David Chaston details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that European banks 'devoured' a three year bond auction by the ECB overnight, buying almost half a trillion euros worth. Essentially this is the ECB flooding the market with cheap money.
It is a dramatic development, and one that shows just how frozen banking markets are in Europe, and how desperate bankers are to get their hands on bond assets that have some perceived worth.
The idea by officials was that banks would use the funds to invest in European sovereign debt, but that looks unlikely. It seems they have taken up more than two thirds of their 2012 maturing obligations and will use the funds to bolster their own capital. Most of them will be under pressure to add capital reserves in 2012. If this is the outcome, it will be a spectacular public policy failure, especially for President Sarkozy who pushed for this action. Banks got a capital boost, but it may have little effect on their lending. Some called it a "cash for trash" event.
The euro rose when the auction results were announced, but has fallen sharply since. More from Bloomberg here »
Across the Atlantic, US home sales rose strongly, up 4% and this is being seen as further evidence the US is growing again. This is a ten month high, and is another indicator showing the bellweather housing sector stabilising in the US.
The NZ dollar rose sharply yesterday, fell back overnight, but is rising again this morning as the euro debt news sinks in. Oil is rising on the US news, gold is falling on the euro news, and the Dow is down slightly in late trading, although it has had a volitile session. It's still over 12,000 though.
Back home, a number that came out with yesterday's Q3 balance of payments data that got little attention is the level of New Zealand's overseas debt. It now stands at a record $271.9 billion, up almost $18 billion in the quarter. What was surprising about this was not the $4.8 billion rise in government debt, but the $13.1 billion rise in private sector debt in the third quarter. That rise ends a four quarter run of falling overseas debt by the private sector - in fact it wipes all of that deleveraging out and we are back to overseas debt levels last seen in early 2009 by the private sector. We can't help ourselves; we are addicted.
No chart with that title exists.
75 Comments
(Cross post).
Most people who read this site, and the owner of it, will read this, rightfully aghast, because it's what got Europe into the mess in the first place, yet, these same people will still continue to advocate the centrally banked, Big Brother State to run their lives.
Crisis Part III coming to you in the New Year: bigger, better, faster than both the two crises before. See whole nations wiped out.
Crazy.
Gee a bit stressed out there? Pre-Christmas rush getting to you?
I would have though nationalism or nationhood is everything to do with it. Afterall each nation has it's own central bank and it is intricately linked to governance, which is what you are on about.
If we were all governed they way you propose then nations would be irrelevant surely? One world government perhaps?
It was a throwoff, satirical line (to sound like a movie trailer - jeez, jokes don't work if I have to explain them).
Yes, to a libertarian, national boundaries are irrelevant and nationalism is repugnant. No argument. But no one wolrd government, which is where Europe has already gone, because libs only want limited government. As I've been stating all along.
My vote, in our tyranny of the majority social(alist) democracy, as far as defending what few freedoms I have left, or property rights, is as useful as a vote would've been in the Soviet Union. That can't be denied by anyone.
We need a libertarian minarchy in which rights and freedoms are put beyond the vote, and such a system can only be built on laissez faire capitalism (and no, that does not exist today, only crony capitalism which is to capitalism what sea horses are to horses).
Who am I to think I could influence your rationality?
For a start have a think about whether you are the only one in step.
The world needs your thoughts to help establish the range of thinking.
Nassim Nicholas Taleb advocates Negative Empiricism as a means to establishing skepticism. I reserve my opinion on your logic.
Have a nice holiday season.
Just saying that things would be better if they were different doesn't get anybody anywhere. Socialists are just as correct when they say that things would be better if everybody were happy and willing to give their best, regardless of incentive, and to make sacrifices to help those less fortunate than themselves. How do you propose to get there, that is the real question.
Yet didnt you say you hoped the present "mess" would collapse so there was an opportunity for Libertarianism?
