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Monday's Top 10 with NZ Mint: Euro system 'near explosion'; progressive protectionism; sit and die; distruptive manufacturing; Clarke & Dawe; Dilbert

Monday's Top 10 with NZ Mint: Euro system 'near explosion'; progressive protectionism; sit and die; distruptive manufacturing; Clarke & Dawe; Dilbert

Here's my Top 10 links from around the Internet at 10:00 am today in association with NZ Mint.

Bernard Hickey is on vacation and won't be back until early May.

I welcome your additions in the comments below or via email to

I am still keen to get your suggestions for suitable cartoons. If you notice a really good one, please email me.

See all previous Top 10s here.

1. It won't last
As everyone knows, Australia is a "province of China" because of the dependency the Aussies have to China as its main minerals customer. China's per-capita consumption of steel (and other metals) is low by international standards so there is a general expectation that the Aussie mining boom will last a long time yet.

But some new analysis casts that view into considerable doubt. Research house Nomura has dug deeper and reckons its not per-capita that matters, rather its consumption-per-GDP that really matters, and on that basis China's consumption is "outrageously high". Basically it is using far more of these metals to generate the same amount of GDP than everyone else - and it can't last.

Here's the review of the Nomura reserach at Also sprach Analyst. This chart shows it for steel:


2. 'The euro-system is near explosion'
German tempers are boiling over the back-door euro rescues. Controversy is raging in Germany over soaring "payments" by the Bundesbank to shore up Europe's monetary system and cope with a tidal wave of capital flight from southern Europe.

It's the relentless sceptic Ambrose Evans-Pritchard's take on situation, but it's a powerful read never-the-less:

Even defenders of Target2 admit that such vast transfers need proper scrutiny. The International Monetary Fund said the system is a back-door means of financing the trade deficits of Italy, Spain, Ireland and Portugal.

Dr Sinn's IFO Institute has refused to back down. Its latest report said Target2 violates democracy. "Who are the losers from this process? The savers in those remaining European countries that still have sound economies," it said. They have been pledged their assets "without their knowledge or consent".

"This enormous international credit should have been subjected to the parliaments of Europe," it said.

3. Is bad urban design making us lonely?
I love Auckland - I reckon it's one of the world's great cities. I am sure most people like living where they do (otherwise why are you there?) In the case of Auckland, one of the things that really endears it to me is that it just grew, developing 'naturally' around a wonderful natural harbour. But 'experts' always want to change things, mainly for well-intentioned reasons. A popular reason these days is that cities 'can be lonely places'. They think we need to plan "physical structures and social organisation". You up for that?

Where we live can play a huge role in our social lives. Bigger cities offer more opportunities for interaction, suburban areas tend to prioritise private spaces over public ones.

But even small-scale urban design details can have a large impact on our social lives. Bad urban design is one of the major causes of loneliness and asocial behavior in Australia, according to a new report from the Grattan Institute, a think tank focused on public policy there. They don't have much faith that people will naturally work stuff out. They want more 'urban design'.

Cities can help social connection, or hinder it. They can be so poorly organised that they are hard to get around – a problem not just for getting to work, but also for seeing friends and family and participating in social activities.

A city that ‘builds in’ isolation through its housing options, transport accessibility, and other features, can have significant consequences for the strength of people’s relationships and for physical and mental health.

Of course, the physical by itself does not determine what happens. Design is not destiny. People often find ways to meet despite physical obstacles. Conversely, the best-designed spaces don’t guarantee connection. Overt attempts to engineer social interaction can backfire as people often withdraw when they feel their privacy is under threat. The right balance flows from an interaction between physical structures and social organisation.

4. Apocalyptic Daze
Catastrophic thinking is on the rise. And why not? The economy is frail, the earth is overcrowded, the specter of war looms. Impending disaster is everywhere. Some of our commenters have caught the bug.

But Pascal Bruckner is here to calm your nerves, although he suspects people don't want realism anymore, certainly not news of progress - they want tales of the "coming apocalypse".

Environmental worry is universal; the sickness of the end of the world is purely Western. To counter this pessimism, we might list the good news of the last 20 years: democracy is making slow progress; more than a billion people have escaped absolute poverty; life expectancy has increased in most countries; war is becoming rarer; many serious illnesses have been eradicated. But it would do little good. Our perception is inversely proportional to reality.

5. Please stand when you read this
A study of more than 200,000 Australians adds to the growing body of evidence that people who sit the most die the soonest. It also found that you can't exercise this effect away, though exercise does help reduce it greatly.

The study's simple message is that spending more time standing and less time sitting prolongs life.

Just thought you would want to know. More here »

6. Living without 30% of your electricity
The Japanese government has given the go-ahead for shutdown nuclear power plants to be restarted, following the Fukushima disaster. Nuclear power supplied 30% of Japan's electricity before the quake.

