sign up log in
Want to go ad-free? Find out how, here.

Friday's Top 13 with NZ Mint: Now even the Australians are printing money; NZ ranked 5th most prosperous in the world; The next Cory Jane is Jane Cory; What Xi might do; Jon Stewart gloats; Clarke and Dawe; Dilbert

Friday's Top 13 with NZ Mint: Now even the Australians are printing money; NZ ranked 5th most prosperous in the world; The next Cory Jane is Jane Cory; What Xi might do; Jon Stewart gloats; Clarke and Dawe; Dilbert

Here's my Top 13 (!) links from around the Internet at 10 am in association with NZ Mint.

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.

My must watches are Jon Stewart's post-election coverage at #10/11/12. Laughed. Out. Loud.

1. And then there was one - Clancy Yeates at The Age reports the Reserve Bank of Australia (RBA) may have been quietly buying US dollars and Euros off other central banks to try to keep the Australian dollar from rising.

If true, that would leave New Zealand as pretty much the only country in the world that is not interfering with its currency. The RBA tactic is in line with the proposals put forward by former RBA director Warwick McKibbon a few months ago

The Age refers to a UBS report on central bank deposits at the RBA that UBS says suggests the RBA has been printing money.

This would tally with the rise in the New Zealand dollar vs the Australian dollar in the last four months from around 76 Australian cents to almost 80 Australian cents.

In the game of money printing musical chairs we look like being the last ones left standing. Or more correctly, the last ones left losing their jobs.

We are naive spectators in a world riven by currency wars. Just nuts.

In research published on Wednesday, UBS strategist Gareth Berry said there was “compelling” evidence to suggest the RBA had taken the unusual step of meeting central bank demand in direct off-market transactions, which would dampen the currency’s strength.

In the three months October, foreign central banks’ deposits at the Reserve have jumped by $848 million to more than $2 billion, the highest since early 2009. At the same time, the Reserve has lifted its foreign exchange reserves by almost exactly the same amount.

Mr Berry said these trends suggested the bank was effectively “printing” new Aussie dollars and supplying them to foreign central banks, which were then keeping the Aussie dollars on deposit at the RBA.

‘‘The Reserve Bank of Australia may have recently begun printing Australian dollars to satisfy overseas currency demand from foreign central banks,’’ Mr Berry said, adding that the evidence was not conclusive. If this is a genuine policy innovation, then it takes the RBA into uncharted territory.’’

2. And here's Alex Tarrant's interview with Warwick McKibbin on how the RBA would do this. Here's McKibbin's now famous AFR Op Ed on how the RBA could intervene.

.

3. Here's what a Greek protest looks like. They don't do things by halves in Athens.

4. How Obama could do it - Now the talk starts about how Obama could fashion some sort of bipartisan budget deficit deal.

John Gapper at FT.com has an idea:

Mr Obama would gain hugely from hammering out a long-term approach to deficit reduction. Not only would he prove himself to be a bipartisan leader but the economy could also gain jobs. Any deficit reduction plan would further squeeze public sector employment, so he needs companies to pick up the slack.

A deal won’t be easy to negotiate. The Tea Party wing of the House Republicans will try to block any tax rises. But, if he is adept, Mr Obama has a chance of outmanoeuvring his most intransigent – and most bitter – opponents by marshalling the backing of business leaders as well as Democrats. A grand bargain requires a broad alliance.

5. We're fantastic! - The Legatum Institute has published a Global Prosperity Index that puts New Zealand at number 5, thanks largely to our free, democratic and well educated society.

6. What will Xi do? - China's all-important 18th Party Congress started last night. It's the much more important political transition for New Zealand.

Here's David Pilling at FT.com explaining what it might mean.

“Today the most important thing is political reform,” says Ren Yi, the grandson of reform-minded former Chinese leader Ren Zhongyi. “All Chinese, including those inside the system, all agree that it’s the next big thing.”

Another princeling, as the progeny of senior officials are known, puts it more bluntly: “The best time for China is over and the entire system needs to be overhauled.”

This son of a former government minister says the party’s authority is “declining at the same time that the economic backdrop has become much worse”. He added that without new rules of the game, Chinese politics would “descend into chaos”.

7. Totally a video of a girl playing American football -- We need to get her into the All Blacks. She looks like a young Cory Jane. We could call her Jane Cory.

