Hi Bernard, My name is Jodi Butler,(male - just to clear that up).
I am a real estate salesperson for a high end agency. As your name is probably the most well respected amonst my senior piers, I wish to pose a question to which I have not yet received a viable answer.
If the IMF can print money at will to fund wars or what have you, why do they not simply print money to even out the world economy? Now, I understand the 'inflationary' concept a little, however, if money was printed to pay for the bad debts, how would the inflationary disaster happen? I can understand how it would create a problem if an excess of money was injected into the system when it did not have to go towards debt repayment, thereby increasing spenditure. I do not, however, understand where the surplus spending would come from if it was not available to spend on goods and services, as it would appear to simply put the equation back onto an even keel. Forgive my naeivity. I simply have not been able to get this question answered elsewhere. Thanks

Hi
Im a small time farmer. Im trying to sell cattle apparently the market is dead as money is hard to get so its very hard to move stock. Also been advised to off load as much stock as possible as soon as possible. Worried about PPCS, wont supply them stock
dont trust them, also dont trust Wrightson Pgg after the shenanigans of the Silver fern farms purchase. Worried how farmers will pay interest on debt let alone principle.
I know the RBNZ is trying to pump in liquidity but who would borrow to buy a farm in this ( i know Helen spent 40 mill yesterday on a farm we already owned ie it was crown lease land) Friends are growing Veg gardens again even my accountant expects the worse and has a veg garden!
Also very dry worry about another drought. very hard frosts like last year knocking around grapes.
I used to gross 100k a year in sales last 2 years more like 20k this year hopefully 45-50k still a long way to go.

Anecdotally, Money is very hard to secure.
I went to my bank some weeks ago to see about borrowing more.
The response I got from the ASB bank manager was that each case is looked at individually but that they were very choosey about what they lent on & the age of valuations. I started sending in the paperwork & rapidly came to the conclusion I was wasting my time, & that it was better to leave the status quo rather than proding the tiger.
Interestingly, although the ASB was not keen on property lending, they were happy to give me a new credit card with a decent credit limit.
And also try to sell me some more insurance.
Maybe our banks will become more of a credit card and insurance broker than a lending institution for a while.

Anecdotally, I have heard of a deal to buy 10 quality apartments in Aucklands CBD fall over because the Banks would not finance.
I have heard of settlements not being able to be completed due to banks withdrawing the preapproval given.

You mention no "mass mortgagee sales", well I disagree. Loads of the properties currently up for sale are mortgagee sales, take a drive down the street & look at the signs, or check the mortagee sale site.
There are Dozens of developments that have been closed down due to the withdrawl of funding. Some are starting to pop up here on this site www.dariusrealestate.com

If you can source the money, they can be picked up for way less than their "real worth"- even after accounting for Bernards 30% drop !

Anecdotally, (from visiting a wide range of companies) businesses are seeing a lot less trade than they would normally expect, or need. Particularly those that have any connection to property, building, finance, trucking, conveyancing etc.
They are considering layoffs & certainly not taking on any new workers.
Interestingly, or as might be expected, some of the builidng companies doing renovations are seeing a bit of a pickup. the rest are really struggling- take a look at how many small businesses are starting to fall over as a result of developments like Kensington Park in Orewa.

I am astounded at our governments total Blinded Possum response to the current crisis. The World cuts interest rates all at once & our Reserve bank says- "we're thinking about maybe sometime in the future we might get around to perhaps lowering the rate a little, if the statistics that are 3 months old, that we expect to get next week, begin to show a substantial decrease in activity."

There are some good sides to every situation! My car was starting to get on a bit, and with end of year devaluations etc coming up I decided to see what's about. Found what I wanted and threw in a silly offer. Done! The rational from the dealer was that he gets $50,000 cash; a lesser value item to sell in his showroom ( wider market) and one less expensive item to hold in his inventory. I tried the same thing last year at this time, to no avail. So there is better value starting to appear. eg Keithw's appartments etc.

Jodi,
Good point. The US Treasury should be buying the banks rather than overpaying for their toxic mortgage bonds. It's much fairer for taxpayers and much more effective for the banking system.
Britain has taken the route you suggest. It is likely to have much more success and I suspect America will eventually have to do the same.
cheers
Bernard

This is how much cheaper banks have got. Don't know where I found this sorry I pasted it to my file of useless info without header.

2006, Royal Bank of Scotland spent £1bn buying 54.3m of its own shares at an average price of £18.37. As late as December that year, it paid £141m for 7.1m shares (average price: £19.79). Yesterday, RBS shares fell by 39pc to just 90p. What cost £1bn is priced at £49m today.

