Gaynor calls for end to farm sales to foreigners; NZ's demographic crisis; Stocks underperform bonds in the long term; Nothing about that wedding; Dilbert galore
Here's my Top 10 links from around the Internet at 10am in association with NZ Mint.
I'll pop the extras into the comment stream. See all previous Top 10s here.
I welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
I will not welcome any mention of this wedding thing in Britain. Interest.co.nz is officially a wedding-free zone this week.
1. Tenants in our own land - Brian Gaynor bravely came out against the sale of Crafar Farms to foreign interests in his column in Saturday's NZ Herald.
This is important because it's the first time I've seen a mainstream commentator say so directly that we have to end the process of selling our assets to foreigners to sustain our unsustainable spending.
Gaynor argues rightly that we used to have a domestically owned forestry and wood products industry.
Now we just have foreign owned forests, lots of log exports and locally owned sawmillers who can't get access to logs.
My views on this have hardened in recent months. This series of charts convinced me we have to stop selling our assets or we face an ultimately dispiriting march lower in our local income.
Here's Gaynor in the NZHerald.
He muddies the waters somewhat with a call to open up Fonterra's share register, but his point is well made.
Fonterra can either raise fresh capital from outside investors, while leaving farmers with majority control, or continue to hamstring management by insisting on 100 per cent farmer ownership.
If farmers adopt the latter approach, and farm ownership is opened up to foreign interests, we could see a repeat of the forestry sector's unfulfilled potential in which Chinese-owned farms would export low value product directly to China to the detriment of New Zealand's dairy industry, our domestic farmers and, ultimately, farm values.
2. Demographic crisis unfolding - Natalie Jackson from Waikato University tells Maria Slade at NZHerald that a demographic crisis is unfolding as our baby boomers age and the workers who are supposed to support them with taxes are leaving.
Professor Natalie Jackson says the downstream effects of New Zealand's baby boom will be more severe than in most other countries.
The post-war population burst was much greater here than in other places - New Zealand's baby-boom birth rate was 4.2 births per woman, compared with Australia's 3.6.
Added to that, the baby boomers were living much longer than anticipated and New Zealand had suffered a "bite" out of its 20- and 30-something population thanks to migration.
Businesses and government agencies tended to focus only on the particular demographic that affected them, the University of Waikato academic said. "But the whole age structure is the story ... There is a crisis unfolding."
Between 1996 and 2001, 24,000 young men and 12,000 young women disappeared from New Zealand's population because of migration.
3. Stocks aren't necessarily better - The theory that returns from stocks are always better than those from bonds or cash over the long term is ingrained into the thinking of every professional fund manager and many financial advisers.
You often hear the phrase it's 'time in the market' rather than 'timing the market' that allows stock investors to do better over the long run.
But US fund manager Rob Arnott from Research Affiliates writes that the S&P500 has underperformed bonds by 5% over the last 10 years and has only outperformed bonds by 0.53% over the last 30 years.
Arnott points out that 30 years is reasonably long term horizon for investors and questions the thinking about bonds being worse over the long run.
A 30-year stock market excess return of approximately zero is a huge disappointment to the legions of “stocks at any price” long-term investors. But it’s not the first extended drought. From 1803 to 1857, U.S. equities struggled; the stock investor would have received a third of the ending wealth of the bond investor.
Stocks managed to break even only in 1871. Most observers would be shocked to learn there was ever a 68-year stretch of stock market underperformance. After a 72-year bull market from 1857 through 1929, another dry spell ensued. From 1929 through 1949, stocks failed to match bonds, the only long-term shortfall in the Ibbotson time sample.
Perhaps it was the extraordinary period of history—The Great Depression and World War II— and the spectacular aftermath from 1950–1999, that lulled recent investors into a false sense of security regarding long-term equity performance.
In our view, a more normal economic environment would suggest 2–3%, which is the historic risk premium absent the rise in valuation multiples in the past 30 years. But these are not normal times. Today’s low starting yields, combined with the prospective challenges from our addiction to debt-financed consumption and aging population, would put us closer to 1% .
4. Russia's kleptocracy exposed - This is an extraordinary story from Jamison Firstone at Foreign Policy that exposes the depths of corruption at the heart of the Russian government. It's a stunning must-read for anyone with connections or trade with Russia. Here's the Barron's version of it, that's also shocking.
5. A strike in China - This is well worth watching. A rarity and on a large scale. Reuters reports truck drivers in Shanghai have protested for a third day, holding up operations at the world's busiest container port.
There are also widespread reports of crackdowns on dissidents and religious groups in China.
The strike is a very public demonstration of anger over rising consumer prices and fuel price increases in China. It comes as the government struggles to contain higher inflation, which hit 5.4 percent in March, fearful that rising prices could fuel protests like those that have rocked the Middle East.
A crowd of up to 600 people milled about outside an office of a logistics company near the Baoshan Port, one of the city's ports. Some threw rocks at trucks whose drivers had not joined in the strikes, breaking the windows of at least one truck. The strikers, many of them independent contractors who carry goods to and from the port, stopped work on Wednesday demanding the government do something about high fuel costs and what some called high fees charged by logistics firms, said the drivers, who clashed with police on Thursday.
China is especially wary about threats to social stability following online calls for Middle East-inspired "Jasmine Revolution" protests and has detained dozens of dissidents, including renowned artist Ai Weiwei.
6. Here's Paul Callaghan - This was his presentation at a recent Strategy NZ session.
7. Sweden's amazing strength - Sweden may be a member of the European Union, but has kept its own currency, like Britain. It's doing very well now. Its growth is strong, it has a budget surplus and falling unemployment.
Here's Sweden's Finance Minister Anders Borg, who has a ponytail and an ear ring. Dude.
Can you imagine Bill English with a ponytail and an ear ring?
He makes some very interesting points about the outlook for Europe and how America is operating in this interview in Foreign Policy.
