Here's my Top 10 links from around the Internet at 10 past 7 pm in association with NZ Mint.
I'm a Crusaders supporter today. To be fair, whenever any New Zealand team is playing the Waratahs, I'm going to support the New Zealand team. But the guys in red and black are definetly my team tonight too. Go the Crusaders.
I welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
1. How to get rid of the US dollar - China seems desperate to break the US dollar's role as the world's reserve currency, for obvious reasons.
It wants to be less exposed to all that risk tied up in US Treasury bonds at the moment.
So it is doing all it can to help reduce the dependence of its exporters and importers on trading in US dollars.
What better solution than to allow traders to settle all their trades in yuan and start using it as the reserve currency.
Reuters reports the People's Bank of China as saying overnight it wanted to allow all traders to settle in yuan by the end of this year.
The International Business Times has this take on a barely reported announcement. HT Zerohedge
Moreover, China will “respond to overseas demand for the yuan to be used as a reserve currency” and allow the yuan to flow back into China more easily. This is all part of China’s plan for the internationalization of its currency, which may, in the decades to come, threaten the global ‘market share’ of other currencies like the US dollar.
Previously, China also announced that bilateral trades with Russia and Malaysia will begin to be conducted with the yuan and the ruble and ringgit, respectively. Other moves on the part of China to internationalize its currency include allowing foreign companies to issue yuan-denominated bonds and relaxing rules for foreign financial institutions to access the yuan.
2. One reason Kiwis might not move to Australia - It now costs so much to live there. Simon Mortlock at eFinancialCareers held a forum with 16 recruiters from financial organisations and found living costs were a major problem for Australian recruiters trying to hire overseas right now.
Maybe this is an opportunity for NZ recruiters, to point out we're a bit cheaper than Australia.
Another reason why we have to get house prices down somehow...particularly in Auckland.
Representatives from several large firms said the rising cost of living in Australia is making it more difficult to recruit or internally relocate overseas candidates, especially professionals with young families.
Candidates from Europe think Australia is a “paradise where the sun always shines” and they have high expectations about working here, said one delegate. But that’s before they do the salary, tax and cost of living calculations, he added.
“Global competition for talent is heating up, especially with the growth of Asia, and we have recently lost candidates from Europe to low tax places like Singapore and Hong Kong,” said another attendee.
Employers need to re-educate candidates that Australia is not a cheap destination. “It’s very important to mention costs early on in the hiring process. We don’t want to get to offer stage and they say ‘wow, Australia’s so expensive, no thanks'.”
3. Customer satisfaction - Australian bank customers 'can't get none'. Choice published a report this week for the Australian government with a bunch of recommendations to improve competition in Australia between the banks.
Although Elizabeth Knight at SMH.com.au does point out that National Australia Bank is now trying hard to break up with the other banks and force some competition.
More recently National Australia Bank has led the charge on the introduction of discounting/abolishing some bank fees. A rather catchy advertising campaign has been mounted by NAB around breaking away from the industry.
Findings published yesterday from a brand research group, Forethought Research & Forebrand, suggest NAB has overtaken the Commonwealth Bank as most price competitive by consumer measure. The others have moved - kicking and screaming - to match these initiatives.
But Choice has a few more recommendations on how to improve competition.
Top of this list is remuneration for bank executives based on customer satisfaction. While this is already one of many features included in the composition of executive bonuses, it should probably receive a bigger weighting. But this is an issue that bank boards need to decide on rather than have regulated or legislated.
The portability of account numbers between banks is one that probably falls into the too-hard basket at this stage despite the fact that it operates in other industries like mobile telephony. Even Swan signals this as difficult.
Here's Wayne Swan...and Joe Hockey talking about carbon prices...
4. The Marxist critique - I've referred to this entertaining version of a Youtube verrsion of a speech by British academic David Harvey before.
But it's worth repeating, given news from FT.com this week that the Top 10 hedge funds made US$28 billion in the second half of last year, which was more than profits from Goldman Sachs, JP Morgan, Citigroup, Morgan Stanley, Barclays and HSBC combined. We're talking about US$28 billion in earnings for a few hundred people.
The hedge funds of course are not restricted by regulations from leveraging up with cheap borrowing under the Fed's print and trickle down policy.
Is this the solution? Matt Taibbi recently asked in Rolling Stone why no one from Wall St was in Jail.
