Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including the long awaited announcement from the US Federal Reserve that it plans to buy US$600 billion worth of long term US Treasury bonds by mid 2011 in an effort to restart the US economy.
The New Zealand dollar strengthened against weakening US dollar as investors saw the prospects of further US dollar weakness and rising commodity prices.
They worry the Fed's attempts to stoke up inflation will spill over into the faster growing emerging economies and commodity-linked developed economies.
The Kiwi dollar briefly hit 78 USc, its highest point since June 2008. See more here in Mike Jones' currency report.
The US$600 billion will be spent at a rate of US$75 billion a month until June 2011 and was slightly higher than expectations of around US$500 billion. See more here.
Many fear however that this monetisation of US government spending will simply fire up inflation and devalue the world's reserve currency, sparking a series of tit-for-tat devaluations, trade sanctions and capital controls by economies desperate to protect their export industries from rises in their own currencies vs the US dollar.
Others worry this attempt to pump money into the US economy will fail because households are already heavily indebted and won't want to borrow more, or that banks are still too weak and risk averse to lend out money.
A failure of this latest round of money printing would trigger further attempts to stoke economic activity with more easings, they argue.
The US Federal Reserve's two day meeting of its Open Markets Committee (FOMC) has been the most anticipated in its history. Over the next two days the Bank of England, the European Central Bank and the Bank of Japan will all announce their own monetary policy decisions.
Many expect countries to fire back in these 'Currency Wars' to stop their currencies from rising vs the US dollar, using a mixture of currency controls, capital controls and trade sanctions.
No chart with that title exists.
29 Comments
Who actually owns the Federal Reserve? Wikipedia says it is privately owned but does not say by whom.
"If the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered".
Thomas Jefferson, 1787.
Was he onto it, or what?
Baron de Rothschild pushed for the system - "A few who can understand the system.....will be either so interested in its profits, or so dependent on its favours, that there will be no opposition from that class".
Rothschilds and Rockefellers were in at the beginning....., but I seem to recall Kuhn-Loeb, Goldman Sachs, Lehman Bros (were) Warburgs, Lazards, and some (all?) US commercial banks.
someone here will know more...
Essentially, it is a co-operative owned by the different federal banks created under US Statute.
In reality, the US FED is controlled by the Federal Reserve Bank of New York. Which is a club for the bankers of New York.
If your interested read The Lord of Finance - it is very very good.
78 today.....88 in 12 months.....somewhere in the months to come the exporters will demand payment in Yuan or Yen. This US$ farce must stop. Part of the problem is the RBNZ brown nosing the Fed at every chance. The only imports that require US dollars are oil based. Key needs to speed up the change over to an electric transport system..reduce the need for oil...and stop buggerising around.
Payment in Gold/Oil. Something which can not be created on a whim.
Why trust anyones paper?
This looks interesting:
“If I were BoJ, I would set a trap for all the currency speculators in the world. I would intervene in the currency market, appearing unsuccessfully, to lure speculators to commit more and more funds. I would get into a spit fight with the US Treasury and appear scared from time to time, egging the speculators on. I would quietly sell ¥10 trillion per day, not completely offsetting the speculative inflow and allowing dollar-yen to drop slowly with rising trading volume. I would play the game for two months and let dollar yen drop to low 60s until ¥500 trillion of speculative funds are sunk at an average price of 75. I would then announce unlimited supply of yen at 120. The speculators would suffer losses of ¥ 312 trillion instantaneously. They have to unwind their positions to stop losses. Just in case that they don’t unwind, I would announce the price would be raised to 130 one month later. I would use half of the profit to retire 16% of the national debt and donate the other half to Melinda and Bill Gates Foundation for helping Africa. I would refloat the currency, after all the speculative positions have been closed, and impose 0.1% Tobin tax on yen currency trading to stop future speculation.”
Andy Xie, 12th October, 2010, in China Finance
http://www.arpllp.com/core_files/The_Absolute_Return_Letter_1110.pdf
What about a Tobin Tax on NZD trading?
Wally says: Key needs to speed up the change over to an electric transport system..reduce the need for oil...and stop buggerising around
..... imported, partly or entierly manufactured here in NZ is the essential question ? Most politicians Included the new Auckland City Council are saying we do need more public transport, better engergy supply, etc. but where does it come from ?
The new Wellington mayor has pointed out the way Walter...she peddled her bike to the airport to say gidday to Hillary...we need to see Key doing the same...sell off the German cars the pointy heads are carted round in....issue them bikes instead...that would speed up the improvements in roading for those on bikes....
