# 8 : Why would anyone place an iota of credence in anything Blind Owl Greenspan has to say ? Hey , meebee bonds yields have risen because the economy is growing . 'Tis spring , love & optimism are in the Yankee air .

@#4

Mr. Key has obviously never heard of the Ultimate game. This is not a solution. Nobody with a leaky building is going to settle @ a 64/26 ratio. They will render their buildings rent asunder and walk away from their mortgages before they accept any "solution" that is obviously against all know rules of social reciprocity.

@ 7 - Decade of strife.
Bernard - you are correct when stating the NZ faces a similar scenario. The outrage against mining, welfare reform and indeed the sale of farms to China shows that most NZ'ers simply don't get it i.e. you can't spend more than you earn indefinately...
The $250m per week we are borrowing is not clyical, it is s structural deficit and is only going to get considerably worse as the BB's start to retire. I despair that our children will have to repay the debts of our greed and stupidity. John Key needs to come out and say this directly - we are going broke and can no longer afford our levels of welfare, education and health and in particular, our superannuation.

Unfortunately, under populaist democracy, this will not happen the only way we will address this is by complete collaspe and rebuild.

@Michael

Maybe NZ government can issue bonds secured form the assets of the 100% pure mining lakes!! More mines = more lakes = more bonds!!

Re. #4: How about a referendum on this matter. It's alright for the Gov't to say that all taxpayers and ratepayers should now bailout the leaky homeowners. But what about asking them first?

@ From the sidelines
There is very little outrage against welfare reforms in NZ. If you read the vox pops and online polls, you will see that they are overwhelmingly popular. People generally recognise that tough decisions have to be made to prevent our economy going the same ways as Greece, Ireland etc. Most of all, however, they resent bludgers and life-style beneficiaries.

Nice link Wally
Indeed.

18,000 workers needed for $60b gas project
The $60 billion project involves building a pipeline from the Surat Basin to Gladstone to export 72 million tonnes of liquefied natural gas to Asia over the next two decades.
Queensland Resources Council spokesman Michael Roche says the project will need a workforce of about 18,000 people.

cheers
Bernard

Yes indeed Wally;........ would the last one out please turn off the lights !!!

RE: #1
BERNARD - isn't it time for a decent article investigating the potential impact of such foreign based property investment on NZ housing markets???????

People can bang on all they like about planning controls (and yes they are a factor in higher prices) but I feel unless the hard questions are asked about foreign property investment we will never properly address the housing affordability question

A question for Bill England: Does the Government care more about making foreign investors richer, or giving young kiwis a chance to buy a first home?

Greg out West - not so sure if it's commonsense. If you are in the point of the global graph where the trend is to the vertical (economists hide this by making the vertical axis logarithmic....go figure!) then clearly you are into the last half of the Hubbert Curve of almost everything, and into the last 'doubling time'.

If you think global fiscal interactions will continue - I don't - then surely the later you leave extracting your resource, the more it will be 'worth'?

This is why enlightened banks used to loan against the future value of a tree (for instance) because it would grow more timber between year 30 and year 31, than a replacement tree would between year 1 and year 2. It was better to leave them in the ground, and only immediate cash-flow made folk take them out early.

The ultimate diffo in the case of mining, and Queensland gas for that matter, is that at the end-game of resource extraction, what's the point in cash?

Whatcha gonna buy?

Not many get that.

Yet.

Why don't we start by getting the $3,500,000,000 the power companies stole? My friend told me how his 18yo boy ended up in jail for 2 years because he stole a cell phone and punched a guy. The guy who embezzled $16,000,000 from the Otago Hospital Board got 4 years. (How many people died as a result of that theft???) That was a good outcome- most of the biggest crooks in NZ get nothing- or a knighthood if they are well connected

"However the OIO said a conviction would not necessarily shut someone out of foreign ownership of New Zealand land, if that person was deemed to be of good character".(herald)

Oh for facks sake..you didn't know why Noddyland is a standing bloody joke....now you do...!

#1. I thought the aussies had a few more clues, than to let in so much foriegn investment in residential property. They already have a property bubble big enough to burst all over the place. All they had to do was look at the NZ property market from 2001-07 to see what will happen.

