So the Kiwi-Socialists Bank has joined the melee , and is lending hand over fist into the housing market.........Sorry Wooly Bully Bollard , you gotta stop whittering on , and actually do something...........What the heck do you do , Alan , to warrant the $ 500 000 p.a. ?

The decision is to leave the problem for Mr Market to sort out, which is what will happen as the cost of credit goes higher and higher. Just a question of time.

David Harvey - accumulation by dispossession - I know I've mentioned it before, but just in case some folks who are still thinking of mortgaging themselves to the hilt, but haven't yet - it's worth reading him on this subject.

Amercians did it - and they are now paying dearly through dispossession by their lenders - who are in turn accumulating more and more of these assets through foreclosure sales.

I just worry that young NZers in particular might also be taken down this same path.

Big borrowing is just madness in today's economic climate.

Jeez, you guys make me feel so relieved that I didn't "follow the herd" and sign up for $400k of debt. Can someone tell me, what's so good about having that level of debt at a young(ish) age?

That's a bloody good point Simon."Trouble is when you default and they make a loss at the mortgagee sale they lose ten times as much as they lost on the sale" So the truth is the banks are only as 'safe' as the property bubble! That is downright frightening. The economy is reliant on the quality of the BS and spin. My money stays overseas for sure in gold and copper.

To be sure . GOLD is a four word letter , and is RICH . CASH . BANK . Lots and lots 'o them . Splendid it is .

More excitement on any journey if you take some chances......The road less travelled .

Do you believe in Vampire Squids , Wally ? They also have oil at $US 95 / barrel , by year's end . We shall see .

Roger, $95 oil will be cheap compared to what it will be, post the Israeli destruction of the Iranian nuclear weapons production facility! China is not everyones cup of tea, except maybe for Wayne Swan and the CEO of BHP but they are currently using about 50% less copper per capita than your developed western countries. They are set to increase consumption by the rate of GDP for some time to come. Throw in a similar demand growth pattern for the other developing nations and check out the stagnant growth in supply. QED supply shortages and that means rising prices. This is why copper is being bought and stored as savings in China along with gold. Also, as the US$ falls, copper will rise.

Still a bit of upside in copper but its had a stellar run, Freeport on the NYSE is a god way of leveraging the trade. I am sitting here hoping gold stays above 1000 an ounce which has been a great play this year, have a look at OGC and hang on for the ride to $4 when their hedges expire and they jettison the daft Phillipines prospect.
Wally copper has always been a recovery play because of its use in infrastructure and building and your position on the world economy is pretty negative, I understand its negative correllation re the $US and its tight supply but am interested in why you think its a play.

Careful guys its going to be different in the future

http://money.cnn.com/2009/09/10/news/economy/insider.sales/index.htm

http://money.cnn.com/2009/09/10/news/economy/insider.sales/index.htm

David, Roger, it's as simple as understanding why water is crucial for farming. Copper is crucial for a modern economy. Remember Roger, an ore find takes at least 4 years to get into production, if all goes well!

Roger - re this 'big'new find from BP in relation to peakoil.

A few points to consider.

1) BP (actually its contractors) had to drill 35,000ft down to find this field - Tiber as its been named (deeper than Everest is high). Its in the Gulf of Mexico - an area prone to annual hurricanes and the damage/disruption which goes with that.

2) Although the field is touted as containing maybe 4 billion barrels best estimates thusfar are that only 600-900m barrels will be recovered. Recovery rates from deep offshore fileds are notoriously low.

3) To put that in to context the world uses 85million barrels a day - so at best estimate the new amazing field keeps us supplied for 10 days.

4) Its likely that it will take years for this field to be developed - take a look at the development of the much touted Thunderhorse project in the GoM if you want to see how such projects get delayed/damaged by hurricanes - and Thunderhorse was in considerably shallower water.

The cost is these deep sea drills is immense, the difficulty in getting the oil out massive. Doesnt it tell you everything you need to know about the parlous state of our oil supplies that BP are prepared to chase oil under such conditions?