Such a collapse wouldnt be peaceful......or without un-necessary death and suffering.
and of course there are/were 1500 voters for your cause in NZ v 4million others and its theat 4 million that are brainwashed.....
yeah right........
regards
You're right steven, I didn't say that.
1,500 hundred people believing in something has no bearing on whether something is right or not, as does one million people. It's either right or not. On your theory, Kim Jong was a God. Really, do we have to do this childish BS at the start of every thread?
First para, fair enough.
This isnt a "right or wrong " thing...it is no absolute physical law of nature....it is a choice we make on how we want our society.......
BS....LOL...you accuse 4million others and myself of being brainswashed..........thats conceited at the very least.
regards
My point was not very clear after re-reading what I wrote.
I was trying to say that by using debt based fiat money (NZ$) 4 million people are in effect jumping off a skyscraper to their deaths without realising it, economically speaking. There is a very small fraction (but growing fast) number of people that understand the implication of using a monetary unit that is in of itself a ponzi scheme.
Without economic sovereignty, there can be no national or personal sovereignty. To live in a free society we need an honest monetary unit. We need a commodity based or non-interest accruing fiat currency with effective restraints in its issuance.
Have you been following the Ron Paul Revolution in the US? He is a libertarian whos terms in congress has spanned 5 decades, he has preached strict libertarian views, often being a sole voter against bills before the house.
He is a follower of Austrian Economics, he belives by continuing these insane keynesian practices that have got us into this mess it will only gaurantee we have to face an even larger cricis later on.
It is only been in the last few years that his views have gone mainstream, it is only now that Austrian Economics have widespread acceptance for correctly forcasting the GFC while the mainstream keynesians hadn't a clue and now he is shaping up to be a serious contender for president.
"First they ignore you, then they ridicule you, then they fight you, then you win."
http://www.youtube.com/watch?v=fW8amMCVAJQ
And Marxism predicted the fall of capitalism, is that going to be the new fashion after Liberalism?
Look down the road of the monetary system, and whatever philosophy you smear on top of it doesn't matter. They all end in economic collapse. With or without sound money.
Laissez faire doesn't operate anywhere, it's not been allowed to: that is the problem.
Leaky homes are not an issue arising from laissez faire capitalism: Part I, Part II, and Part III.
Outside of that, the below quotation from Cafe Hayek says everything I need to say about the benefits of laissez faire:
Let’s be clear about one indisputable fact: capitalism vigorously pursued has never produced the atrocities – starvation, tyranny, and genocide – that are produced by statism vigorously pursued. Nothing remotely close.
Capitalism vigorously pursued might produce trade cycles and long periods of high unemployment; it might produce anxiety in yesterday’s successful entrepreneurs who now face competition from today’s upstart entrepreneurs; it might cause too many people to become obese; it might kill off animal species in unusually high numbers; it might cause the earth’s climate to change; it might create asset bubbles; it might spark envy and over-work in the Smiths who are trying to keep up with their neighbors, the Joneses. It might do these things and others that reasonable people might regard as unfortunate in comparison with some imaginable paradise.
But we must never lose sight of this important asymmetry: complete or near-complete state control of the economy is proven to generate deep impoverishment and tyranny, while historical periods that have been close to laissez faire – that is, much closer to laissez faire than is America at the dawn of 2012 – have witnessed nothing remotely of the sort. Indeed, whatever problems might be caused by more and more reliance upon laissez faire capitalism are always accompanied by – are at least partially (and arguably significantly) off-set by – unambiguous benefits of capitalism such as the elimination of starvation, more abundant supplies of clothing, and better housing.
Any problems promoted by greater and greater reliance upon capitalism, in short, are first-world problems (which isn’t to say that these problems should be tolerated); they are problems incomparably more tolerable than are the horrors promoted by the elimination of capitalism.
Load of rubbish. A global situation has never existed without significant concentrated power structures and the rules they create. Trying to present a history of capitalism in such a context is plainly false, and of course the sort of idealogical fantasy expoused by your particular brand of libertarian philosophy.