And here's the response.
Sorry I meant here's the response.
5. Stresses in Saudi Arabia - Oil traders are nervously watching the political situation in Saudi Arabia, where the king rules and a lot of angry young men in the east of the country are demanding housing and jobs and the like. As Bloomberg reports in this story, it's proving difficult for Saudi Arabia to solve its housing problem because there is such little lending for housing.
The King's pledge this week to spend a further US$15 billion on housing is just a drop in the bucket.
Much of the property investment in recent years has gone toward the upper end of the market or on commercial real estate without addressing the housing needs of the wider population. Banks have shied away from mortgage lending in Saudi Arabia because of unclear regulation that could lead to lengthy court disputes in cases of default, leaving the country’s real estate fund unable to meet the demands of a growing population.
Less than 1 percent of all Saudi home purchases are financed by mortgages. That compares with 7 percent in the neighboring United Arab Emirates and 66 percent in the U.S., Deutsche Bank estimated in November.
“To say this is scratching the surface is perhaps too derogatory, but it’s very partial solution,” Kotilaine said of the increased spending on housing. “The kinds of numbers that we are seeing in Saudi Arabia are going to require a solution of a completely different magnitude.”
6. The problem with oil - There's isn't enough of it to meet rising demand. Here's The Economist with an excellent precis of the overall situation.
OPEC’s spare capacity now is put at anything between 6m b/d (by OPEC) and 4m-5m b/d (by industry analysts); Saudi Arabia’s share of that excess is perhaps 3m-3.5m b/d. The oil price has retreated from its peak in the past ten days largely because Saudi Arabia says it is pumping up to 600,000 b/d to replace the shortfall in Libyan exports. It has invested heavily in expanding capacity, with plans to spend perhaps $100 billion on wells and infrastructure by 2015. It has also been far more open about letting the world see what it has done. OPEC’s stated aim of stabilising oil prices relies on traders believing that the Saudis really do have the capacity to pump more when prices rise.
Why, then, are traders still so nervous? The answer is that the long-term trends of supply and demand were already unfavourable when the Arab shoe-throwers intervened. Before the uprisings, a barrel of Brent crude was commanding close to $100 a barrel. World demand grew by an extraordinary 2.7m b/d in 2010, according to the International Energy Agency. It will probably keep growing by another 1.5m b/d this year and the same again next, as the rich world recovers and demand surges in China and the rest of Asia.
Net expansion of non-OPEC supplies is likely to be negligible in the coming years. Though the rich world’s inventories are high, with cover of around 50 days, it is not clear that Saudi Arabia can pump much more than it did in 2008; and the speed of oil released from government reserves, such as America’s Strategic Petroleum Reserve, also has upper limits. If disturbances hit Algeria and threaten its oil industry too, the buffer of spare capacity would fall below where it stood in 2008. But demand now is much higher, so spare capacity as a proportion of that demand is much lower
7. Utah to recognise Gold - The state of Utah is about to pass legislation recognising gold as legal tender, FoxNews (!) reports. This is nearly 80 years after FDR banned it as a medium of exchange and 40 years after Nixon removed the US dollar from the gold standard.
The Utah House was to vote as early as Thursday on legislation that would recognize gold and silver coins issued by the federal government as legal currency in the state. The coins would not replace the current paper currency but would be used and accepted voluntarily as an alternative.
The legislation, which has 12 co-sponsors, would let Utahans pay their taxes with gold and also calls for a committee to study alternative currencies for the state. It would also exempt the sale of gold from the state capital gains tax. The bill cleared a state legislative committee on Wednesday, the first of 11 similar bills in statehouses across the country to do so.
8. Here's a global map of fiscal risk - New Zealand is seen as in the same boat as Canada, America and Australia, but not quite as bad as most of continental Europe, this report from Maplecroft says.
9. Today we are all wearing red and black - The team at ASB dressed in Westpac colours to show their support for Christchurch. And then tweeted about it. To which Westpac NZ responded in good humour. Nice to see inter-bank rivalry being put aside for a day or so.
We are all with Christchurch today.
10. Totally unAmerican video - A guy walks across America in a very sped up fashion. This would never happen in real life.
Americans tend not to walk anywhere when there's a gas guzzlin' pickup they could drive instead.
11. Totally American video - An Islamic community group in California tried to have a fundraising dinner for a women's shelter.
