US jobless claims surge; Japanese machine orders recover; China books record trade surpluses; Indonesian retail slumps; Sydney rents fall; UST 10yr at 1.10%; oil stable and gold down; NZ$1 = 72.2 USc; TWI-5 = 73.5

US jobless claims surge; Japanese machine orders recover; China books record trade surpluses; Indonesian retail slumps; Sydney rents fall; UST 10yr at 1.10%; oil stable and gold down; NZ$1 = 72.2 USc; TWI-5 = 73.5

Here's our summary of key economic events overnight that affect New Zealand, with news China is winning the trade wars, and handsomely.

But first, new claims for jobless benefits rose sharply last week in the US as the pandemic continued to bite into the American economy. More than 1.15 mln people filed new claims last week, the first time since July they have exceeded 1 mln. Another 284,000 claims were filed for Pandemic Unemployment Assistance, an emergency federal program for freelancers, part-time workers and others normally ineligible for state jobless benefits. (Seasonally adjusted levels reported elsewhere were lower.) That means there was a jump in the total of people on these programs to almost 5.9 mln. Until they get the pandemic under control, these unusually high levels of people out of work will remain a severe drag on their economy.

The incoming Biden Administration apparently has a plan to tackle both the pandemic and economic challenges. It isn't cheap.

But Trump isn't going without leaving hand grenades. In yet another toxic case of rule-making as the Trump Administration exits, they changed the rules to force banks to lend to gun manufacturers, oil drillers and other controversial industries that some have refused to do business with. They have also given federal banking licenses to technology firms, an amazing move given the Trump Administration has been protecting and easing up on banks during their term and fighting big tech. Burning friends and supporters is a signature Trump move.

A few days ago we reported a good rise in Japanese machine tool orders. Today we can report that more general machinery orders in Japan rose in November too. It was only a small +1.5% rise from October but that was a better result than expected because a sizable fall was anticipated (-6.2%).

Further West, the improving economic health of the Chinese economy is on display with their December international merchandise trade data. Their exports were up +18% and that was better than the +15% expected. Their imports were up +6.5% in December from a year ago and that too was more than the +5% expected. The result is a growing December trade surplus of +US$78.1 bln. For all of 2020 they booked a trade surplus of a massive +US$535 bln or +3.7% of their 2020 GDP. All this is a new record high.

The politically sensitive trade result with the USA ended the year with a December surplus of fractionally under +US$30 bln, resulting in an annual surplus of +$317 bln. China seems to have managed to grow its surpluses with others at the end of the year more than the one with the Americans. But they run deficits with New Zealand and Australia still. Ours was a deficit for them of -US$6 bln in all of 2020 and for Australia it was -US$61 bln. China's iron ore imports rose +9.4% in December. They also ran a deficit with Japan (-$32 bln) and with Taiwan (-US$14 bln), also South Korea, Brazil and South Africa. But they run good sized surpluses with the EU and most ASEAN nations plus India. Clearly they run much bigger surpluses than deficits, so we are an outlier here but similar to other commodity suppliers. (Interestingly, their trade with Russia is only about half the level they do with Australia.)

In Indonesia, retail sales dropped more than -16% in November from the same month last year, the biggest fall since May and coming on the heels of a -15% drop in October. This is a worrying sign for the world's fourth largest country by population.

In Australia, Sydney's apartment rents fell -7.8% in 2020, with most of that (-5.1%) in Q4. Hardest hit were the central city, east, and inner west markets, with rents at 8 year lows. Rents on Sydney's lower north shore are the cheapest in 9 years.

Wall Street is little-changed today, up by +0.2% in early afternoon trade. Overnight we have seen similar rises about +0.5% in European markets. Yesterday, Shanghai closed down -0.9% but Hong Kong rose +0.9%. Tokyo also rose another +0.9% yesterday. The ASX200 ended its session up +0.4%, while the NZX50 Capital Index ended its session essentially unchanged.

The latest global compilation of COVID-19 data is here. The global tally is rising faster, now at 92,563,000 and up +729,000 in one day. We are heading for 100 mln within ten days now mainly because the UK variant is taking off worldwide now. It is still very grim everywhere except in our region. Global deaths reported now exceed 1,984,000 and +16,000 since this time yesterday as death rates rise everywhere.

