any orderly exit plan politically unthinkable (remember: mid-term elections coming up and the Christmas shopping season is underway). Instead, balloons are being floated for a second stimulus package. So forget about any rate hike.
The inflation/deflation argument is clear... both are right. Rents, food, vehicles, homes, and clothing all in a deflationary spiral (offshore anyway). Commodities on the other hand: precious metals, ore, and more importantly, oil are all on an inflationary path. As the $USD continues to depreciate, commodities will require more diluted dollars to buy them. That's where hyper-inflation will raise its ugly head.
Gold is almost certainly going to increase in value (perhaps even double), but there is not enough of the stuff to base currencies on it. There is simply too little gold to go around. Gold makes central banks largely redundant and hamstrings government from using monetary stimuli to fight wars or purchase elections through pork-barreling. What is more likely to happen is the creation of a new world currency based on gold - as well as a basket of G7 currencies - so called SDRs. Over time carbon credits may form a component of a new currency.
As nutty as it sounds, the US will continue to print money until it crashes. If the US economy hyper-inflates it will wash out much of the Bonds being held by the Chinese, Japanese and Arabs. It will have the same impact on US consumer debt. If that were to happen the world would have no recourse but to switch to the new currency. The only way to fast-track the process is for someone to trigger a world currency crisis: Hence the talk about France, Japan, Russia, China, and other BRIC nations trading in something other than the US dollar. I was listening to a bond trader on www.kingworldnews.com who said that interest rates in the US would increase 15% overnight should the Chinese STOP buying US Treasuries. The ball is clearly in the European and Asian hands.
So what about us? I can add nothing to the argument being articulated by Bernard. He's got it right and he is bang on when he says our world is about to change... big time.
Gibber You better check out
Gibber
You better check out the options first
http://www.urbandictionary.com/define.php?term=gibber
Doug - spot on. Talk
Doug - spot on. Talk of any rise in US rates anytime in the immediate future is nonsense. They are desperately trying to inflate their debt away (there is NO chance they can pay it back). As calculated risk has pointed out - there is virtually no chance they would move until US unemployment is falling - and that isn't happening anytime soon.
Doug/Andy - if you feel
Doug/Andy - if you feel that strongly go short the "Fed will hike before March 2010" stock on IPredict...I certainly have as its dead cert money taken from the lambs.
Jack - interesting site, thanks
Jack - interesting site, thanks hadnt come across it before.
@Kate: Look to India for
@Kate: Look to India for how to regulate banks that seems to work...ie their banks seem sound...
regards
@Bernard: agree on the inter-generational
@Bernard: agree on the inter-generational thing...right now these are the voters that the Political parties consist of and listen to, just think what its going to be like once they are retired...more time to be politically active, and relatively poor...
regards
@Doug: Personally I dont think
@Doug: Personally I dont think "markets" are rational, so trying to predict what's going to happen is gambling IMHO. Fundimentally I think we are in dire straights, Bernard is right, Key isnt being the leader we need, he isnt making the necessary decisions...but nether are others....ie voters.
Bernard has got it "wrong" before. eg House values v wages is a classic, fundimentally he's right its way over-valued, way above 3.5:1 but it has'nt as yet corrected, maybe it never will.......so I dont think you can predict future markets based on fundimentals or solid factors. The name of the game seems to be keep proping up the Status Quo until it cant be propped up any more...If BE is going to replace JK as PM, then I dont envy BE....he will have to make changes which will consign him to the disliked PM bin because the baby boomers are so spoilt teenagers who never grew up.......
I agree on the US printing, it has no choice unless it makes hard choices and as Bernard said those choices are being made by baby boomers who listen to baby boomers and baby boomers are numerous. So instead they will spend and build up debt for future generations who will have to either default or pay up......the USA cant clear 60T in debt, it can do 30T, ergo the RB has to devalue the $USD by 50%...
For NZ personally I think what will happen is the debt will get so big and the next generations will get so anti that once they come to power they will conciously default on the overseas debt, and I cant blame them, it was made by their parents who will be dead....so long term global finanancial markets are history IMHO. ie there is the assumption that globalisation is the only way and it will continue so you have to play the global game. Once ppl cotton onto the fact that expensive energy changes everyting thing and you have to do most things locally then why care about global debt? it becomes meaningless....also we will have food, which will be like oil, fairly scarce and expensive....most countries cant feed themselves, so will have to import....most exporters have a hugely rising population so will export less...this happened last year, it will happen again in 2010 or 2011, countries wil ban exports to ensure feeding their ppl...
regards
http://seekingalpha.com/article/166993-the-power-of-unintended-c
http://seekingalpha.com/article/166993-the-power-of-unintended-consequen...
I have been trying to find sound reasoning beyond the dislocation between reality and fantasy. Although this does'nt seem to answer all my Q's it does answer quite a few.
And the logic does seem to stack up.
Worth a read. There is also a 2nd edition of the book out if interested.
Thanks for all the great comments.
Good to see you read
Good to see you read John Mauldin and Stratfor too, I only recently found them and thoroughly recommend them too.