Then this happened. This video is worth watching to see just how broken and divided and hopeless America is right now.
55 Comments
Adding a bunch of links stored up over the last week.
Want to publish them before my computer crashes. It does need a good clean out. Poor little thing.
Firstly, it seems little old New Zealand has flown into the IMF's radar.
Caroline Atkinson, Director, External Relations Department, of the IMF made some comments a couple of days ago that have just popped up in IMF transcript. Hmmm.
It seems an IMF team about to pay us a visit...
Quick. Clean under the fridge. Sweep the path. Girls. Put on your best lippy.
I'm off for a shave and to deal to my pesky hair...
http://www.imf.org/external/np/tr/2011/tr030311.htm
Here's the transcript from the Atkinson
"I have also a question on New Zealand, saying “There have been news reports that the IMF is lowering its economic forecast for New Zealand. Is that correct and if so, from what to what?”
"There is actually the Article IV Consultation Mission for New Zealand, the 2011 Consultation Mission that will be going I believe at the end of next week. And I’m sure obviously we’ll be looking at the economic forecasts then. Given the disruption from this earthquake, and of course, the human toll is the most terrible for New Zealand, the earthquake in, two quakes, in Christchurch. There will, of course, be some impact on economic activity. It’s often a little hard to work out just what that will be because in addition to the destruction, there is then rebuilding that tends to offset some of the impact on output. And our current forecast, our most recent forecast in January, had been for 3 percent growth this year. So the mission, I think they think now it’s likely that they will reduce that somewhat, but they will be doing that work when they’re in the field."
My apols for not HTing all my correspondents. I've lost the emails in the wave of time. I'm getting 300-400 a day at the moment...
Jeff Rubin at the Globe and Mail reckons the Saudis can't increase output much...
http://www.theglobeandmail.com/report-on-business/industry-news/energy-…
With no functional spare capacity left in OPEC, any significant supply disruption in the region could easily see prices spike and test the $147-a-barrel mark set in 2008, just before the crippling global recession. Once speculators start challenging the mythology of Saudi spare capacity, they will invariably squeeze the market.
But the real danger from the Middle East is not the risk of temporary supply disruptions, or the speculative betting that it will encourage. It is that we lose sight of the levels that oil prices had climbed to even before this latest crisis began, and the basic supply-and-demand forces that pushed them there.
We are now living in a world of triple-digit oil prices. The massive changes this will compel won’t be limited to regime change in the Middle East.
Harold Meyerson writes at Prospect.org that American business is booming
America's leading corporations have found a way to thrive even if the American economy doesn't recover. This is very, very bad news.
http://www.prospect.org/cs/articles?article=business_is_booming
This is fascinating from Debora Mackenzie at New Scientist on how to predict a revolution using mathematics. HT Troy via email.
It seems the CIA had no idea about what was coming in the Middle East
http://www.newscientist.com/article/mg20928024.000-i-predict-a-riot-whe…
cheers
Bernard
A couple of know-alls last week blogging here telling me I was mad converting some of my cash to gold or silver coins. They said no-one will accept them. That's mostly true for now.
Sure we're not in Utah but the writing's on the wall folks. More and more states will do this now because it makes so much sense. Why rely on cash when the Fed just prints more when it needs it? This policy of recognising the significant difference between fiat money (cash) and real money (precious metals) will spread around the world - I reckon.
You reckon..........but it depends
Some conversion isnt that un-reasonable....moderation/balance is the key IMHO.....I think gold is over-priced where silver looks cheap and its still a precious metal.....and possibly easier to trade for food in the expected small quantities....make sure you have physical possesion of the gold and not an iou....
Fed v RBNZ, we are not printing hence our exchange rate is still good, pity or lucky (depending on your point of view) is that we have so much private debt that its dragging us down....Also I think the US is a very sick puppy both socially and economically, NZ is no where near that bad so I dont put us in the same boat.....
The IMF visit is a bit of a weird one....just why they feel its worth visiting us I dont understand, sure our growth will be low or even negative but thats a global issue....so context.
regards
Steven your comment that NZ is not printing is interesting. I agree, it seems we are not. But a fellow called Iain Parker who contributes here, explains where our borrowed money comes from very well...see his blog. We have to borrow because we have made the decision not to print.