But the largest number of reported cases globally are still in the US, which rose +256,000 for their tally to reach 23,650,000. The US remains the global epicenter of the virus. The number of active cases rose overnight and is now at 9,267,000 and that level is up +86,000 in just one day, so many more new cases than recoveries and again by a substantial margin. Their death total is up to 395,000 however (+5000), a daily disaster that they brought on themselves with a woeful response. They are now expecting more than 90,000 more deaths over the next three weeks, stunning. The US now has a COVID death rate of 1189/mln, sadly comparing with the disastrous UK level (1245).

In Australia, their community resurgence is back under control although officials are on high alert over the risks from the UK variant which is starting to show up in managed isolation intercepts. That takes their all-time cases reported to 28,658, and only +8 more cases yesterday with all in managed isolation. 275 of these cases are 'active' (-21). Reported deaths are unchanged at 909.

The UST 10yr yield will start today unchanged at 1.10%. Their 2-10 rate curve is unchanged at +95 bps, their 1-5 curve is flatter at +37 bps, and their 3m-10 year curve is also flatter at +100 bps. The Australian Govt 10 year yield is unchanged at 1.06%. The China Govt 10 year yield is lower however, down -2 bps at 3.14%, while the New Zealand Govt 10 year yield is down -2 bps at 1.07%.

The price of gold is down -US$10 from this time yesterday in New York at US$1848/oz. However that is above its earlier low of US$1837.

Oil prices are just under US$53/bbl in the US and little-changed, while the international price is at just under US$56/bbl and marginally softer for a second day.

And the Kiwi dollar is firmer today from this time yesterday at 72.2 USc. Against the Australian dollar we are firmer as well at 93 AUc. Against the euro we are up to 59.4 euro cents. That means our TWI-5 is now at 73.5.

The bitcoin price is on the move higher again, up +13% since this time yesterday and now at US$39,190. The bitcoin rate is charted in the exchange rate set below.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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China found the trade war easy to win - Trump's effort to recreate the past has failed.

Trump appeared to think that the world needed the USA more than the vice versa. Bitter pill to swallow then if it has turned out that the USA needs China more than vice versa.

It’s become increasingly apparent that China is looking more like the US and the US is looking more like China.


No. No. No.

China is communist. There are no property rights there. There are no human rights there. There are slave camps with millions of their minorities incarcerated.

And just ask Mr Ma if China is the same as US .... if you can find him.

Yes, Trump got it wrong. But Xi Jinping has over the last months shown his hand on how evil China is, and I'm starting to think the world needs to start doing something about it. Despite the cost. For starters, the world including NZ should have stood behind Australia.

Human nature is too self-interested to consolidate... all want to keep the trade going eh.

Let's be honest. China is no longer Communist after 1979. They are hardcore national capitalism nowadays. The real question is why guys like Elon Musk still happily built the factory in China during the trade war. He could offer more jobs to American people.

cost of production

More of the potential of the market. China's automobile electrification happens rapidly. And Tesla is now a benchmark. Being a capitalist, Musk is doing everything by the book in a so-called "communist" country.

Provided that the locals can afford to buy a Tesla. There are big upsides for China by having a company like Tesla operating out of there. Communist would be putting it nicely, more autocratic in practice.

They can indeed. Telsa sold more than 21000 model 3 alone during December 2020. Locally assembled Model Y will make a hit when it comes this year.

sheer number of people I guess creates a big market

Good comment deserving an uptick...the west are addicted to their shiny plastic things but don't want to make them, too busy looking at screens.

I'd say modern China is fascist, in the technical sense. One-party state, run capitalistically but with Government interfering when they see fit, nationalistic.

There is some confusion here. China has successfully mixed Communism and Capitalism, the two are not opposites. Hence why they (and everyone else should also say) "Communism with Chinese characteristics". They have state control over the means of production when they want, but its not often exercised. When it isn't exercises, then it's run under capitalist ideals. Things like military industries and many food and basic infrastructure (power/internet/roads/airwaves etc) are still under state control, though this does not extend everywhere and it is more and more run with private sector involvement (think like our power companies here). Corn and wheat for instance seem to be state controlled but meats and veggies seem to be run competitively. At the same time they weild the biggest of sticks, able to shut down any company or create charges against any individual who piss them off. The judiciary is not separate to the government in China so charges can be easily bought against people who don't tow the line. But this almost always comes with warnings first.