But actually getting them going faces a big hurdle - they also need local consents. The nation may need the power, but the locals don't want the risks in their backyards. Here's Fortune with an insightful analysis:

For the past year, through interviews with employees of TEPCO (some officially sanctioned by the company, some without its knowledge), government officials and nuclear industry experts in Japan and abroad, we've attempted to answer two of the most fundamental issues at the heart of nuclear debate now roiling Japan: how could the accident at Fukushima Daiichi have happened - and how, in particular, could it have happened in Japan, a country once known, not so long ago, for its sheer management and engineering competence?

The answers are bracing. The epic disaster at Fukushima Daiichi represents failure at almost every level, from how the Japanese government regulates nuclear power, to how TEPCO managed critical details of the crisis under desperate circumstances.

7. Away-with-the-fairies
Election campaigns throw up all sorts of wacky ideas. There is a campaign in France right now and one idea being peddled there is "progressive protectionism". It may seem foolish from an international perpsective, but it would seem doubly foolish from an EU view. Why would a wealthy country choose a path that would make itself hopelessly uncompetitive, one that will so obviously require an endlessly rising protective wall around it?

Here is a fan describing their fantasy:

Progressive protectionism by contrast would instead allow countries to wean themselves off export dependence. It would enable the rebuilding and re-diversification of domestic economies by limiting what goods states let in and what funds they allow to enter or leave the country. Having regained control of their economic future, countries can then set the levels of taxes and agree the regulations needed to fund and facilitate this transition. National competition laws would ensure that monopolies didn't develop behind protective barriers and an internationalist approach to trade with poorer countries would insist that the gains from reduced levels of international trade helped fund the move towards a localised economy that benefitted the poor majority. In essence, this approach would make space for domestic funding and business to meet most of the needs of society worldwide.

8. A worker revolt at American Airlines
Here's a novel approach. As you know, American businesses that go into bankruptcy can be reorganised without shutting down. The Courts oversee a process where the lenders and other creditors are offered a haircut or different terms so the business can trade on, and come out the other side rejuvinated. (The owners invariably lose everything, but jobs are often protected.)

Now unions are learning how to participate effectively. American Airlines is in bankruptcy, but their workforce has gone off and made an alternate pact with another airline, doing an endrun around the airline's management. It may be a sign of the future. Businessweek reports:

The president of American’s pilots’ union, the Allied Pilots Association, alluded to this in his Friday letter to pilots. "Working with US Airways, APA was able to achieve in just over a week far more than we had been able to achieve in more than five years of trying to bargain with AMR management," APA President Dave Bates wrote. "Our interaction with US Airways was in stark contrast to what we have been experiencing with AMR. We dealt directly with the people whose jobs are to run an airline."

9. The third industrial revolution
The digitisation of manufacturing will transform the way goods are made - and change the politics of jobs too. Like all revolutions, this one will be disruptive, and is likely to be very unfriendly to modestly skilled workers.  More from The Economist:

A number of remarkable technologies are converging: clever software, novel materials, more dexterous robots, new processes (notably three-dimensional printing) and a whole range of web-based services. The factory of the past was based on cranking out zillions of identical products: Ford famously said that car-buyers could have any colour they liked, as long as it was black. But the cost of producing much smaller batches of a wider variety, with each product tailored precisely to each customer’s whims, is falling. The factory of the future will focus on mass customisation—and may look more like those weavers’ cottages than Ford’s assembly line.

Digital technology has already rocked the media and retailing industries, just as cotton mills crushed hand looms and the Model T put farriers out of work. Many people will look at the factories of the future and shudder. They will not be full of grimy machines manned by men in oily overalls. Many will be squeaky clean - and almost deserted. Some carmakers already produce twice as many vehicles per employee as they did only a decade or so ago.

Most jobs will not be on the factory floor but in the offices nearby, which will be full of designers, engineers, IT specialists, logistics experts, marketing staff and other professionals. The manufacturing jobs of the future will require more skills. Many dull, repetitive tasks will become obsolete: you no longer need riveters when a product has no rivets.

10. The last laugh
And now here's John Clarke with Bryan Dawe on the great ship of state we call Australia.

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 Why would a wealthy country choose a path that would make itself hopelessly uncompetitive, one that will so obviously require an endlessly rising protective wall around it?
Now that's the Question of the week David....why..?
 What would you have to proceed in that direction.
What would .. cause...  the perception of saftey in a return to protectionism..
The U.S. has itself over the last period of extreme volatility echoed these rumblings.
Why....? most protectionist periods followed catastophic it a return to protectionism or a readying for events that may unfold when the IMF steps away and says.....
"Well..!! that didn't work itself out " ...... 