Bottom line is - the money we borrow is not even real, it's created out of thin air (debt), printed. Is having that worthless paper sloshing around building sewers, paying workers etc in Chch sensible?
As Peter Schiff recently said, it's all one big ponzi scheme. Schiff made a really good point the other day in his weekly video blog (see it here www.europac.net)
Madoff would be one of the least trusted people in the world for good reason. But he was an expert at ponzi schemes. If anyone was to teach how to create a ponzi scheme in universities - it should be Madoff. Interestingly, Madoff made the comment just before he was locked away - "the economy is the biggest ponzi scheme of them all". Unfortunately, I think he's hit the nail on the head.
Hence the recent flight to stuff that can't be printed.
Debt I agree......I guess the key differentiator is ppl have trust in debt made out of a "sound" currency (hahahahaha)....printing isnt sound 100%...the former is dubious, I cant see any contention over the latter being unsound?...
Peter Schiff, I used to like his analysis but not his solutions, there is a saying "there is no humanity in extremism" we have choices as a society we choose a mild form of capitalism with some socialism thrown in and with a twist of liberatarism I also tend to think he tends to be right for the wrong reasons so I dont bother with him much...ditto Austrian school of economics....
Madoff and consumerism....I agree its one huge confidence scheme that as long as ppl keep buying stuff it just about keeps going, its churn with the Govn clipping every opportunity....there are two problems however, 1) It has to keep growing or is staggers not even stagnates......and by implication it requires infinite cheap resources and we are on a finite planet....
So we are in poo...
Flight to stuff that cant be printed....some ppl are doing do, usually those of a right wing disposition, mainly because of their fixed and IMHO faulty economic outlook. Most thoughtful money I see is going into real assets and not lumps of metal....
Take the most important point of all, as debt is created out of thin air, so really is precious metal, it represents the effort to extract what is an almost worthless value when it comes down to it ie you cant eat it....you use it to buy food and fuel, ie energy...so gold / money is IMHO a proxy for energy.........
regards
regards
Re; video 11 - are we really that surprised that as societies are put under pressure (initially financial, ultimately resource depletion driven) that fault lines start to develop between racial and religous groups? Don't for one moment think that this is just some US based phenomenon. We'll see increasing outbreaks of such discord globally as life continues to get harder for Joe Average - Europe, with its large unintergrated ethnic populations, will I imagine, be at the epicentre.
And what of New Zealand? Are the two main racial groups sufficiently at ease with themselves that such conflict can be avoided as the economic clouds darken? If history is anything to go by then when resource abundance goes out of the window enlightenment and the fellowship of man follow close behind.
Highly recommended is Jared Diamond's book Collapse: How societies choose to fail or succeed
Re: point 2 - I spent 5 weeks in Australia before Christmas in Brisbane, Adelaide and Perth and areas in between. I was amazed how expensive each of these cities had become compared to just a few years ago. The greater cost of living in Australia on a day to day basis is something few here appreciate IMO.
AH - yes, I've been thinking of Diamond these last few days - Chch is just a taste of the long emergency. While there's hope, things truck along. Without?
I always wonder what was going through the mind of the person who chopped down the last Easter Island tree. It comes to mind every time I hear Key and Goff talking of getting back on track.
What happens when the average person (like that blogger Bernard linked us to in Chch) realises their cafe-latte gidget/gadget lifestyle isn't coming back, even as their incomes collapse and their mortgages default?
Re 5 and 6 above:
"Indeed if oil prices escalate beyond US$100 for long, growth in much of the world will suffer again,"
Bollard, A, Jan 2011.
Ive long wondered about easter island.....even the most stupid person surely would have seen the end coming long before the last tree?
Bollard, Indeed but he's made the jump to high oil prices causing mayhem, its like he's part way discovered something....Im not sure how someone who can get that far cant finish the thought and think....."Ive heard of peak oil....Ive looked it up, once we meet that max production figure the inelastic nature of fuel demand will make the price rocket.......and as production drops its going to stay very high until the global economy collapses...So as RB what do I do about it?"
Oh and I did a sum on the price of petrol, If I did my sums right $2.04 a litre is $6USD per US gallon.....so petrol for us is already way beyond what the Americans paid back in July 2008....