I think New Zealand and now Aussie will be singing the Chinese national anthem in about 15-20 years.

I hope everyone likes dumplings and roast duck :)

Anyone know what the plans are for the gold mine at Waihi?

Give it 10 years (or whatever), that could be a great leisure resource too? If it is going to be filled in with water, I wonder how long it will take?

Alan.

@PDK: "To take a finite resource ‘away’."...indeed but I think within a year or two it will dawn on Govn's that they need to start hording....when that happens boy will there be mayhem....

The recent piece about OBama's energy guy is telling....

http://petrole.blog.lemonde.fr/2010/03/25/washington-considers-a-decline...

So the US collapse and a depression might happen far far faster....it only keeps going as long as it can import oil, Mexico's output is nose diving, just who will replace that once hording starts?

regards

Bull frog11 says: I hope everyone likes dumplings and roast duck.

Why do the media/ public not "roast" our politicians frequently and stronger ? Why do we not have more open debates about politics, economy etc. ?

Proposal:
Replace a few silly programs on prime time 7pm- 9pm on the TVone channel with a one hour of a "Political Forum": Have a theme and a moderator.
- Invite the person(s) in charge of the department/ government-
-Invite some professionals-
-invite 15- 20 politically knowledgeable people from the public.

This would not only inform the public about our parliamentarians and test their ability of representing us citizens and taxpayers, but also add quality and sensibility to political dialogs among/ between the public and politicians. I’m sure this would lead to some serious and necessary changes in our economy also.

Steven - yeah - I lifted that piece onto my own blog - more telling than everything, really.

When fuel gets scarce, it's at the margins that the demand will show. Stuart Staniford reckons the last half of this year, and even Obama's man gets that it will be before 2015, and starting by next year.

That graph is a beaut, eh?

Which means all mining (energy excepted) will have to compete for energy, with things like - um - food, and - um - You just wonder how so many folk can take part in the rush-hour traffic, watch the costruction of buildings, and not understand that it all needs energy.

Meanwhile, the mined energy returns less-per-litre, even as the litres get less-per-field.

Given the lead-times, I don't see National Park mining getting off the ground, let alone under it...

Yes the graph is telling, that's one huge hole....so the US will be making yet more ethanol...which means a lot less food on the open market....which means our food will go up in price, should be good for Farming exports...bad for those who cant afford it...Egypt had bread shortages, Haiti making mud cakes....ie starving etc....Japan only grows 36% of its food needs so has to import but has nothing to barter when it comes down to it....mayhem could happen so fast...especially if the fools start protectionism....and they will I think...

I recall there were some pilot schemes (10million?) that were to convert tallow to bio-diesel....the company walked away after the Govn wasn't interested, we will regret that day I think. Let alone the 2%? bio-diesel requirement scrapped under National...Brownlee is a fool he has no concept of risk and impact....those small %s give us a safety factor....he's chopping our own legs from under us....I will rejoice the day he's hung out to dry for his awful mistakes as energy minister...pity NZers will suffer for his in-competence...

regards

www.onlineuniversalwork.com

@ Walter
You raise an interesting point. Our media is very poor on robust discussions around the key issues facing NZ. You only need to look at the "headlines" and it really is lowest-common denominator tabloid news. Very poor quality. I am not sure if this is the result of a lack on interest by the NZ public or the lack of quality journalism to spark the discussions.
I think that Bernard stands out as the exception and has been telling NZ'ers the key issues we face for a while now and he does it in an easy to understand way. I do fear, however, that NZ'ers will not take the issues seriously until it is too late.

@From the sidelines: I think it comes down to no one wants to read/hear bad news, they just wont buy the paper.....so mindful of this, the papers, the Pollies, indeed anyone who relies on ratings or add revenue just ignores real bad news....ie bad news on a scale that effects everyone as opposed to some group not lucky enough to get protected by the Govn for their votes...

However the recent comments from Obama's "main official expert on oil market in the Obama administration" (like he has one!) makes me think the Pollies do indeed know about it, they just cant do anything without raising the populations dire....so they shuffle it on to the next Govn...and the next until it cant be forwarded no more....just like the financial crisis...