Apart from the deeply anti-democratic nature of the US brand of Libertarianism, paying only lip-service to it's belief in democracy. People should be deeply concerned about it's particular definition of freedom, usually freedom of US action.
Dealing in particular with money, money is means in an economy, those without money have no means. This means fundamentally that any economy which aims to have 'freedom of opportunity' must also try to achieve equality of wealth. An obvious and fundamental truth. But the opposite, of course, of what US branded libertarianism actually espouses. Libertarianism likes to talk about equal opportunity but we observe once again what it actually supports is the concentration of power, and the removal of any democratic influence over those concentrations of power. Nearly the opposite of the rhetoric in fact.
Dealing in particular with money, money is means in an economy, those without money have no means. This means fundamentally that any economy which aims to have 'freedom of opportunity' must also try to achieve equality of wealth. An obvious and fundamental truth.
When you take your kids to the playground, and other kids are there who have more toys than your's do, do you tell your kids it's fair for them to simply take those other kid's toys home to equalise their wealth?
What sort of adults do you think your children will grow up to be if you did this?
Well why is what is anathema to the bringing up of your children, suddenly right when wrapped up as social policy forced on the population by an all-powerful government? What sort of society do you think this ends up growing?
Perhaps the 'fundamental truth' of arbitrarily taking the wealth someone has earned from them to arbitrarily give to someone whose not earned it isn't so 'obvious'? In the good old days it was called theft, and to honourable, freedom loving individuals, it still is.
Now I've got to work ...
You are deeply confused by your own fundamentalism, when the in-equality reaches the point where any decent opportunity is denied people by virtue of their parents then you can't talk about freedom. This is why any system of money which purports to support freedom of the society using that money must also have systems to create equality of opportunity. For example providing an decent level of education to each and every member as they start out and nearly free of charge. Because the only alternative (which has or ever will exist) is for the wealthy to have priveledged access to education ahead of the rest. Maybe you remember that phrase from your own favourite declaration of independence, 'all men are created equal' though the phrase did need to be modernised in interpretation to also include women, foreigners, blacks and slaves (from the time it was written).
There has never been and never will be a society free of power structures, and so it is necessary for society to form the power structures it chooses, for itself and in the interests of its own ideals. That is a democratic principal by the way, if you are going to believe in democracy then you also have to abstain telling it how to structure itself. In the absense of power structures chosen by society they spring up, usually in the form of cronyism.
The Libertarianism you demand is the same as the one supported by the Cato institute, and its not democracy enhancing. Its as anti-democracy, as American democracy has of course become. The Cato institute is well aware of this, but rather than seek to enhance it they instead want it to spread. The Cato institute does not believe in freedom, they want corporate tyrany as much as their funding and membership suggests. You can call that 'freedom' all you want, its not in any way freedom enhancing. The fact that America is further along this road than any other countries should tell you where the road leads well enough.
" This means fundamentally that any economy which aims to have 'freedom of opportunity' must also try to achieve equality of wealth. "
Absolutely not. Since we have unequal ability and unequal efforts, it makes sense that we would never have equality in wealth.
Equal opportunity demands unequal outcomes, since people take different opportunities from each other based on preference.
The problem with any libertarian system is that those born wealthy, who have done nothing to deserve it, have an advantage.
We don't tax the rich, we tax the hardworking.
I expect then that any crony friends of any government could claim their superiority to those who must live under their rules. After all you had every opportunity to emulate them, and to confiscate wealth for yourself. Why should anybody accept the claim that wealth is in any way meritocratic, especially as you highlight it is frequently not.
If the ability to better youself depends on access to wealth, then some degree of equality of wealth is necessary in order to facilitate. Otherwise you can not talk about 'equal opportunity', opportunity doesn't demand anything of the results, actually.