Interestingly when Americans actualy downsize their then the tax revenue for their roads will collapse........they also base their rates on the value of a house directly? so if I understand correctly when houses devalue so does the state income.....so we comment that expotential growth is bad, but it also seems to me that americans almost seem to have discovered exptotential growth x 2 and built it into their economy.....got to wonder just how long they will last at this rate....
regards
Re: Easter Island
"When the slave raiders were forced to repatriate the people they had kidnapped, they knowingly disembarked carriers of smallpox together with a few survivors on each of the islands...." Not quite 'The Lorax' story that it is often represented as.
It will be interesting to see how these multi-cultural experiments with immigration eventuate in Europe. I am especially pessimistic about the future in this respect for the UK as the majority of their immigration has come from Islamic countries.
FYI this #eqnzpickuplines thing on twitter is the funniest thing around at the moment
http://trendsmap.com/topic/%23eqnzpickuplines
cheers
Bernard
Congrats Crusaders - true grit
More on geopolitics and oil in the Middle East. Michael Klare has observed this for a while, and here is his latest take:
http://www.tomdispatch.com/post/175362/tomgram:_michael_klare,_oilquake_in_the_middle_east/#more
It really makes me wonder why we persist in wasting billions on motorways and highway improvements. Shelve it all, and divert the funds to the Chch rebuild.
So oil is getting scarce is what you are accepting? So re-build ChCh and do what with it?
Or maybe I should say what sort of rebuilding?
Cities are dense things all setup to burn fossil fuels to support themselves, rebuilding "as was" is just as silly as more roads....well not quite....but not far off, especially if they take the opportunity to um "modernise".....
Also spend 20billion on ChCh or spend that on Auckland, Welington and Dunedin.....which is better value? not that anyone (a pollie) will do such a calc / statement....
Also those billions and man power would be better spent pouring money into renewable sources such as tide, hydro and wind (probably in that order).....
regards
Steven
OK my last sentence was a bit glib – shelve the roading projects and even just saving ourselves from needlessly increasing NZ debt would be a good starter. Anything other than misdirecting our current wealth into projects that have a very limited useful life.
Towns and cities have always been dense things that have been around since agriculture began, and their inhabitants have always had to burn fossil fuel of some kind, even if it was just wood. It’s just that our current consumption rate of fossil fuels has become manic. We and succeeding generations are going to keep whittling away at the ever-decreasing remaining deposits of oil, gas, coal – and wood – and it is easy to take a dystopian vision of where it all ends.
Let’s face it – how truly sustainable are “renewables” such as tidal, hydro and wind – even if an installation can be kept going for a long time, they still require burning of ever-reducing fossil fuel supplies to maintain them and to manufacture replacement parts.
Thinking about Chch, no, not rebuilding Chch “as was”, but I fear that is on the mind of govt/city leaders. I am sure that we both agree that any rebuilding done should take account of our energy descent, be it in terms of city transit, urban and building design, etc.
What I would personally like to see, is to at least start planning now for a return to mixed use (housing/retail/growing/making things) walkable/cyclable neighbourhoods, which is the way cities used to be before we started gorging on oil – and will surely be the way we will have to return at some stage. Chch with its many vacant lots to come, surely has an opportunity now to rethink how its neighbourhoods are structured.
Agree.....
When you look at the densities cities had until about 1920 were sort of self-limiting....today we are way over those densities all due to crude oil.
Generation via renewables, the biggest saving will be learning we have to live on 1/2 of the energy we use today, no choice....a lot of our oil consumption is transport, ie we burn it....by cutting back on these areas we can maintain and build renewable energy source plant...the biggest obvious issue is going to be the electronic control systems as chips etc take a very high level of technology, which infurs population and energy use. Mostly though it comes back to cities being to big, we will have to disperse....hence chch being rebuilt I think at 5 years odd wont ever be finished....
regards
Interestingly enough just prior to the earthquake the NZ Transport Agency had commenced the construction of the $140 million southern motorway in ChCh.
Madness
Gold at NZ$1942 - I believe that takes out the high reached 2 years ago in NZ$ terms.
Barbarous relic!!!
Attracts no interest, tricky to store, you can't eat it - however it just keeps going up and up in value.
Hoocoodanode?
"... loose monetary policy and money printing by the world’s central banks is creating all kinds of asset bubbles. However, now that we are getting price inflation in oil and food, central banks will soon have to begin raising interest rates in order to ward off inflation, which will likely collapse asset markets .... we will see a repeat of the last crash (the Global Financial Crisis) ...“equities, commodities, precious metals, everything will collapse”.
