Inflation rising; US trade deficit larger; world trade to grow again; air travel strong; EU growth up; Brazil in deep recession; Aussies short of natural gas; UST 10yr yield at 2.51%; oil unchanged, gold down; NZ$1 = 69.8 US¢, TWI-5 = 75.5

Thanks for you reg updates Andrewj. It's like the news is not news anymore because we can pick these things from your prior links. and it looks like more bad news to come.....how bad can it get i wonder? Milk prices and Auck ppty going down the toilet at the same time is going to hurt.

Who is manipulating commodity prices...

Rehypothecated product funding outfits? Pledge repo is a type of mechanism operating in China.

Suppliers/distributors attempt to manipulate prices by restricting supply. Price is low they hold back, as soon as price goes up to what is deemed an acceptable price, they all attempt to dump their stockpiles at the same time. This over supply, then drives the price right back down.

This is what happens when your commodity is sold by auction, as a seller the only way you can be a price setter is by restricting supply. But you then have to rely on other sellers also restricting supply.

There are a lot of farming folk in Canterbury and the wider regions who absolutely believe this to be the case. Yet the NZ government will happily encourage the sell off of as much of New Zealand as they can.

One thing I have been pondering is, where exactly is all our banks offshore funding is coming from?

The Chinese may not even need to swoop in. All the property could just be gifted to them as a security when one of the banks fail.

I see where you're coming from Rastus, but your view does remind me of the common view of the 'frightful efficiency' of the German army in WW1 and WW2, which Heath Robinson loved to make gentle fun of with his cartoons.

I think that China is nowhere near as coherent in its global strategy as we think it is. They have large internal debt problems themselves, constant investment bubbles, are concerned about social stability, the political class spend a LOT of energy on political infighting and elbowing, and, based on my own experience working and living there, are not nearly as efficient at organising things as made out to be, notwithstanding shiny new airports and freeways.

The majority of our debt problems are of our own making: lifestyle expectations, ingrained growth models, failing to plan and allow for downturns, the role of banks in our society, record low interest rates, etc. Of course, China may benefit from fallout, and some Chinese may be pleased to see it for the "buy the dip" opportunities it represents, but I very much doubt that it is the *direct* result of a Chinese strategic play. Remember that a large proportion of China's economy still relies on old-fashioned export of hard products, which requires overseas consumers to buy to maintain a balance of trade.

We opened NZ economically to the world, and have reaped the benefits and the disadvantages of doing so. With China, we had no real expectation of reciprocation (i.e. many sectors are off-limits to FDI), so it's probably time to start asking what needs to be changed, and how it can be changed, and taking responsibility for our part in our national problems.

I'm pretty sure this was covered in one of the Asterix comics. Can't remember which one. Has Asterix been translated to Chinese?

I think you are wrong though I get the tendency to think that way - in fact, the evidence is very clear that monetary stimulus, unparallelled in human history, by the Fed, BOE, ECB & BOJ et al. has pushed the price of financial assets skyward (e.g. Australia, NZ, Canada, UK house prices). For perspective, Interest rates have being suppressed at 5,000 year lows for 10 years & NZ still doesn't tax capital gains - it is a recipe for inequality that has been growing for a long time.

In terms of asset allocation decisions, it has to be said that NZ dairy farming is a poor place to park investment based on cash returns at present, however on a long term view it is unparalleled if the expected inflation does take hold. At $25K acre, purchasing land is ludicrous and myopic professional advisers who don't head the world financial climate have a lot to answer for.

In terms of the Chinese resource acquisition blitz, that is entirely a decision for the OIO and as long as NZ has an open door policy, the best assets will be owned by those with the deepest pockets, which generally means those with access to the biggest populations.

However, where is the criticism of the RBNZ? SO FAR BEHIND THE CURVE ON MACROPRUDENTIAL...

Basically the economy is owned by foreigners who are claiming more than a pound of flesh, because they can. And the likes of Malcolm Turnbull are there to enforce as much. Citizens are the collateral damage.

The mineral sector cut backs left a lot of people scrambling for any job contracts that were going. Some in oil taking huge pay cuts. Kind of sucks if your income drops by 80% but not so much when that still leaves people in the top tax bracket.

The property markets are looking a little unstable and look in worse shape that Auckland. Yet they are still carrying on, so there's no panic.

Gas shortages? Where do you get that from? Usage has dropped off significantly in the last few years. If anything we have excess.

I have just moved back from Australia and was working in the Oil & Gas sector.

Many states in Australia now have moratoriums on unconventional gas exploration / drilling. Gas that has been developed is generally contracted for LNG export so there is a squeeze on domestic gas supply. There is plenty of gas that can be developed if the political will is there.

Australian manufacturers would love to be able to buy gas for $3-4/GJ like the good old days but resources that can be developed profitably at that level don't exist these days (or very little anyway).