You have three different things going on at the same time. One is a very strong recovery in Northern Europe. It is not only Sweden that is growing. Estonia, Poland, Finland: all of these countries are forecasted to have around 5 percent growth next year. Germany is obviously in a much stronger position. So, the northern part of Europe is growing very fast.
This could be an issue in a couple of years, because you still have a lot of problems in the south of Europe, which means that the [European Central Bank] will be very reluctant to raise interest rates. So there is a risk that we could have a more unbalanced development.
We have two really big problems to deal with: one is the banking sector. The recapitalization that is needed in Europe is substantial. Then you have the huge issue of public finances which is both shot-term and long-term. Short term, obviously it's Greece, Portugal, and Ireland. That could be dealt with. The governments are doing the right things. They are increasing VAT rates and the retirement age and so forth.
The other problem is that the whole of Europe is now indebted. So the room for stabilization policy in the next downturn will be very limited. We could have a very severe and harsh crisis the next time we see a slowdown in the world economy.
For us to say that we would ever be over-expansionary, would be very difficult. The U.S. can be very expansionary. You have 10 percent deficit and interest rates are still hovering around 1,2,3, percent. It's basically only the U.S. that could behave that way. For everybody else it would mean huge bond spreads. To my mind, the U.S. is saying to the rest of us that we should be more expansionary, but we're also on top of a huge U.S. debt. The markets will not punish the U.S., they will punish everybody else standing on top of that debt. I would be very cautious about running a huge debt like the U.S. because we are a small vulnerable country. That is true of many of these European countries.
8. Not so motivated - Alistair Helm has a useful piece over at Unconditional on how 'stressed' the property market is. He measures the amount of times the phrase 'must sell, desperate, urgent and motivated' are used by both sellers and searchers.
It shows a gradual decline over the last couple of years of interest by searchers, but not so much of a decline among listers in the last year or so. Here's our own chart of a housing stress index for listings on both realestate.co.nz and trademe.co.nz.
So it would seem that whilst the urgency of buyers to seek out properties whose vendors are experiencing pressure of mounting financial stress has declined markedly over the past 2 years the use of these key emotive phrases by real estate agents on behalf of clients has not diminished.
9. 'Don't rely on interest rates or Standard and Poor's' - Carmen Reinhart and Kenneth Rogoff wrote the seminal paper (and then book) on how growth in indebted economies is slower after a financial crisis.
Reinhart points out via this NYTimes blog that ratings agencies are not good at predicting sovereign debt crises, and neither are low interest rates. Those claiming, therefore, that America's AAA credit rating and its very low interest rates are a predictor that everything is alright and America can keep borrowing willy nilly should not be so relaxed.
In a recent interview, the financial crisis historian Carmen M. Reinhart said that ratings agencies had historically done a poor job at predicting sovereign debt defaults, currency collapses and other financial crises.
That is because, as she wrote in her paper, “Default, Currency Crises, and Sovereign Credit Ratings,” ratings agencies — like so many other professional forecasters — tend to focus on the wrong variables in calculating their ratings. In other words, S.&P.’s announcement may not actually tell us very much.
In other research Professor Reinhart has found that that interest rates are surprisingly bad at predicting debt crises in the near future. The painful rise in the cost of borrowing that is typical in a sovereign debt crisis often comes on extremely suddenly, Professor Reinhart says. (After all, the assumption that just because things have been trending a certain way for a long while means they will stay that way forever is exactly the kind of logic that led to the housing bubble.)
In other words, there are a lot of things to pay attention to when you are trying to predict whether the United States is likely to default. Unfortunately, despite what you may have read lately and seen in the markets, sovereign credit ratings and current interest rates may not actually lend you that much insight.
10. Totally excellent Clarke and Dawes - Bob Brown talks about the 'polluders'.
75 Comments
Paul Callaghan- INSPIRATIONAL!
Where are our 100 enterpreneurs?
They are not on this forum.
(apologies - Apart from an occasional visit from Selwyn Pellett)
they're here - but the category is wrongly nomenclatured.
Think in terms of pushing the intellectual boundaries, not the fiscal. A comsumer market, brainwashed (what else is advertising?) into stupefaction, lied to by politicians and associated cornucopians, is no measure of 'success'.
I've developed one of the mose energy-efficient houses in the country, with the most efficient fridge, lighting, passive heating/circulation systems you'll see anywhere. I run open-days, group visits, seminars........ all unpaid. I'm about developing the technology, and spreading the knowledge.
Why use a doomed (fiat/leverage/credit/debt) fiscal system as the yardstick for 'success'?
I'd love to hear how you've made your home so energy efficient. Do you have details of how you did it on your blog by any chance?
bits of it probably are.
Some is in the articles I write too.
I'll think about a dedicated blog page soon :)
It's a matter of insulation Pluto...stuff the wall cavities with old pollys...bung some live ones in a 'rat treadmill' and run a very long 20 amp cable to the neighbours garage..poke a hole in the wall and plug the bugger in....hey presto an E home to go. Don't forget to feed the rats.
Re. #2 - Somebody better explain this to John Key ( when he gets back from the W event in London).
We don't need to sell...we can lease...let's lease the Chathams to Beijing...triple wammy...get the rent inflation indexed of course...the sailors will spend up large in Chch on R&R...and hoards of commy party bloats will come on down for their hols....what's not to like!!!!!
The Chathammers will get a super ferry service to the Mainland.
The Mainland will get to flog heaps of grub to the Chinese navy.
Beijing will build a spanking new port in the Chathams and tart up Lyttleton!
The first Chatham Brothel will open up to a roaring trade...think of the 'immigration'...a property boom...hell even OllyN will arrive in town.
Paul Callaghan is on the right track. Where are all the entrepeneurs? A lot were probably sucked into property development by the artificial money environment, and now that dog is dead.
Key word in there is sustainable, and I like his take on mineral wealth being a one off.
