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Greece under the pump, Germany strengthens, US economy rebound stutters, ANZ advice shocker; NZ$1 = 76.9 US¢, TWI = 81.5

Greece under the pump, Germany strengthens, US economy rebound stutters, ANZ advice shocker; NZ$1 = 76.9 US¢, TWI = 81.5

Here's my summary of the key issues from overnight that affect New Zealand, with news of the Greek crisis intensifying. 

Greek government bonds have plunged, shaken by yet another downgrade and growing expectations the country will be forced into a default. The IMF says it no longer supports more extensions to Greece's debt repayment schedule. Time is tight and the pressure is on Greece. 

Four leading German economic institutes have raised their growth forecast for Germany's economy, because of falling oil prices and a weak euro. The country's economy is expected to grow by +2.1% this year.

US housing starts rose far less than expected in March, and were -4.6% lower than the same month last year. This suggests the US economy could struggle to rebound from a soft patch hit in the first quarter.http://reuters.us.feedsportal.com/c/35217/f/654199/s/4573525a/sc/24/mf.gifFurthermore, jobless claims rose unexpectedly last week.

OPEC has joined other major energy forecasters, saying an imminent fall in US oil production will see the US oil boom end this year. In fact, the Brent Crude benchmark jumped today.

In Australia ANZ has revealed it will pay $30 mln in compensation to thousands of financial advice customers who didn't receive the advice they paid for. This has re-ignited calls for a royal commission into the sector. Reports of tension between ANZ's CEO, Mike Smith, and the bank's chairman, indicate this could be the last straw for Smith. 

UST 10yr yields rose earlier today to 1.93%.

The US oil price has remains at US$57/barrel, while Brent crude rose to US$64/barrel. 

The gold price has eased back to US$1,198/oz.

The New Zealand dollar in the stratosphere again. It rose nearly a cent overnight, reaching 76.9US¢, the highest it's been against the US since mid-January. The dollar weaken slightly against the Australian, sitting at 98.4 AU¢. It reached a new record against the Euro, at a whopping 71.3 €c. The TWI is the highest it's been since July 2014, at 81.5.  

If you want to catch up with all the local changes yesterday, we have an update here.

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41 Comments

US$ is weaking, I have a friend who keeps telling me we are going to parity with the US, he's a banker.

(Reuters) - German Finance Minister Wolfgang Schaeuble said on Thursday that high debt levels remain a source of concern for the global economy, noting that growth in China appeared to be "built on debt".

In a speech at the Brookings Institution in Washington, Schaeuble said expansionary monetary policy and debt-financed fiscal policy had spawned the financial crises of the past decades and continued to weigh on global growth.

"Debt levels in the global economy continue to give cause for concern," Schaeuble said, citing data showing global debt has risen by $57 trillion since 2007, with government debt making up nearly half of that amount.

"In China, debt has nearly quadrupled since 2007," he added. "China's growth appears to be built on debt, driven by a real estate boom and shadow banks."

He added that an "alarming" amount of corporate debt was being issued by companies with poor credit ratings. 

Saudi Arabia boosted crude production to the highest in three decades in March, with a surge equal to half the daily output of the Bakken formation in North Dakota.

http://www.bloomberg.com/news/articles/2015-04-16/saudi-arabia-adds-hal…

http://www.bloomberg.com/news/articles/2015-04-16/china-starts-campaign…

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"...growth in China appears to be built on debt..." And they are not the only country we can say that about. The debt deleveraging is a myth. What could possibly go wrong?

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Debt isn't a problem if you have a feed back loop that cancels it, or is it? What happens to nations that don't have this privilege? Or the legitimate bond holders?

 

"When a central bank creates money and buys a government bond, it is the same thing as cancelling that bond – so long as the central bank does not sell the bond and so long as it rolls it over when the bond matures. That means the United States, the UK and Japan have far less government debt than is generally understood. The same will soon be true for the Eurozone governments. This has important policy implications that the world cannot afford to ignore.

 

The Federal Reserve has acquired $2.5 trillion of US government securities, nearly 14% of all US government debt. The US Treasury Department pays interest on that debt to the Fed. Then, at the end of every year, the Fed turns around and gives its profits to the Treasury, including the profits from the interest income earned on its government debt holdings. Last year, the US central bank gave the US government $97 billion, reducing the budget deficit by nearly 20%. It has given the government $500 billion since 2008. In other words, on the bonds held by the Fed, the government is paying interest to itself, which is the same thing as not paying any interest. Bonds that do not pay interest have been effectively cancelled. Seen in this light, the ratio of government debt to GDP in the United States is not 105%. It is 89%.

