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Monday's Top 10 with NZ Mint; Wanted: a real central bank; windows that generate electricity; a Russian euro; a history of money; India waits for rain; Dilbert

Posted in Opinion

Here's my Top 10 links from around the Internet at 10:00 am today in association with NZ Mint.

Bernard will be back with his version tomorrow.

As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.

See all previous Top 10s here.

 

1. 'Crime of the century III'
Remember the New Zealand finance companies of 2005-2008? Many of these were risky endeavours, but among other reasons (supply and demand) they set their term deposit offer rates at a level benchmarked against banks. They did not wish to appear risky to investors.

Well, it turns out some of the world's largest investment banks used exactly the same strategy in 2008, as the Libor scandal is revealing.

The FT has more »

Regulators are focusing on at least four of Europe’s biggest banks as they investigate the attempted manipulation of the region’s benchmark interest rate, suspecting that Barclays’ traders were the ringleaders of a circle that included Crédit Agricole, HSBC, Deutsche Bank and Société Générale.

It has been clear for some time that about 20 institutions have been drawn into regulators’ sights over the affair. But until now, the details of how individual banks could be implicated has remained murky.

There had been a broad assumption that most banks under investigation were suspected of manipulating Libor submissions in the financial crisis period running from 2007-9 to appear healthier than they really were, sometimes allegedly with the implicit nod from policy makers.

However, the alleged involvement of traders at Crédit Agricole, HSBC, Deutsche and SocGen, predates the financial crisis by several years. Barclays’ settlement with regulators made it clear that there were two distinct periods of attempted manipulation – the first for trading gain, the second for broader reasons of financial stability.

Satyajit Das has been also looking at how these rates have been 'fixed'. He says the Libor fix may be a simple example of "beezle".

Coined by economist John Kenneth Galbraith, the term describes the fraud or embezzlement that occurs in booms as sharp people take advantage of the favourable conditions and abundance of money.

2. The EU needs a real central bank
All major sovereign countries have crushing debt burdens. But investors are flocking to US Treasuries, UK Gilts, Japanese bonds, and Swiss government issues - but not to the euro. Just a very few years ago, the euro was considered a serious alternative to the US dollar as a reserve currency, but not any more. Why is this? It looks like it has a lot to do with the willingness and freedom to print money in a crisis - that is, do serious 'quantitative easing'. The EU/ECB won't, so the euro is being trashed. Is it too late to save it? Looks like that to me. Here is Anatole Kaletsky at reuters.com:

The ability to print money, officially known as quantitative easing (QE), has allowed the U.S., British and Japanese governments to run whatever deficits they wanted and to offer their banks unlimited support without suffering the sky-high interest rates that are now driving the Club Med countries toward bankruptcy. Instead of raising money from private investors, these governments finance their public spending and deficits by borrowing from their own central banks. This means that the U.S., British and Japanese governments are actually much more solvent than their huge deficits suggest, because much of their debt does not really exist. They are an accounting fiction – an IOU from one branch of government, the treasury, to another, the central bank. The Bank of England, for example, is lending £375 billion to the British government in 2009-12, out of a total planned deficit of around £450 billion. The Fed’s $3 trillion balance sheet effectively reduces the U.S. government’s total debt by 20 percent, from $16 trillion to $13 trillion.

Of course using printed money to finance government deficits cannot permanently solve structural economic problems such as poor education, crumbling transport infrastructure or unaffordable pension commitments – and in some circumstances financing of deficits by central banks can be extremely dangerous, generating rapid inflation. But the world today is not threatened by inflation and overspending, as it was in the 1970s and 1980s. Instead the danger is generally thought to be deflation caused by inadequate investment, weak consumer spending and falling wages, as in the 1930s.