He is wrong on the Ady Gil though, which travelled from England to Australia on one tank of gas. 13,000 nautical miles on 12,000 litres. Pete Bethune, BSc, BE & MBA is an oil engineer that has seen the light regarding peak oil. Earthrace was his attempt to educate the world about alternatives. http://en.wikipedia.org/wiki/Pete_Bethune
Read about the company he co founded, Camsensor Technologies, and this is exactly the sort of entrepeneur we need around. His world record is an astonishing feat considering other players have huge backing. He turning down full funding from BP because they wanted him to drop the biofuel. Unfortunately the lame government let an injustice occur to him in Japan.
Sustainable is a completely nonsensical concept as it assumes current technology is all we will ever have,
The harvest of flax was not sustainable - we never ran out of flax for sails - along came steamships.
The mining of copper for telephone lines would have depleted then known resources - along came wireless - no copper.
You must remember humans are adaptable - they have markets and access to technology.
We do not operate in a static world.
For any particular item as demand increases - supply will expand, prices will rise, technology will develop and substitutes will emerge.
Thus we will continue to increase our well being as we have done for hundreds of years.
Look at the massive backlog of new aircraft orders if you think we are somehow going to stop traveling because of some strange " sustainability " concept.
Nothing is ever " not sustainable " - we have boundless energy resources with thorium breeder reactors and the ability to manufacture hydrocarbons from virtually infinite limestone resources and absorb the resultant CO2.
Please - no more sustainability - it is a complete nonsense.
jb - you came from the lower echelons at school?
Those aircraft are designed to use the high-calorie-per-kilogram fuel known as oil.
and just because we hopped from room to room as the doors closed behind us - we would be out of flax now - doesn't mean we are going to find a neverending supply of new rooms.
And - how many consumers, then now and in the future?
I'll tell you where the nonsense is.
oh - and does wireless work for power tramsmission?
Or has the energy needed to raise weight W up height H in time T, altered? Do it by radio, perhaps?
Nuts.
Nothing like a bit of personal abuse when you feel your logic slipping away pdk.
Yes wireless does work for power transmission.
Imagine a fuel cell at every load location generating the electricity needed and using the waste heat for heating and cooling loads - no transmission required and 100 % energy efficient to boot.
So yes wireless as in no copper !
Distributed generation is a well known and admired concept with many firms working towards making the technology reliable and affordable.
BTW very plentiful carbon was a another conductor from memory - just not as efficient.
Generation by wireless is in the fractional wattage over the odd few centimeters, I dont know hat the efficiency is but its probably in the 1% or less range.....This isnt nor ever will be GigaWatts over hundreds of kms.
Imagination, uh maybe cut down on the hemp?
regards
Steven - I'm not sure what it is with the Simon types. It's worked so far, therefore it'll always work, seems to be the refrain. The stone age didn't end blah blah, flax ditto.
I happen to come from a long line of flax-millers, quite familiar with the howl of a scutch, but you can't learn much from that which relates to the limits to growth, the Hubbert linearisation, a gaussian curtve, or anything else, really.
I do have a copy of the letter from the Waitati flax-miller, complaining to the local cockies that he'd supported them while they cleared their land (of flax, presumably) and now they were'nt supporting him.There is no flax left in Waitati. Maybe that had something to do with it!
I'm beginning to suspect - Joyce's throwaway line today re oil prices was typical - that these folk will never accept what is happening. There' will always be a blame-shift - like Obama initiating an enquiry into 'specuation'.
Joyce, I think it was Matt Simmons? who said he didnt think that most ppl and especially Govns would not accept growth was not possible and the game was over until 3 or 4 of these events have past.....we are just entering number 2....so another 2 to 4 years...(just listen to Goff he seems as bad.....both energy ministers seem gormless plonkers....)
Then there will be a lot of doggy doo doo hitting a lot of fans......
regards
Generation by wireless is in the fractional wattage over the odd few centimeters, I dont know hat the efficiency is but its probably in the 1% or less range.....This isnt nor ever will be GigaWatts over hundreds of kms.
Imagination, uh maybe cut down on the hemp?
regards
Sustainable and technology are not linked like this.
Steamships replaced sail because they were safer, more reliable and faster...
Sustainable, coal for steamships in the UK peaked in 1913, we moved to oil, that is peaking now, what other raw energy source can you name? hint there are none. All you are doing is exhausting each non-renewable source in order of ease of use....its not sustainable its just a question of when.
I actually worked for a consultant who did a report for the flax industry, it wasnt that there wasnt enough flax, but that nylon rope was cheaper, safer and lasted longer....
Humans adapatble indeed, get used to walking, biking and probably horse riding...
Supply - demand, sit back and explain why oil costs so much today...you know zero about economics doyou, look up in-elastic demand...........
Well being, no this is or was it....
Aircraft orders....lemmings follow each other off a cliff....so that makes lemmings pretty dumb. Airlines will be going broke shortly, just like they did 2 years ago....cattle class will within a decade cease to exist....it will be a few business class and first class users, thast all....the rest of us wont be moving about that much.
Thorium breeders....if we actually ever build some...however using the energy to make hydrocarbons in this way is highly in-efficient far better to power up batteries......
What you cannot see is the number of plants required to do this sort of thing on the scale required and the time scale to build them...and the level of technology to support them....not happening economically, in engineering terms and environmental terms,,,
Nonsense is what you are spouting...You obviously lack any; engineering, finance/economics, or project management experience and knowledge....
regards
Maybe I misread the announcement early this year that China has now committed to a massive 20 year R & D program to commercialise molten salt thorium reactors which have breeding capability.
If I misread this I apologise - but please check first.
My reading skills are quite limited.
JB - that's OK.
Whether you read it right or wrong is immaterial.
Long before 20 years is up, we're in deep doodoo. Unless of course you want to re-write the laws of thermodynamics, and the more concrete ones of simple physics. By which I mean, you're advocating electric 747's. For 9 billion people, presumably?
try reading this, then putting it alongside population, and per-head demand:
http://crash-watcher.blogspot.com/2011/04/part-6-predicting-regional-an…
Treat it with respect, and don't skimp.