 

The UK government is paying interest to itself on the £375 billion of government debt owned by the Bank of England. That is 24% of all UK government debt. Since the Bank of England is unlikely to ever sell those bonds the ratio of government debt to GDP in the UK is actually 70%, rather than 92%, as it is now reported to be.

 

The Bank of Japan owns Japanese government bonds equivalent to 53% of GDP and it is acquiring new government bonds at roughly twice the pace that the government is selling them. When it is understood that Quantitative Easing is debt cancellation, the BOJ’s very aggressive QQE program makes sense. It may be the only way to prevent a fiscal crisis in Japan, where government debt is reported to be 245% of GDP. The more government debt acquired (and effectively cancelled) by the central bank, the less likely a fiscal crisis will be.

 

Fiat money creation on a large scale was supposed to cause very high rates of inflation, or even hyperinflation. It hasn’t because it has taken place at the same time that Globalization has been driving down the cost of labor in the developed economies. Under the Bretton Woods system, when trade between nations had to balance, aggressive fiat money creation would have over-stimulated the US economy (for instance), quickly leading to full employment, full capacity utilization and wage-push inflation. Under the Dollar Standard, trade no longer has to balance; so all domestic bottlenecks can be circumvented by buying from abroad. In our new global economy, two billion people live on less than $3 per day. That means we will not hit capacity constraints in labor, leading to wage inflation, for decades. And that, as the history of the past six years demonstrates, means that the central banks of the developed economies can create money and finance massive government budget deficits without causing inflation.

 

This combination of fiat money and Globalization under the Dollar Standard creates a once-in-history opportunity. The government debt owned by the central banks should be held permanently and perpetually rolled over, effectively cancelling it. It would then be clear that governments really have much less debt than is generally understood. The governments of the developed nations could then borrow more and invest that money in new industries and technologies to restructure their economies and to retrain and educate their workforce at the post-graduate level to ensure that the standard of living in the developed world continues to improve, rather than sinking down to third world levels. Furthermore, large investments in green technologies could be financed with GQE, Green Quantitative Easing, perhaps preventing an environmental catastrophe.

 

Heretical as it may appear at first impression, Quantitative Easing has already effectively cancelled trillions of dollars of government debt without causing inflation. At the very least, this fact completely undermines the case in favor of further growth retarding fiscal austerity. If this opportunity were fully exploited, investments could be financed that would not only restore global growth but that would also improve the wellbeing of everyone on this planet."

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Good arguments, that to me have seemed obvious now for some years. The UK for example will clearly never repay itself the £375 billion. There will never be a political imperative to do so. Only the Greeks find themselves without this get out of jail free card.

Countries are printing money to support huge current account surpluses, and we should consider our response. Think Japan, Swizerland, China, and in a roundabout way, Germany. These countries are soaking up the hard assets of the world basically for free.

What should a country like NZ do in response? In my view some capital or inwards investment controls, (such as some of the non resident housing controls being mooted currently) and or potentially some printing of our own, either to fund infrastructure developments, or to buy foreign assets in return, such that the currency at least was fairly valued, and the current account close to balance.

I note that the NZD is now significantly higher than when Wheeler last said it was unjustifiably and unsustainably high. 

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Exactly, the buy our assets with money they create for free and we sit back on take this. Our commentators should be saying more as this is a leading issue. Anyone permitting this is quite frankly a traitor to New Zealand.

 

But the only answer I can see is to print our own money in whatever form is possible and use it similarly to how Duncan recommends. We should wean outselves off oil by investing in renewable energy. While we still need oil, which is half our energy needs and all our transport needs, then we still need US Dollars with which to buy it.

 

If you play with capital controls then you draw attention to yourself and only capture a portion of the fraudulent money moving through. Build a sustainable future and it might go under the radar.

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Heretical as it may appear at first impression, Quantitative Easing has already effectively cancelled trillions of dollars of government debt without causing inflation.

 

Not the Federal Reserve's currency liability equal to the nominal value of the government debt purchased, which inturn has created a massive inflationary asset bubble realised by  those in receipt of the fabricated money settling the purchase of the remaining outstanding sovereign securities etc. Read more

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No Free Lunch

Yes I think you are right to a point however central banks have suppressed interest rates for a very lengthy period causing massive mal investment with economies – investment has become highly focused on assets rather than productive sectors sooner or later interest rates are going to have to rise perhaps sooner than later.

 http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11539…                                                    

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No interest rates won't rise, they can't. Well they can but only for short periods. They are locked into a 30 year downward trend that they can't get out of. Run some numbers though this, my rework of the  quantity theory of money by adding in interest. (M.V)+i=P.Q.

