90 seconds at 9 am with BNZ: Gold hits fresh record on competitive devaluation fears; US$ weak after Chinese warning; Irish woes worsen

Bernard , about your article on controls  yesterday , you may want to look at what happened between the 1929 stockmarket crash and the Great Depression of the 1930's . Countries resorted to controls of all sorts during this period , ( controls such as you suggested yesterday ) , trade wars , protectionist policies and currency manipulation to overcome their  problems . Now we see the US Congress is sabre- rattling with China over its mercantalist polices. Yesterday the Brazilian Premier accused countries of a 'currency war' to force their currency to devalue to mask thier problems  . Nationalistic policies and protectionism may be all well and good as a solution when you are angry , but somehow I dont think it will work to sort out the problems , especially if everyone retaliates .

You are right in your assertion that we are on the edge of an economic abyss , its what to do about it that has got everyone divided 

See the Wall Street Journal last night  ' How currency wars end" for a good perspective 

Of course when the current worldwide economic situation worsens there is an increase risk/ chance of Mercantilism having a renaissance.

.If this is bad or not considering all aspects - certainly worth a debate. The link:

http://www.interest.co.nz/opinion/opinion-why-we-must-abandon-economic-orthodoxy-and-embrace-capital-trade-and-exchange-rate-controls#new certainly a good starting point.

 TOKYO — China's ban on shipments to Japan of rare-earth metals that are crucial for advanced manufacturing threatens to undermine the Japanese economy, a top finance official said Tuesday amid a territorial row between the rival Asian powers………………

http://www.google.com/hostednews/ap/article/ALeqM5gQ-gWuoypbkAsh2SnqBaFswD4qdwD9IGUJ400?docId=D9IGUJ400

WW3 thats how this will end......when all else fails (and it will)  pull on the gloves and go for it...unlike the spilt ends song this time ..history does repeat

because of this global fallout being largely bought about by the connectivity engendered over the last twenty years of  the "global economic village"...is it not fair to assume that all countries will endeavour to obey their inner financial instincts in the long run whereby the trade walls go up, the sovereign debt defaults kick in and we go back over a century to each country protecting it's borders and doing it's own trading with other worthwhile nations who can pay?

the downside is that we now have smart weapons so if my posited scenario was to occur over the coming decade ...can we look to the outbreak of savage wars and attempts to annex high-yied/low defence economies such as New Zealand for sovereign survival.?

I don't see Mel Gibson coming over the hill yet...but when the "race to the bottom" is over the strongest and best tooled up with weaponry will sharpen up their metaphoric fangs and start looking for domination....winner takes all etc...whats to stop that occurring when the global policeman" america, is on it's knees and sinking in a sea of debt and incompetence?

at the end of the day, money is only a concept and the implications of a set of "zeros" but human behaviour, survival and greed is inherent and instinctive.

a chain is only as strong as it's weakest link and if the worls gone bankrupt..i know what i'd be doing if i was a mandarin speaking Premier or Euro- oligarch?

cucumber sandwich,anyone?

or is it time to " chase the dragon"

Boatman I found that link,

http://blogs.wsj.com/source/2010/09/28/how-currency-wars-end/?KEYWORDS=…

As philosopher and artist I can say that again and again and it becomes more valid by the month:

 Well, the world is struggling, fast moving and changing for ever- time for New Zealand to find visionary solutions.

In the current situation it is probably wiser to listen to philosophers, environmentalists, ecologists and humanists (I’m not religious - sorry) and find the right answers to solve our upcoming challenges.

 Greed & Megalomania

The people of New Zealand are not only suffering under too much consumption but Greed, Megalomania of a minority – including corruption and a bloated government without a clear economic direction for years.

How much longer is the younger generation waiting for a revolt in “Beautiful New Zealand” ? The “Powerfools” in this and other countries are not only destroying theirs, the public’s natural environment, the land, the waterways and the air, but also their future, our souls and pride. The BB generation is currently causing enormous damage in our society not investing, but for them selves– costing this, but especially the next generation Billions to clean up the mess in may sectors/ levels. Not to mention our bubbly Property Industry – making our NZkids renting flats on Rook Creek Rd or worse, while foreigners living in flash houses on Orchid Park Drive  – HA this is all crazy!

 Ethics- Philosophy- Economy

More and more country are losing the battle against a clean and green environment, healthy food supply/ production, fresh water and air – quality of life. As a remote and rather under-populated country we have an exceptional chance to be different. The key is branding New Zealand -  the introduction of a “GREEN & CLEAN” economic philosophy – why ?

 For years our economy is so unbalanced, unstructured and unorganised- badly managed, when serious philosophical questions have to be asked. What is New Zealand way of life in the 21^st century ?

