David Chaston details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the International Monetary Fund revamped its credit line program to encourage countries facing outside shocks to turn to the fund with few conditions attached, as European leaders fail to end their debt turmoil.
The changes, which enable countries that pre-qualify to request IMF funds without having to make as many policy changes as with traditional loans, come as Europe’s crisis threatens to spread to Spain and France. The IMF is co-financing bailouts in Greece, Portugal and Ireland and is preparing to send a team to Italy for an unprecedented audit of the country’s efforts to cut its debt. But more loans, when the problem is too much spending and too few taxes, is hardly a sustainable solution. It is just compoundiong the failure of public policy.
Across the Atlantic, the American public policy failure just gains momentum, although there is a crude 'solution' looming - the end of the Bush-era tax cuts, which will raise revenue from the wealthy, along with substantial automatic spending cuts. Both sides of the political debate will take substantial pain, and the immediate impact on US growth will not be positive, but as crude as it is, it is action in the right direction.
Third quarter US GDP growth was revised down a bit, but US payrolls showed good signs of expansion in October.
Closer to home, the Australian parliament looks set to pass its mine tax legislation, but just at a time when demand for iron ore seems past its peak. Prices are falling, and mining activity slowing sharply as demand from China weakens.
Despite all this uncertainty, gold has made only a small recovery after its steep fall a few days ago. The NZ dollar is trading pretty much unchanged overnight.
And as our election looms, don't forget to check all the detailed policy comparisons we have on the site - eighty five separate areas are covered so we are sure to have the ones you are interested in.
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6 Comments
I heard from some friends in WA that their wheat harvest is double what they would have in a good year, this year. There is so much grain that the port it is shipped from has no more storage capacity, and the concern is as to just where this grain can be stored until it is shipped.
Hungary turns to IMF as stress mounts in Eastern Europe Hungary has returned cap in hand to the International Monetary Fund after kicking out inspectors last year, becoming the first country in Eastern Europe to succumb to contagion from eurozone debt stress. http://www.telegraph.co.uk/finance/financialcrisis/8905478/Hungary-turn… Erste, Unicredit and Raifeissen advertise every day on Croatian and Bosnian TV offering credit cards and loans TO PEOPLE WHO CANNOT AFFORD IT, just like banks did in the UK , stoking up a huge credit bubble. Bank lending is like riding a bike, if you stop peddling the bike falls over. I'm glad my family has no credit and understands the essentials :FAMILY, HOME (shelter), FUEL (wood) and FOOD (garden).
Stuff the banks. When you see a horsedrawn cart going to market being overtaken by a Porsche Panamera you know there's a problem and getting worse.
That's one way of dealing with 'Dutch Disease'.
How should we deal with our version of the same problem?
Cheers, Les.
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