Communism and capitalism are very different. Like night and day. Start with unlike communism, capitalism is not even a system ... then follow through to what type of economy supports a free life philosophically.

Neither do.

Both attempt to extract, consume and excrete the finite resources of the planet. Both are subject to the Laws of Thermodynamics, including the problem of Entropy.

Free - as in unfettered personal freedoms to consume NOW - can only be temporary. The only way you can extend it, is to remove the 'freedom' to reproduce, because the consumption thing is 'per head'.

What on earth do you sprinkle on your weetiebix mate?

PDK may not be very good at communicating his points, but many of them are true. I think what he's trying to say is that both "systems" fail to acknowledge the physical limitations of our finite resources. The very resources that support all life on this planet

In which he is wrong.

One of the great things about capitalism is how it leverages off human ingenuity to make stuff if only governments kept out of the way.

But this is the only seconds of my life I'm going to spend debating that.

"leverages off human ingenuity.."

We leverage resources / energy sources ... not human ingenuity
If in doubt, shut yourself in a cage for a month and see how your ingenuity gets on

We make capital from our minds. We turn metals into circuitry that runs a platform like this, and into rocket ships that go to space.

End of.

Yes we can clone planet Earth..easy as I am sure Elon it up to it???? Face Palm

Despite our minds applied to science are now finding thousands of earth like planets, we don't need to clone Earth. Strange comment.

So riddle me this Einstein. When all resources are depleted, is human ingenuity going to create them out of thin air? You do realise that the raw materials you speak of aren't infinite?

I'm assuming at some point we'll need to Mine the shit out of Mars, then suck jupiter dry...

We aren't going to deplete all Earth's resources in the manner that you mean.

Have you been pushing the peak oil fantasy for the last twenty years as well?

We've got 7.8 billion people and counting. Please tell me how we will avoid resource depletion and continue infinite growth

Via our minds.

Musk and co are getting us into space ... no, really. He is.

We will always find substitute materials products, etc, to aid our living. The cheapest fuels we have are still fossil fuels and they remain an abundant cheap energy. I suspect the current green alternatives will be way inadequate in the long run, but then nuclear fusion is progressing well: that will give us almost limitless cheap energy.

The thing is when we were 1 billion people you would have said oh but what's going to happen when we get 2 billion people!. But here we are .. I think we're 8 billion aren't we.

I think you're the one that's been sprinkling stuff on your cornflakes...

Argue against it.

What resources have disappeared so far that we haven't found substitutes or whole new technologies to replace and has been to our detriment?

Debt/leverage reflects a resource shortage
Hence the debt ponzi mountain
It's why we now mine debt, not resources

Metals are finite resources. Rockets require fuel. Human society in the last couple of hundred years has made use of a very concentrated, one-time energy resource (fossil fuels). They are a one-time dividend. Ingenuity alone doesn't replace that incredible level of energy concentration of that one time resource. But if one uses more energy to extract that energy then ...

Plenty of substitutes for metal products (and put the number of years by 'finite': 1000 years, 2000 years?). Fossil fuels are actually still plentiful, and currently dirt cheap because so plentiful. There will be in the not too distant future nuclear fusion plants which will give limitless cheap energy. That tech is all being worked on.

Again, give me resources we have used up that we haven't been able to replace by substitutes or new tech that have been to our detriment? We've got plenty of resources ... and we are now at the very very start of solar system exploration.

The problem is less the price of fossil fuel, than how much one has to use to extract more. Think about it ... why would one burn 2 litres of fossil fuel to extract 1 litre of fossil fuel. It doesn't matter what the price is. It's about how much energy is needed to extract the remaining fossil fuels - and that's what's getting harder to justify.

"new tech that have been to our detriment" - where do I start?? (1) weapons - originally useful for hunting to survive/protect - now capable of wiping ourselves out; (2) fossil fuels themselves - one time energy resource that fed the industrial revolution leading to today's current civilisation, but now leading to habitat loss, sea level rise, mass extinctions etc. etc.

There has been progress, but with all progress there are also "progress traps". See Ronald Wright's "A Short History of Progress".


There is a plentiful supply of fossil fuel: it's currently cheap owing to plentiful supply at current extraction costs.