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Thanx scarfie for a good piece ow work

 

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scarfie - Can you explain this cycle for me?

The Central bank creates money

With this created money the CB buys government bonds

The government never has to pay this money back because the CB just keeps rolling over this debt.

That i understand

But

The government gets this money and then what?

The money stays in circulation forever

OR

The government uses this money to pay of its debts to private banks.

The private banks, who created money to lend to the government, can now destroy that money.

Is that how it works?

Alternatively

The government spends this money into circulation.

The money, now in circulation, increases the money suply and weakens the currency.

Etc Etc

 

 

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Mike remember I am an INTP so am not inclined to absolute detail. I can see the big picture sure but when it comes to the minutae you want an INTJ like Steven, Stephen, Iconoclast or even PDK, plus more. Cowboy could probably give it a good crack.

 

But I will have a go.

 

Remember in all this that there are underlying assets. In terms of a sovereign nation it is the productive power of their workforce and the productive capacity of their land and infrustructure. Resources also, although they are a consumable one off. The lender in theory is betting on the future output. What happens when the loop described by Duncan is cancelling the debt, ask yourself what exactly was the lender lending against? Total distortion in my view.

 

I think what you may be missing is that the CB's are not buying all the debt. But yes the government costs money to run and what they don't take in via taxes can be borrowed from the perverse borrow from yourself loop.

 

No, when you borrow money then eventually the loan gets retired, however you need to print the interest. I have warned my MP that everytime a cashed up non resident offshore buyer purchases residential property here it contracts the money supply. However our money supply isn't shrinking, so in reality the money supply in this loan retirement has to be made up elsewhere. This thing can't go backwards in my view.

 

I think the above answers your alternative, government does spend it but unfortunately unproductively. Yes it will ultimately weaken a currency but we are all linked via the CB's so really it is a merry go round.

 

The allegation of currency wars are quite likely correct. But I prefer to see this game a little differently. I see that there is a tremendous battle at play for both unearned income and assets in amongst a world swimming with unfulfillable promises (debt). Watch all the various plays around the world and see them in that context. I mean both local, national and international. 

 

 

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Remember in all this Mike that there is the Shadow Banking system creating money via a different mechanism.

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Thanx scarfie - Have to try and get my head around that bit.

 

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I'm ISFP so let me give you some detail.

The Central bank doesn't create money, they just like to claim they do.  They charge banks penalty interest if the banks lending vs assets+liquidity isn't at the correct rate. they do this by making the banks borrow from their Central Bank account, like a homemaker does with an overdraft facility.

The Central Bank covers it's accounts by borrowing from government bonds.  Bonds being fixed term deposits.  The Bonds clip rate/discount is the the extra the CB must pay, from their "profit" from interest.   But they don't actually make a profit, so like an interest junkie they must raise more funds via long term debt (more Bonds) to keep the numbers liquid.   Becuase of this the government bonds are have to be pretty low yielding over the large numbers involved, as the extra income is only generated when banks step too far over the mark.  If the CB constantly runs low (eg run on Wholesale bank lending) then the CB has to work out where it's going to get funds from....if the CB needs short term funds then it must borrow (at much higher rate)...or if they think the funding is long term, then through another long-term debt acquistion (more bonds).  Because the CB is so central and critical the the government bonds are a pretty safe place to store money, so they low yield isn't too much of an issue.

When the old bonds are almost ready to mature, then the CB will just look at their funding requirements looking forward and get new bonds + expansion to pay the previous ones.  Generally they can do this because they're reliable and established.  You'll notice bumps in the market when various banks and governments are nearing re-financing time.

The government has an account with a wholesale bank (Westpac, was BNZ).  It gets special interest rates but otherwise is just like any other large departmental company.

The Wholesale banks get told what their lending ratios are allowed to be (debt assets, vs holdings, vs liquid and non-liquid assets, vs liabilties.)  The banks can raise funding through borrowing just like normal businesses, but since their main income is through lending rather than value adding services (c.f. manufacturing), then they must be careful about what they borrow vs the amount of that which can be re-lent. and adjust margins.

Often they will lend to consumers directly in small amounts...and thus large interest rates.  The consumer works gets earnings, and from the income left from earnings, pays the loan and interest.

