Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that China's industrial output growth slowed in May, but its inflation rate rose more than expected to 5.5%.
The contrasting signs of a slowing economy in tandem with rising inflation highlight the challenges for the Chinese authorities. They are trying to engineer a soft economic landing that avoids the political pain of job losses and food price inflation. See more here at NYTimes.
The outcome is crucial for the New Zealand and Australian economies, given our heavy reliance now on China's growth rate both for our trade and for its influence on commodity prices. A sharp China slowdown could hit commodity prices and slow the Australasian economies, which would delay increases in the Official Cash Rate here and probably drag the New Zealand dollar lower.
Chinese industrial output growth slowed to 13.3% in May, while retail sales growth slowed to 16.9%. The stronger than expected inflation triggered another tightening of China's reserve assets ratio.
This makes it harder for China's banks to lend more and has often been preceded by a hike in Chinese official interest rates.
The 50 basis point increase in the reserve assets ratio to 21.5% is the sixth hike this year.
Meanwhile Indian inflation rose to 9.1%, emphasisng the inflationary impact of high commodity prices, driven some argue by loose monetary policies in America and Europe. See more here at BBC.
Elsewhere, US Federal Reserve Chairman Ben Bernanke warned the US Congress that any failure to lift America's debt ceiling before a likely US default on August 2 would prove disastrous for financial markets. See more here at Reuters.
No chart with that title exists.
41 Comments
4.4% term deposit for 6 months, interest payeable monthly. ANZ/ National. Take out inflation and tax and you have a minus return. Bollard says New Zealanders are no good at saving and we have to do better. Please stop talking shite Alan! Savers are being used to save the Banks backsides and the housing/ farm bubble.
Yeah Bolly .....give us 15 good reasons why save and they all better have % after them.....
If you look back a year ago CPI was 1.7%, so you need to look at annual inflation and not monthly equiv.
Some prices are up, some are down, I know Im seeing clothes heavily discounted...so I lose a bit on food and gain on clothes.....
Beyond that you save for a rainy day so you can lookafter yourself if you need to...so savings is a safety thing and not so much make a living at it thing....also that's deposit rates at risk free rate of return....
The good news for savers is hang on, I think real deflation/depression is coming, so even at low rates your capital is worth more every day.
regards
Would you like fries with those jeans Steven?
5.12% for 3 months fisher finance and govt guaranteed!....
Rates can only rise...Greece is being buried along with the banks that loaned the loot...the haircuts will mean higher returns are in demand by the banks to recover losses...those in debt to a bank will get shafted...
On top of that you have the Bernanke printing rort driving up commodity prices and it is these which are triggering demands for pay rises...inflation is already beyond the control of the BoE and the Fed and the BoC and the RBNZ and the ECB....stands to reason a period of seriously awful stagflation is arriving....
If not...please explain!
UK Inflation
http://www.telegraph.co.uk/finance/economics/8573665/Food-costs-keep-in…
Bread prices rose 5.8pc, meat 5.1pc, fish 11.4pc, fruit 5.4pc, vegetables 5.1pc, and sugar and confectionary 7.5pc on last year. At the same time, alcohol and tobacco prices rose at their fastest pace since records began in 1997 – at 9.8pc. Restaurants and hotel prices also rose at a record pace of 4.5pc.
and if ppls income isnt rising, other parts of the consumer economy must be contracting by an equal amount.
regards
Perhaps, unless people are eating less :-P
Apparently noodles are still cheap.
And the antidote to inflation is.........gold - to hit $5000 on supply issues allegedly.
http://www.cnbc.com/id/43396080
Cue: but you can't eat it blah blah blah..........
Buying gold doesnt cure inflation so it isnt an "antidote"
and yes there is a limited amount of new gold every year, so with huge over-demand and being at about peak production its price to extract has to rise...
regards
What about Wolly's stagflation into the mix. If interest rates are higher, gold is less attractive as an investment.
"Chinese industrial output growth slowed to 13.3% in May, while retail sales growth slowed to 16.9%."