The large and increasing national account deficit seems to force the government into stupid actions of desperation. Obviously falling into a trap by considering revenues form:

- natural resources damaging our environment/ nature and  eco- tourism -

- opening more land for intensive (dairy) farming destroying our environment, undermining animal welfare standards and in disregard of the influence of climate changes –  

- doggy immigration policies leading to social, employment and housing problems etc.-

- it doesn’t create skilful jobs (see below) -   

I’m proposing a clear, consistent, long term strategy for our economy to be the world leader:

  -New Zealand’s Green Sustainable Economy Model of the World”

Such a model would make us unique in the world, inspires, lift ethics, spirit, pride among the population and feed into many sectors of our economy and society.  But it also supports strong and already existing sectors. It would make Billions in revenue, the country would prosper.

Industry and Ecology

 Today and in the future “Green Industries” offer new, good opportunities for NZ’s economy. Manufacturing Research & Development in sectors like Power, Transport and Telecommunication, in fields where we relay on foreign dependency most, even to a degree that our national security is at risk is essential. Building sustainable niche markets, producing and branding quality goods for us and to cover export demand will be successful.

Energy, Public Transport, Telecommunication

 Two examples of how we should proceed with infrastructure questions in Energy and other such as Public Transport. Financially and economically it doesn’t make sense to import or to produce heavy and expensive machinery/ equipment like turbines/ generators, nuclear power plants or heavy trains.

Such imports are mostly under overseas contracts, managed and installed by overseas technicians and workers, without hardy any local workforce especially skilled ones.

In stead we should research, develop and produce –SMALLER UNITS- manufactured and installed by Kiwis in our own country. A step, when supported by government with enormous, but positive implication for our country:

 - increase employment opportunity -

- better education after school –

-  technical skill and knowledge improvements -

- higher wages/ imports of brainpower –

-  positive influence to other sectors/ fields such as Science and Research -

- less quality imports / reduction of account deficit -

- control and sovereignty –

- quality infrastructure services –

- national security improvement –

- almost no affects because of natural events -

 Sustainable Public Transport - developing a sector of industry to cover public mobility within a 100- 150km radius. Innovative businesses producing SMALL QUALITY UNITS starting from bikes, scoters, light rail systems and the interaction within, hardly seen in other countries. All planned, developed, installed, maintained and ran by Kiwis.

Sustainable Power supply/ savers SMALLER QUALITY UNITS developed, produced, locally/ regional installed and ran/ maintained by Kiwis.

A clear strategy to master the international dependency on fossil fuel, gas and power consumption.

Please, read and understand this in context to my many other articles.

I think that the next decade or three will be a splendid time in world history . Globalisation will reduce the threats of trade protectionism and of war . The emerging market economies will produce a new middle-class , demanding goods and services . And olde western economies will have to pare down their bloated government bureaucracies to keep up , or fall permanently behind . The western style welfare state will have to be cut to size , as these economies cannot go on living beyond their means . And that will be a good thing for them , as the private sector fills the void of government agencies , far better , more innovatively , and cheaper .

Yes , my friends , it is all good ! Follow the Chicken-Little Hickey depression scenario if you will , your free choice ........ Me , I'm gonna step into the warm glow , the soothing balm , of the capitalist market-place .

just got this in from one of my daily email  strings...i think the two headlines are oxymoronic nearly, but clearly indicate what a "lucky dip" this whole crap financial thing is...."blind leading the blind etc"..

July home prices dip, business outlook weakens. 4:06 AM  read more

US stocks rise on earnings expectations, deals. 6:11 AM  read more

..and all on one page and in one breathe?

If it all fails ...was it Charlton Heston who said something like..."back the man with the biggest gun"

;)

 "We continue to look for the RBA to raise rates twice, by 25 basis points a piece, before end-2010," said ANZ's head of macro-economics, Katie Dean.(the age)

Kiwi will slide toward 75au...may fall to 73 now with the current GDP likely negative.

I wonder how long Tweak and Fiddle will carry on playing BS the public that recovery is coming! Can they really last past the election....or will Mr Market turn up to take their toys away. Clearly the cheap and easy credit formula has turned out to be a big fat ballzup. Noddy is stuffed with debt and like the fat 'Monty Python' German..is set to explode.

You just don't want to be here when the German explodes! The borrowing bonanza by the buffoons in wgtn will come to an abrupt HALT. The fiscal hole will open up and down will go Tweak Fiddle and all.

Bit of an overstated headline in the China warns....Yu Longdong's been banging that drum for a while now.....and his motive and agenda is painfully obvious....it's early days in the currency chess game....got to sacrifice a few prawns to get the big Won Ton. 

Great news..Kiwi smashed down through .75au......keep going little bird.