Businesses are far larger borrowers, with much bigger incomes.  this acts as a bulk discount, as the banks costs & unsold "bonds & borrowings" are better covered from the interest on a 2million business debt, than on a hundred 20k loans, especially as the businesses tend not to default so readily and have better security to reduce costly losses.
 The business makes it's money by selling to consumers, the consumers buy from their earnings that are left over called income.  Note that the _consumer_, aka "customer" MUST be the one to pay the debts of the company otherwise the company will shrivel up and die.  The earnings of the company either go to expenses (other businesses), wages (to consumers for their work), or into tax and interest&principle.
  Other business iterate this same pattern.
  Wages to consumers go either to business purchases (re-iterate the loop), investments including "deposits" at banks and including simple storing for zero interest, or to cover the consumers own borrowing (which is interest, but the consumers interest is banks margin, and serves as the banks earnings, so re-iterate the business loop.)

The government receives taxes which it uses to service it's huge debts (with CB).
The government has no capital or shareholders, nor does it pay dividends or rent to anyone (except possibly to HRH the Queen, but that's usually collect duties and tariffs).
 So to do anything the government cannot rely on capital equity nor is it supposed to collect revenue (for purpose of profit to shareholders).
So any projects require either wholesale bank loans (budgetted to projects over many years) or drawn from department "working accounts" which are basically just overdrafts from which tax and bond money is allocated each month.  As you can imagine there's not much point "The Government" raising a bond then having the money sitting doing nothing around so as to pay contractors each month - nor is it worth bond raising each month to pay everything.

anyway...must go

But the money isn't created by central bank. Nor is it created by government.
It is created by workers taking out loans and agreeing to pay interest - the interest is the injection of funds into todays banking system,  it's value is the future labour of the worker.

 Without interest, the banks would consume themselves.  The government gets it's funds by big borrowing - but the government pays interest - so it's a net payer (consumer), the little money it does have is through balance of payments which it pays in wages or interest (on bonds through its banker).
 The ones storing all the value are the ones lending the governments and banks money, as they aren't consuming the value, only lending.   these are big familes, big corporations with cash holdings, a few banks, and a couple large investors who seem to take pains to hide their name (from press and internet).

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Thanx cowboy - have to digest this also.

I am now confused as to who is creating all this QE if it is not the central banks.

 

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mike B...   QE is the Central Bank creating.. "money out of thin air"...and purchasing Bonds.

The reason they dont just simply print the money and give it to the Government... is that it is illegal to monetize the Govt debt...  

So they simply purchase t Bonds in the Open Mkt and pay for it with created money.

Central Banks can create money....   as can the private Banking sector.

In fact , these are 2 different kinds of money.  and there are different terms to describe them ...such as "inside money' and "outside money".... OR  Base money and Bank money

 

 

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Did you catch this speech by Jim Grant, the bit on the Swiss CB, starts  23 min in.

 

http://www.zerohedge.com/news/2014-12-06/jim-grant-sums-it-all-2-stunni…

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The wholesale banks (trading banks) have to have a reserve liquidity (similar to a margin, or margin of safety).
Depending on the source of there funding that reserve can vary. Central Bank sets the rules. Local savers (deposits) count for so much. shareholders equity counts for some more (which is basically free cash). bonds have a certain weighting depending on age bracket left until refinancing.

However banks can take out loans with each other, but to do so just like any other business they need to prove their liquidity, and their security. As you can imagine banks' loans are much bigger than normal business loans, and so the security also has to be much bigger. In some cases they can even factor (on sell) the loans and security contract to a third party, but that gets technical.

Depending on the security contract, the risk of the loans can be variable - a lot of home owners, or property consortiums is a pretty reliable security.
A package of business loans is individually more risky, but all put together they have an excellent chance of the majority of them paying back their slightly higher interest rate, so it evens out.

The amount of interest charged by the underwriting third party bank depends on the size of the loan assurance given, and that risk factor. (they have to get insurance which costs a small premium).