3. The right must learn to love the state again
The 'right', especially the American right, has a serious blind spot when it comes to advancing ideas on how to address or solve the GFC issues and get beyond the them. They think excessively large government and government programs have caused the problem - and they might well be right. But the solution will not be as simple as 'shrinking government' - what is probably needed is a smaller but more nimble government, one organisationally transformed from the 1950's model (or even the 1930's model) which seems to have survived. Francis Fukuyama has a useful opinion piece in the FT on this, here »

If contemporary conservatives could get over their ideological aversion to the state, they would recognise that ... government is both necessary and in great need of reform rather than abolition. Private sector companies have undergone huge changes in recent decades, flattening managerial hierarchies, upgrading workforce skills and experimenting ceaselessly with new organisational forms.

[Government] needs to be smaller but also stronger and more effective. And this will not happen unless people see public service as a calling, rather than a despised occupation for people unable to make it in the private sector.

4. Waiting for the rain
There has been a noticeable and worrying shortfall in the amount of rain falling in this years Indian monsoon season. Last year things were normal to heavy, but this year the subdued season has India on edge. Or so Chandrahas Choudhury reports:

For about a month, Indian foreheads have been creasing at growing fears that the rains brought by the annual southwestern monsoon -- the climatic feature that most strongly distinguishes the subcontinent -- are going to be less than normal this year.

As of this week, the rain shortfall in India was about 22 percent, compared with the 50-year average, and the shortfall in several critical regions was worse. A rain map of India in 2011, a year in which the monsoon was close to normal, is here, revealing the enormous variations seen across a landmass as large and yet local as India.

Monsoon rains are crucial to India's agriculture and economy, because they provide about four-fifths of the country's annual rainfall, because much of the arable land is still mainly rain-fed, and because about two-thirds of the population still depends directly or indirectly on agriculture (even if agricultural output comprises a much lower percentage of gross domestic product than in decades past).

In Australia, by contrast, things are normal to wetter this year, a far cry from the droughts of a few years ago - which some reckoned pointed to a sign of things to come - well, they didn't. What came was normal variation.

5. One year on
The markets have ignored S&P's ratings downgrade of the US and it seems to me they are ignoring the coming 'fiscal cliff'. BusinessWeek reports:

When Standard & Poor’s stripped the US government of its top AAA credit rating last August, predictions of doom followed. Mitt Romney called it a “meltdown” and warned of high long-term interest rates and damage to foreign investors’ confidence in the U.S. Republican Representative Paul Ryan of Wisconsin, who chairs the House Budget Committee, said the cost of mortgages and car loans would rise. Mohamed El-Erian, chief executive officer of Pimco, the world’s largest bond fund, forecast erosion in the standing of the dollar and U.S. financial markets.

They were wrong.

Almost a year later, mortgage rates have dropped to record lows, and the government’s borrowing costs have eased. Yields on 10-year Treasury notes - in effect, the interest rate the bond market charges the government on long-term credit—have plummeted from 2.56 percent just before the downgrade to 1.51 percent on July 17. The dollar is up 11 percent against an index of major currencies, and the Dow Jones industrial average has risen 12 percent. International investors’ enthusiasm for the US has strengthened, with 46 percent of respondents in May’s Bloomberg Global Poll calling it the market with the most potential.

Warren Buffett turned out to be prescient. “The US is still triple-A,” he said in 2011 amid the uproar. “In fact, if there were a quadruple-A rating, I’d give the US that.”

Buffett owns 13% of Moody's of course - and you might even say Buffett is his own credit ratings agency, given the power of his opinion.

6. 450 year old debt. Trillions owed
It is not a good idea to let a debt go unpaid for a long time - or maybe it is. CSMonitor.com has the tale:

The sleepy hamlet of Mittenwalde in eastern Germany could become one of the richest towns in the world if Berlin were to repay it an outstanding debt that dates back to 1562.

A certificate of debt, found in a regional archive, attests that Mittenwalde lent Berlin 400 guilders on May 28 1562, to be repaid with six percent interest per year.

According to Radio Berlin Brandenburg (RBB), the debt would amount to 11,200 guilders today, which is roughly equivalent to 112 million euros ($136.79 million).

Adjusting for compound interest and inflation, the total debt now lies in the trillions, by RBB's estimates.