Peakoil is nothing to do with us not finding new oil fields - we will - there is considerably more oil to find. Peakoil is about the fact that the flow rates from these new fields cannot keep up with a) demand and b) the depletion rates from existing fields. Global (total liquids) production looks pretty much stuck at 85-87mbd.

The story of the next 10 years is everything to do with our dwindling oil supplies - as soon as any meaningful economy recovery comes and demand rises (it looks to have now started to climb again) oil will jump above $100 and we will get hit by another recession. I wonder how many times this has to happen before folk realise whats really going on here?

AndrewJ, knew about those comments and I fugure they have much to do with a desire to keep commodity prices low. Makes sence when you realise China is moving from saving in US$ to saving in stockpiling critical commodities. I bought into more copper/gold months ago in the crisis. You know what the rise has been. That will not be repeated but prices are set to pass $7ooous a ton in 2010. About $3.50us a pound.
Throw in the expected US$ decline and you get price adjustment in commodities. The $ drop and the supply shortage are the reasons Joe Chinaman is buying copper. Gold too but it comes with security problems even in China. You won't see the crims shifting a ton of copper very quickly. So owning shares in an aussie copper/gold midcap that is a potential acquisition target, provides a currency hedge v the us and the Kiwi, with upside potential re the supply/demand factor, has extensive tenements to drill for other finds and is one of the lowest cost miners out there with a brand new plant operating in a stable country right on the main market doorstep!!! Seems to me a better bet than NZ property.

To further put into context the BP find of 3/4Billion barrels, its instructive to look at what is happening to a nearby oil field which was discovered in the 1970s (we dont make discoveries like this anymore), and had an estimated 10 times as much oil (35Billion barrels, 18 Billion recoverable) - the famous Cantarell field operated by the Mexicans.

This was once arguably the third most important field in the world - but it peaked (as ALL oil fields do) at 2.2mbd of production in around 2004/5 - it now produces a mere 600,000 barrels a day, production collapsing at 100,000bpd every 3 months. Its prouction has collapsed to a mere 25% of its peak in 4 years.

If you would like to educate yourself about peakoil then the looming catastrophe in Mexican oil production is a good place to start:

http://www.theoildrum.com/node/5768

Excellent point , Mark , about Gumnuts' knee-jerk reactions into harebrained reneweable energy schemes . The USA's plunging into ethanol production from corn comes to mind . Creating a scarcity of corn , a staple human and stockfeed ingredient . Food prices rocketed 80 % around the globe . Bloody brilliant idea Mr Bush ! Politicians just don't join...the...dots and see the ramifications of their blundering into the market-place . The Helen Clark " we know best " approach has rooted us !

Sumitomo !? Copper !? No thanks, JC!

http://en.wikipedia.org/wiki/Sumitomo_copper_affair

Further evidence of the China surge:
http://news.theage.com.au/breaking-news-business/vw-announces-china-inve...

The Aussie banks are borrowing hard out last week Westpac 5.3 b now CBA

International dollar-denominated debt issuance was huge. Issuers included Hutchinson Whampoa $3.0bn, Commercial Bank of Australia $2.75bn, Spain $2.5bn, Svenska Handelsbanken $2.5bn, Iberdrola Ireland $2.0bn, Swedish Export Credit $1.5bn, Taqa Abu Dhabi $1.5bn, Tetroleos Mexica $1.5bn, Vale Overseas $1.0bn, and Petroplus $400 million.

Gosh AndreJ, our Bill will have to shake a leg or end up empty handed. Pull finger Bill, we don't want to miss out on the shot of $$ heroin.

Wally
Whos going to pay it back?

No Way, I dont have any money must be Harriet going to pay for it. I also have no debt. Im in a minority and plan to keep it that way.

Im packing my bags as we speak Im going to um,um ,um, anybody help me, where can I escape this madness. Argentinaaaaaaaaaaaaaaa

Don't laugh, Andrewj, but I just got back from a reconnaissance to Mooloolaba. Was very nice; civilised, even; but then what? I guess not speaking Spanish has it's limitations.
www.mooloolabatourism.com.au/

I understand Kiwibank is now doing the same as the Aussie banks and borrowing from overseas as well.
Isn't this one of the main reasons the US banks got into trouble? by issuing debt for mortgages to overseas banks, and pension fund etc?