So on a lighter note for background listening Im enjoying this piece,

http://www.youtube.com/watch?v=7dPPemYn6Sw&feature=PlayList&p=336EAEFE9C...

That guy can make his sing.....tempted to get that guitar, at least that brand...

Maybe a birthday present for myself..

:D

From the sidelines - how true!

I just wrote an op/ed for the ODT on that very thing, but wasn't holding my breath. What we did got, was a lash-out at bloggers from the mainstream media - even as my offering was on the desk.

He had a point, to a point. The uninformed blogosphere can closely resemble a lynch-mob at times, true. But if the mainstream media was doing it's job, you'd think there wouldn't be a place for anything else.

I think Bernard still ducks the real question though. I thought the same about Kim Hill last Saturday - if you missed it, the podcast is worth the time - but maybe there is method in their madness.

The emails to Kim showed that there are a lot of thinkers out there - and you have to wonder whether one reportorial way to let the cat out of the bag, may be to question the holes in the hessian.

Quite why they don't take it on is a ponder - fear of peer ridicule? Death through dying ratings?

Les Rudd - I saw that Oram piece too - but it's hogwash. He is a nice fellow, a genuine fellow, well-meaning, not stupid, but I suspect religious (it doesn't help when you think a bigger being is in control).

The philosophy is flawed, as is common for a trained economist. He too, fails to 'get' the point we are at on the graph, and that the 'wealth' at the end of the extraction exercise,won't buy anything.

He was the first I heard advocating that we have to 'feed 9 billion by 2050' a refrain subsequently echoed by Key. We don't/can't feed 6 billion now, fully energised.

I think it says that his kind of thinking is as out of answers as the incumbent regime. Meaning that left and right are both on one end of the see-saw, and that we need to see a bigger picture.

Someone ( above ) is being more than a bit condescending towards Rod Oram . Rod is proposing the desirability of our country fostering a " NZ 100 % Pure " mining industry , developing world's best practice , and creating new skills for Kiwis . What the heck is so wrong about that ?

@ Powerdownkiwi - do you have the link to Kim Hill's podcast?
Re. Oram - do you think the issue is that economists and mainstream media is that frame their thinking on what has happened in the past i.e. "conventional" thinking? i.e. we repeat the policies that have been a success in the past, but only do more of them. i.e. produce more people, more consumption, more production, more exporting, more exploitation of resources. However, they fail to recognise that the model of the past is outdated and indeed following it is detrimental.
I do can not understand why governments still adovcate increasing the population, through subsidies such as DBP, WFF and through immigration when in fact, an increased population is the greatest treat to the future economy, especially when the population growth is in the lower demographics which are reliant on welfare and have the highest % of social problems.
I think you once bloged the question "with limited resources such as water, food and energy, who is more wealthy, the country with the larger population trying to spread them around everyone or the country with a small population?". That was a great question.

I look upon myself as a pragmatic greeny. It seems to me to be best that we access our mineral wealth at times like NOW when we are able to influence environmental practises. Otherwise it WILL be done during times of war, dictatorship or whatever current 'disaster'. The future for us humans is one hopes a very long time and much can and probably will change. Those who think we will not repeat the mistakes of the past are fools.

Powerdownkiwi how do you know Rod Orams Philosophy is flawed . you say that hes religous maybe why I dont know, but before that you built him up by saying that hes genuine,well meaning and not stupid and then flawed please explain why you are so sure of your own Philosophy.
Baz

Really? Really?

Thanks powerdownkiwi I will look up those words later ,but I beleive there is much misleading info about whats under the earth and will it last etc. What concerns me is this word Sustainabilty what does it mean , and what do they the powers to be want it to mean even that undemocratic UN love that word so I am very wary of people that tell me that the world is overpopulated ,not enough food etc . History has a nack of repeating itself .
Baz

Powerdownkiwi Shell sold out because there is no money in Gas they make about 15c a litre thats about all there is, gas stations are closing all over this country the ships come full of petrol and leave empty , IF they put linners in the tankers and filled them up with pure NZ water from Fiordland they would get more than that for the return trip. We are only being told half of whats being going on in this country .
Baz

Foreign investment in property isn't one way. I've looked at several Auckland city apartments in the last 2 weeks that are mortgagee sales. Australian and Chinese owners. Agents have told me that Australian investors in particular have taken heavy losses. Neil Jenman warned them about overpriced Auckland apartments off the plan 5 years ago. Many are now selling for 50% less. If the kiwi has another of its regular big downward corrections there will be more carnage for foreign investors.