But these figures are increases from May 2010 and the market loved it.
Well the market is collectively stupid.
A doubling time of 5.5 years or so.
Quadrupling in 11 years.
This is physical activity we're talking here.
Given that they can't maintain a doubling of the current rate of energy-resource extraction, even that first doubling won't /can't happen.
So I can confidently predict that its growth-at-that-rate has a less-than-five-year window.
Anyone who thinks otherwise is nuts.
caveat/afterthought: of course, it could be done at the expense of the resource being used less elsewhere. Like........ here
More severe trouble in Fuckushima Japan, but hardly any news in the media:
http://ex-skf.blogspot.com/2011/06/fukushima-i-nuke-plant-live-camera.html
http://www.shimbun.denki.or.jp/en/news/20110614_01.html
http://www3.nhk.or.jp/daily/english/14_33.html
How much is lost forever ?
Interesting data from Fukushima, read links also.
US insurance risk analyst EQECAT estimates US$3-5 bln in new losses from Monday's quakes. Details here http://bit.ly/lJPujo
thats significant, and not unexpected
Apparently job vacancies lifted in May, mainly from vacancies for positions around the rebuild in chCh
As I posted yesterday, a lot of skilled workers are going to be drawn down from Auckland to Chch - this is going to relieve housing pressures in Auckland without a doubt
OH BUT WE'RE DIFFERENT
http://www.cnbc.com/id/43395857
Bernard I think you need to have a quick glimpse at this.
Big story all over the net - specially for the three warmies here ( who have nowhere else to go now that traffic to AGW sites has plunged )
I would venture to say that it is a possibility, but would exacerbate peak oil issues if correct. What happens to global food production if it is hit by a protrated cold period, the fertiliser supply drops, mechanical assistance is restricted, and water/aquifer issues all hit at the same time. One top of that you have issues of mono cropping and genetic engineering.
Yes it is a far bigger concern than any warming, not that there has been any for the past ten years as temps have stayed flat while CO2 has increased, even so to miniscule levels.
I have read some convincing arguments on both sides of the GW argument, but don't get side tracked by that argument. We are trashing our environment wholesale and sooner or later there will be consequences.
To be sure I am definitely an environmemtalist and agree with you, however CO2 as a pollutant is the biggest hoax of all time. It is aerial plant food and the building block of all life on earth. It's warming effect is greatly exaggerated. There are however plenty of nasty air born pollutants and they must be tackled. The air quality here in HK has in the past few weeks dramatically improved and my regular walks on the trails over the 70% of HK which is left as government nature reserves have been most enjoyable. The bird life here is just amazing but local people are oblivious to it. Yesterday encountered magnificent butterflies and a huge lizard. My greatest coup has been spotting an asian porcupine on the Peak.
For a population of close to 8 million, Hong Kong is a remarkably clean place considering its small size. Smoke in a public place and you are fined $1,500HK. Have seen very few smokers in the past 7 months.
Ah right the new trend for denialists, trying to claim to be a "skeptic" isnt getting traction, so lets claim to be an environmentalist who doenst believe in co2...
regards
Steven people with a seemingly closed mind like you actually do more harm for the AGW cause than good.
Why are you so dismissive of those with a counter view to yours......
I can answer that one: "Because the overwhelming majority of scientific evidence and research totally supports the conclusion that GCC is caused by human activity."
Was that evidence based on the fabricated data or the unfabricated data ?
Remember the leaked emails....who got caught dressing up porkies as fact ?
Dunno about global warming but I do know I have NEVER known the southern alps to have so little snow at this time of year or be so warm! The shortest day of the year is only a day or three away!
http://www.tekapotourism.co.nz/webcam.html
http://www.ohau.co.nz/ohau/webcams/
http://www.cardrona.com/webcams.html
http://www.nzski.com/cameras.jsp?site=mthutt
http://www.nzski.com/mountain.jsp?site=coronetpeak
http://www.nzski.com/mountain.jsp?site=theremarkables
And all the others are no better or even worse.