8. Sensible Advice - David Wessel at WSJ has some advice for Barack Obama. Cut the unemployment rate before you fix the deficit. Fair enough.

Steering away from the fiscal cliff is important. Not only would the abrupt across-the-board spending cuts and tax increases of the fiscal cliff push an already-weak economy into recession, going over the cliff would convince the public and financial markets that Washington truly is dysfunctional.

The budget deficit, for all the hue and cry, isn't today's economic problem. The U.S. government is borrowing more than $3 billion every weekday and paying the lowest interest rates in history. Today's problem is unemployment.

The deficit is tomorrow's problem: Spending on promised benefits will far exceed anticipated tax revenue even after the economy recovers. And this, Democrats and Republicans agree, is unsustainable. Doing something now that reduces the 2016 deficit is more important than reducing the 2013 deficit.

9. Buckle up - Political Scientist Jamie Chandler points out at US News the partisan poison in Washington will make any sort of fiscal cliff compromise very difficult.

We have two diametrically opposed parties in camped in the Capital. Perhaps the 2014 elections will yield some change, giving the president an easier go in the last two years of his second term.

If Democrats and Republicans commit to grooming compromise candidates, then bipartisanship, so prevalent during the 1960s, will return. But for now, expect legislative discussions to produce nothing more than Capital carpets soaked with slicks of oil and puddles of water.

10. Totally Jon Stewart on the Election Result, or, as he calls it, Democalypse and America taking a cold shower. Hilarious.

11. Totally Jon Stewart on Karl Rove's maths. Hilarious x 2. Stewart enjoys twisting the knife on Fox News.

 

12. Totally Jon Stewart on Barack Obama getting his groove back.

 

13. Totally Clarke and Dawe on Australia's budget surplus. It's on its way.

 

We welcome your comments below. If you are not already registered, please register to comment.

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.

16 Comments

#1 Will Wheeler do a QE ?  The fact that the RBA is doing it means Wheeler is the last man standing.....up to the bitter end ? IF HE DOES PRINT  this means the fastest u turn in history !!

i doubt the latest unemployment figures is going to change his mind> already we have the politicians saying it is an error>>>like the statistic department calculated wrongly !!

so we won"t be the last one osing their jobs> we will be the FIRST one losing their jobs>

#4. After four years of non-coperation, will the Repubilicans suddenly turn round and help Obama form a bipartisan action ? I believe that now they have nothing to lose, the intransiance will be even worse !!

Up
0

Dammit , I knew something wasn't right. Now we discover those Aussies have been underhanded again, intervening to protect themselves in the currency markets !  

I have argued on this blog for months , that there has been no justification for the NZ$  strength against the Aussie $ .

Our economic fundamantels HAVE NOT CHANGED , yet our currency strength makes us look like a member of OPEC

Our GDP is said to be less than that of Tasmania  , our economy is on its back , our exporters are reeling , unemployment is over 7% , and under-employment is about 70%.

We should fire everyone in the Treasury and start again

 

 

Up
0

The Tasmanian comment, i am hoping it is an exageration, but I am not sure- can anyone confirm? Is Tasmania a bigger economy than NZ?

Up
0

Considering only half a million people live there, I very much doubt it.

Up
0

Always good but this Fridays round up on politics by Bryce Edwards is particulary telling that NZ's Fourth Estate is starting to show it isn't going to participate any longer in the old propoganda of the left/right divide;

 

http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10846245

 

 

Up
0

I am reposting my comments because I think Kim Dotcom is spot on!! 

Kim Dotcom said unfortunately the Government wants to invest in roads.

"In 10-15 years more people will work and shop from home. You don't need Tarmac you need fibre." He also said that data storage centers require massive amounts of clean electricity which we have, especially if the Tiwai Point Aluminium Smelter leaves. Our future as a nation lies on the internet. Anyone who has children can confirm this- you don't need an expert! Much of what children, adults and oldies want to do these days is internet related.

Dunedin could have funded the Pacific Cable with the money we have just wasted on a stadium. A cable would have funded the city and guarenteed a massive increase in tech, design, fashion, retail, construction etc etc jobs throughout NZ! But that is blindingly obvious. How could we expect our >$1,000,000 PA leaders to figure out what anybody with kids could have told them.