I know the RBNZ has made it so banks must get a higher proportion of funds locally, but maybe it's time to put and end to their practice of borrowing from overseas totally, and require all bank lending to come from local depositors.

Then Bollards problem about not wanting to raise interest rates is solved for him, because rates will go up anyway.

China Slams U.S. Tariffs on Tires as 'Serious Act of Trade Protectionism'

I bet there will be more of this in coming months...>
http://www.foxnews.com/politics/elections/2009/09/12/china-slams-tariffs...

Looks like Globalization is in reverse Gear.

It would be interesting to see this chart next to one that has their deposits over the same time period.

Oil price should on average stay below $100 per barrel for many decades as demand drops off due to cars going electric/hybrid and more solar power and energy efficient methods utilised, freight will become dominated by electric trains rather than long haul trucks, and hydrogen power will be the next big thing, so not really worth worrying about oil situation in our lifetime or even our grandchildrens - it's all just scaremongering.

@Mark H: The piece in the NYT is wrong on all counts. Mark Lynch wouldnt know an oil geologist if he fell over him.

I dont know where he gets this crap from but his english is even wrong, let alone his engineering and geology.

"rate-of-discovery argument first: it is a statement that reflects ignorance of industry terminology. When a new field is found, it is given a size estimate that indicates how much is thought to be recoverable at that point in time."

No, rate of discovery is rate of finding....not estimating the size of an oil field...he's either mixed up or mixing it up on purpose to confuse. Either way he simply wrong...

"In truth, the combination of new discoveries and revisions to size estimates of older fields has been keeping pace with production for many years."

simply wrong...new discoveries are negligable....have been for decades....yes oil reserves tend to increase, as the field is utilised conservative guesses can be improved...but its no where near the same rate as its being used...simple math shows that....

All we see from this guy is similar to you....fear that at the end of the day Govns will have to regulate oil and energy use...which does not suit your political outlook, ergo the engineering/gelopogy/economics/etc is wrong to you...not because their disaplines are wrong, but because the political outcome of them being right is wrong, to you...

"But we can't let the false threat of disappearing oil "

FFS, we live on a finite planet...by defination, when something is FINITE, and you USE it, there is LESS left, so at some point we will have run OUT....

Oil is half used, right now we have passed, are at or shortly will at the maximum oil flow rate that can be sustained....about 85MBPD....that's it.....its better than 50/50 that July 2008 was the end of the plateau of output that started in about 2004....

What you are advocating is doing nothing....so instead of a little pain now and over a period of time, its going to be left to ppl to adjust to a severe change in probably as little as 2 years to that downward slope after peak oil....thats gambling and its in-competent....this is the sort of in-action and fringe outlook that has got us into this modern day financial crisis....and the people are the ones left with dealing with it...

@Lara: Sorry but you dont have a clue about what you are talking about, read the reality...its takes 10~15 years to move 100's of millions of cars to expensive hybrids that cost 40~50% more than conventional cars...If you think what you just wrote, then you are in for a bad shock....what you are churning out is make believe....its fantasy.....its likely that hydrogen power is 20~30 years away, but its most likey it will never happen....Read Robert Hirsch's 2005 report....or carry on with your head in the sand...I just wish it was only your life you were throwing away and not mine and the next generations.

You are probably right about an average $100 a barrel, (though I'd bet on closer to $150) this is not for your reasoning however. Its becaue every time oil gets to $150~200 a recession will result....and each recession will last 2~3 years...we will see a recovery, then the oil will spike and into recession we will go again...time and time again as we follow down that peak oil curve....ppl sit here thinking that last one was bad....looking forward its going to be like this for 30~50 years....the future generations will probably look at the waste of your ilk with disgust and loathing....seeing what you have left them, nothing...

regards

Peal Oil Debunked:

http://peakoildebunked.blogspot.com/

http://mises.org/story/1717

For every proof for peak oil 'now' - gosh, we need to destroy our standards of living and hand our lives over to the State, the free market can't fix this - I can put up a site to debunk it.