Regards to your quote -
Fair enough that totalitarianism is worse than absolute laissez faire capitalism. But why do you assume that the ideal amount of governmental control is zero? I'm pretty sure that somewhere along the line would be a sweet spot, and I'm equally sure that that sweet spot would not be all the way at the libertarian end.
For example, did you watch the child poverty doco recently? That showed that a higher level of state intervention into child health (Sweden) resulted in better child health outcomes and for a quarter of the cost than in New Zealand.
Finding where state intervention is helpful and where it is not is probably more useful than giving a blanket 'no.'
I'm not saying zero control: libs are not anarchists, there is still the rule of law, particularly policed around the non-initiation of force and fraud principle.
That documentary was flawed. Yes you can't leave existing children in poverty, but libs want to move to a system that doesn't create poverty. But Google the many articles debunking that doco, especially search Lindsay Mitchell's blog - I'm too busy with work to continue this thread for now.
You would not know you were talking with an anarchist, if you were. Anarchism means removing un-justified power structures, so if you believe the power structures in a libertarian society are justified (e.g people would sign up to live under them given a choice) then you are an anarchist.
Most people don't believe an un-accountable (to them) corporate tyrany is a justified power structure.
If it doesnt operate, and has never operated, you can only, at best, think it is a good philosophy for running a country. There is no certainty that it will work or be an improvement on the current state of affairs.
As is pointed out in another post. The countries which regularly top Quality of Living, child mortality, GDP, Life Expectancy etc are in the most part the Scandinavian block which have socialist systems in place. How do you account for this? are you saying these countries would be even better if their governments abandond their current way of doing things and changed to follow Hayek's principles?
most part the Scandinavian block
As I've said above, I've got to work now, but if you want to continue this line, you might want to get your reading up to date. Start with this clip:
http://www.youtube.com/watch?v=ENDE8ve35f0
I haven't got the bandwidth this month to be watching videos, but if I am partly correct the Scandinavian story is about legislation to back up the culture, not the other way around. I have ancestry in that department and it is socially unacceptable to display your wealth in these countries. However it is not unacceptable to have wealth, a fine difference.
It seems to me that people need to prop their egos up in this country by having the flashy toys. For instance why would you buy a Mercedes over a Lexus(Toyota) and the term Remuera tractor springs to mind when talking big 4wd's that are never used for their intended purpose. Perhaps the Porsche Cayenne is a good example as was mentioned here a few weeks back, a totally nonsensical motor vehicle.
Displaying, or should I say flaunting, your wealth It is a sign of immaturity and probably of low self esteem.
From my angle is shows in our Architecture also, all flash and no substance.
Nothing wrong with having wealth, it is what you do with it that defines you as a person.
The wealthy people of Remuera are exercising their right to choose.
Some may choose to buy that Mercedes, some may not.
Less fortunate people don't have the option, they cannot buy the Merc, even if they really really wanted to. Exercising your right to choose does not equal flaunting.
If it surpasses the minimum that is required to do the job then it becomes flaunting. Same car, same function so why the need for a more expensive, less reliable, more expensive to fix car that will only last 2/3rds as long? It is no more than the appeal of the brand and the prestige that fools think it brings them.
Heck even the cars badged Lexus that share a Toyota Platform is flaunting.
Whoever has the resources makes the rules, and they have lassie fair every day. Wether it's gold, money, oil, military. Whatever the essential resource is, the holder makes the rules. Liberalism enshrines this in law. If you want to give freedom, give them total freedom, so they can go and kill those greedy power hungry people that are hogging all the resources. Thats lassie fair.
Philosophy is right up there with religon when it comes to creating a utopian ideaology. Interesting, but fundamentally flawed every single time.
Do you really think that the only way to acquire a share of resources is to go and kill the people who have them?
That's not the way I acquired my car, or my flat. I bought them, at a price that I was willing to pay, from somebody who was willing to sell them for that price. And yes, I now consider myself the legitimate owner of them and I expect the Government to uphold my ownership.