I found this Article Interesting. 
I don't agree with all his conclusions, but I think its an intersting viewpoint.
It is by Paul Craig Roberts [send him mail], a former Assistant Secretary of the US Treasury and former associate editor of the Wall Street Journal
Soft Power, America and China
Americans, the British, and Western Europeans are accustomed to thinking of themselves as the representatives of freedom, democracy, and morality in the world. The West passes judgment on the rest of the world as if the West is God and the rest of the world are barbarians in need of chastisement, invasion, and occupation. As readers know, from time to time I raise questions about the validity of the West’s extreme hubris. (See for example, the following articles: Washington’s Insouciance Has No Rivaland Is Western Democracy Real or a Facade?)
China is often a country about which Washington’s moralists get on their high horse. However, China’s “authoritarian” government is actually more responsive to its people than America’s “elected democratic” government. Moreover, however incomplete on paper the civil liberties of China’s people, the Chinese government has not declared that it can violate with impunity whatever rights Chinese citizens have. And it is not China that is running torture prisons all over the globe.

Was that for me personally...Kiwi...? I fail to see the connection to the Topic at hand, but good for you..!
I'm converting to Communist this very afternoon culminating in a cup of Tiger Penis Tea.....I'll think of you while chowing down on a Tortoise tasty bit...(links provided if required)
 The West passes judgment on the rest of the world as if the West is God and the rest of the world are barbarians in need of chastisement, invasion, and occupation.
Really...? the entire Western World...? have you got a complex of some sort..?
It may enlighten you to know ....They ( China) are not bad when it comes to annexation and occupation themselves(do some history).....and not unlike Russia ,hold a converse view of Western ideals with much the same narrow minded bigotry they feel the West engenders toward them.
You may not get's not that important....but it's not about being's about selling N.Z. future to the highest bidders.....without the consideration of a clash in idealism at some future point.

The article wasn't directed at anyone. 
After I clicked save I discovered that you had already posted.
What did you think of the article?
I don't like everything about China. I don't like their one child per family policy.  I don't like the forced purchase of individual farmer's  land. Then again most Chinese don't like that either, and they are changing that policy now. 

I found the article to be as narrow minded as the subject matter it covered.
 Only a fool believes Democracy, as we know it, is truly a reflection of the will of "the people".
Only a fool subscribes to propoganda targeted at the minds of the population to reinforce an idealism not lived up to for reasons of greed corruption and control.
 Only a fool cannot see that regardless of the idealism the regemes of this world want control and obedience .... but rely on apathy.
 Fortunately there is no shortage of fools in this world.
 For me Kiwi...I will take a broken democracy foolish enough to guarantee me a right to express my disgust at their perversion of democracy. 
better the devil you know..n..all that.

People are allowed to express their views in China as well.
I just went to the chinadaily forum and clicked on one of the main topics.
It seems like they can say pretty much want they want, just like at
This is the post
China - The Great 2 Faced Nation
Here is a perfect recent example of China's problems in it's development.

The government sacked Bo Xilai, an old traditional communist with hardcore values, in a bid to continue its reform and opening up policy (or at least attempt to "show" that they are reforming and opening up if nothing else)

The government, straight after doing this, then ammends a law giving them the right to now detain so-called dissidents for "national security" reasons without informing their families.

These 2 examples pretty much perfectly sum up the development stage China is currently at.

Reform and open up in the left hand...

Crack down and close the door again in the right hand...

left hand, right hand, left hand, right hand, swinging from one to the other, constantly, back and forth!

There will be many more similar examples like this for many more years (probably decades) to come as the government continues to reform, then gets all scared and paranoid about losing power and quickly swings back the other way again.

The great 2 faces of China! 

Look are you selling something....? Now go use your google finger to find crackdowns on freedoms of opinion in China....geezsus.
I get it , like's ok with you to hitch you wagon to them ....I get it...and I'm ok with it. 
And just so you know ...I have family and a half of which are Chinese...I go see them sometimes...gets me outta the maybe you go see too ...have a look around ...tourist mecca.

Christoff: gettin a bit peppery since your wife gave you that love-tap on the head.  Kiwi is an anglisisation of qhizhi.

Would be my summation too iconolast...But I didn't want to climb on to another left hook...if you follow me ..... my "Right Cross" must be slipping.

Most jobs will not be on the factory floor but in the offices nearby, which will be full of designers, engineers, IT specialists, logistics experts, marketing staff and other professionals.
1/ Where does that leave those that don't have the smarts?
2/ Why do professionals assume that their jobs are not under threat also?  And soon.

And who can afford to buy the stuff when they don't have jobs....

Ha!. Soon.  Yeah... Right.
As in. The Threat is Here and it is Right Now for many.
Plus the  next door neighbours have a financial planning business.  Fits in the Small to Medium category.  Their back office work is now done in the Phillipines.  Much cheaper...