On another point, why is there no political party suggesting we cut all public sector pay by 20% overall, applied progressively so people at the bottom only get 5% and people at the top get 30% cuts? We all know they are overpaid by that amount compared to the private sector.
This is what the IMF would presumably require if we needed them to bail us out.
That would surely solve the government budget deficit in one go.
Am I just being a controversial and confrontational bastard?
Try this for size ,
Try this for size , Rogie , if you want controversy : Scrap WFF : immediate saving to Gumnut $ 3 billion, give or take . Cash up ACC portfolio , fund them from current revenues only ; $ 11 billion to Gumnut . Scrap Cullen fund , another $ 10 billion + to Wild Bill . Begin programme to extend retirement age to 68 + , over next 15 years . Either make Kiwisaver compulsory , or scrap it . If it is to continue , model it on Oz super . Introduce land tax . Remove LAQC's . Whew , budget hole filled . Easy peasy !
NO...Roger....on all counts Some people
NO...Roger....on all counts
Some people would rather someone else...PAYS.
It is called SNOUTs in the TROUGH...
Keep digging & Blogging....they will have to listen ....ONE DAY SOON.
And another thing! What is
And another thing! What is all this rubbish about the Aussies doing better than us:
http://www.debtdeflation.com/blogs/wp-content/uploads/2009/10/IMG0005_52...
The full article is here
http://www.debtdeflation.com/blogs/2009/10/02/when-herds-collide-on-the-...
Ipredict.....Jesus Christ...Is this what academia
Ipredict.....Jesus Christ...Is this what academia coming too.!!!
Who are the bankers / underwriters behind this nonsense.?
This is the best argument yet for overpaid / misguided academics I've seen yet. Why the hell are'nt they lecturing.(They obviously have'nt had the time to do study / Research).
This explains perfectly why NZ's regulatory / world system is in such a mess. Semi educated university twits.
Ireckon send them all out to the real world just like Mao did and learn some hard labor with the rest of the peasants.
Lew Burton, you being a
Lew Burton, you being a former Chicago hedge funds trader, now lives in New Zealand and is an investment adviser, now head of derivatives at Goldman Sachs JBWere in New Zealand, I give you some credit for at least using your own name and allowing an open stand up debate with such an insider, I look forward to it as debate with such a worthy opponent can lift the financial literacy of all listening in.
Lew, I may be a truck driver in the Real Sector of the economy but I am not a dimwitted fool. You trying to put forward a few cheap speech fee's to infer that Summers made no more than that from other personal party loans and friendly investments into companies he is associated with, is amateurish, John Key would be most disapointed. He will be hoping his latest recruit David Mayhew, to take up the role of commissioner for financial advisers (http://www.stuff.co.nz/business/2975276/The-return-of-the-regulator )
Lew, I can see why you would not like the reputable collection of journalist that contribute to http://www.globalresearch.ca/ especially http://www.globalresearch.ca/index.php?context=theme&themeId=2 as they give the common folk far to much institutional memory than you would be comfortable with.
The financial sector, International Financial Institutions, have gotten all to greedy and cooked their goose a little at present, the Real Sector have become all to aware of their unscrupulous hideouts in the Caymen Islands etc, thus creating their next dirty money laundering hideout in a nation that is seen as one of the most transparent and least corrupt democracies in the world would be very beneficial, hence the wave of heavy hitting corporate raiders upon our shores.
Those that want to know just who Lew Burton is, and what he is about:
"In New York, where I grew up, it is common to give companies tax breaks for remaining in the city. In other places the local government will give away land or natural resources. New Zealand is a great place to live. It should take a small economic nudge to get companies interested in moving headquarters here. Tax breaks work, and it costs nothing if the companies demand little in the way of unique infrastructure......New Zealand is small and resourceful; we can use tactics and smarts to outmanoeuvre the world. In the future we won't need to measure our success by GDP or employment statistics but by the length of the line to get New Zealand residency."
http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=105...
"Lew Burton, executive director of equity derivatives at Goldman Sachs JBWere, sees this as the real problem. "Their leverage is huge. They're so leveraged that a pretty standard amount of defaults would bankrupt them."
http://www.stuff.co.nz/sunday-star-times/business/238063/Why-the-sharema...
If you want see what he looks like and what this good old New Yorker sounds like:
http://tvnz.co.nz/business-news/summit-must-more-than-talk-attendees-250...
Peoples, I would personally put this man in the category of an upgraded Roger Kerr of the Business Roundtable. John Key the central banker on sabatical is bringing in the hard hitters now. And, many investment bankers are heading this way, such as:
"Justin founded Murray & Company in 2004 upon returning to NZ after 9½ years as an investment banker in London."
http://www.murraycapital.co.nz/people/justin-murray.htm
"The US$30m was raised in the form of convertible bonds. Christchurch-based boutique investment bank Murray & Company was Lead Manager and Arranger of the convertible issue. Murray & Company placed the bonds with a Singapore-based investment fund. "
http://www.scoop.co.nz/stories/BU0801/S00123.htm
""This bond issue, the first by a New Zealand tertiary institution, aims to secure additional resources for the world-class teaching and research facilities that will enable the acceleration of the current investment plan."