I do not think it would be just, or better, or indeed any kind of freedom, if you were allowed to come along and take them from me by force. That isn't what libertarianism advocates.
Mde M - ooooh, careful there. Google Ken Sarowiri. Work out which oil company was behind his hanging (it's easy). Ever buy petrol from them?
Then you got it cheap via the murder of someone who had been disenfranchised.
Consider yourself the rightful owner of the litres involved?
Then get a hold of a copy of 'China Blue', and have a yuletide ponder upon the definition of 'willing'.
all the best
Barkis. :)
But I was objecting to the notion that it's OK to acquire property by going and killing the people who've got it, which is what skudiv seems to advocate as true freedom. What happened in that case - although I would have thought you'd have been able to come up with a better example than something that happened sixteen years ago in a country which is now under a different Government and involved a company which has since made considerable andexpensive efforts at reparation - was wrong by those lights, but I can't see that a person buying petrol now is benefiting from it.
In any case the important point is that it wouldn't have happened if there had been a libertarian regime in place. Such a regime would have defended Saro-Wiwa's rights, and ensured that Shell couldn't remove them except on terms agreeable to both parties.
Seriously the thought that things are bad because of govt theft via taxes, will pale in comparison to Greed ownership of the most essential resources to life. There are very few markets where greed is unregulated, and they use their power to oppress the poor.
The lie that things will be better without taxes and govt is just an illusion to confuse the masses.
Ever heard of price fixing, anti-trust, monopoly power etc?
No you are screwed with, or without govt. People making descisions always based on self interest, and the best thing for any rational persons interest would be if there was a hell of lot less people on the planet, using up the resources, polluting the planet, spreading disease etc.
You think rational people are somehow generous, and community orientated? Rational people don't need 7Billion people on the planet for starters.
I you want to protect some rights, here are a few.
- Food
- Clothing
- Shelter
They in the libertarian manual? Don't worry, just focus on the no taxes, and small govt bits. It's poor peoples own fault for being born, they should of thought of that before they were born, and worked harder and been smarter.
Quake-city pay rise angers residents
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10774740
@ David Chaston - We can't help ourselves; we are addicted.
Yes you are addicted to the advertising income derived from the peddlers of the product causing the rise in foreign debt.
As I am to the income from the money I lend to them.
Nonetheless, I wish you and your team a Merry Christmas and a Happy New Year.
Stephen Hulme.
So you 'lend money'. and expect to make a 'profit' therefrom?
I presume you expect to 'spend' that 'profit'?
On goods and/or services, unless I miss my guess.
Al of which consume resources, using energy to do so.
Ever questioned how long your exponentially-increasing parasitism on the physical underwrite can continue?
Merry Xmas to you too, but I suggest the new year may be not so great for many........pounds of flesh come to mind......
@powerdownkiwi - I presume you expect to 'spend' that 'profit'?
If only - I get 3.5% p.a.government guaranteed return.- after tax much less.
I noted in another thread that nominal GDP rose 6.17% on an annual basis in the year ending Sep '11. I think I am being eaten alive - no profit here just negative carry losses and diminishing capital value. It's exponential losses I am experiencing.
Back in 1975, I stumbled across the Hubbert Curve, in my McGraw-Hill Encyclopaedia of Energy.
Being not entirely stupid, it made me think. By 1985, I'd worked out that peak oil (there is no energy so potent and transportable) would mean peak wealth.
Being not entirely bright either, it took me until 2005 to realise that the fiscal system would hit that point in overshoot, due to the fractional-reserve / usury lever. Then I realised that the scale of the overshoot, on the downslope, meant that debt would NEVER be repaid.
My aim all through was to be as immune as possible, but since 2005 I've upped the ante, and like Martenson, I think I'm late.
Even a global debt-forgiveness at this point, won't cut the mustard. It needs a system which relates one-to-one to the remaining 'wealth' available.
