Daily briefing for Wednesday, January 4, 2012; 'Nobody understands debt'; James Frick; a banker speaks out

Remember however that although pessimists are often right, it is the optimists who achieve everything worthwhile.

Yes but it is also the optimists that do all the damage. Hitler seems pretty optimistic about forming the Third Reich.

But on the happiness theme did you see that famous DJ on the news a couple of nights ago, Irish I think. Anyway he said that Australians and New Zealanders are the happiest audiences in the world. So there we have it, we are officially a cheerful bunch of bastards. 

It's actually Krugman who doesn't understand debt.

Also, plenty on Cafe Hayek about Krugman's false notions, and muddled thinking.

Evans-Prichard is always worth the effort to read

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8987846/Ambrose-Evans-Pritchard-2012-could-be-the-year-Germany-lets-the-euro-die.html

There could be gloomier predictions than his. At least with even part of his scenario coming true we would ll be out of this sooner rather than later. The pain is in the waiting for something to be resolved.

'Key Fairyland' is no place to be if this drags on.

• This is todays Must Read for Mathusians,dreamers,loony leftists,trolls,warmists,sustainability fanatics,enviro taleban, and Occupyists

The chamber has warned that a sustainable surplus can not be achieved without the creation of 200,000 jobs.

Australia has been warned to put profits before politics if it is to survive the battering the global economy is expected to take this year.

The Australian Chamber of Commerce and Industry said that without profit growth, unemployment would surge, the Government would not achieve its promised budget surplus and businesses would not be able to meet higher electricity costs expected to flow from the new carbon tax.    SAME FOR NZ

"With rising costs and downward forecasts, if a business is not making a profit in 2012 it's unlikely to be around for much of 2013," the chamber said in a preview of the year. SAME FOR NZ

The chamber said that after a disappointing year that had focused on wealth distribution instead of wealth creation, growth was needed in the economy's slower lane. EEEXACTLY !

"Unfortunately, 2012 carries the risk of rising business failures and higher unemployment due to lower global growth forecasts and increased business costs pencilled in from mid-year," it said.

"The Reserve Bank's two interest rate reductions in the past two months warn of tougher times ahead. This needs to be a year when making profits is greeted with a sigh of relief, not as a dirty word.  AAAAABSOLUTELY

Making a profit and protecting the business bottom line will need to be the catch-cry in 2012."      IN NZ TOO I HOPE

The chamber warned that the Government would not achieve a sustainable surplus in 2012-13 if tax receipts from business did not grow, and unemployment - already forecast to be 80,000 higher than last May's predictions - would not stop rising unless about 200,000 jobs were created during the year.

Without increased sales and rising profit margins, businesses would not be able to afford higher electricity costs from the July 1 introduction of the carbon tax, nor higher wage and penalty costs.    E.G  TAXING OUR WAY TO PROSPERITY

"Profits don't grow on trees," the chamber said. "They have to be made. Business, banks, governments, the Parliament, unions and the community each have a responsibility to support new wealth and new profits."     THIS WILL BE NEWS TO SOME TROLLS HERE

Banks needed to provide access to capital and pass interest rates cuts on to business customers, governments needed to introduce integrated reforms - including industrial law reforms - and the federal Parliament should reject new business costs such as planned rises in the superannuation levy. Unions, it said, needed to resist making "exaggerated" bargaining demands.

Tyler Durden on zerohedge:

http://www.zerohedge.com/news/global-bond-issuance-top-staggering-8-tri…

Krugman: So yes, debt matters. But right now, other things matter more. We need more, not less, government spending to get us out of our unemployment trap. And the wrongheaded, ill-informed obsession with debt is standing in the way.

Bush spent trillions, where did it get them?

Obama spent trillions, where has it got em?

Krugman forgets not only the short term history, but the fundamental rules of running any REAL economy. The aim is to minimize debt and maximise profit via...............exports, small government, less regulation and legislation, low taxes for those who work at the coal face of industry, and MOST importantly, an honest banking system with a real monetary system based on things that take real effort to create WITH real INDEPENDENT federal oversite.

Conclusion: Krugman is an idiot

The German Banker echoes what the poets were trying their best to tell us thirty years ago when they smelled something whiffy on the wind:

Well, God is in His heaven

And we all want what’s his

But power and greed and corruptible seed

Seem to be all that there is

I’m gazing out the window

Of the St. James Hotel

And I know no one can sing the blues

Like Blind Willie McTell

Bob Dylan, 1983

In the early 1800's, immigrants were spreading across America and establishing new settlements.

Back in those days everyone had the right set up a bank and so many thousands of banks were set up across America.

These banks issued their own banknotes and made many risky loans to the settlers.

Without these risky loans it would have taken America another generation or two to expand.

Many today, say these loans were a good thing, because it was these loans that enabled the continent to expand as rapidly as it did.

Was it a good thing?

What tends to get overlooked is that everytime a bank went broke someone lost their money. So it was the lenders who involintary financed this expansion.

The same is true today

Who is involuntary financing this mess when haircuts are taken?