Considering the massive account deficit and an economy, which increasingly nears a third world status I think this isn’t a laughing matter. America will certainly show us all in the near future – how serious the situation is.
All this new hot money available would mean NZ banks can start lending at cheaper rates soon?
And the cake came out of the oven with 6.4% on it...now would that be from all the jobs created in the surge of growth we haven't had!...or the state sector bloating WINZ to deal with the 6.9% which in itself was just a cake to keep the punters happy...or did the unemployed receive travel subsidies to jump the Tasman. That's your free cooking lesson for the quarter folks. Tune in again in three months for another taste.
Any idiot can see the 6.9% to 6.4% change is a fraud.
I agree 100%. The number of registered unemployed was up 5.8% for the same quarter. Personally I can see no reason for any divergence in direction.
Stats NZ statistical survey methods are in a word "useless". (Sorry to be harsh).
Economist Robin Clemens is sceptical of the quarter's unemployment figure . The data is " jumping around alot " ( Radio National ) .
Wolly, so do you think Adam Feeley should be laying charges against Statistics New Zealand?!
Following on from the Harold ‘Hal’ Lewis Emeritus Prof of Physics Resignation from American Physical Society for what he described as the “global warming scam”, there are now a number of very intelligent and informative articles from Judith Curry.
Just to avoid the usual ad hom attacks, this is who she is:
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Judith A. Curry is an American climatologist and chair of the School of Earth and Atmospheric Sciences at the Georgia Institute of Technology.
Her research interests include hurricanes, remote sensing, atmospheric modeling, polar climates, air-sea interactions, and the use of unmanned aerial vehicles for atmospheric research. She is a member of the National Research Council’s Climate Research Committee.[1]
Curry is the co-author of Thermodynamics of Atmospheres and Oceans (1999), and co-editor of Encyclopedia of Atmospheric Sciences (2002), as well as over 140 scientific papers. Among her awards is the Henry G. Houghton Research Award from the American Meteorological Society in 1992.
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So in anticipation of ad hom attacks:
1. "Where are the peer-reviewed papers?" - Over 140.
2. "Paid by big oil" - I don't think so.
3. "She's old and out of touch" - ahhh, nope.
4. "She's not a climatologist" - ahhh, yes she is.
5. "She's a denier" - of what? Can you find something she is "denying"?
6. "She's female" - ahh, yes she is. Maybe even alarmists won't stoop to that one!
This is the 1st article from Judith Curry that caught my attention. I highly recommend spending the time to read it all:
Heresy and the creation of monsters
October 25, 2010
by Judith Curry
http://neuralnetwriter.cylo42.com/node/3758
=============
The title of the article itself is rather astonishing. The Wikipedia defines heresy as: “Heresy is a controversial or novel change to a system of beliefs, especially a religion, that conflicts with established dogma.” The definition of dogma is “Dogma is the established belief or doctrine held by a religion, ideology or any kind of organization: it is authoritative and not to be disputed, doubted, or diverged from.” Use of the word “heretic” by Lemonick implies general acceptance by the “insiders” of the IPCC as dogma. If the IPCC is dogma, then count me in as a heretic. The story should not be about me, but about how and why the IPCC became dogma.
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I also found this one very good:
Decision making under climate uncertainty: Part I by Judith Curry
http://neuralnetwriter.cylo42.com/node/3778
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Conclusions
The current decision making framework based on the UNFCCC/IPCC has led to a situation where we are between a rock and hard place in terms of decision making. The strategy (primarily model based) has provided some increased understanding and a scenario with about 3C sensitivity that is unlikely to budge much with the current modeling framework. A great deal of uncertainty exists, and emissions target policies based on such uncertain model simulations are not robust policies.
It seems that we have reached the point of diminishing returns for the science/decision making strategy reflected by the UNFCCC/IPCC. Its time to consider some new decision making frameworks and new scientific ideas. In Part II, we will explore some robust decision making strategies that consider Weitzman’s “fat tails” and ponder the kinds of scientific information needed to support such strategies.
============
It would be good to see the MSM, such as Radio New Zealand National, cover climate science properly, in an unbiased intelligent way, in contrast to its recent Flannery/Suzuki chats.
Judith Curry would be a very good place to start.
Bernard - do you have a filter function for these paid one-topic hucksters?
I hope that Bernard doesn't , PDK ....... ... Call me an old softy , but I'll miss you , buddy .
GBH - keyword: paid.
you're an old softy.