Oh I have no doubt that some of the air will be taken out of gold's sails as the next phase of the crisis hits - but then the NZ$ will also take a whack (its a commodities currency) so gold's price in NZ$ (which is what counts to buyers here) wont be going down at the rate of the US$ price. But then if asset prices collapse again what are the US authorities going to do? The only thing they know - PRINT MORE fiat money.Which will lead to........
Eventually the whole monetary system breaks down whereupon gold REALLY starts to show its value.
andyh, must be small change compared to what the banks are making on Oil. We were in the States last winter, we paid, Us$ 2.66 a gallon( us gallon =3.78 liters) in Phoenix and up to $3.30 in California. Looks like those prices are up by a whole 1$. This will cause the USA to shut down. Im due back in May going to be very interesting.
http://www.phoenixgasprices.com/
When this bubble blows we will find out how much real money is backing commodities, including Silver and Gold.
And form the site you put me onto years ago now, the automaticearth
Ilargi: It's somewhat darkly funny, isn’t it: rising food prices are, as we all know, a major factor in the protests in the Arab world, and these protests in turn, according to the FAO, lead to higher food prices (oil being a main driver, for one). Irony, unintended consequences? No shortage of either these days, is there? Damned if you do, doomed if you don't.
You need look no further than Geithner and Bernanke "saving the US economy" (look at those markets!) in the face of persistent mile-high unemployment, with a fast growing percentage of new jobs paying $10 an hour or less with no benefits. Then again, are those consequences really unintended?
As the real economy is being gutted to the bone, the rising markets are nothing but a mirage, a talk-to-the-hand scheme devised by the spin masters who know what all of you like to hear and who feed you exactly that. Until their masters decide the time has come when they can't squeeze enough money out of you anymore to justify keeping the game going.
And then it will all vanish into thin air. And you won't even know what hit you. You’ll be left with a whole load of nothing. No services, no benefits, no jobs, no homes, just a huge bunch of empty bags. Don't let the markets fool you, look at the situation on the ground. That reflects the future much better. We will probably see another set or two of positive numbers for jobs, and the stock markets may not have reached their highest peak. But it's all the hot air of false optimism: the economy is irreparably broken. For a while, you can delay debt payments by creating more debt, but that is a dead end street, and the piper waits at the other side.
Bill Bonner in Ireland, sounds like we may have the same problem.
he Irish dream big. The republic is not big enough for them. So they go abroad. Only 4 million of them are left on the island. Some 60 million of their descendants - the Irish diaspora - live in America, Canada, Australia, Argentina and elsewhere. Your editor is one of them.
For the first time in more than a decade, the Irish are emigrating again.
"If you're a smart young man or woman, what else can you do? It's sad for their families. But Ireland has nothing to offer them. They have to leave. And usually, they don't come back."
The Collaps Of The Old Oil Order
How the petroleum age will end
by Michael T. Klare on tomdispatch.com (scroll down)
http://www.tomdispatch.com/post/175362/tomgram_michael_klare_oilquake_i…
SORRY - just realized, this has been already posted, can't delete.
Yet we are paying at $2.04NZD the equiv of $6USD per US gallon...
regards
Re: When this bubble blows we will find out how much real money is backing commodities, including Silver and Gold.
A fiat money system isn't backed by real money, its backed by debt. Gold and silver used to be what gave paper money any value as it was a paper representation of that commodity. So when the bubble blows the only thing with value will be the commodities. Unless you need to wipe your ass and NZ dollars suck for that.
What were you paid with last week? Gold? Silver? If not, by your thinking, you worked....for nothing! You were paid in legal tender; NZ$, and you used it to do all sort of things to sustain your life. And if that ever goes away your capacity to sustain your life will dissappear with it. Gold or silver, whatever tiny amount you have or manage to procure, will not last long enough to get you 'to the end', and that end will come very quickly. Proabably at the end of a rather large, heavy stick weilded by a member of a band of hungry people.
Snarlypuss IMHO you have your head firmly stuck in some pretty sticky brown stuff on the unpleasant side of the NZ$20 note that the previous commenter will soon be using to tidy his nether regions on completion of his ablutions.