So Mr Key, next time you borrow more money just remember

"The easy part is spending what you don't have, the hard part is paying it back."

"Ports of Auckland has suffered a further blow today with the news that Fonterra, the country's largest exporter, is set to withdraw its export shipments from Auckland amid ongoing strike action at the port."

 As I posted last year,  it beats me why PoA dont do a Qantas style full  lockout  to get the govts attention . Who is running this country - the govt or the unions ?

This was a goodie from The Herald on New Years day!

2012 - what you can be sure of....

http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10776170 

:-)

and an interesting bit of triv, seeing as we are holidays mode. It turns out the monopoly was originally a pro-land tax / anti-rent game to teach kids a lesson

http://en.wikipedia.org/wiki/The_Landlord%27s_Game

 "Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs"...is that all....phut...tis nothing.

 http://www.bloomberg.com/news/2012-01-03/world-s-biggest-economies-face-7-6-trillion-bond-tab-as-rally-seen-fading.html

 "An area of central Christchurch is pushing for lightweight structures as a less expensive and ''more sensible" way to rebuild parts of the earthquake-ravaged city".stuff.co

So what's wrong with a Yurt....

"Less expensive" will not go down well with council cash grab based on cost...oh dear.

And it will not be good news for Bill who wants all the gst he can harvest....otherwise he might be forced to trim the landlords subsidy...or heaven forbid reduce Sir Humphrey's bonus.

Carbon Sense boys in Oz have some useful things to say - some bed time reading for the trolls on this blogsite follows 

Australia and New Zealand should follow Canada and immediately withdraw from the failed Kyoto Protocol.

With Canada deciding to cut and run, no country in the Americas bears Kyoto liabilities. And with the announcement by Japan that it will not renew its membership, there will be no Kyoto bunnies in Asia. It is time for the two lonely suckers in the South Pacific to also withdraw.

Kyoto has achieved nothing useful. Some countries such as Russia achieved fraudulent cuts by retrospectively choosing their base year to take advantage of the plant closures that followed the Soviet collapse. Others evaded real cuts by paying for often phantom cuts in other countries. Australia used larceny to seize carbon credits by banning regrowth clearing on private farmland. New Zealand is sacrificing their forestry industry on the Kyoto altar.

Europe's worship of Kyoto has led them into their current fiscal mess. Believing they are gods who can control the climate by demonising carbon, they have spent a fortune on green energy, carbon trading and international junkets that has exacerbated their deficits and now condemns their industry and consumers to expensive and unreliable energy.

The future for Australia and New Zealand lies around the vibrant Pacific, not in the backwater of Old Europe.  We should immediately abandon Kyoto, cease wasting money on the IPCC, abolish all climate change bureaucracies and repeal all carbon tax and trade legislation.

The money saved should be used to develop appropriate infrastructure to cope with the inevitable natural disasters whenever they occur.

Peaks and turning points are only obvious to most people in retrospect. Looking back from December 2011 we can see clearly that climate alarmism peaked at the Copenhagen Climate

Cockup in late 2009. The nails were driven into the coffin by India, China and others at the more subdued Climate Wake in Durban in late 2011. These sensible countries got settlement on a vacuous statement that agrees to keep holding the Climate Parties for a few more years as long as nothing onerous is actually agreed. Last week Canada put the last shot into the dead horse by announcing its withdrawal from the Kyoto Foolishness.

But the real war in Australia will now intensify, mainly in back rooms as the plotters scheme to keep carbon tax, green energy subsidies and all the climate bureaucracies alive and on the law books.

Their main strategy in Australia will be to keep the carbon tax out of the headlines. They will try to maintain the myth that “the debate is over”. Our strategy is “never let people forget”.

We will be helped by the gathering scandal in UK about the BBC bias in acting as the megaphone for the climate alarmists and the apparent connivance of the US Department of Energy in hiding data to prevent sceptics from discovering dodgy climate research. The ABC will be watching the exposure of their ideological brothers in the BBC and they and their fellow alarmists may start to give token platforms to sceptical ideas. Non- government media are certainly awake to the extent and cost of the fraud.

More info from Oz on the climate crazies -

What Really Happened in Durban?

What the media are not telling you

"We redistribute de facto the world's wealth by climate policy...Basically it's a big mistake to discuss climate policy separately from the major themes of globalization...One has to free oneself from the illusion that international climate policy is environmental policy. This has almost nothing to do with environmental policy anymore."

Ottmar Edenhoffer, high level UN-IPCC official.

Australia’s Greg Combet was played for a fool in Durban. He and the Kiwis followed the loony greens now running Old Europe. Their day is past. Old Europe has abandoned rationality and their current leaders care more for their green religion and their dreams of world government than for the welfare of their own people. The failure of their economic and energy policies is on display daily.

The European climate crazies were comprehensively outsmarted by the BASIC Group (Brazil, South Africa, India and China). The Europeans want to continue penalising their people with expensive and unreliable energy. So the Basic Group humoured them by agreeing to let the Europeans keep penalising their people. The Europhiles of the Pacific, Australia and New Zealand, picked the wrong side yet again, and have also chosen to keep penalising their people.