There's a lot of thinking to do, re exponential growth, energy, and finite resources. Take your time - although you'll find a little irony at the end of the study - you'll realise that time is the thing we don't have much of.
And just for the record, you don't transmit meaningful kilowatts through the ether. Although you could argue that all the fried brains around are possibly the result.....
Like i said scale and project management....to build a typical reactor is 5 to 8 years...so it takes them 20 years to get to the point they can build them commercially, call it 25 years to the first one throwing the on switch......
There is a very interesting piece in fact a few talking about the degree of complexity a civilisation can support....when we start to regress due to the depression and we will, it will not be safe or maybe even possible to build nuclear plants.....so 20 years is really, never IMHO. It simply wont matter now.....today and maybe for the next 5 years the plant we put in will probably be all that is significantly put in...its that bad IMHO....
regards
Well a storm has fired up while I have been attending to other things. PDK and Steven will hopefully have given you food for thought:)
But here is a small lesson from history about resources, only one but there are more.
When Rome turned their hand to Greece and invaded, the Greeks burned their own temples rather than let the Romans get their hands on them. Thing is they didn't want the Romans getting their hands on the roof beams and turning them into war machines. Wood by then was already a precious commodity, and there is some belief that Rome fell because the easy timber was all gone. Timber was not only a construction resource, but their primary source of fuel.
Bottom line is that sustainable is quite a sensible concept.
Seems insane to bank on something that hasn't been developed or invented yet.
Funny that. I always thought that sustainable as a concept was to do with us being on one planet subject to the laws of thermodynamics and nothing to do with any assumption that current technology is all we will ever have.
um........I wouldnt put sustainable and laws of thermodynamics together.....the laws really state how well you can get work out for the work put in.....the source doesnt have to be sustainable.....Technology on the other hand is indeed limited by physical laws such as thermodynamics.....
regards
AR - absolutely.
Technology will probably go into overdrive soon, as per a war effort.
But that won't make the work required to lift a certain load up a certain hill, any ditterent. That's where the confusion enters, I think.
I have debates with folk who sincerely believe that More's Law (nothing more than an observation that, for a while, the size of transistors repetitively halved) will somehow make it easier and easier to lift that load up that hill.
They've been lulled into that by the increasing supply of cheap, compact energy known as fossil fuels (I presume).
While that state held true.
I wonder how complex the cpus will be in say 20 years time....back to 486s?
regards
No , Bernard , I cannot imagine Bill English with a pony-tail or an ear ring ............ But if the next term of his financial ministry is anything 'like the last 3 years , I can easily imagine him with a Gummy Boot up his arse .
# 7 - and they use LVRs, apparently.
Basel - a better question is where is the policy set that will encourage said enterpreneurs, in their 10s, 100s, 1000s?
Hugh - I wonder who Bryan Gould is talking about here:
Bryan Gould: Being Prime Minister has risks as well as rewards
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10721471
Bernard - suggestion, get Don B in for a quadruple-shot interview. (A coffee and a double brandy - to loosen him up.) Suggested questions:
1) What do you think of my idea of the, "radical option would be for the Reserve Bank to print the money to buy the government debt"? (That is, your idea BH on the, "Don't tell the kids we are stuffing the country and their future with debt", thread.) Also ask, why not at least use such an option to fund the ChCh rebuild? QE for bogs, building and bridges.
2) Will ACT (or ACT II) also support abandoning the concensus on monetary policy, as Labour have? Would he support the implementation of supplementary tools to the OCR, such as variable fuel excise duty; variable LVRs; variable cap. adequacy buffering; specifying and varying the proportion of banks' foreign funding; banning fixed rate loans, to name but a few?
3) Will ACT (or ACT II) support Hugh P's thinking and appropriately deconstrain land supply for housing?
4) Will ACT (or ACT II) support abolishing the intent rule and implementing a land tax and unify paye, corp and trust tax to one flat rate somewhere in the low 20%'s? Which (ref TWG) is possible with untaxed property and capital gains wealth actually taxed more effectively.
5) Will ACT (or ACT II) seek to 'turbo-charge' the economy via effective support for the real economy and employ tax incentives to support 'winning behaviours' in firms producing differentiated hi-val-add products?
6) Will ACT (or ACT II) support abolition a whole raft of benefits and associated government departments and instead use a GMI approach?
7) Will ACT (or ACT II) support ditching the ETS scheme? Does ACT (or ACT II) know by how much NZ will reduce world temperature if we totally remove our 0.16% of world greenhouse gas emissions? The last one is multiple choice, a) by zip, b) by no significant amount, c) by 0.00sfapointblankblankzeroandahalf%
Cheers, Les.
Cheeers Les.
Great questions and idea.
Bernard
8) - Also, point him to the Int.co threads on the 2025 work and SOE sales, and ask if ACT (or ACT II) can get pragmatic about abandoning the contexural failure points of the Neo.lib/Washington Concensus 'doctrine of faith' that many now see as inappropriate?
The point about ETS is leadership...we show some as much as what we save....of course when you look at our emissions per capita its not very good.....in fact its awful...
regards
The point about leadership, is getting people to follow. Who, of significance, will follow us?
Is it likely that for those that are significant, their per capita emissions are better than ours, but that they might be able to answer the temperature change question I posed?
Meanwhile, the Greens have just put out this release on land sales:
With commodity prices at record highs, New Zealand must protect its global advantage by keeping New Zealand land for New Zealand citizens, permanent residents and companies, Green Party Co-leader Dr Russel Norman said today.
Fonterra is forecasting a record payout of $7.80 per kg of milk solids due to strong international dairy prices. The price of lamb has also increased and wool prices are at record levels.
“As food prices rise globally, New Zealand’s productive farmland will become more and more attractive to overseas bidders,” said Dr Norman.