It also needs a system which values things in a manner beyond $$$$. I wonder whether Shearer grasps this, or whether he's just another growth-promiser? Clark raised the 'sustainability' flag, listened, and took it down. Perhaps what we need, then, is a more informed voter.
Tui Ad.
PDK really good to see you around the traps again....
The informed voter is a myth....as unbelieveable as Ricky the Magic Pixie, To bring such a wisened person to the hustings ,you must first adjust human nature and natural response mechanisms ................That in itself will either take a miracle or an apocoliptic event that would leave only enough of us behind to learn the lessons we refuse to accept historically.
The reason such learnerd people who visit this site and others ,oft times feel like they are giving due warning to Simple Simon to mend his way, only to watch the dribble that pools in the corner of his mouth as the eyes roll back.....is........because he dosen't want to know.
It is just too much information for his pithy little existance punching the clock Monday to Friday looking to pay the bills....get some R and R..raise the kids as best he can...watch the telly where he can leave it to others to give him a version of events that he need not reinterpret or even think about ..".the telly said so "is why.
Globally this human makes up the bulk of developed world population......and so the task of the reformist will only ever be made easier by control of media outlets.....yet even then they themselves will have to be incorruptible saints to continue on .
We arrive always at Cassandra's Dress........
Glad to have you back....stay well.
..."only to watch the dribble that pools in the corner of his mouth as the eyes roll back..."
and merry christmas to you to Count:-P Actually I don't get involved in that whole affair.
The Scarfies life is all R&R these days. All good with a view of the Beach and my craft brewed beer. Design your lifestyle or someone else will do it for you, but keep it simple eh!
The price of energy is related to wealth, as energy gets more expensive with limited supply and increased taxes, our overall wealth must also flatline or decrease. I'm just not sure which.
China's growth is fuelled on cheap coal and nuclear, and we are greatly sheltered by our renewable energy sources and China's appetite for our animal products.
Then again there's lots of room for efficiency and that may postpone the decline in wealth for another generation.
Efficiencies are my thing - they're an oxymoron though; essential but not enough....
Count - it's good to be back, but it was good to be away. On that basis, maybe one should live on the half-way line? Did you read my latest offering columnwise?
I'm with Scarfie, though. For all I rant here, life is a box of laid-back fluffies. The Wwoofers are guitaring in the sun, dogs in the shade, water's rippling and trees are shimmering. Don't know if I could ever work formally again......
Wrong IMHO....but partially right in a way.....ie its going to happen.....thats as sure as it gets.
The price of energy is related to the cost of energy to extract it....if wealth is energy and thats what it comes down to, then yes, but Im not sure thats what you mean.
Personally I think China's growth in GDP has been a fiddle for at least 5 years, a substantial part is I think make work....
China's economy is fueled by coal, nuclear is a small %...and to grow at 10% they need about 6% more energy per annum.....in expotential growth terms thats a doubling every (roughly) 12 years....hence with Peak oil being 2006 it cant continue...
Efficiency, you need to look at the scale IMHO....efficiency will help but only as a brief transitional "fuel" not for a generation.....on a big scale maybe 5 years......
Decline in wealth for many has been going on for years hidden by debt.....you have maybe 10 years max and I strongly suspect its < 5years...before it really sinks in....I think Matt Simmons(?) summed it up well, he thought it would take 3 price spikes for the reality of peak oil to sink in Currently we are on or about no2....so 3 years for no3....
regards
Try this David.... http://www.marketoracle.co.uk/Article32242.html
It's a more accurate look at the US housing farce.
Libertarianism focuses on the base desire for self preservation, and encompases the sub groups of fear and greed. A scientific resource based society eleminates the need to be concerned for self preservation, because it is guaranteed. Resources are managed as a heritage and societal ownership. Leaders are chosen for their knowlege and expertise in any given field. Governence is through scientific principals by following the scientific method.
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