7. Adopting a great idea
Russian Prime Minister Dmitry Medvedev (Vladimir Putin's alternate) is calling for the introduction of a common currency for the Eurasian Union of former Soviet countries as a hedge against growing volatility. They want to use the good bits from the euro experiment.

The first thing to do when creating a single-currency union is establish a common central authority overseeing the fiscal policy in each of the bloc's countries, something eurozone countries don't have, said Alexei Devyatov, chief economist at UralSib Capital.

I don't think the obvious colonising implications will go down that well outside Russia, however.

8. Windows that generate electricity
UCLA researchers have developed a new transparent solar cell that is an advance toward giving windows in homes and other buildings the ability to generate electricity while still allowing people to see outside. Their study appears in the journal ACS Nano.

"These results open the potential for visibly transparent polymer solar cells as add-on components of portable electronics, smart windows and building-integrated photovoltaics and in other applications," said study leader Yang Yang, a UCLA professor of materials science and engineering, who also is director of the Nano Renewable Energy Center at California NanoSystems Institute (CNSI).

Yang added that there has been intense world-wide interest in so-called polymer solar cells. "Our new PSCs are made from plastic-like materials and are lightweight and flexible," he said. "More importantly, they can be produced in high volume at low cost."

9. Toward a cashless society
Money is an abstraction. ASB has recently put it on Facebook. It's on mobile phones around the world. Whatever it looks like or whatever it’s backed by, what matters is that people believe in it. James Surowiecki has penned a brief history of money to put it in perspective.

Today, many people long for simpler times. It’s a natural reaction to a world in which money is becoming not just more abstract but more digital and virtual as well, in which sophisticated computer algorithms execute microsecond market transactions with no human intervention at all, in which below-the-radar economies are springing up around their own alternative currencies, and in which global financial crises are brought on for reasons difficult to parse without a PhD. Back in the day, the thinking goes, money stood for something: Gold doubloons and cowrie shells had real value, and so they didn’t need a government to stand behind them. 


In fact, though, money has never been that simple. And while its uses and meanings have shifted and evolved throughout history, the fact that it is no longer anchored to any one substance is actually a good thing.

10. Where the hell is Matt?
Talk about not knowing what you’ll be when you grow up! This from the NY Times: (love that seal!)

Matt Harding was a video-game designer in his early 20s, traveling the world. On a whim, he put together the now-immortal video, “Where the Hell Is Matt?” It consisted entirely of short clips of Matt, a non-dancer, doing his “stupid dance” in one famous world location after another, edited to a great, soaring song. The result had a power, a universality, a happiness, that drove it to become one of YouTube’s most popular videos.

And now Matt released his 2012 video. It’s a big departure - and it’s a masterpiece.

This time, it’s not Matt just swinging his arms, stepping in place. This time, he actually learned to dance, often in the style of the country he was visiting. As a result, there’s a feeling of collaboration, of immersion, that wasn’t in the earlier video.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment in the box on the right or click on the "'Register" link at the bottom of the comments.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

62 Comments

Great Top 10

Great Top 10 David.
cheers
Bernard

Chinese premier warns of grim

Chinese premier warns of grim complicated jobs situation
 
 
Chinese Premier Warns of "Complicated, Grim" Job Situation
 
 
http://english.cri.cn/6909/2012/07/22/2982s713055.htm
 

#8 Very interesting - I

#8 Very interesting - I wonder how much a large building can generate - perhaps half the aircon requirements or most of the electricity needed for computers? This is a big development. From the link you gave I found another interesting story about monsoon research - see http://www.newsdaily.com/stories/bre86j0cs-us-india-monsoon-mission/
Here in HK it has been quite a lot wetter than last year. 