“Global investors, many from China and often with the backing of the Chinese government, are buying up land in developing nations, and then exporting food back to China.
“While this plan makes excellent sense for China, it is not helping these nations who have lost their ability to export their primary produce.”
Chinese agricultural company Agria are looking to take control of New Zealand rural services company PGG Wrightson, dependent on the Overseas Investment Office’s approval. The Shanghai Pengxin International Group are also seeking Overseas Investment Office approval to buy the Crafar farms.
“New Zealand must protect itself from the global land grab by tightening its own overseas investment rules,” said Dr Norman.
“The Key Government’s tweaking of our overseas investment rules last year will not protect New Zealand’s productive land.
“The solution is to keep the privilege of ownership of New Zealand land for New Zealand citizens, permanent residents and companies.”
Link to global land grab website:
I have had personal experience lately as to why entrepreneurs get stifled here. One word, bureaucracy. And expensive at that. A couple of months ago I patented a simple device that when fitted to an old wood burner will allow it to meet or exceed modern standards of efficiency and emissions. Think of the embodied energy wasted when an old wood burner is discarded. With this device I have melted the wires out of an 1100°C thermocouple during testing! I have been onto MFE who are not interested. Compliance testing for this device would cost me $10,000 for each model that it would be fitted to. Out of my league I am afraid. The same technology is also applicable for a new wood burner design. Same problem really. It is not my first invention, with the first one now on the market by an American company because I could not secure interest here. Check out the Ergoactive hipbelt, http://www.blackdiamondequipment.com/en-us/shop/mountain which I invented six years before these guys. It is not a dead duck for me, but I would need tens if not hundreds of thousands of dollars to fight their patent application in a US Court.
Scarfie - try EECA.
But you're right. I had flashing LED lights on my bike helmet in '84. I didn't patent it, couldn't have defended it, didn't care.
It's good fun thinking ahead of the pack, though, eh?
Thanks for that tip, I will follow them up. Looks a little more friendly than the MED.
I was actually planning on launching it on trademe this week as a pioneer product for people to try at cost. You are right in that it is good to be ahead of the pack, but I lose heart once the design is solved and it needs to move into a business. I am a designer not an entrepreneur, but could use matching up with one:)
RE: the hipbelt you are right there also, as peak oil will slow down the recreational activities that company depends on.
Doh.......I actually started to play with a led indicator for a car......doh
regards
yep scarfie that's shocking and embarrassing.
that'd be another question for donbrash.....what would he do about the beaurocratic swamp.
i remember hearing john fleming (http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10693646 ) interviewed about alt fuels but it seems so tragically difficult for people with a plan to get ahead in nz
similarly the noted american anarcho-farmer joel salatin was in the country with almost no media coverage.....they'd rather cover the royal wedding. feeble
It would be interesting to see what the losses are from the electricity to ammonia, and then again to HP.
Woodgas seems the easiest transport fuel alternative I have come across, but the 40% power loss means slowing down a bit.
Interestingly hydrogen is a component of my invention. It works by taking the water content of the wood and passing it over the hot coals(carbon) which steal the oxygen to form carbon monoxide and leaving H2, both of which are flammable. The super hot temperatures just nuke everything leaving low quantities of white ash.
'gasification' ? There are a couple of importers bringing in gasification boilers. ($10,000).
Does the retro-fit allow for 'less robust' wood burners (some are only capable of softwood).
Good luck (off to get more wood)... but I'm intrigued.....
'gasification' ? There are a couple of importers bringing in gasification boilers. ($10,000).
Not really required for most of NZ but have their applications. Can be polluting as they belch out woodgas when they are on low however, and this is a common complaint. Lawrence Dobson patented one in the 80's that will burn green wood chips/sawdust, then recover the heat by condensing the steam out with an air to air heat exchanger. No fan for draught though as the flue is sufficient. Claimed 97% efficiency, and I drew some inspiration from it. Mine incorportates a drying zone so will burn green wood if you get it hot enough to start with. GEK are doing a complete 10 or 20Kw add wood and generate electricty package for around 20K USD.
Doug at Fluidyenz has been working in CHP applications for 30 years and his website is worth a look.
Does the retro-fit allow for 'less robust' wood burners (some are only capable of softwood).
I don't see why not, although I would have to familiarise myself with the model. My mod actually takes all the heat and abrasive stress from the flame, so is likely to be highly suitable. It just takes a clean run from the top of the box where the flue exits, to the bottom of the fire box. Combustion plate no longer required.
Won't work as well with one that draws air from a grate at the bottom, although I don't have access to one to try yet. Perhaps with a new grate......
Good luck (off to get more wood)... but I'm intrigued..
Thanks, if I could get off interest.co and get some work done on it I might get there.Lol.
Thanks Scarfie - won't ask more.... though, as with PDK, there's much more to ask...
Fleming is (after Rutherford perhaps) about our smartest ex-pat.
He actually said "we have 5 years to find an energy source as good as oil, and perhaps there just isn't one".
You gotts love an optimist :)
RE #1 - Tenants in our own land
Bernard - pity it has to go mainstream before you jump on board - there have been some quality comments here over the past 6 months - Brian Gaynor is being influenced by those comments - and you wait for it to get fed back to you in the guise of "mainstream".
A simple solution is to take a leaf out of the Gillard Governmant and charge a Resource Rent Tax on unprocessed logs shipped out of the country, and ignore the screams, thats sovereign risk at work. Could do the same with milk powder.
Or charge a tax on the land the logs come off . Land tax!
Unless the exporter gets enough to pay the tax they will have to do a rethink.
Most forest land is locally owned by Maori, the Crown or farmers. The overseas pension funds tend to own only the current crop of trees.
The real problem is that the NZ wood processing industry is uncompetitive due to chronic under-investment, large corporate short-term focus, poor commodity markets during the last decade, and log tariffs in some overseas markets.