On the previous thread on interest.co.nz:
90 seconds at 9 am with BNZ: Weak US jobs signal QEII; Currency wars rage; SCF puts Mr Apple on block
http://www.interest.co.nz/news/90-seconds-9-am-bnz-weak-us-jobs-signal-…
the first reply to my post about Harold 'Hal' Lewis's Resignation letter was this from steven:
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by steven | 11 Oct 10, 10:14am
Reduced to spamming are we?
Excellent, the anti-agw loons are side lined as the crack pots they are....
regards
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Then later powerdownkiwi replied with this:
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by powerdownkiwi | 11 Oct 10, 2:02pm
He seems to come out of the woodwork on one subject, and one only. Bit like HughP.
Those cases always make me wonder, just quietly, where their funding comes from.
Those 'leaked emails' were put to bed, although the media seemed to take less interest in that part of it.
Maybe he's just another Inwood?
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To which steven replied with:
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by steven | 11 Oct 10, 2:24pm
Indeed posting a piece totally out of context for the 90 at 9....no where lese to post that would get read I suppose.
Funding.....there would seem to be a good trail of dollars surrounding the deniers...pretty dirty money.
I read once that when someone insults you and you dont understand [part of] it...throw it back as usually they throw things at you that they are themselves are hurt by so think you will be....I suspect thats the case here so the money trail should be interesting to uncover... If its not money then its extremist politics......
The media were looking for their usual scandal / sound bite, but usually want the truth....nice and juicy but substantiable truth. When the truth was obvious from looking at the emails themselves they lost interest, indeed I think the entire episode did the deniers more damage than good they turned the incident into one huge farce with them as lead actors.
regards
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This how Bernard Hickey viewed it:
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by Bernard Hickey | 13 Oct 10, 7:49am
This is a generally interesting (and mostly civil) debate that we haven't had on this site recently.
I appreciate people's attempts to keep it civil.
A quick reminder to people to not be abusive and to back up their arguments with links to other sources/authorities.
cheers
Bernard
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My reading of that is that my post, and the subsequent responses were welcome.
Today I posted about Judith Curry.
The first response was from powerdownkiwi:
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by powerdownkiwi | 04 Nov 10, 12:25pm New
Bernard - do you have a filter function for these paid one-topic hucksters?
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My response to that is as follows:
Mahatma Gandhi said "First they ignore you, then they ridicule you, then they fight you, then you win."
It appears I have made considerable progress :)
This sort of behaviour is exactly what Judith Curry has been writing about. The dogma that has overtaken science in the climate area.
Now to the exact post. I assume, I think it's a fair assumption, that powerdownkiwi is referring to me. In which case:
"paid" - paid by whom for what? I am not paid by anyone for anything remotely connected to climate science.
"one-topic" - if you visit my website you will see I cover a wide variety of subjects; economics, banking, peak oil, technology, science, the recent earthquake here etc etc. I admit I do tend to concentrate on economics, and the "follow the money" clue that the AGW climategate saga has revealed - how interconnected AGW and the current financial situation is. Carbon credits are the attempted replacement in my view of the collapsed derivatives market. An attempt to continue inflating the currencies.
"hucksters" - thank you, you make my case about dogma for me.
I little more from Judith Curry:
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If you think that I am a big part of the cause of the problems you are facing, I suggest that you think about this more carefully. I am doing my best to return some sanity to this situation and restore science to a higher position than the dogma of consensus. You may not like it, and my actions may turn out to be ineffective, futile, or counterproductive in the short or long run, by whatever standards this whole episode ends up getting judged. But this is my carefully considered choice on what it means to be a scientist and to behave with personal and professional integrity.
Let me ask you this. So how are things going for you lately? A year ago, the climate establishment was on top of the world, masters of the universe. Now we have a situation where there have been major challenges to the reputations of a number of scientists, the IPCC, professional societies, and other institutions of science. The spillover has been a loss of public trust in climate science and some have argued, even more broadly in science. The IPCC and the UNFCCC are regarded by many as impediments to sane and politically viable energy policies. The enviro advocacy groups are abandoning the climate change issue for more promising narratives. In the U.S., the prospect of the Republicans winning the House of Representatives raises the specter of hearings on the integrity of climate science and reductions in federal funding for climate research.
What happened? Did the skeptics and the oil companies and the libertarian think tanks win? No, you lost. All in the name of supporting policies that I don’t think many of you fully understand. What I want is for the climate science community to shift gears and get back to doing science, and return to an environment where debate over the science is the spice of academic life. And because of the high relevance of our field, we need to figure out how to provide the best possible scientific information and assessment of uncertainties. This means abandoning this religious adherence to consensus dogma.