OMG, you think its a big

OMG, you think its a big development....yet have no engineering background to make such a statement....very bold, amazing really......
Assuming the glass is vertical....and in NZ.....and that the building is fixed in orientation...not a lot......<100watts /m2 say....(I could go back and work it out but I have better things to do)...
By all means though feel free to google for the calcs CIBSE (http://en.wikipedia.org/wiki/Chartered_Institution_of_Building_Services_...) will have it and ASHRAE I think.
Really its a non-event....the basic angle (vertical) is just wrong.....now a glazed roof, yes OK. 
I'd take a stab and say that you could cover the roof at less cost and get more power by a factor of 2 so 1/3rd the area and hence cost.....very rough guess mind.
Wetter in HK, a lot dryer eleswhere....India, USA....etc funny that.
regards

Of course I was thinking of

Of course I was thinking of HK buildings - an example.
http://nunan-cartwright.com/projects/bnp_paribus/
Why do people on this board despise you steven?
So now you are conected to the rain god. Pathetic.

Right so in Hong Kong at 22°N

Right so in Hong Kong at 22°N the Sun through the peak solar radiation hours in summer is going to be at a very acute angle to the walls and deliver minimal energy. Did you actually think before you posted?

Why don't you come here to

Why don't you come here to have a look for yourself, or better still go to the manufacturers of this new product and tell them they have a dud and see what they have to say - I'll leave the sarcasm to them.

Where did I say anything

Where did I say anything about the product? In fact where did I say anything other than your understanding of solar radiation is pretty limited.

Why don't you work on a list

Why don't you work on a list of opinions which don't offend you? Rather than gradually adding to a list of opinions which do, that way we can stick to the non offensive ones when we are not busy trying to piss you off.
I just think it might be a shorter list, less effort on your part.
 

Here Nic, something I know

Here Nic, something I know you will appreciate - always keen to help and maintain a positive outlook.
http://www.climateconversation.wordshine.co.nz/

Sure, well if I ever get over

Sure, well if I ever get over the sheer entertainment of holding opinions which are offensive to you, I guess we know which opinions are acceptable.

You are welcome to any

You are welcome to any opinion you want Nic, and I'll defend to the death your right to say it.
Now your use of the words "offensive" and "piss off" - seems to suggest a degree of intolerance.
OK signal 8 Typhoon has just been declared. Could get exciting!
You'll be fine in the morning. ;-)

No, completely wrong, I find

No, completely wrong, I find your opinions comical, not irritating at all. I am not one of those people who cares how much NIWA spends of lawyers. And its about time we found out if the court thinks it can declare Science invalid (oops sorry not listening to your argument again), the court can not rule on the science, but might declare that NIWA should do it better? Sorry, I am having trouble understanding what the argument is.
It really doesn't help that every time the defence makes a point, Treadgold can't quite make it out, maybe someone should get him a hearing aid?
Hey, here is something totally non-offensive, is George Carlin with the 'Sceptics'?
http://www.youtube.com/watch?v=eScDfYzMEEw
 

Carlin is a hoot - a very

Carlin is a hoot - a very familiar face - but, like CAGW, dead too. Glad to amuse you anytime. LOL.

Don't know about that, did

Don't know about that, did the court make a ruling? On George Carlin being dead I mean. How will we possibly know?

Ya know, Nic , I really think

Ya know, Nic , I really think you're starting to warm to me  ( but not globally - if you know what I mean)

It gets down to social

It gets down to social maturity/responsibility.
 
While there is any doubt, the worst-case scenario is a wipe-out of the species. Clearly, you eliminate that possibility, or why are you doing anything else? Rich but dead? Stupid.
 
If it turns out less threatening, you have the option to burn all the remaining fossil fuels still available. If it turns out to be a real threat, you did the right thing.
 
At the bottom of all denial, is the desire to use the fossil fuels NOW, which is no more than an expression of selfishness.
 
Social immaturity/irresponsibility, in other words.

No, what you are really

No, what you are really saying is that the poor and impoverished in this world should be denied fossil fuel use to lift themselves from poverty and hence bring their populations under control, while rich folk like you plant conscience salving co2 absorbing trees so you can swan off to exotic locations to satisfy your inbuilt "disaster" genes - Pearl harbour was your last excursion, wasn't it?
 
How's the lesson preparation going for your next major lecture to 5 year olds at your wife's school?  
 
In all the schools I taught in clowns like you were shown the door.