Brian Gaynor's argument is that there is insufficient capital and too much debt to ride through the tough times so things get sold overseas at bargain basement prices. Saw the business news this morning and it's obviously a sore point with him.
A land tax has merit but it should be independent of land use with no cross-subsidisation. This Government seems to have no appetite for land or capital gains taxes.
Iconoclast
I've been sceptical about selling to the Chinese (or anyone else) for some time. As you'll see from the piece I linked to with Gaynor's piece.
And I read the tone of the comments here....
Here's what I wrote in September last year, here on this site.
http://www.interest.co.nz/opinion/50803/opinion-why-we-must-abandon-eco…
I feel like a priest who has been wrestling with his belief in god and has now decided god does not exist.
It's time for me to recant and to say what I've been thinking for months: the economic god of completely free markets and capital flows is not worth believing in anymore and we must look for other things to believe in and do.
I think New Zealand needs to have a debate about capital controls, about foreign ownership of assets, about measures to control our currency and about being openly nationalistic rather than internationalistic about our economic policy.
I think the Global Financial Crisis and the preceding decade of debt-driven instability in global capital markets and trade flows have demonstrated the failure of the economic model most New Zealand policymakers have adhered to for nearly 3 decades.
I think we need to rethink the way we run monetary policy, the way we allow foreign ownership of assets, the way we encourage savings, the way our financial institutions are regulated and change the things we are aiming for.
We should debate more specific controls on who owns what assets, whether monetary policy should still use the Official Cash Rate to focus on inflation alone, and whether banks should still be free to lend however much they want to whomever they want.
cheers
Bernard
Sell off a few more assets and then bring down the hand of re-nationalisation. Not officially of course but with a slick tax system that avoids being emaciated by double tax agreements while making it very difficult for overseas ownership without a majority NZ shareholding.
We have got to be innovative there by thinking up a tax that has no equivalent counterparty tax.
Then the only way we lose it is by physical invasion or unbalanced immigration policy which we can already see the start of. The Japanese can teach us something on that one.
Stirs pot.
Boom Boom!
Gaynor is dead right, very interesting points about the forestry industry.
But we know how pathetically PC this country is now, that if you object to bulk foreign land sales, you will be shot down and accused of being xenophobic, it's a joke.
The PC brigade have well and truly won in this country, it's not about what's best for NZ anymore.
But weren't National cabinet ministers the ones calling people xenophobic? And somehow pc and national cabinet ministers doesn't match.
Haaaaaaaaaaaaarhahahahaha..choke..yurk..splut.
"If 1 percent interest rates and that small Greenspan monetary increase back in 2000 caused the boom and ultimate crash of 2008, then what will be the ultimate result of our current extended course of 0 percent interest rates and a 300 percent increase in the monetary base?"
The outsiders views and beliefs in what Fonterra shareholders should and shouldn't do is somewhat amusing.
re Brian Gaynor - If farmers adopt the latter approach, and farm ownership is opened up to foreign interests, we could see a repeat of the forestry sector's unfulfilled potential in which Chinese-owned farms would export low value product directly to China to the detriment of New Zealand's dairy industry, our domestic farmers and, ultimately, farm values.,... I would have expected someone of Brian Gaynor's experience to realise that the share structure of Fonterra and foreign ownership of farms are two distinctly different beasts. He is silent on the fact that the Chinese are 100% owners of what was Synlait's processing buisness. The real money for a company, corporate or co-operative, is made at the processing/marketing level, not at the farm gate level. Hence it is more valuable for foreign interests to own the processing plants rather than the farms. Yet there wasn't a squeak about this when Bright bought Synlait's factories.
At least this government has realised that the real threat to the dairy industry in NZ lies in foreign ownership of vertical integration systems.
Fonterra shareholders can own up to 200% of their production in shares. 100% has to be production based and the other 100% are 'dry' (non voting) shares. It is known and accepted that some of these 'dry' shares are owned by shareholders in name only. That is others have given the shareholder the $ in which to buy the shares, in return for the dividend payment. So if you are really keen to be part of Fonterra, go find yourself a friendly shareholder with shares to spare. If Trading Among Farmers goes ahead, this will enable this 'back-door' ownership to be transparent.
We have a call for raw milk price regulation - the biggest noise coming from corporate processors with their own supply base who do not supply fresh milk into the domestic market, BUT are able to access cheap DIRA milk to EXPORT. In effect Fonterra is supplying these corporates, some with significant foreign ownership, with its own milk at a government set price, to be processed by competitors, who then sell it offshore in competition with Fonterra.
Not one media commentator, or anyone else, have called these corporates to 'please explain how your concern for the price NZ consumers have to pay for milk, can be considered in any form real, when you do not supply fresh milk in to the domestic market, yet you access cheap milk from Fonterra and export it.'
Not one media person has asked these same corporates what their views would be if DIRA milk was only available for domestic market products - which is what it should be past the first season.
Not one media person has asked these corporates 'if they believe that the raw milk price is being manipulated by Fonterra and is too dear, why they continue to buy it.' Afterall they do have their own supply base with Open Country being the largest dairy company after Fonterra.
The fact that some of these corporates are making reasonable losses and blaming it on high milk prices and therefore implying Fonterra has a part to ply in their problems, is a joke. Open Country reported a $8million loss for last season, what is it going to be this season?
IMO Fonterra shareholders are not about to vote to allow direct voting shareholding in the company by non suppliers any time soon. Farmers in Ireland did, and now after a few golden years, followed by many dark days, are calling for a return to a co-operative industry. The day we allow outside investment with voting rights, will be the day we start to follow the forestry industry.
...it is more valuable for foreign interests to own the processing plants rather than the farms.
Indeed, but how do you prevent a foreign interest, having acquired sufficient farming capacity, from setting up its own processing facility? If you could do that you might find that foreign interest in the farms would suddenly disappear...