That's the benefit I have from had many years of successful trading under my belt with $20 notes. Well electronic 'paper' actually. And I can tell you, that by the time 'people' start talking about gold being 'a good investment', much smarter people are already making their 'paper' money, from the wave of latecomers - 'the gold bugs'! When you see gold being traded in the supermarket malls, the last retail market, the game is pretty much over, because there is no other market left!
People who buy gold as an investment will actually benefit from massive money printing and creation out of thin air. If you think everyone buys it as an investment Snarlypuss that explains your delusion. If that is why you would buy it, you're right not to buy any.
UK facing 1970s style oil shock which could cost the economy 45bn Pounds
Article by Patrick Wintour in the Guardian
http://www.guardian.co.uk/environment/2011/mar/03/chris-huhne-oil-price…
and the ppl these incompetant pollies have chosen to ignore for years have said all this time and time again, high volitility, peaking prices, global recessions, all the result of peak oil...
regards
The rebuttal of Harvey's critique was very low grade ideological argument.
Claiming to discredit a claim of income decline for 60%+ of the population (which is what Harvey said) by using average per capita income is a fundamental flaw which calls into question all of the argument of that (anonymous) commentator.
On the other hand the Hockey/Swan interview as brilliant.
Perchance of some significance:
Head of Shell admits risk of oil demand outstripping supply:
http://www.telegraph.co.uk/finance/oilprices/8362579/Shell-chief-Peter-…
"We may face a situation at one stage where supply cannot meet demand," Mr Voser said. "That's where OPEC spare capacity will help but we have to replace significant barrels because of natural decline over time."
That, Ladies and Gentlemen is commonly known as Peakoil. And that is coming from the mouth of Bigoil.
And Jeremy Warner at the DT has started to join the dots:
http://blogs.telegraph.co.uk/finance/jeremywarner/100009694/oil-price-s…
Yes things of note....
a) If he thinks demand may outstrip supply then its a dead cert it will and probably fairly soon or he'd deny it or keep hs mouth shut, he isnt because he knows full well his ass would be on the line if he lies and gets caught....so he's covering his ass.
b) The max oil price the world's economy can stand would seem to be in the $100 range, which we are now comfortably over...
c) He has confidence in OPEC, why cant he or non-opec do it?
d) "lack of investment" he's big oil, why hadnt he invested?
Probably because of b) he cant jsutify drilling for oil when that oil is going to be in the $90 to $100 range....or more....and every time we get there the world plunges into recession again....and days later its $50 a barrel....so the average over time could be $75 in which case fields costing $90 to drill make no economic sense...and never will.
From the above I conclude that its likely the 2.2trillion barrels of recoverable oil in the ground, (which is half, 1trillion is gone) may never ever be recovered.....we wont have the economic strength to do so....so the slope after peak is looking very desolate right now.
regards
AH - that is a great link.
He misses one point yet - but he'll get there - if the USA pulls in it's horns, that will collapse their GDP bigtime. Just because the use is discretionary, doesn't exclude that from GDP. They're still buying the stuff, still buying and wearing out the cars, tyres.............
GDP - the measure you have when you're not measuring anything meaningful.
:)
http://opinionator.blogs.nytimes.com/2011/03/02/a-conspiracy-with-a-sil…
An interesting article on silver. It gives some background info about the silver conspiracy. Perhaps it's a bunch of "conspiracy theorists" that are currently investing, but in the end those with physical silver will be in a strong trading position when the US dollar loses its position as the reserve currency.
Personally, it seems like a good way of safe guarding for the inevitable crash and restructure of global currency.
There's a photo in today's Press of John Key talking to Chch power workers, and prominently wearing a BNZ t-shirt.
The govt's main sponsor?
YoungTel - ask McCully
read Wishart : Daylight Robbery.
I don't particurly like or agree with Wishart, but that ones a goodie.
http://blogs.telegraph.co.uk/finance/jeremywarner/100009694/oil-price-s…
".........Forget the present turbulence, which may or may not be temporary. You don’t have to look far into the future, perhaps as little as a year to 18 months, to see that a major demand challenge is looming which even assuming no further disruption to existing production, will challenge the present supply base to breaking point.
As it is, it’s fair to assume the world is closer to full capacity than producers care to admit. Rewind to the last oil price shock in the summer of 2008, and Saudi Arabia, pumping out oil at the rate of around 9.5 million barrels a day, was having to draw on inventories to meet demand. It’s therefore reasonable to assume that 9.5 million bpd then represented maximum capacity.