The precedence has been set in Australia to hold corporate trustees liable, it first helps to know just what their obligations are:

A corporate trustee's role is to act in the interests of investors by being an independent supervisor of the security and a custodian of assets. The prime responsibility is that of a prudential supervisor, and not a hands-on manager.
Issuers of securities to members of the public are bound by a trust deed and require a trustee by law. The trust deed sets out the 'rules' for the investment. The trustee's role includes to...
- represent the collective interests of investors
- ensure the company offering the investment complies with the trust deed
- hold assets in trust separate from the scheme manager (in some cases).
http://www.publictrust.co.nz/corporate-trustee-services/what-is-a-corpor...
----------------
the case precedence for corporate trustee director liability:

In a split decision the South Australian Supreme Court parted from that view. Mr Hanel had argued that personal liability under section 197(1) did not arise because the corporate trustee was entitled to a full indemnity under its trust deed. On that argument it did not matter that the Daroko Unit Trust of which Daroko was trustee did not have sufficient assets to be able to honour the indemnity. The majority of the South Australian Supreme Court refused to adopt this interpretation of section 197(1). It approached the application of the section as both a question of fact and law and held essentially that if there were no assets with which the corporate trustee could actually be indemnified; there was no entitlement to indemnity for the purposes of the section. Of the Judges who considered the matter, Gray J held that the words referring to an insufficiency of assets would have no meaning if it was enough that a hollow right of indemnity existed. Accordingly, the Judge found that the section should be construed so that directors of a corporate trustee would face personal liability for any debts incurred by the corporate trustee where there were insufficient trust assets to meet the debt.
http://www.taxcounsel.co.nz/Resources/Publications+papers+and+commentary...
----------------
Of course Jane Diplock would wait until the two year statute of limitation was up before bringing charges, the offenders would get off and we would end up paying their court costs, which they would inflate of course.

the more I look and consider offers on property and then look at the fine print, the more I realise how many properties here are either crap, leaky, both or have some kind of legal hitch around the title. then there are rates which may get hitched massively as a result of the leaky building fiasco.....
maybe renting is best after all

I wrote earlier:
I think our unbalanced, messy economy nears a point, where fundamental philosophical questions have to be asked.
-
The accumulation of negative impacts on our environment coming from different industry sectors are unsustainable and harm our “Green Clean” reputation here and overseas already. As a nation we should reverse the trend and build and set a model for the world with our “green clean” economy. To succeed as a society we need to fit our economy more around nature’s economy. We cannot have it both ways.
-

Les, I'm sure Roger is positive of some form of manufacturing in NZ. Maybe he can explain this, because he's working in that industry producing "fish'nchip wrappers". Don't go ballistic, because of a few words you didn't understand correctly or you are not 100% agree.

Walter

Matt in Auck,

I too believe in protectionism to some degree, so will join you and Winston. Surely the events of the last 2 years have shown that market fundamentalism was never anything other than self serving propoganda served up by the wealthy. It was naively followed by my wanne be Gordon gecko commerce grad mates. Govts shoudl act pragmatically on a case by case basis ... if something is in the best interests of its citizens who gives a toss what Adam Smith or the Chicago school of economics think.

In my opinion a country shoudl be run like a family business. It needs to be viable, but at the end of the day you want to keep the wealth in the family. There might be a better person for the top job, but then your kids will miss out, so as long as they can get them there in the end you give them a break. Likewise, you dont sell out your stake to some interested party so you can cash up and have an easy retirement when your kids want to take over. You especially dont do that when it was your grandparents and great grand parents who got the business off the ground.