Stupid statement.   If it

Stupid statement.
 
If it takes fossil fuels to 'lift them out of poverty'. then clearly it's a temporary measure. Only a fool would put their name to such an illogical connection.
 
Rich? Life-wise, yes. Money-wise, no. A conscious choice. I planted enough trees to absorb the carbon I produce, and live with my own conscience. Sounds like you are having trouble with yours, the angst pours out in every word above.
 
Don't make assumptions.  My partner of 30+ years ('wife' says a lot about you) doesn't teach nowadays, get it right if you're going to get personal. She works in a teacher-advisory (Science/environment) role for the Uni and the L.A. 
 
Glad I wasn't involved in schools like that, hope ERO was on to them.
 
 

There's an unwritten eleventh

There's an unwritten eleventh commandment
 
"Mind your own business"
 
Too hard for you, aye?

Anything that has the

Anything that has the potential to kill my kids - and me - IS my own business.
 
And I appraise that from  a logic basis, as above.
 
Trying to use the fact that the too-numerous-for-the-planet poor need to be 'raised out of poverty', to justify the continued use of fossil fuels, which therefore necessitates denial of any possible side-effects, is the madness of a "I can't believe they have to eat mud pies" Monckton.

So who's selfish now? Still

So who's selfish now? Still claiming the high moral ground are you? Your wicked mind has been exposed for all to see. What an own goal.

This planet can - perhaps -

This planet can - perhaps - carry 2 billion of our species, on an ongoing basis.
 
Only if they live sustainably.
 
I can't save the other 5 billion, and it's not worth trying.
 
But it's valid to demonstrate/ live the sustainability.
 
It was valid to warn the Titanic passengers, but they wouldn't all survive, and it would have been silly not to see to oneself. Only the stupid would start with their investment in deckchair-rental, and work backwards via the need for bums for the seats, to the fact that the ship won't sink. As stated, logic is the key.

Thanks for the video #10!

Thanks for the video #10! It's really beautiful.

re 8 - there is about a

re 8 - there is about a kilowatt of solar energy hits every square metre.
 
You can use it to generate electricity, or go on through and heat your house, or a proportion of both. Adding panel to the unglazed wall area would make more sense.
 
Still it's a step in the right direction. Now we just have to manufactre the glass, transport it to the houses - bother. Oil, and transport. Bother, folk like Hughey didn't orientate the houses to the sun. Oh well.........

I would have to go digging

I would have to go digging for some exact numbers but I think its  < 200 w/m2 on the surface, and then that varies with the angle of the surface of the earth to the sun's rays and time of day if the solar panel isnt tracking...so more like 150watts/mtre2.
regards

That's what you get out of

That's what you get out of the panel. It's a k that lands. If you can get it into the house, and not let it out.......
 
I get 1.5 kilowatts in from 4 sqm of air panel on the East wall, of a morning. Just natural thermosyphoning over a 4m height, glass and matt black steel 50mm apart, vents top and bottom.
 
Tracking? We built a system, but panel just got so cheap, it's easier to just add fixed. Sadly, Jevons appears on the scene........

Ah OK east in the

Ah OK east in the morning.....low sun so the angle is OK.........water or electrical?
How much per panel?  output per panel?
yes I suspect the improvements make tracking pointless...
regards

Neither Steven, it's air.

Neither Steven, it's air. Vent in from the house at the bottom, back into the house at the top. Total thermosyphon - starts at sun-up, stops midday for obvious geometric reasons.
 
Two old alloy ranchslider doors, one above the other, mounted 50mm off the wall, and a matt-black-over-coloursteel backing.
 
No leaks, no cost, permanent heat gain. Why doesn't everyone do it? Go figure.

Trombe wall by the sounds of

Trombe wall by the sounds of it PDK. 20m2 would supply the all the heating for most nouth Island houses. Perhaps supplemented in the south. Just one of many methods for passive solar, but you comment re urban sprawl without thermal performance considerations is well made.

Not technically a Trombe,

Not technically a Trombe, because there's no thermal mass, but it's a hair-split.
 