Since then, the Saudis have brought a further two fields on stream with a capacity of around 2 million bpd, bringing total capacity up to some 11.5 million bpd. But there is generally reckoned to be an attrition rate of around 6pc per annum on existing fields, taking us back to square one in terms of maximum daily output. This is perilously close to what the Saudis are already producing, and makes the assumed buffer of Saudi spare capacity considerably smaller than the Saudis claim. There’s not much slack anywhere else either.
Now look at growth in demand, virtually all of which is coming from China and other emerging markets. Chinese demand at around 10 million bpd annually is already around half that of the world’s biggest oil consumer, the US. But unlike the US, where demand is in gentle decline, in China it’s rising like a rocket. Last year Chinese demand rose by close to 1 million bpd. It’ll probably be a bit lower this year, but not much. More cars are now being bought in China than the US, and they’ve got to run on something."
So when we see its not just the tin foil hats.....should we maybe just maybe conclude its going to get a little rough?
Westpac see's 6% growth to june2012...he just miseed the -ve............
regards
Re #4)
David Harvey comes across as an academic crank in this video, lucky for him he is a tenured professor so probably doesn't have to live in the real world.
Hopefully Britian doesn't go bust trying to pay his salary.
http://www.youtube.com/watch?v=7gd6-zfeeaM
Hey, look at Stuff this morning
http://www.stuff.co.nz/business/money/4736576/Kiwis-houses-cost-20-too-…
Those uninformed and deluded fools at The Economist claim that NZ houses are 20% overvalued still.
They obviously haven't carried our proper consultation with Our Own Olly!
Rising oil prices will in fact be matched with rising property values. So no problem.
Cheers
yeah no worries mate
even though households will be paying $80-$90 more in petrol and food per week, they will still be able to pump more and more into property because our economy and wage growth will be so strong
Good points Matt
Add to these the NZ version of the "demographic dividend", where the large cohort of baby boomers need to retire, and the hollowing out of the next generation of productive workers, which will clearly plough wealth into property.
Plus the indebtedness level of NZers, plainly at a level ready and capable of a borrowing splurge. Matched by the overall borrowing of the country as a whole, which can hardly be seen as a problem
So business as usual. Sit back and enjoy the ride.
Cheers to all
completely agree with Aus being the costly country ... certainly as regards housing (and now rental) costs. For me its a prime motivator to return home, even Auckland looks cheap compared to Melbourne. Believe me, 800k AUD does not get you much in Melbourne, converted to 1.1m NZD I can get something pretty awesome in Auckland. I view Aus in the same way as I used to view London. A great place to earn money in the short term, not the place to raise your kids (unless you are wealthy or prepared to endure great mortgage stress).
every action has a reaction as they say--holcrim has a decision pending on the construction of a new cement plant in various location,s through out the world--with the recent tragic event in chch the odd,s would would have to have firmed considerably for the oamaru plant to be selected--all consents are in place--it just await,s construction
http://www.odt.co.nz/regions/north-otago/148288/delay-expected-cement-plant-plan
Peter Schiff again people:
http://www.youtube.com/watch?v=P7A1dVIWVzY
"Bernanke can be replaced with a chicken from China town". Ain't that the truth
Beautiful comment by Schiff quoting Madoff at the end..."we are running out of fools"
4.9 in Kaikoura ! I hope that Hikurangi Trench build up doesn't give way.
UK government - 'We must wean economy off oil':
http://www.guardian.co.uk/business/2011/mar/05/oil-uk-energy-sources
Its a bit late in the day but evidently Peakoil is gaining traction in the corridors of power in the UK.
Maybe National might surprise us?
Actually it ends up sounding like John Clarke 'round in circles'.
It's nothing to do with 'green', for a start. It's chemistry and physics - why do these pollies never get it?
And China is outstripping the world in sustainable energy, but so what? It is in everthing else too.
They won't really do anything, either because they don't really know what's happening, or because they know they'll be voted out if they point out the inconvenient truth. Even now it's a 'carbon' issue, not a 'scarcity' one - shhhhhh, don't spoot the horses. (we might need 'em)
Mervyn King (Governor BoE) is at it again - very chummy interviewer.
...and the tame detractors
and a different view of the same interview.
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