And Lara's right: the solution to peak oil, 'when it does come' is, and will, be found by innovation in the market, not by politicians and taxation.

Mark - you are aware that the peakoildebunked site carries this banner at the top of the page?

DISCLAIMER FOR IDIOTS: This site officially accepts that oil is finite, and will peak someday.

Recommended movie: "Who killed electric car", by Chris Paine.

Andy - the Japs have already worked out how to power a car using water - hydrogen produced in the process - it's just expensive to produce such a car but the cost will rapidly reduce when they perfect the process and begin to sell cars in volume. They actually need oil to increase in price so that more people will by alternative cars.

I would not call the US Govt innovators - leave that to the people in businesses such as Honda, Toyota etc - they have more to gain and will invest in it as that is where their future lies.

Wind power generation, water power generation, they even have prototype units that are built into busy roads and cars constantly driving over them feeds more power into the national grid.

I think all you peak oilers are underestimating how innovative the human race is, just look at how we progressed in the last 50 years on the technical front. Why worry about depletion of oil - put all that wasted time worrying about oil into thinking how can we continue on in life without it.

If NZ population especially in flat cities like Hamilton, Christchurch and Palmerston North adopted scooters or electric bikes for commuting at the same rate as the Italians have then that would be a good start. Saw a guy alongside the motorway heading down the Western cycle way last week on a unicycle with a glo-vest with the letters - "One Less Car" on the back - now he was on to it! He was moving faster than the traffic and was getting plenty of stares!

So lets get positive about solutions rather than remaining depressed about the peak oil beat up.

there are approx 118 hydrogen powerd cars already in nz(mostly old holden v8,s).one guy has a motor bike on the stuff.you can drive from wellington to auckland on about a litre of water(you need real pure water though like the sort you can buy from the warehouse for about4 $/10 l )emissions are just water vapour very enviomentally friendly too.i guess the fuel /oil companies dont want hydrogen as a fuel to take off until we have used up most of the oil though...the prius is more harmful to the enviroment than a Landrover discovery v8 (all that lead in the batteries and xtra energy to make the composite materials used in manufacture) ...................so burn your petrol and enjoy it! i think i read somewhere we have enough coal on the west coast to supply all our electicty needs for the next 200 years!! better than looking at all those ugly windmills on every bloody hill

@ Alan

Good call, that is one heck of a watch (who killed the electric car) picked it up from my local dvd store and thought "why have i never seen this on the box"

And does the tourism industry in New Zealand have to worry about the absence of an electic/hydrogen aeroplane? Could be we all get ready to stay closer to home?

Lara

"The find - estimated at 7 to 8 trillion cubic feet, about five times what Spain uses in a year - was made with the Spanish energy company Repsol."

Five years supply, FOR ONE COUNTRY. Hardly enough to address the imminent Peak in fossil fuels supplies.
http://news.bbc.co.uk/2/hi/asia-pacific/8251981.stm

Lara - Looks like UK could use the Venzuela Gas... theirs is running out fast

http://english.aljazeera.net/focus/2009/09/2009911112515731341.html

All the major banks in Aussie have raised additional capital by share placement, they are well placed moving forward compared with the rest of the worlds banks, if they fail we are all doomed.

Nuclear power will replace oil... and much better batteries then we have now.

Oxygen-Evolving Complex

Mike in welly, where did you get this from "It is estimated that the production of an electric car requires twice it's weight in fossil fuels" which has to be a greenie hint we must stay with gas guzzlers! So what if energy is required to produce an EV, even a bloody horse uses energy and produces CE.

Todd Stern, told Congress the effort to reach a new climate agreement in Copenhagen was about the development of clean energy, too.

''Countries that would cling to the old developing world adage that development must precede the environment make a fundamental error,'' he said. ''In the world we inhabit now, the only sustainable development is low-carbon development.''

http://www.smh.com.au/environment/nation-illequipped-for-green-future-20...