I agree neco - and the government realised vertical integration is the threat when the Natural Dairy bid for Crafars was lodged. This current bid is also looking to eventually market their own milk in China, which in my mind should put them in breach of OIO rules. However, they say they won't do it in the first season. But the fact that that is their intention should put them in breach, whether they own the processing plant or not. I'm not sure of the fine print on that section of the OIO rules, so there maybe a loophole that will allow it. They will not make money on the farms that will reward them for their investment, so their end game has to be vertical integration.
But surely Casual Observer, anyone who questions the wholesale hocking off of our most productive land, and only real export earner to overseas interests, possibly forever, must be xenophobic mustn't they be? isn't it just obvious?
There would never be any other reason to oppose anything so ridiculously stupid would there?
FYI from Colin via email
Andy Xie reckons central bankers are running amok
http://english.caing.com/2011-04-22/100251567.html
Price stability is supposed to be central banking's main goal. But these days, central bankers think they're super heroes who should rescue the world and make everyone happy.
Inflation, since its negative effects are spread thin and take time to materialize, is ignored. Today's central banking is about so many things except inflation. This is why inflation will worsen for a long time to come. Indeed, inflation is the main theme for the current decade. A change will occur only when the current generation of central bankers is replaced.
This is probably the first time in history that real interest rates are negative worldwide. The fear factor is driving liquidity into inflation-hedging commodities and precious metals. The former accelerates the process of turning loose monetary policy into inflation. Brent crude prices have risen above US$ 120 a barrel, up 50 percent in six months. The FAO food price index declined 2.9 percent in March from February but rose 37 percent from the same month one year ago. Odds are that energy and food prices are still tending upward.
Meanwhile, labor costs are skyrocketing in emerging economies. Inflation is a push factor, since wages must reflect living costs. Hence, a wage-price spiral has begun in emerging economies. This dynamic is strengthened by labor shortages in major economies such as China's. This is why global trade prices are rising for the first time in decades, and the trend will only worsen.
Economists tend to ignore balance sheets and want to focus on maximizing current production, because they think in terms of growing out of balance sheet problems. This sort of thinking is unlikely to work now. Post-World War II baby boomers are retiring, raising pension costs and decreasing growth potential, which adds more fiscal burden.
Without dramatic action soon, most developed countries could go bankrupt. An alternative to technical bankruptcy is inflation. Inflation is similar to bankruptcy because it means paying creditors in devalued currencies. I'm afraid this is the most likely scenario for the future.
And this final flourish from Andy Xie is a cracker
http://english.caing.com/2011-04-22/100251567.html
An alternative explanation is that Bernanke is playing a game against China and he intends to win. In other words, he is patriotic. China's monetary policy amplifies the Fed's policy impact on inflation due to its currency linkage to the dollar. In such a dynamic, China has a far more serious inflation problem. Hence, it could see a hard landing before inflation becomes a serious political problem in the United States.
A hard landing in China would bring down commodity prices and reduce inflationary pressure in the United States. Hence, the Fed's policy is sustainable as long as China fails to handle domestic inflation.
Even if China does have a hard landing, though, it would be back on its feet in a couple of years. It's unlikely that the United States will be able to resolve its problems quickly.
So the Fed's policy is, at best, designed to buy time. I'm afraid it's mainly aimed at helping vested interest groups saddled with debt. Negative real interest rates can save them by giving them more time. The sad truth, though, is that many of these people should go to jail. The United States needs a jasmine revolution.
I posted this theory nine or so months ago in an almost word for word fashion.......funny, now Andy (with respect )is on it.......it has credibility value..!!! how fabulous
Of course Bernard ...you will need to factor in the recovery of the commodity markets that take the hit on China's pullback...and the U.s. betting they come cap in hand.
Think it through.
And here's more from the FT about that strike
http://www.ft.com/cms/s/0/030231de-6e68-11e0-a13b-00144feabdc0.html#axz…
cheers
Bernard
And from John via email
in today's Frankfurter Allgemeine Zeitung (one of the serious ones, as you'll be aware) there's an article on investment strategies: Sell US bonds Buy safe bonds (from countries with low debt levels - NZ 10 year bonds with a yield of 5.75%, Norway with 3.8% are given as examples Buy shares (Russian for their low value, German for high corporate profit margins Hoard gold Full article here - Google Translate should do the jobNZ bonds are seen as safe....interesting...5.75% is actually pretty good...
regards
How the Germans took over Ireland's fiscal policy, courtesy of Andrew via email
http://www.irishtimes.com/newspaper/opinion/2011/0423/1224295310921.html
cheers
Bernard
People - in Smokoshima something is going on - but we cannot see it.
well that'll be all the smoko Walter........
Consumer Confidence has risen sharply in the USA to reach 65.4 in April , an increase from 63.8 in March . And it is believed that this is not at all a consequence of the Royal Wedding in England . Instead , theories are propounded that folk are feeling more secure in their employment , and more confident with their personal debt levels .
........ But wait , there's more good news , Ford has thrashed estimates to record a stellar revenue and net profit result for Q1 . Unlike GM , Ford are focused on achieving fuel efficiency within all their models . GM is focusing on a select group of their models for fuel efficiency . The rest are gas guzzling great clunkers , ideal only for transporting folk a short distance , such as to the Royal Wedding in England .
GBH you are evil. Anyway I've been trying to decide where to put some money I've saved. There are a lot of pro bond articles around atm.
"American Hellholes, the U.S. Economy is Dieing, there are simply No Jobs "
Just keep on wishing it away Wally....one day your Midas moment may arrive.....go for gold sunshine.....may it rain upon you in nucleotide.
Nucleotide - what happens when a tsunami ebbs?
hello PDK....hope all is good with you....I been ...er...away.....as to your response...now.. I know..... your way smarter than that.....
I'm not expecting a response from the Messenger of death himself ...and so your time is appreciated.....saw you post yesterday regarding asking the Minister the hard question...good piece....not that many of them here these days. stay well.