Mount Cook and the other peaks in the main divide are bare. What the heck gives?
There's always snow on the mountains by now and usually a few falls on the ground too, but not this year. Nobody has seen anything like it. You'd think it was late March, not the middle of blimmin June!
My red oak and black oak trees began dumping their leaves at the end of April and then just stopped part way through in confusion. We have never had leaves on the oaks in May let alone in June.
All I can say is that I'm glad my livelihood isn't dependent upon snow!
Crikey that looks dire. But you should be enjoying the nice weather! :)
and that is explained by el nino / la nina....they have about 11 year cycles and are one of the dominant single events that effect the world's temp....so we have had the cooling event for 11 odd years, its about to switch either for 2012 or 2013 to the warming event...so one of those two years is highly likely to exceed 1998 or 2005 depending on which data set you choose.
regards
Steven ive got $5 to say neither of those years will be warmer than 1998. You up for it ?
Short fat guys with moustaches and minimal education hate GCC because they're afraid it means they may have to slightly modify the way they live, but mostly it's because they are afraid of change of any kind for any reason.
Steven - have you worked out who he is/was yet?
The clue is the one-shot-but-agree-with-the-rest.
Remember?
Ok it's not related to finance but .....
" A police officer has told the inquest into the death of Aisling Symes that testing shows if she stood on a displaced manhole cover it would have flipped." herald....
Did the tests also show the little tot would have left dna evidence on that iron cover....or did the experts not look for any...and did it not dawn on the Police that the little girl may have been dropped down the hole after it was checked out!!!
Too many bloody unanswered questions here...!
Oh anything to do with the Police is significantly linked to finance.
Have you heard the term 'chequebook' Policing?
We have one of the lowest ratios of Police per capita, plus what we do have is under resourced. In Australia their fleet is turned over at 40,000Km, where as here it is common to see 150,000 on the clock.
There is no way they should ever give our Police guns, because they will never get adequate training.
Why on earth would police check it for DNA? Before it was known that she'd gone down there it was just one feature of thousands in the area. Were they supposed to take swabs from every tree, fence, hatchway, fence, manhole cover, sign, railing, and vehicle within a 2km radius, dump thousands of swabs with thousands of different DNA traces on ESR with a sample from her hairbrush and wait 20 years or so for it all to be processed? That's ridiculous.
We had a group of Japanese in our ArtGallery yesterday - I felt warm and radiated and shortly after they left switched off the heatpump.
------
When Fuckushima should make headlines in the international media - silence.
What is really going on in Japan and how much is the rest of the world affected ?
TEPCO announced that the accident probably released more radioactive material into the environment than Chernobyl, making it the worst nuclear accident on record.
Meanwhile, a nuclear waste advisor to the Japanese government reported that about 966 square kilometres near the power station - an area roughly 17 times the size of Manhattan - is now likely uninhabitable.
http://english.aljazeera.net/indepth/features/2011/06/201161664828302638.html
http://readersupportednews.org/opinion2/303-211/6005-fukushimas-apocalyptic-threat
Kunst, we expect you personally to stop using electricity. Lead by example. To do anything else would be hypocritical.
On the other hand, we could always build a windfarm in your back yard. No? "Noisy, unsightly, dangerous to birdlife, but - worst of all - will negatively impact my property values"? OK. How about a solar farm? No? Same reasons? Uhuh. Coal-fired plant? No? OK. Hydro? No again? What's that? "Those things are OK if they are not near me"?
Wouldn't want to see your property devalue or your lights go out. Because, you know, every single Watt of available generation capacity must be consumed immediately.
Fair go Walter....you have a heatpump....what's wrong with a woodstove...the beaches there are awash with driftwood and the bush is stuffed with fallen Kanuka...get with the chainsaw Walter....
No, no guys - from now on we "use" Japanese language students to heat our home in the winter time. I just placed an ad in the “Tokyo Herald”
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