What the Quantitive Easing does is that certain Central Banks have now said on that security package, the bank is now allowed to borrow from other banks and have bond debt of 20 - 100% more. so instead of the bank being able to sell 100mil loans to NZ people and businesses, they can now use the same amount of security to sell 120 - 200mil in loans. They still have to find customers to lend to, who can work, get paid wages or profits, to create money, to repay the interest.... most notably tis is achieved by lower interest rates and extending everyones' payback time longer into the future (the longer the period of time, the more money summation (or integration if you're up with calculus) occurs and the greater the volume of money activated today.)
The most obvious place for QEasing money to be lent is to other banks and countries, eg NZ, because the QE bank doesn't have to get new security for the quantity of assets on their books - and for the NZ banks they have to have the same assets or increase loan sales to get some of the QE money from the QE bank, but the bigger loan the NZ bank can get the bigger loan book and more customers than can support. Which can work out ok for NZers, provided it goes into something that generates profit, even speculative profit, in the future - what is bad, is if NZers pile all that cheap money into "dead equity" (like residental houses) which don't create the money going around and around (velocity of money) to pay the future debt. (ie the dead equity creates a shrinkage in economic activity, where the incoming loan money needs to "not be consumer debt "bad debt") but needs to be "good leverage" to encourage NZers to spend it and earn it back...... and that's the danger when the taxes come in, because the government sucks it out of the economy to pay it's consumer loans (because government isn't supposed to be making profits, which makes it a bad debt consumer, more than a good leverage profit provider).

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Great post scarfie.  I've said before that I believe QE has worked not just as a mechanism to avoid prolonged depression but going forward it could be used to control inflation.  We currently control the money supply (and hence inflation) via the rather antiquated OCR, an indirect tool that is proven to be largely ineffective.  Money supply distribution via the banks further waters down the OCR's effectiveness as bank funding can largely come from elsewhere.  Directly influencing the money supply by printing money can directly boost inflation when required and can be spent in the productive sector.  Similarly when we need to slow down inflation you can simply stop printing money and/or increase taxation.  It turns out it's a great way for governments to manage debt also. 

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I have boiled it down in comments here in the past to GDP being the consumption of resources. All the rest is just different methods of doing so. QE is obviously working for now but I think Duncan is right, the money should have been used to build infrustructure(he ha been saying that for a few years).

 

What you are seeing as I answer below to MikeB is the battle for unearned income. Governments vs Bankers at the highest level. The Bankers usually win but I am not so sure of the result this time around. My dooster beliefs are that available unearned income is reducing on a per capita basis. While it was going up the system worked fine, but with a situation where less is availble, and compounding going forward, you will see the battles heat up.

 

What you are seeing is governments starting to target unpaid corporate tax, this is the leading edge. If you have assets or income producing potential then expect to be a target.

 

 

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The idea that central banks buy Govt bonds is theft and fraud. i.e The Govt is buying goods and services with money created out of thin air. Individuals cannot print their own cash. Take this to another level why not abolish tax and simply print money to pay for Govt services. The whole exercise is BS and will end in tears.

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Governments have always printed money and distribute it through the banks and the banks choose to invest that printed money in mortgages on houses; pumping up house prices.  Governments effectively don't control the money supply, banks do.  If you need a bridge built why shouldn't the government just print money to fund it as long as inflation is not pushed too high.  Think of the alternative, the govn, i.e. tax payer, borrows to fund said bridge and it costs twice what it should.  I agree that governments borrowing to bail out the risky practices of private banks is immoral but the alternative would have been an OBR type event. 

Governments should never borrow money, they should simply print it as long as the expenditure doesn't push inflation too high. 

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Happy your absolute faith in this current crop of global politicans and central bankers is commendable. Despite the history of their types deciding that, rather than borrow, which always has its eventual limitations, printing money is a no-brainer and therefore print, print and print some more is the way to go until, as its happened throughout history, they get massive inflation - yet you consider the current lot are more disciplined ...not one fiat currency in the history of mankind and survived intact, the US alone is on about its third one is a few hundred years, yet this time will be different.

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Governments don't print money. Check the US bank vs the FED. The bank of the US with it's own money only lasted a year. Same as many other cultures, the government appears to be printing the money but in reality they do not. That's because government has many services and not much good in the way of providing actual practical manufacturing.
they sell the money printing business to certain individuals or companies, those money businesses be they banks or coin pressers etc, have to bid (pay) for the contract, and then pay for regulatory advice. thus the government rids itself of a tough task (including security), and one that would be a massive hot potato political football, and gets itself a sweet cash gain and guaranteed revenue stream.

The can do this because "money" or cash and especially currency is just tokens for transfer of value.

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Happy. ye surely have been studying Bruce Beetham?

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1. Debt is fiat money.

"..Let me make the facts very simple and my policy very clear. In the first place, government credit and government currency are really one and the same thing..." President Roosevelt. We have known this for many many years. Its not something new someone just came up with a few years ago, since QE started. They created QE because there was no alternative, not because they thought it was some new 'financial innovation' where by you can get something for nothing. The world financial system was in crisis.