It is not just the immediate jobs from being a world data center, it is also the environment that cheap and blindingly fast internet (Why not free?, McDonalds/Starbucks figured out years ago the benefits free wifi brought to their businesses). Build data centres in Dunedin or Invercargill or Christchurch. (Think Seattle or Vancouver). That attracts tech startups and established tech businesses. Hi tech business demand good environmental standards, organic food, fashion, the arts, universities/polytechs and access to adventue/outdoors activities. We have everything in spades,EXCEPT even mediocre internet (our internet is batshit, but not gay)! Its a great, simple and INEXPENSIVE proposal to increase employment opportunities for our children and make a more exciting environment for us oldies. It is certainly more positive than a future based on indoor rugby, 20 story whore houses, casinoes, lotsa booze and overseas ownership of our sorry asses.

Up
0

unbelievably spot on comments,

Up
0

If it's such an obvious investment to make, why don't yourself and a bunch of like minded investors have a whip round and get it built?

Could it be that it is a significantly risker investment than you make out. The owners of Southern cross cable at any moment can upgrade their fibre with new technology, ie increasing the number of light wavelenghts used to increase available bandwidth and technology has been progressing in this area to get more bandwidth from a given fibre strand.

Pacifc Fibre was unable to get sufficient investment for a reason, ie risk. Particularly the investment by Huwaei on another Auckland-Sydney link. There is much investment going on in Australia-Singapore/Asia cable links and from there, plenty of capacity to the US/Europe.

Now would there be advantages in another direct NZ/USA link. Definitely, but will people be prepared to pay for it? Another matter entirely. Sure the latency will be slightly reduced compared to routing via say Singapore, but again how much are you prepared to pay.

It takes more than fast internet to foster entrepreneurship, ie compare average USA internet speeds to Japan/Korea, yet which country has more global internet companies?

And it's a massive assumption that data centres are suddenly going to make the move here on the back of one cable investment. However the govt can certainly make the business environment more conducive to investment. As a starter to see if our data hosting is internationally competitive perhaps we should check to see how many of east coast Australian businesses are locating their data centres in NZ?

Up
0

Hi Robby

The proposal is not purely an "investment" in terms of return on dollars. It can also be seen as infrastructure investment. What is the dollar return on our sewage system, roading, hospitals, bridges and potable water? It is immense, AND far more than just in MONEY MONEY MONEY terms!!

 

In 1927, French poet, Paul Valery predicted that images and sound would be piped in and out of our houses, just as water,gas, electricity, sewage and waste water were at the time. He was absolutely correct!!

 

Another point is redundancy and resilience. Have you noticed that you have two testicles or two ovaries? Two lungs and two kidneys?.Two eyes and two ears? There is a reason and it is tried, true and precedes you by hundreds of millions of years. It is called "the ability to survive".

 

If you read what I wrote you would have seen (with your TWO eyes) that fast, cheap (or free) broadband was only one key element of an array of attractive attributes of high tech communities, like Seattle and VanCouver.  Its pretty funny you pointing out that internet is cheaper and faster in Japan and Korea than USA, but USA has more tech.. The fact is that Japan/Korea/USA all have way more high tech companies than NZ. Your argument is disingenuous.

 

If a society is "into/addicted to" something, there is always money there. The smoker find money for his fags, the boozer for her booze, the computer geek for her internet, the rugby fan for his indoor rugby stadium.

 

The point I am reiterating is that our children and young people are "into" the internet. This is a world wide phenomenom- everywhere, even in Central Africa. Any other response is like being a bearded Amish man in his horse drawn cart, meandering down a Pennsylvanian super highway, with a kerosene latern flickering at the rear to warn speeding log trucks of his presence.

 

 

Up
0

The proposal is not purely an "investment" in terms of return on dollars. It can also be seen as infrastructure investment. What is the dollar return on our sewage system, roading, hospitals, bridges and potable water? It is immense, AND far more than just in MONEY MONEY MONEY terms!!

Unlike sewerage system, roading etc, I see no credible evidence that international fibre links are some sort of natural monopoly. Anyone can come and lay a cable, (assuming enironmentalists/grievance industry don't object to it coming ashore) and we see plenty of evidence of investment: speed upgrades on Southern Cross, Huawei investment, and Pacific Fibre trying to invest, (but not finding enough customers).