========
Cheers Steve
All we really have to do is abandon the notion that "predictive science" is "truth". I think this is where Curry is coming from - all these fancy "models" of today... be they economics, climatology or sociology are (as Jasanoff calls them), "technolgies of hubris".
We have a history of denying fact if it is inconvenient, and particularly if it undermines currently-held dogma.
Classics are Gallileo, Magellan (actually his crew*) Darwin (still) Malthus, Meadows and Hubbert. Closer to home, Lloyd Geering.
All knocking comes from the incumbent power-wielders, and it's not hard to see why - you don't change a system you see yourself as a 'winner' in. The Confederate States come to mind.
The incumbents, of course,are prepared to pour large percentages of their current winnings, into the fray (think Shirtcliffe).
The warners of change, the scientists, the discoverers, and the suffragette types, have to do it alone at first, always outnumbered (until they tip past 50%) and always unpopularly with the incumbent press.
Hunter Thompson put it better: "History is hard to know, because of all the hired bullshit.
For 'history' read: everything.
* the church donged them for celebrating the Sabbath a day out - nobody had thought about the date-line, because the world wasn't round....
pdk.. what Curry is saying is that "climate science" has become "current dogma".
And you need to be a great deal more circumspect with the use of the word "fact".
In particular, "predictive science" does not produce "facts" - it produces predictions.
Therein lies the problem.
Powerdownkiwi
We have a history of denying fact if it is inconvenient, and particularly if it undermines currently-held dogma.
Evidently you are in denial of your treatment of Steve Netwriter. You behaved like a thug and now you justify it.
AiF
Bollocks.
When he first turned up, I went back to first principles.
Got out my weather books (I flew for years, and sail heaps - just delivered a yacht back from Tonga, taking good notice of the ITC cloud-forms) and my CC books, went through the lot.
Taking notes.
Visited an Associate Prof and a Prof, friends of mine.
After perhaps 30 dedicated hours, I reaffirmed my previously-held position.
Then I noticed he's a one-hit wonder.
Kate - nonsense too. That is the same line that keeps the anti-evolution cretins going. It was entirely mathematically predictabe that a numerically exponentially-increasing species, altering the chemistry at an exponentially-increasing rate per-head, would hit the limits of it's ecological survival-envelope, and at speed.
The momentum always meant that we would be playing double or quits, and that it would take just one linch-pin parameter to go unaddressed, for a die-off.
Which means every threat has to be addressed with enough precaution that we can cease before we hit the habitat limit.
I knew about the carbon cycle at intermediate school. Knew enough to limit my offspring to replacement-or-less (25 years ago), knew enough to limit my contribution to pushing those parameters, understood sustainability. Our forest (planted as a rain-forest-depletion-replacing carbon sink in 1989) is part of that.
That we're having this discussion AFTER we've gone through 350 PPM is ridiculous, and I regard those who seek to prolong the inertia, as socially criminal.
I make no apologies for being out of patience at this point.
PDK
The issue here is the nature of science. You said Steve was paid to be here. Steve has been around the blogs for ages posting some interesting graphs on NZ economics. He also posts on Green energy advisers.
Ask Andy Hamilton for confirmation he was on GHPC. He was no friend of mine there but that is not the point.
There seems no evidence to support your theory. You acted poorly.
As for global warming there is now more sea ice around Antarctia than 30 years ago and it is not surprising to me, that if you look at the temperature record of NZ over the last 120 years, it is more or less the same as it was.
Climate varies and we may well be in a warming phase between ice ages.
so sailing around the the south pacific in someone else,s yacht staring at the clouds confirms your views does it murray?--one of your boys is a sparkie--right? how does that fit in the powerdown equation
I'm A Denier, another great video/song from M4GW
http://neuralnetwriter.cylo42.com/node/3802
Enjoy :)
This is what Dr Judith Curry says in her profile article:
================
The question then naturally arises. What is Judith Curry sure about?
She pauses before giving an answer in three parts.
“Climate always changes,” she says.
“Carbon dioxide, all other things being equal, will contribute to a warmer planet.”
And lastly, “Whether in the coming century greenhouse gas will dominate natural variability remains to be seen.”
Asked what she is certain of, her most definitive answer is uncertainty itself.
===============
http://neuralnetwriter.cylo42.com/node/3805
I agree with all of those statements.
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