The US, Japan and Russia were bemused bystanders, happy to allow the Europeans to flagellate themselves. Canada kept quiet and dropped their withdrawal bombshell after getting home. Australia postponed the Kyoto costs so far by dispossessing Australian farmers with scrub-clearing bans. That trick will not work twice. When we have to fork over billions of real dollars (the prospect that Canada faced), hopefully sanity or an election will occur.

If anyone has any illusions on what the UN bureaucrats have in store for us they should read the report by Christopher Monckton on their 138 page document detailing how they will govern the world. It includes plans for:

1. A new international climate court
2. Rights for Mother Earth
3. The right to survive (climate change) at our expense.
4. Total disarmament (apart from UN forces no doubt) and the end of war.
5. New dreamtime targets for world temperature, emissions and carbon dioxide content.
6. Historic responsibility ie the west will pay for everything.
7. World government with everyone reporting to the UN bureaucracy. (e.g Miss H Clark ???! )
8. A green climate fund (supplied by us of course).
9. World-wide cap and trade.
10. Technology transfer to be aided by abolition of patents and intellectual property rights.
11. Taxes on shipping and aviation fuels (going to the UN of course).
12. Equitable access to global atmospheric space

In case you think this is all make-believe, have a look at Christopher Monckton’s report here: http://nzclimatescience.net/index.php?option=com_content&task=view&id=806&Itemid=1

Letter in The Australian

http://www.theaustralian.com.au/news/opinion/basic-science-is-the-answer-not-ideology/story-fn558imw-1226235960159

The climate cultists will resist deprogramming to the bitter end. They have a mental health issue. Expect to be attacked GONZ like I have been.

This is the shortest, and most easily read explanation of how the "new, new, normal" sovereign debt > bank > central bank financing system works.  WITHOUT real market participation!

http://www.zerohedge.com/news/would-ponzi-any-other-name-smell-bad 

And to quote a comment on ZH

The snap back from this mother fcking bllshit is gonna rip people's heads straight off of their bodies. God, this is gonna be a bloody mess before its all done. 

Typical extreme Leftist quote -   at least we are getting  down to what their agenda is

Back to topic ... I agree, nobody understands debt (except me, sigh) and bankers should'nt need to speak out.  Easy money,  easy money.

Wanna guess when it'll start!

"Tuesday warning that Iran would unleash its "full force" if a US carrier is redeployed to the Gulf.

"We don't have the intention of repeating our warning, and we warn only once," Brigadier General Ataollah Salehi, the armed forces chief, said as he told Washington to keep its carrier away."

http://www.google.com/hostednews/afp/article/ALeqM5jCra4caw37NivvlSBm45a8b7umUQ?docId=CNG.6afbce094a48d6294e825945987151a6.161

ReaDY....READY...STEADY NOW CHAPS...

 (Reuters) - European governments have agreed in principle to ban imports of Iranian oil, EU diplomats said Wednesday, dealing a potentially heavy blow to Tehran that crowns new Western economic sanctions imposing real pain just months before an Iranian election.

FIRE

World War III ?

Last Month, Major General Zhang Zhaozhong, professor from the Chinese National Defense University, said China would not hesitate to protect the Islamic Republic against a military strike, even if this means the start of the Third World War.



 http://www.presstv.ir/detail/218815.html

 The question is can the world take that risk ? Iran isn’t just geographically a very important place. There is a lot of sabre- rattling going on right now. Hopefully the political leaders are for once wise enough and beware us, the world from a catastrophic event.

Anyway - this is a development the world doesn’t need – the consequences will have severe implications on world economies, financial markets and societies will become much poorer.

Sad to read the above.

South-paw -  left/right is an obsolete concept now. To keep playing that game, is to play a loser. In a finite world, with finite opportunities now, the only game in town is displacement.

The selling-off of energy is a classic example: everyone currently :) benefits, but the 'investors' will subsequently benefit at the expense of the 'clients. Means that the rich will benefit at the expense of the poor, in a zero-sum game. Ironically, the 'rich' fail to see that the blood in the 'poor' stone will have dried up.............

Stand back, and try to see the big picture. Left and right were about who got how much of the cake - we have now run into the fact that the cake is unable to continue delivering.

One can assume that altruism and caring will morph, but it has to be in the direction of a sustainable community (whatever the scale).

The timetable for this forced morph is less than a decade. Time a leader emerged who articulated this clearly.

It will be an interesting process, education the public to the truth of the matter - one has to eliminat the Gonzos and the Omg's and the PB's on the way.

If you don't know what I'm on about yet, get in touch via my blog.

Mitt Romney closer to getting his paws on the top job by the looks of it -  but Oh Bama might be ok for another term if the US stats keep improving

Too many Nicky Hagar books been swallowed eh ?    we would be blogging in japanese and eating rice pudding if the US hadnt intervened in 1942 .   BTW  Were the moon landings a jack up too ?

So Tojo was a decent old chap after all -  try persuading the people of Nanking  that .And the families of 1200 sailors entombed in the USS Arizona will  feel a lot better knowing it was all the US fault too