We've been capable of wiping ourselves out with weapons for decades: we haven't. And anyway that's off topic to this debate of supposedly scarce resources. Extraction of fossil fuels with new technologies is much cleaner than it was. Sea level rise .... yeah, don't know about that. Lived over the sea all my life, my high spring tide mark is unchanged.

And anyway, I've said twice, nuclear fusion, soon, will make fossil fuels redundant. Personally, there's a very good argument for many more nuclear fission plants: that's our cleanest energy.

Hope I've got fission and fusion around the right way. But you know what I mean.

You live in some cloud-cuckoo land, MH.

Where you go wrong, is in mis-identifying driven, and driver. Then you compound your problem by trying to reinforce your wishes, by 'bending' things to suit yourself. Also, I know to sound the alarm when someone lumps all FF into one.
Some oil - Ghawar for instance - is still pumping at $10/barrel. But the next=best untapped option, is not Ghawar, it's the next-best frack left, and that's on the way to 'expensive' (actually, it requires more energy to obtain its energy, but that may be too hard to grasp?). There's a spectrum and it's widening.

Also, the amount of energy, or raw physical resources you can conjure out of the human brain - is zero. Nil, none, zilch. As with efficiencies, the human brain can apply energy and resources more, well, efficiently..... And until they're depleted (a state which no amount of intelligence will change) the brain can possible add to the extractable amount. Technology, of course, merely does efficiencies - it cannot create energy, not one Joule. Julian Simon was seriously deluded, via the same misunderstanding.

What also cannot be changed is the finite nature of this little tennis-ball we exist on, not the parameters upon it, outside of which we die. Nor can we do anything permanent about physical depletion; the energy required to parry Entropy, becomes too much. Ultimately, the quality of everything deteriorates, including the fossil energy resource (we cherry-pick the best, first).

Your comment about 'cheap energy' are wide of the mark, indeed after 10 years of me posting here, are astounding. Without energy, no work. Without work, nothing produced. Therefore no underwrite for money. Thus as we go down the energy-available curve, the debt had to increase. Exponentially. And the interest charged on said debt, had to reduce to zero. Thence below zero. Ring any bells? Is that not what has happened since the chewing-gum snapped in '05-'08?

Try reading stuff that isn't self-reinforcing. Try original thinking. For instance you can't maintain an exponentially-increasing demand for a resource, using substitution (even if some brains may well double as a concrete-substitute). Clearly, the substitute runs into the 2/4/8/16 doubling thing too. Very quickly you need 2 planets, 4/8/16..... Doesn't happen.

From the sound of it, you try to use debt (which is a digital forward bet, nothing more) to commandeer more debt, so you can exchange the difference for processed parts of the planet (houses, cars, food etc). Right? Ask what underwrites - or did - the debt? Did someone ensure there were resources and energy available, earmarked, before they issued it? Pig's posterior, they did. They needed to believe or their lives, mana and standing. just went pear-shaped. So too, with all those who choose to believe that their issuances were/are guaranteed.

I suspect you've lived an artificial life, believing in money, thinking about money, trying to 'make money'. Try

See, (a) your comment is too long. (b) I got to 'try reading stuff', and that was after stumbling over me in cuckoo land, all of which is arrogant - coz you know, you're awful on the most part, but doomsday prepper obsessives can tend to be that way - and so I have now switched off. I've got a huge hole in my bank account today called provisional tax, so I have to go and try and fill it back up again.

Oh, but thank you for derailing a debate on the very important philosophical and economic differences between communism and free market capitalism to yet another doomsday dirge on depleting resources or something.

No - thank you for pointing out that both the red and the blue deckchairs will be underwater when the ship sinks.

And turning off is what people have to do when they're the wrong end of the argument.

As is the denigration - doomsday etc.

Do you have any conversation outside your obsession?

So you're willing to try the one month cage challenge.... and see if you're ingenuity is up to it?

PDW is sprinkling critical thought into his breakfast.

He is concerned with the lack of appreciation that the resources both consume are limited. So at the end of the day there is no difference.

The poor oppressed worker driving to work in China burns the same fossil fuel as the free and democratic worker in the mighty USA.