RBS was not alone. Even after the credit crunch hit the headlines in September last year, when Northern Rock crumbled, Halifax-Bank of Scotland was busy buying its own shares at fancy prices. In 2006-07, HBOS spent £1.5bn (average share price: £10.01). Yesterday, it joined the infamous "Ninety Per Cent Club" of losers, after the bank's shares dropped 37pc to 94p.

actually this is a good page on that site to start:

http://www.capital-flow-analysis.com/capital-flow-watch/index.php

'Buyback bear rages'

in response to Jodi Butler - how the credit crunch affects us all. The current financial crisis shows how the presently structured monetary system has worked out for us all. It also shows how the banking system is happy to take the profits but wants to socialise the losses when their bubbles burst. A very enlightening look at money, credit and the creation of them, can be found at www.monetary.org. I think our financial leaders would do well to educate themselves about the solutions to the crisis, and as voters we need to be aware of the solutions as well - it's not rocket science.!!

Have a read , you'll feel better !!

tonz - lucky you "” when do I shift?

jodi "” factoid: before 1980 the IMF's role in world monetary affairs ranked less than 10 percent (I'm being generous) - for advice, good, but the trend has increasingly gone to in-nation banking using offshore affils. 9 that is to say don't over-rate this entity). You'll have to excuse my naiveté for not addressing the remainder of your remarks..

"John B
We have borrowed some $ 100 Billion in the last decade alone and no one - including all political parties seems to give a stuff.

I suspect this will very soon be higher on their agenda's"

Don't hold your breath John- the politicians are either too stupid to understand or too self serving to care.
Tonights news summed it up for me. First item of headline news "The Everswyndell sisters give up competitive rowing " !!!!!!!!! While the rest of the world is highly focussed on a world wide financial crisis.
The press either doesn't understand, doesn't care, or someone has asked the orchestra to keep on playing as the Titanic lurges to one side in preparation for going DOWN.

Without wanting to give Bernard a big head, & not agreeing with everything he says, at least he & his crew are trying to bring things to the attention of the masses.

There seems to have been a "run on" macracarpa sleepers for raised garden beds (according to one supplier).

Thanks for that Zin. I have a question for you. Suppose for one momentus momentum, that we, as a global commuinty were a lot closer to if/when the world banking system is controlled by one government/organisation, which organisation do you suppose this would be? Humour me please.

I can not say what is going on in New Zealand but in Ireland things are getting tight. The government is running out of money (tax take is down €9 billion), and is planning a tough budget next week. Many defined benefit pension schemes in Ireland are at risk. There are less jobs around, and my company has given orders to cut costs due to a multi million € drop in revenue projections. Redundancies are being planned. I heard rumors that the Christmas party had a budget cut.

People are talking about the economy for a change which is nice at work.

I am in the Electrical Installation business, our company is fielding very little in the way of new business inquiries. I had 3 staff, layed off one and both the others have had their hours reduced, I am no longer taking wages or salary from the business. I will be in liquidation by Christmas at this rate after being in business for 7 years. I have reduced much in the way of expenses and increased time spent looking for new work.

Simon, hopefully it does not even know it is there or it might want to spread some damage! Interesting to hear from the different sectors though. You will probably find most bsinesses to do with consumer spending is seeing some downturn - i have noticed some deep discounting at stores such as Briscoes and the likes. I also noted that big boats on Trade-Me have become cheap!

Here's Christmas future:
The deleveraging vortex

Shipping rates are declining dramatically. China is about to shut up shop. That will cause the Australian economy to go into recession and will in turn have devastating consequences for the New Zealand economy.

Remember that when Australia gets the sniffles New Zealand gets explosive diarrhea.

Thanks for that outline Tonz, it is amazingly similar to what we are seeing here (& our govt continues to say everythings fine !)

AndrewJ, you mention the cattle market is dead..at least you have food on the hoof and a vege garden..

Don't just think about motor cars and machinery producers.

Think about pending food shortages, how about this info?

Russian wheat farmers (9% of worlds wheat production) can't get credit from banks to buy seed to plant crops (Gloomberg.com!) ..............what is happening in the USA wheat fields...or close to home wheat fields such as Canterbury ?

Our Father which..........

DOES ANYONE KNOW HOW LONG A CAN OF BAKED BEANS WILL KEEP???!!!!

Baked beans from China with enough Melamine should out last all of us.

Tonz........Canterbuy is one of the biggest growers of seed around.

And you are right for a new lobby group to start. It will need to involve reformers though and not a bunch of bank economists and usual faces.

Its time for the NZ MOFMAR to start (Movement for Monetary Reform).

We do need to prepare for the worst and hope for the best.

Ha!
Love it.
cheers
Bernard