Of the $500 million capital development planned by the university, it could fund $350 million from its operating profit.
The bond issue could raise another $100 million.
That would take the university's debt to equity ratio from zero to 12%..........
Murray and Company and First New Zealand Capital are the joint lead managers.
Dr Carr said the bond met all security requirements and should appeal not only to New Zealanders but to overseas investors who could follow their money into New Zealand."
http://www.odt.co.nz/news/business/77281/university-launches-bond-issue
And just what is Mr Carrs' background, have a quess I dare you:
Dr. Rod Carr is the Vice-Chancellor at the University of Canterbury.
Previously Rod had been the Managing Director of Jade Software Corporation Ltd. Rod joined Jade in 2003 after a distinguished career in the banking sector, most recently as the Acting Governor of New Zealand's central bank, the Reserve Bank of New Zealand. During a five-year career at the Reserve Bank, he played a key management role as a Director and Deputy Governor, including five months as Acting Governor.
Prior to this, Rod was a senior executive at the National Australia Bank in Melbourne, Australia. During his 11-year career in commercial banking, he worked in senior executive and management roles spanning many aspects of the business."
http://www.cecc.org.nz/main/rod_carr/
Wake up people, if the good old Kiwi truckdriver can find all of this in one hour on a hazy Sundy morning, their are many so called commentators in this nation who can only be labeled fools or liars.
Before we bother to focus
Before we bother to focus on what the Ozzies are up to , how's about we get cracking on the mess our economy is in . If we make good decisions , we may inadvertently sail past the Ozzies , anyway . If we don't , we may sail the wrong direction past Iceland .
Please can you get my
Please can you get my last post awaiting moderation up as fast as possible, as a hazy Sunday afternoon is perhaps the best time for the average folk to have time to digest what are complex issues requiring lots of supporting info.
Cheers
Iain
Roger, my mistake, I thought
Roger, my mistake, I thought we were an outer colony of Australia, sorry about that.
Nooooooo , lest we set
Nooooooo , lest we set our sight's too high , and go giddy with excitement . Baby steps are what we need . Shall we adopt a manageable goal , such as doing better than Tuvalu or Nuie , and build up from there ? Somalia too , we can topple them on GDP and reform . Although their peoples' informal assault navy is a hard act to beat .
It does seem silly looking
It does seem silly looking at how Aus is going to structure itself for a number of reasons:
1) Aus relative wealth has nothing to do with better management but a) size and b) awesome resources easily dug out and sold and c) lets face it, better weather which makes it more attractive for immigrants including us (I reckon weather governs 30-80% of a place's attractiveness depending on your outlook. What does Brissy have that Wellington does not???????).
They have a lot of the problems we have and a govt who is following the same old line of not altering the status quo, especially re housing speculation which appears to be worse than NZ thanks to FHOGs, reduced CGT, govt bailout of banks etc. Despite their luck re resource exports they stil have a CA deficit nearly as bad as us, which is indicative of a foreign debt driven consumption economy fueled by a naive belief that property can only inflate at ever increasing rates. OR in other words, their younger generation aint going to be able to share Aus wealth going forward - it will be divvied up between boomers and then foreigners.
AUS IS THE LAST PLACE IN THE WORLD WE WANTTO FOLLOW.
We could learn some things
We could learn some things from Auz:
http://www.interest.co.nz/ratesblog/index.php/2009/07/20/opinion-why-cat...
Les, Not sure i buy
Les,
Not sure i buy those arguments re Aus. They pay pretty much what we pay in tax, and it isnt very flat either going up to 45%. The things I think they have done better than us is 1) compulsory super 2) govt protectiion of local industry from foreigners where appropriate (rather than our naive ideological rejection of this as being anti free market, despite everone else doing it). eg oppostiion to Chinalco, apples etc.
Regarding protection it is not an easy issue. My approach is that we should look at it the same as a family buisness. If you can hire the son to carry on (even though he is slightly behind another contender) then the business may make less profit, but at least more money is kept in the family. the trick is to judge at what point the internal benefits are lost via the loss of competitiveness. i guess in essence what I am saying is that profit is not the only consideration, its the net benefit to the country that should overrule. The problem we face though, is because we dont have compulsory savings, we are not even in a position to afford many of our own companies. So we become easy pickings.
jimmy - we both agree,
jimmy - we both agree, there are a good few things we can learn from the Auzzies - like how to be more like them in regard to being considered more like, "the French of the South Pacific", than say.... well you tell me?
Anyone for tea/cricket/Chicago Hot Dog?
" the French of the
" the French of the South Pacific " ??????? ........ We should stick nuclear war-heads under our neighbours' atolls , and blow 'em up just for " tests " ........ More fun than rugby tests , I suppose . Chacun 'a son gout , Les . Good luck with Edith Piaff and the escargot !
Bill didn't sack John over
Bill didn't sack John over the weekend - who the Hell.en is in charge in this country ?
I see trouble !
It is said that JS
It is said that JS Huntlands author of the 'Nick Twisted Minds (Domestic Violence) series and the 'Me and My Best Friend (Children's interactive books) series is to be in the top 50 up-coming authors......
Media only:
For a free copy for your review please email me