CCP never said "Communism with Chinese characteristics". Instead, they say "Socialism with Chinese characteristics" : ) ... even they know Communism is dead. CCP wants China to be a big Singapore (or Taiwan in the 80s) with much more authoritarianism in politics and national capitalism in the economy.

"Capitalism with nationalist characteristics" would be more accurate.

Thumbs up!


If the West is so free - explain Julian Assange

Or Snowdon, Chelsea Manning, it doesn't pay to question the offical narrative.

It's not a binary FREE or UNFREE. China is definitely *less* free. It's very obvious if you go there and talk to people.

Good point. Freedom is a spectrum. I would suggest the gap is overall quite wide between China and The West.

Unless your black and living in free America. In which case you can live free in prison...

(dp sorry)

Exactly, how a man not convicted of any crime sits in prison shows how one eyed we can be when comparing ourselves with others. If we really like freedom of speech, Assange should be celebrated as one of our most important people. Instead we kowtow to our overlord and ignore/selectively choose our facts to pretend we are better than others.

Well put. 100% agree.

Well, Corporate America has shown a little appetite in offering jobs to Americans and improving American infrastructure over the years. In that sense, America needs to learn a thing or two from China.

It all goes back to the Clinton era when he lobbied for China to be admitted to the WTO thinking it would open up new markets for US exports and that China would become more like the west. That never happened, the end result it exported its jobs and manufacturing to China instead.

Yes yes yes. The more I look at it, the more I am convinced that most of the West's economic problems can be solved by doing one thing - massive infrastructure building project spanning the next couple of decades. It would solve the persisting under employment issues and provide the ability for Western economies to actually grow and keep up with China. Instead we have financialised everything in the mistaken believe we have can get rich by printing money and selling each other assets for ever increasing prices, without increasing the the value of those assets. It would need to be government led, but our weak and ineffectual leaders all over the West are pathetically useless.

"massive infrastructure building project" ..I am wondering what these will be as opposed to should be? Dams, Offices, Bridges....or maybe we need to look forward instead. Imagine if we have built a high speed rail network years ago?

I'd start with the motorways; I travelled to both Shanghai and LA regularly until COVID came out. LA's motorways were terrible compared to Shanghai's. Another thing is the digital infrastructure like the 5G network and IoT hardware, China is definitely leading in this space right now.

Motorways are the problem. Or at least, indicative of same.

They represent - in Kunstler's words - The biggest misallocation of resources the planet has ever seen. (actually, he was referring to suburbia, but that's what they serve).

Completely redo the sewage systems of most major cities in the country, damns, wind farms (there is a huge one in the Wairarapa yet to be built) and yes - high speed rail. There are a variety of rail upgrades that also should be done, the rail line to Gisborne is hilariously STILL closed 8 years after it was damaged, utterly ridiculous. There is a hell of a lot of road upgrades on top of that, for instance in the Wellington region a car tunnel through the Rimutakas (likely to reduce emissions over time), the Melling interchange (definitely will reduce emissions over time) and fixing the Basin. Almost guarantee there are similar projects all over the country. There are 3 obvious places where high speed rail would be fantastic - Auckland/Tauranga/Hamilton loop, Wellington/Palmerston North/Masterton loop, Christchurch-Dunedin.

There is a tonne of water projects that can/should be funded by central government, the Tasman dam should have been as well as the Ruataniwha in Hawkes Bay. Otaki river in Wellington should be damned to solve the water woes on the Kapiti Coast... these are just off the top of my head.

Add up all the above and you are probably talking about $200-$300b of projects over the next 20 years.

But nah, let's print $128b and give it to the banks and property owners instead, because that makes sense...

The US now has a COVID death rate of 1189/mln

Only 0.1%. That's the same as the HN strains of seasonal flu. Food for thought.

0.1% of the population have died, not 0.1% of those infected. If it's let to run its course maybe that gets up to 0.3-0.5% of the population dying.

They're saying up to 80% of people present with no symptoms. For an extremely contagious virus, I'm comfortable using population as the base after 10 months.

That is a crazy assumption to make when cases and deaths continue to rise so strongly. It's clear from a quick glance at the graphs of cases and deaths that this is not done yet.

Who's "they're"?


His covid denialist echo chamber.

If it's let to run its course maybe that gets up to 0.3-0.5% of the population dying.