Once the government runs a deficit funded by monetisation of its bonds that money is in the economy (due to its spending it), regardless of the CB buying its bond/debt.  QE does not remove that spending from the economy or reverse it and flow on and on...

 

2. QE has caused inflation - it's shown up in blotted inflated asset prices all over the world. It has and is distorting price signals all over the world. Not to mention the theft from savers, by hugely artificially suppressing interest rates. Globalization should have brought asset prices down, not just labor costs.

 

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Your friend might possibly be a moron. Go look at the U.S. dollar index since the GFC then come and tell me that the USD is weakening and that we are going to parity with the USD.

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NZD/USD is not represented in USDX. Read more

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I know but he said the USD was weakening. It's not. 

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At the start of the GFC on or around the end June 2007 NZD/USD stood at 0.7723 and two days before at 0.7590.

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So? Are you suggesting that the strength of the USD should be measured based on the NZD/USD? (LOL), The USD index is THE indicator of how the dollar is performing. And that index clearly shows that the USD is not weaking at all. 

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Versus the KIWI USD is unchanged since GFC, as I just pointed out. I bought NZD/GBP at 0.3268 in 1998, now it's trading at 0.5125. I am better off than if I remained invested in the UK by quite a margin versus the USD.

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Really the fracking "boom"  (debt bubble)  will end.   Who on earth saw this coming?  Just don't tell profile he will be so upset.

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Amused more like.  Reading you chicken littles idealogues pontificate about $60 oil when 12 months ago were derisive/abusive to anyone who suggested it could go below $100.

 

When the US gas price dropped much more steeply from $12 to $3 in 2009 why  didn’t the shale gas industry disappear?

 

http://www.eia.gov/dnav/ng/hist/rngwhhdm.htm

 

"EOG said this month that, thanks to improved technology and cost reductions, it can make more money with oil at $65 a barrel than it did three years ago when oil was $95.“I don’t think anybody is thinking it’s going to go back to $95, but $65 would be great for EOG,” Thomas said at the Feb. 25 conference."

 

http://www.bloomberg.com/news/articles/2015-03-03/l-shaped-oil-recovery…

 

Is there no doom porn to peddle today?

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You didn't touch on the debt levels involved with the fracking boom (debt fueled buble).  I can only assume this is because you can't see the connection between financing and production.  Both sides of the argument will always struggle to see the others point of view because we both genuinely believe that the other side is deluded.  

 

Regarding the price of oil, nonsense I never said oil wouldn't be below $100 again.  I have been pretty clear that I think over the next ten years we will see oil prices rise to a point say $150 a barrel during an economic recovery and then that high oil price will push the world back into recession and the price of oil will then drop and a tentative recovery will start oil prices will increase oil prices rise etc etc.   

 

But whatever this is boring we will know soon enough who is right and who is wrong.  The problem is if I'm right that sucks for the economy.  If you're right that sucks for humans due to the added strain on our biosphere from all that growth.  

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Std profile operating proceedure, claim you said something that was proven wrong when you did not.  

The original $150 was 6% or so of US GDP for a pretty healthy economy.  I'd suggest that given the world's economy is now weak and over-indebted that even $120 could be low enough to trigger a recession and a price collapse.  

For the record Matt Simmons predicted such swings some years ago. This one was driven by a glut and not a recession, though I am not so sure on that.  

 

 

 

 

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AndrewJ = Looks like everyone thinks so

 

Sizing up ECB president Draghi: What a waste of confetti

Nowhere is this lack of clarity more apparent than in the case of the European Central Bank (ECB) which has for the past five years fought a pitched battle against itself; an economic extension of existential angst if there ever was one.

http://atimes.com/2015/04/sizing-up-ecb-president-draghi-what-a-waste-of-confetti/

 

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We should all be concerned about this

OMG! U.S. tries to put its Pacific trade pact on the “fast track”

http://atimes.com/2015/04/omg-the-u-s-tries-to-put-its-pacific-trade-pact-on-the-fast-track/

 

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On the contrary, this is good for the US' negotiating partners.  It means that if and when agreement is reached with US negotiators, that is what the agreement is. 

 

In the absence of "fast track" negotiating authority, US politicians are able to pick apart the deal and decide which bits of it they do and don't accept.  They're not likely to make sure that the bits which are more beneficial for other countries than they are for the US stay in.

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