Another point is redundancy and resilience. Have you noticed that you have two testicles or two ovaries? Two lungs and two kidneys?.Two eyes and two ears? There is a reason and it is tried, true and precedes you by hundreds of millions of years. It is called "the ability to survive"

Southern Cross has redundancy, do you know what you are talking about here? Extra links to Asia (via Sydney) will only increase resiliency.

If you read what I wrote you would have seen (with your TWO eyes) that fast, cheap (or free) broadband was only one key element of an array of attractive attributes of high tech communities, like Seattle and VanCouver.  Its pretty funny you pointing out that internet is cheaper and faster in Japan and Korea than USA, but USA has more tech.. The fact is that Japan/Korea/USA all have way more high tech companies than NZ. Your argument is disingenuous.

Not disingenuous at all to say that internet speed has little to do with creation of global internet "tech" businesses. Check out www.netindex.com to see where USA rates on various measures - it is reasonably mid field.

Of course Japan/Korea/USA all have more 'tech' than NZ, not that I agree you can lump 'tech' into one category, and all these countries had more 'tech' before the internet really came about. Again having an extra cable will not through osmosis cause NZ to become some world data centre powerhouse. Perhaps we should focus on what the other "key elements" are?

If a society is "into/addicted to" something, there is always money there. The smoker find money for his fags, the boozer for her booze, the computer geek for her internet, the rugby fan for his indoor rugby stadium.

You'll not get an argument from me here on this list of poor expenditures. Indeed if you are going to waste $400m of govt money, probably better to waste it on a cable than a stadium, but the point is govt. shouldn't be in the money wasting business to begin with.

The point I am reiterating is that our children and young people are "into" the internet. This is a world wide phenomenom- everywhere, even in Central Africa. Any other response is like being a bearded Amish man in his horse drawn cart, meandering down a Pennsylvanian super highway, with a kerosene latern flickering at the rear to warn speeding log trucks of his presence.

Resorting to complete hyperbole. Am I saying we should have infrastructure like in a horse drawn cart era? Of course not.

But where is the market failure? Pacific Fibre tried to fund another NZ/USA link and in an environment of low interest rates still couldn't make it work. How is the govt (who incidentally can't run WINZ kiosks properly) supposed to come in, build and know the best places to run these cables to?

Perhaps a link to USA isn't need, but a link to say Singapore/Asia might be more viable, especially considering the growth rates in that part of the world. Perhaps Pacific Fibre should test this thesis?

Up
0

"Perhaps a link to USA isn't need, but a link to say Singapore/Asia might be more viable, especially considering the growth rates in that part of the world. Perhaps Pacific Fibre should test this thesis?"

 

I strongly agree with you! Our future lies in the East and the Pacific. What we need is fast and inexpensive/free broadband and it doesn't matter to me where it comes from. One way of thinking of it would be as "efficiency". The faster the internet,the less lag time. The cheaper the internet, the broader the uptake. It becomes something that is just there and usable, like tap water. It means that our 14 year olds are competing on a level playing field with the 14 year olds in USA, Korea and Gabon.

Up
0

Re: #5

Frankly I prefer the climate here to the top 4, but I would be really interested to hear the reaction to this survey from all those on the right, who want us to emulate USA (12th) or Singapore (19th). Any takers up for the challenge?

Up
0

Well said! Boatman.

HGW

Up
0

He really is a dufus, isn't he. Wonder if he wears that Hi-Vis jacket to bed, just in case he feels the earth move.

The herald article on his book notes it's 'self-published', what does that tell you?

Up
0

-

Up
0

Sandy mpore lost than admitted?

"Trillions of dollars worth of stock certificates and other paper securities that were stored in a vault in lower Manhattan may have suffered water damage from Superstorm Sandy.

The Depository Trust & Clearing Corp., an industry-run clearing house for Wall Street, said the contents of its vault "are likely damaged," after its building at 55 Water Street "sustained significant water damage" from the storm that battered New York City's financial district earlier this week.

The vault contains certificates registered to Cede & Co., a subsidiary of DTCC, as well as "custody certificates" in sealed envelopes that belong to clients."

http://buzz.money.cnn.com/2012/11/02/stock-certificates-sandy/

and 50billion in losses?

http://money.cnn.com/2012/11/02/news/economy/sandy-economic-impact/inde…

 

regards

Up
0