It's just an air column - but the air blows out the top vents like a 1.5k fan heater. Melted the first plastic vents......

hair-split? That might be

hair-split? That might be akin to what my father used to call a pussy whisker.

  Egyptians built pyramids to

 
Egyptians built pyramids to get some jucy sun angles.
Pity all the panels have been removed over the mists of time…  

Just thinking about the

Just thinking about the logarithmic nature of the eye's sensitivity to light, you could probably cut out 75% of the light (to be absorbed and converted in the PV) and let the rest through, which would still look reasonably bright.
Perhaps useful in hot sunny climates where keeping the sun out is more interesting than trying to warm the home (as it is here in most of NZ).  Keep your view and get electricity too.
 
 

There is a minimum level

There is a minimum level tahts safe.  I think its 350  for general work you want I think 500~750 for detail work...l/m (lumens per metre?) So for walking down the street yes OK -75%..... but I dont think land area is that limited v what we can get out of the ground to make that many panels...
regards

With a web-cam outside and an

With a web-cam outside and an screen inside, coupled with PV energy transfer, who needs glass?
 
 

Indeed! :-)   That's right up

Indeed! :-)
 
That's right up there with an idea I had for super-insulating passive solar.  It involves mounting a light gathering system (dish probably) outside, firing the resulting beam through a tiny (single and only) window into the house, then using a reverse dish/lens system to illuminate/heat the inside of the house.  The idea being that windows are responsible for a large portion of heat loss, but at the same time wanting to make use of solar  ... hasn't made it past the brainstorming to proof of concept phase yet. :-)
 
The problem with the web camera/screen thing is everything appears so 2D.  Whereas with a window... everything's so lifelike, it looks almost real. :-)
 

Not bad thinking. The rule is

Not bad thinking. The rule is the use different glass to wall rations depending on orientation, your idea would be dynamite on the south side. Not so sure about cost effectiveness though.
 
Don't forget the phychology of light and space, it is really important.

#2 Rather than one Central

#2 Rather than one Central bank I think Europe wants lots of little Central Banks, one for every Country. Did anyone in Europe actually vote for the EU? The problem is that there is a ruling class that think a United States of Europe is a good idea. Its very easy to  become used to the thought that taking away democracy from European Countries is not that bad and its not a big deal.
This is what the real struggle is all about. France does not want to be ruled by anyone. Germany does not want to give up its sovereignty. The same goes for every other Country in Europe.
 

 Kiwi...What was the European

 Kiwi...What was the European union  meant to be if not  united states on an economic platform....thats why the single currency ....duh.
" Did anyone in Europe actually vote for the EU?  " are you for real....? no really it's just agoogle away...you can find out go on......Move Over Rulers Of Nothing.  
Did anyone in China vote the communists back in...? Did Honk KonK have other options before the handover........watch your glasshouse there my good man.
 

Are there any communists left

Are there any communists left in China? If there are they can't be very good ones as there seems to be lots of Chinese billionaires and millionaires around and no one seems to mind.
Are there capitalists left in America?
Are there any socialists left in Europe?
The ruling elites don't live by ideals any more, whats are left are historical slogans.
Times change 

"Are there any communists

"Are there any communists left in China? If there are they can't be very good ones...."
I Don't know Kiwi...? how many of you over here are good ones..? ballpark it for me.

"how many of you over here

"how many of you over here are good ones..?"
I don't know, I've never been to China, I don't know the language, I'm European. Yourself?

Transylvanian.......but

Transylvanian.......but didn't vote on the E.U.....not the bloodsucking variety.

Appropo of nothing else, I

Appropo of nothing else, I see that one of NZ leading travel insurance providers has suddenly withdrawn insolvency cover from it's policies, due to the general financial stress of the international aviation industry.
 
Just another wee indicator that helps to paint the broader picture....

An industry locked into

An industry locked into higher borrowing rates because of outstanding leases finds it hard to compete on price against rich or new cheaper financed competitors.
 