We had alotta fun over Easter , with spoil-sport Hickey being away ...
.... JD & Elley set up a Succilicous Chocolate Gourmet Corner , and yours truely developed a Gummie's Garden Grot ( meant to be Grotto , but I couldn't get to it ) .
........... Now its all houses & interest rates again , and if you dare to mention the Royal Wedding in England , Gareth sticks lighted matches up yer finger nails ! ....... Party poopers .
I always try not to get ..hung up..over Easter......I take it from your post that Garreth is rooting for the Duchess of York......ah not to worry ..it confounds me as to where my invitation has got to.....still....we shall charge a glass on the day for all those not in attendance.
lighted matches you say....bloody amateurs......Go here and have a lookie see....matches under the fingernails.... pah.
So the Israeli Army found a use for those bloody useless LAV's that Phil Goof wasted $NZ 600 Million of Kiwi tax-payers' munny on ........... They light up , nicely ! ....... 105 to go ........
indeedy they do GBH indeedy they do.........don't ya love the little pause....I'm getting me one to tote on my camel....
"Smaller but highly successful companies, concealed behind a curtain of inconspicuousness, invisibility and sometimes secrecy"
Exactly what Paul Callaghan was talking about
More here from Hermann Simon. Required reading
Gallagher on his 2009 list
Endace still below the parapet
FYI via email from a reader James:
I'm am writing to you in response to a comment you made on the blog
entry Tuesdays Top Ten with NZ Mint."How the Germans took over
How the Germans took over Ireland's fiscal policy, courtesy of Andrew via email"http://www.irishtimes.com/newspaper/opinion/2011/0423/1224295310921.html
I've been a regular reader of and sometimes commentor on your blog
since 2008 and for a number of years have been conducting alot of
independant research on the subject of economics, much of that being
rather heterodox. I now hold most schools of economics and economists
in utter contempt, whether its Keynesians, Monetarists, or Austrians.
The few I do respect are heterodox economists such as Hyman Minsky,
Steven Keen, Irving Fischer, and Joseph Schumpeter whose theories have
been vindicated by the recent economic crisis. Anyway on the topic at
hand as I was investigating the genesis of Europe's austerity policies
which are being imposed on the so-called PIGS I discovered that the
major beneficiaries of the bank bailouts are German Banks."The Bank of International Settlements is a great repository of data
on who owes what to whom. This chart documents precisely how much
exposure banks in different countries have to the public and private
debt of other countries. With the biggest economy in the Eurozone,
it's not surprising that Germany's banks are intricately involved with
their neighbors' economies. In fact, it's clear that many of the
biggest beneficiaries of the deals through which Greece and Ireland
accessed international lines of credit to ensure that bondholders
wouldn't suffer unduly are. . .German. (Here's historical data on
German banks' exposure to debt of other countries.)"
http://finance.yahoo.com/news/Why-Germany-Is-Real-dg-2725833794.html?x=0I also stumbled across an article on a U.S. Financial website which
links to an interview with a German economist who'd worked at the
World Bank and was an expert on housing policy. He claims the subprime
mortgage crisis wouldn't have been possible if it hadn't of been
facilitated by German Publicly Owned Banks who had issued massive
amounts of credit in response to political reforms of the German
banking system in the early 2000s."The crisis started with the decision in the 1990s by the EU
Commission, which had launched an EU Treaty violation process against
Germany after the protest of German private banks against one of
WestLBs recapitalizations. The EU argued that the state guarantees for
the Landesbanken were illegal. The result was a postponement of the
end of issuance of state guaranteed debt for all banks from 2001 to
2005, where the last bonds guaranteed would have to mature by 2015."They didn't invest the credit in their own economy as in the late 90s
they'd experienced their own housing crash."Effectively, the tax incentives were so generous that people
over-invested and that meant there was a glut of supply in Berlin, for
example," Julian Power, director of London-based Berlin Capital
Investments, which advises individuals and companies on investing in
German real estate, told SPIEGEL ONLINE. "People could renovate a
property and they couldn't lose, as they could write off the whole
cost against their tax bill. ... So people were doing it whether or
not there was a demand for it."Boom Turns to Bust
But in the rush to take advantage of the incredible tax break, many
investors seemed to have forgotten to ask themselves whether there
really was demand for the property they were building and renovating."After 1998 a sobering of the market set in," Jürgen Michael Schick,
vice-president and spokesman of Germany's Real Estate Association
(IVD), which represents property advisers, brokers, administrators and
experts, told SPIEGEL ONLINE. "The tax incentives no longer existed
and in the 1990s investors had built over and above market demand."As the housing market bubble burst, investors' exuberance turned to gloom."
http://www.spiegel.de/international/business/0,1518,552901,00.html
Ring a bell does it? LAQCs?Instead they set up Structured Investment Vehicles and bought Asset
Backed Securities that had been packaged by the investment banks in
the United States, which exposed them to the toxic subprime market in
the United States, but they couldn't lose as their government
guarantee didn't run out until 2015.Dübel: The direct extra issuance by the banks following the EU
transition period decision was already massive and totaled probably
€100 billion. However, if you consider guarantees given by
Landesbanken you might well end up at €200, perhaps €300 billion in
total exposure. Those guarantees were called upon when the banks and
investors funding ABCP and SIV called in their capital during 2007.
http://www.ritholtz.com/blog/2009/05/german-subprime-meltdown-interview-with-achim-dubel/Now a government policy that fueled the Global Financial Crisis is now
enshrined in the Global Financial Market Governance Regime."Recent amendments to the Bear Stearns Rule have extended this subsidy
to Fannie and Freddie. The Basel Committee decided to include the debt
of “Government Sponsored Entitites”—bureaucratic code for Fannie and
Freddie—in the definition of “high quality liquid assets.” What’s
more, it also included mortgage-backed securities guaranteed by Fannie
and Freddie in the definition. "
http://www.cnbc.com/id/38953848Bring on the next bubble!!!
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