Currently NZ is run like a corporation - the big figure numbers (eg gdp growth, employment) seem the only measure of success. Bugger our loss of lifestyle and autonomy. And bugger the cost of living and high debt. Our net wealth looks great!!! pity its based on an asset bubble.

http://www.sangambayard-c-m.com

Neven - agreed.
But the super plan was always going to be on a retrograde path, as all investment had to be, on average, post peak energy. It probably doesn't matter which retrograde path they chose, although I think investment in renewable energy is the slowest parachute/best chance option if you have to put amassed tender to work.

I was thinking (rare, I know) last night about the discussion above, re Mr Oram's comments. He does the economist thing of accepting Nz's debt as immutable, and only reduceable or payable.

I do about 20 hours a week on average, voluntary, unreimbursed (I cover my own travelling etc) and regard it as my repayment to society, for what it's given me. Much of it is what educationalists would call L.E.O.T.C. (learning outside the classroom). It could equally be as a hospital orderly, or whatever.

If all public servants did the same, the 'debt' would be gone, but of course they wouldn't be spending as much..... which would no doubt cause a rucus.

Regardless, that is what it will come to. Peak energy meant peak (average) income. If you'll pardon the pun, the penny is taking a long time to drop! :)

I think you're right about fuel prices going up, but it's a double blind game - all activity uses it, so at some point (we got an inkling of it at $147/bbl) it takes down the very structure which sets it's price. Then what's it worth?

Will that be SUPER...or LEADED....I shall not WEIGHT to see.

Alternatively......

Well we should all actually now BUY from SHELL...if it benefits our SUPER FUND...

MIGHT as well keep BP, etc out of our POCKETS.........they have no altruistic aims here.

Might as well SUPPORT....the un-leaded......as.....we SHELL-ve and hit the downward side of PEAK OIL.

Seriously....

SO...KEEP GOING WELL...KEEP GOING...SHELL.....

(well until the INFRATIL...name CHANGE...)

SHELL should now be the ONLY brand to BUY.....

BUY...NEW ZEALAND....

powerdown : I'm seeking resort consent for NZ's first Rat's Milk Dairy farm . A lactating female can express 75 ml. / day . That will be my udder occupation . We only need 900 million milking rats to replace NZ's entire cow herd . ...[ must get onto the Dept. Immigration , as to which nationality has the smallest & quickest hands in the world . Gotta be nimble to milk a rat . ]

Those rats have been milking us , all these years !

Roger - "debate the issue", we have many times in many threads and on specific related articles, in particular provided by John and Selwyn. In all of that it was easily observed that those with a vested interest in maintaining the status quo - to continue deriving wealth by inflation (munny flowing, as you put it,) untaxed capital gain and associated avoidance rorts/scams - will never concede to policy change that would benefit the real economy, elaborates and therefore the wider NZ economy, because it's just not in that small group's interest.

Better controlled inflation/exchange rate and a flatter/broader tax system is just not in that small group's interest. Simple, but stupid, nonetheless.

Cheers, Les.

Roger - yes, to qualify, price inflation is proportional to "munny flowing". No munny flowing, no price inflation. No wonder, "those deriving wealth by inflation (and price inflation) untaxed capital gain and associated avoidance rorts/scams," like "munny flowing". (Unless of course they are 'pump and dump' artists and keen for manipulated flow-stops = deflation, and price deflation.)

Anyway, we split hairs. I'll leave the last word to you Rog.

Cheers, Les.

Ok Walter..I'll play your game.....it all comes down to having and using wisely your competitive advantages. It is that simple Walter. Sadly our clowns in charge have made a pigs arse of that task.
Kaikoura sucks money from tourists because of the Squid nearby that attract the Whales that attract the tourists. No Squid....no money. The Squid and Whales are your competitive advantage.
Given time, the authorities will bugger it all up one way or another, count on it.

Thank you all for your profound answers.
Gosh - I just shake my head how worried I was, explaining for months why the segment manufacturing is important for a nation's wealth creation, businesses and society. But now I learn with a few simple changes, how simple in fact New Zealand’s simple economy works – not complex isn’t ?

No - more wasting my time folks, I rather create some more paintings - Rogie eating red gummy bears - ha !

Walter