Falling Interest Rates Destroy Capital
 
 

Vanderlei Which

Vanderlei
Which one?
cheers
Bernard

I note the following excerpt

I note the following excerpt from the Euro needs a real central bank.
The Bank of England, for example, is lending £375 billion to the British government in 2009-12, out of a total planned deficit of around £450 billion
I know that promoting the idea of printing money gets great resistance on these pages, but still suspect its effects are not widely understood, nor that the UK and its conservative government easily get the Olympic Gold in QE. The perception is that only desperate countries do it. In fact, the problem is that the real desperate countries of Europe cannot. The UK, Switzerland, Japan and the US are not remotely desperate. And talk of Reserve Currencies making a difference is just a crock of rubbish.
The UK has had inflation of roughly 5% since QE started with a vengeance. The QE has allowed social spending to continue to fund "social contracts" including pensions, despite talk of austerity; and without massive offshore borrowing. It has kept the currency competitive, so helping their industry and services. The still relatively modest inflation has helped private deleveraging from very high debts. The real government deficit is actually modest, given the government will clearly never pay the debt back. And the government has actually made money by loaning the mopney out through the banking system at a fair return.
Contrast our approach. Still have massive government deficits- which in our case are real, because we have borrowed from 3rd parties, which are generally foreign as it happens. Which has kept the exchange rate high. Which has kept us in a vicious circle of uncompetitiveness spiralling into a worse and worse current account. 
I believe Bill English has today again ruled out any approach to stop this vicious circle. We clearly are captives of the international banks, and noone has the kahunas to stop being so.
 

Stephen, Your first article

Stephen,
Your first article really just seems to blame the government for the state of the world economy, without real specifics on how the gvernment should fix it. Businesses bemoan the lack of credit; albeit without QE, there would presumably be less of it about.
The second, from Labour supporter the Guardian, reasonably enough talks of the full government deficit. The article on interest.co.nz today points out that 80% of that is funded by QE, so not real debt at all.
Following are a couple of articles by Jeremy Warner of the Telegraph. He actually doesn't like QE at all, but likes some of the benefits- in particular the lower currency. The second tongue in cheek comment explains how the government likes what the BOE is doing.
The UK is not in great shape- probably about as sound as NZ, but given its proximity to Europe, and the implosion of its main industry, finance, the UK is doing relatively well; and with QE, will climb out of their problems faster than we will. In both countries fixing the underlying Government deficits is politically unacceptable; you cannot touch pensions or education, or health services, or even the relatively small social welfare stuff. Nor in my view in near recession should you. So both governments effectively just tinker with stuff, and hope that things come right in a few years.
http://www.telegraph.co.uk/finance/comment/9409746/A-weak-currency-is-no-panacea-but-it-sure-does-help.html
http://blogs.telegraph.co.uk/finance/jeremywarner/100018290/the-emails-that-reveal-how-king-and-osborne-fixed-the-gilts-market/
By the way I agree that in an ideal world there would be no QE; but our government and Reserve Bank give us the worst of both worlds. Plenty of credit and money supply- the commercial banks can't give us enough. But all the proifits from that go offshore; including long term ownership. And the exchange rate remains killingly uncompetitive.
Separately, even if QE is bad, if every other major country is doing it, and we don't, we are absolutely clear losers. Just giving away market share, and ownership.
Tell me another solution for the Current Account, and am happy to listen.

The following link to current

The following link to current accounts may also be interesting. Noting that these have to be in logic a zero sum game, although statistics recording may mean they are not. The link does not explain it, but we know that without any action, and even with Bill English's rosy forecasts, we are heading back to a 6.7% deficit witjhin a couple of eyars. The UK is not great, but well ahead of us.
http://www.tradingeconomics.com/current-account-to-gdp-list-by-country

Good post but it falls short

Good post but it falls short here:
The UK government will always be ABLE to repay its debts in its own currency by only a few clicks of the mouse button.
most of the NZ government "debt" is in the NZD currency so, as above, the NZ treasury & RBNZ will always be able to "fund" it.
No one who has skin in the game is worried about the solvency of sovereign currency issueing    Governments (UK, USA, Canada, Japan, Australia, NZ etc).
 