More people die in car accidents per year than this, but you don't see them stopping people from driving do you?

Where are you getting your numbers from today? The US has around 35k road deaths per year, or approximately 0.01% of the population - an order of magnitude lower than we are discussing. Current covid death toll in the US hits 35k every couple of weeks at the moment.

In NZ, we have around 300 road deaths per year, or 0.006%. This is still considered a lot, which is why we spend so much on road safety. Covid is a completely different ballpark.

So for kiwi under 50's the covid 0.007% IFR is very similar to annual road fatalities here.
A similar ballpark?

Sure. What a shame we have all those old people in the country, right? You're in the wrong country for this kind of argument I'm afraid - you'd have to be pretty perverse to prefer giving the disease free reign in New Zealand while imprisoning a significant portion of the population over the current levels of freedom. If vaccines turn out not to be a goer we can rethink, but we would be doing so from a position of strength, not a position of overflowing hospitals as in many parts of the world.

As I commented down thread spend the billions protecting the vulnerable rather than the "free reign". Why not give everyone under 50 100% freedom, let them build up herd immunity, and protect the vulnerable? Just like car driving - we restrict the licenses of vulnerable people for the greater good.

Stop peddling your utter rubbish. For the second time in this thread you are presenting blatant lies to support your view.
In 2019, an estimated 38,800 people lost their lives to car crashes in the USA. (Reference below)
Covid deaths in the USA in the past 10 months are currently over 10 times that of road death. Your claim that more people are killed on roads in the USA than Covid is not even close to the truth.
Try doing a little fact checking before reposting comments you read on your conspiracy theory sites; you are undermining the credibility of this site and others who post on it.

USA road toll:

It doesn't mean they have achieved herd immunity, since only 7% of population has exposed to COVID.

Rising fast though....

More people in the US died of Covid this week (with distancing, lock downs, work from home, masks, etc.) than died of the flu in 2019-2020.

Maybe 2019/20 was lower than normal totals. NZ can have 500 flu deaths in a year and US is around 80 times nz population

In support of Ezy’s claim your comment is just guessing - in fact incorrectly. The number of influenza deaths in the US in 2019 were only 10% of Covid as reported by the CDC and that year was within the usual range for the previous nine years. (You may also wish to check your population assertion - the US is less than 70 times that of NZ)
EZY needs to front up with information to support his original assertion or withdraw it.
His initial claim appears to be baseless conspiracy theory.

Well it's easy to check. US flu deaths for the YEAR before was 34k (vs 23k Covid deaths this WEEK). The CDC predicting a 25% death increase within the next 3 weeks.

We're almost a year into the pandemic. I don't understand why the "it's just the flu" argument is still happening.

"That's the same as the HN strains of seasonal flu." What is your source of data for your claim?
A quick Google gives me this:
"CDC estimates that the burden of illness during the 2018–2019 season included an estimated 35.5 million people getting sick with influenza, 16.5 million people going to a health care provider for their illness, 490,600 hospitalizations, and 34,200 deaths from influenza".
US Covid annual death toll looks to be well over 10 times that of seasonal flu - not "similar".

For people under 50 it is similar to seasonal flu. The R0 2 Infection Fatality Rate for under 50 is 0.007% whereas influenza is below 0.1%. Under 50 would be a great place to build up some herd immunity. Spend the trillions on protecting vulnerable people from the illness rather than locking down people that are not at greater risk than the common flu.

"Hospitals across the state are sending away ambulances, flying in nurses from out of state and not letting children visit their loved ones for fear they’ll spread the flu. Others are canceling surgeries and erecting tents in their parking lots so they can triage the hordes of flu patients."


It is interesting that you quote CDC figures since it was their figures which gave the lie to your previous assertion that there were no excess deaths in the US.

Show me where I ever said their were no excess deaths. As I said last time - you have me confused with another commenter. I have quoted CDC many times on this site. Having excess deaths in a bad flu season is not unusual.
Per capita we will need 5.5 million deaths to level peg with the '58 Asian flu pandemic. Given IFR for under 50's is similar to the flu I doubt we will ever reach '58 death numbers.

Very interesting that Microstrategy (the company that has started to convert its cash treasury into bitcoin) is matching BTC prices now. Its also up 13%. Wonder if I pay tax if I sell my shares hmmmm

Looking into Microstrategy today...kicking myself for taking so long. Might use via Hatch.

If Microstrategy is great because they've invested in bitcoin... why on earth not buy BC directly, rather than Microstrategy shares?

Because Michael Saylor is a very smart guy and its not the only thing they invest in.

Past 12 months: BTC +450%; MSTR +320%.

Now deduct 33% (maybe 39%) of tax on BTC. MSTR might have the FIF rules though. This is complicated.

Also remember, MSTR only started buying BTC a few months into the year, so maybe the last 9 months are the better comparison.

Good point, though BTC is non-yielding and most hodlers have no plans to sell - so income tax and/or CGT isn't a consideration. As BTC gains traction as a medium of exchange over time, any increase in value could also increasingly be spent on real assets = conversion, as opposed to disposal.

Unfortunately conversion is still a taxable event. Any for of disposal is considered taxable, which is bloody stupid if I want to use it as an actual currency. I mean, I can legally be paid in Bitcoin so....sort ya shit IRD

"The incoming Biden Administration apparently has a plan to tackle both the pandemic and economic challenges" The plan talks about partnering with private companies to achieve the vaccination goals, but what they need to do as well, is partner with private companies to bring their manufacturing base back if they really do want to create more employment. This is something our Government should do too. As discussed over previous days the move of manufacturing to countries with lower labour costs has significant long term ramifications for economies and resilience.

The problem is companies are lazy when it comes to addressing the productivity issues and go for the cheap and easy money. The end result make this a nationally strategically important issue.

"the move of manufacturing to countries with lower labour costs has significant long term ramifications for economies and resilience." Quite right but I strongly suspect to bring even a few manufacturing industries back would require the complete withdrawal from trade agreements or at least drastic amendments with the counter parties requiring some quid pro quo

There may be some sticking points there, but I think It would be done somewhat differently. Plus the communication would be important. I think it would be less the trade agreements than the competition and how they would be matched. There would be some anti-competitive practices likely until the industries were established i would think.

The real problem the USA has remains, even after Trump goes. (3 min read)

KH - That like is a very good and concise explanation of Trump - well done !

Good link cheers!

Rabo Bank,
Sticking with this monetary-fiscal policy crossover, yesterday the BOE released an internal independent report that both praised and criticized its own here-to-stay QE, notably in that it: “…remains a poorly understood monetary policy tool for much of the public and for some its use has been contentious. In particular, there remain strong views about QE’s potential distributional side effects.” The report adds: “…while QE supports asset prices, it also supports jobs and wages…the prevailing consensus [is] that looser monetary policy reduces inequality by supporting employment….The Bank has struggled to persuade external audiences of its message on distributional effects.”

Why? Well, what have asset prices done in recent years (and are doing now)? And what have wages done? Yes, pre-Covid one could say that unemployment was low. But ordinary people can see that they have low-wage ‘gig’ jobs on offer as they watch as the houses and stocks they *don’t* own make parts of the populace vastly wealthier (and the narrower the demographic, the larger the wealth gain).

The report concludes: “…greater staff-level contact --supported by press office-- with journalists and external stakeholders around the publication of key analysis could help the Bank to build their understanding. It could also start a constructive two-way dialogue, before entrenched positions start to build distrust.” In short, let’s co-opt the journalists and publishers, who don’t understand economics anyway. That will solve the problem!

On a related note, George Orwell’s ‘1984’ is the #2 best-selling book on Amazon this week. Why the sudden surge in interest? Is it being bought as a warning - or because people are worried if you don’t own a physical copy then one day it might be unavailable? I had already typed this out when a friend tried to buy the *Kindle* version from Amazon and was told it would only be available on…6 June 2021: maybe the internet is full? “He loved Big Bezos.”

Our friends and family in the UK are getting very cynical regards UK gov't handling of the virus and the continuous lockdowns. It's doing a lot of damage to peoples faith in institutions , when this finally ends, just perhaps people will demand answers. Answers for the thousand who have missed out on cancer treatments and important surgery, lost jobs, education, opportunities.

Most think the lockdowns don't work and are a bit of a joke, they are not happy with heavy handed police enforcement of the lockdown, they thought they were free.

Eva Bartlett pasted this on her feed last night, someone who spent months on the ground reporting on the war in Syria. I admire her strength and determination she has seen the horror of war. Is this extreme?