 

KanucK, Thanks for the first

KanucK,
Thanks for the first compliment. I assume the shortfall you have noted is where I have said the UK government will not repay its debts. I should have explained better that I meant only the debts to its own Bank of England; or Reserve Bank, in that that debt is really a debt to itself, and so does not need to be repaid. In time I suspect they will clear the BOE Balance sheet by the click of a mouse button, as you say.

As long as the UK govt owes

As long as the UK govt owes any Pound Sterling debt to any entity, corporation or individual, it will always be technically able to make the interest and principle payments in the Pound Sterling to meet its debt obligations, or for that meter, purchase any available product or service available for sale in its economy.
The important thing to note is that the decision to meet any obligation described above is a VOLUNTARY one.
Countries which do not issue their own currency have no discretion in the matter.
 

Australian construction

Australian construction weakening.......
 
 
http://www.macrobusiness.com.au/2012/07/construction-sector-job-losses-mount/
 
 
.....with iron ore and coal looking ugly.....
 
 
http://www.macrobusiness.com.au/2012/07/iron-ore-gets-ugly/
 
 
http://www.macrobusiness.com.au/2012/07/coal-gets-smacked-too/
 
 
....not helped by China....
 
 
http://english.cri.cn/6909/2012/07/22/2982s713055.htm
 
 
..and a “grossly overcooked” housing market - the most expensive within the Anglo world...
 
 
http://www.demographia.com/dhi.pdf
 
 
Hugh Pavletich
www.cantabriansunite.co.nz
www.PerformanceUrbanPlanning.org
 
 

All those incomes going down

All those incomes going down the gurgler.
 
What WILL that mean for the medium mutitude?

Why   Umm   Dot and carry

Why
 
Umm
 
Dot and carry two...
 
Dang! Run out of fingers!
 
Eureka - let's have a derivative based on the Median Multiple!
 
Infinite Growth possibilities!

Yup. You could go all the way

Yup. You could go all the way to the limits of the known inverse.
 
I got the solar system covered.

#3 Indias grain problem,

#3 Indias grain problem, nothing is as it appears anymore.
http://www.msnbc.msn.com/id/48039343/ns/world_news-south_and_central_asi...

Spain's stock market has lost

Spain's stock market has lost a stunning 12% in two trading days.  By most measures that's a crash.  Nobody's talking about the magnitude of this, but they should be -- Spanish 10yr bonds pipped at 7.5%, which is more than Spain can pay.  The ability of the government to finance further deficit spending has been foreclosed except through more monetary games.  But if there are more monetary games played then the Euro further collapses and with it so goes the market.
 
http://market-ticker.org/akcs-www?post=209034

Interesting eh.....the right

Interesting eh.....the right seem to think the Gov/Pollies wont allow a collapse, despite thir distain of said govn "interferring".  Fix it? yet look at Spain right now, 2 years ago fixing Greece (by kicking it out of the EU) would probably have been the end of it, they failed....
I think he's spot on with, "governments are tiny by comparison to even local economies and markets, say much less international ones."
Hence I dont think Govns cant stop this they dont have the leverage....cant force the private purse unless they dangle huge sums of public money, they did that for 2 years....
Yet he's wrong here I think "piled in on the wrong side thinking that all of the deception, lies and scams will work out." markets caused or at least made this mess possible and worse.
I think it can be broken down to ppl putting their money where it makes a profit in both cases....and avoiding risk...
I think the wise ppl are in US Treasuries/bonds right now. I think when this meltsdown there will be firesales and this money will rush out to make a killing buying cheap.  I think the USA  Govn books will feel that very fast.  As the same time when that rush out of Treasuries starts from my limited understanding of bonds if you are late out you lose a lot, so I expect it will be fast.
regards

Global economy in worse shape

Global economy in worse shape since 2009...

 
http://finance.yahoo.com/news/global-economy-worst-shape-since-162939273.html
 

Pity we have dithered and left ourselves so vulnerable.....