'They thought they were free', a warning to us all, perhaps about to amazoned into extinction too

I explained to my cousin, a Police Officer, my objection to Police invovlement in lockdown last week. She said well what do you do about it? I said that is the cost of liberty.

DC is putting up his propaganda with the cost of US lives per million.

Well how about a comparision cost of liberty.

New Zealand WWII losses, 6684 per million of population.

"New Zealand WWII losses, 6684 per million of population." Not a valid comparison. Losses per million military aged men would be valid - these were the people affected by fighting in WW2. Covid can infect anybody.

More than valid, we lost useful working age people in the war so the price was much higher. You could complicate this further by saying women were not in the workforce in great numbers then.

Where exactly are you getting this claim about Covid infecting everybody? It is a disease of the already morbidly conditioned, mostly, but not exclusively, that is old people.

I didn't say covid will infect everybody - I said it could. It is a novel virus to which the human race has no immunity.

I didn't say covid will infect everybody - I said it could. It is a novel virus to which the human race has no immunity.

That would benefit scarfie's argument. I guarantee more military aged men died per million in ww2 than during the corona outbreak

I don't see any propaganda at all with using facts on the US loss of life during the last ten months due to covid-19. If the US continued for six years it would be on track to exceed NZ loss of life for the second World War.

The fact you don't see it is sort of the intent of propaganda :-P

It's interesting what's happening in Sweden. They seem to have opted more for a middle ground between where they were originally, and the UK.
My brother told me last night that for his son's schooling, they alternate between a week at school, and a week at home.

Interesting weather coming, strange goings on in the southern ocean

The farm is dry, we are still in this dry cycle it's been the best part of two years, some got thunderstorms, we missed them all, so in two months we got 12mm but that doesn't go far in summer. Trees are looking stressed, creeks flowed for all of one week in winter.

I have grass due to lots of small rainfall events in spring, so I am thinking of cutting some hay, it won't be great quality as it's too late and the bottom has gone, all the clovers have dried out and disappeared.
I also sold bulls so Im comfortable, hay is expensive but it's like insurance, things have changed now we can buy PKE (Palm Kernel extract) but nothing like some hay in the barn.
The problem I ran into is everyone is doing hay, so the contractors are hopelessly behind, in my case far enough to ruin the chance of making decent hay.

Sheep prices are high in the store, I talked to a few local farmers yesterday and we all agreed it's nutsville in the store market at present, better to go to the beach, cheap money is making people crazy.

Vineyard is looking good, honestly guy's and girls, if any of you are thinking of going into horticulture, ring me, I will come over with a stick and beat you till you change your mind for $200, it will be the best $200 you ever spent.

There are a small number-presumably declining sharply-of Trump supporters on this forum. Trump promised that as a 'great deal maker', he would sort out the US/China trade deficit. Well, he clearly did no such thing. Not only was it over $300bln for 2020, but as data from the Economic Policy Institute shows, the US manufacturing trade deficit has been growing above trend since 2016.(the figures come from the US Trade Commission).

Whats the future if the USA keeps running huge deficits with China? The West is addicted to cheap Chinese stuff.

But as the reserve currency USA has to run huge deficit's - otherwise game over. Inflation in USA is roaring ahead..the story of 2021.

You won't get inflation with all the new unemployed. It probably is 'game over'. One million people in the US filed for unemployment for the first time, thats just last week.

I would posit that inflation is quite pervasive: in property, equities, discretionary consumer goods, education = all in plain sight but not captured by conventional CPI figures.

Neither Trump nor Biden, nor Clinton nor Bush, nor anyone back to Nixon, nor Left, nor Right, can change the predicament; all they can do is soften the impact.

And measuring thing in $$$$$$ terms - as you've just done - is just prolonging avoidance of the real problem.

The biophysical Limits to Growth, plus the compounding problem of our current population overshoot, are the only game in town. There isn't enough planet left for the US to re-group, and there isn't enough left for China to get as big as the US was. And the underwrite is dwindling daily, while the unrepayable debt increases ditto.

Presumably some strategists are watching this with intelligence (Putin will get it, perhaps some in the Pentagon, Mutti got it a long time ago) but it isn't in the public discourse. And it's the only game in town....