Indeed. I'm a web developer and I'm basically competing against sites like that. Saving grace for most clients is that they want face to face meetings to feel reassured. But that will erode over time.


1) Even today, if you look at robotics I think I saw a piece that said if a robot could replace a factory worker with about a 2 year payback it was done.   Now the few(er) who look after those robots see a dcent wage increase, those who get replaced live on the dole or tent city............
2) their jobs are under threat.........they can often be done the key is forethought, skills and have to see the rends and niches and make sure you are in and can jump out of / into them....So when I see 20 somethings walking out of Uni with a Degree in say flower arranging  and ending up doing clerical work, what a waste, but it gets worse, so OK some will become managers, they then maybe OK until 40 or 50 then they are un-employed...they have no real skills.........seen it enough now to think thats how it goes.

>>> The Bundesbank is preparing a raft of measures to choke credit before it leads to the sorts of problems seen in Spain. These include lower loan-to-value limits on mortgages
And I say again... Limit NZ morgages within 10 years to 3.5x main earners income (or is it too late already).
>> Far Right 20% of the Vote in France.
And the only thing that history teaches us; is that we never learn from history...

You could set a LVR aka texas of 80%.....and actually allow the RB to vary it to control prices....however I think Steve Keen? commented that a 1% change in that LVR had a huge impact on the market.  Given 95% is common now getting back to 80% would take a decade or more.
and yes its too  late.....if it had been done in say 2000 the Texas LVR would possibly have stopped the bubble....though that and a CGT would have been needed...that stops tax dodging.

The French are in for a real treat if the hard left socialist beats Sarkosy for the presidential throne .... this guy accpets that the government is nearly bankrupt , the coffers run dry .. so his plan will be to raise taxes ..... as if they aren't high enough in France already ...
... typical of the left , not a single brain-cell engaged upon the idea of cutting government expenditures .....

I like #5 David. Does that mean we're getting standing desks soon, you know to prolong our longevity and productivity? You know, I'm big on well-being. :) 
Great top 10!

No, it's all part of a sinister plan.  Thats the whole reason desks were invented, it starts at school.

here, here.
No Standing Desks until National Super age is increased!!!
Got to keep the costs down somehow!!!

We will need zimmerframe desks morelike.

Deserted factories.   Yep - and an enormous tractor can plow 1000 times what the chap with a horse and a wooden plow could.
But the chap bred the horse himself and he and his neighbout made the plow.  And the horse ate grass off the farm.
While the tractor costs about 10 years of  workers income (10 farmers) just to buy and uses the same amount of fuel in a year as a workers salary.
Like the 'deserted factory' it's simply that most of the costs (activities to aid production)  - have just been shifted elsewhere and out of sight.  But they still exist.

Sure war and poverty have come down a little bit, but there are pleanty of hockeystick graphs out there these days.  We have never had so much pollution, or been so reliant on fossil fuels, pesticides, herbicides, feritcides etc.  Population is at record highs and growing, so any notional number comparisons are irrelevant.  The sea ice is melting at rates comparable to previos rapid climate change events.  Debt has never been so high, and is continuing to grow despite the warnings from Rogof and Rheinhart.
Life goes on.... but the question needs to asked 'how much is this going to cost?'  The media get off on it, as they feed off public opinion, and feed public opinion.  Totally bankrupt when it comes to real solutions though.  I'm putting dams in the tops of some valleys to capture rainwater runnoff, now I'll have free gravity fed irrigation, brilliant.  Progress and growth, without the usual sideffects.

Any problems getting resource consents for your dams skudiv?  Genuine question

You mean those landslides?

It's counterintuitive I know, but capturing rainwater runnoff, is the most productive way to stop landslides and prevent erosion.  Next time you see some slips, ask yourself what the economic advantages would have been from storing the runnoff, then using it during the summer, making marginal land into valuable irrigated land.  As opposed to losing valuable topsoil everytime there is a heavy rain.

Not quite what I meant Skudiv. But I am well aware of stability and erosion issues as a desiger, but also having suffered first hand. Best thing you can be doing IMO.
A damn would possibly require a consent, but a landslide wouldn't :-P

they are a permitted activity, up to 20,000m3 where I am.

Do you have to provide fish passage?

In response to #7, an industry might benefit from such a policy if its international competition is well developed and will otherwise put it out of business.
This is exactly the policy which the US used to protect its fledgeling super computer industry, from the Japaneese super computer industry which was already much more advanced at the time. It allowed the American super computer industry, and eventually the PC industry, to develop, and now of course we can only talk about success for the American computer industry.
In other cases protectionism might lead to self sufficiency in some key areas, for example food production. I would think countries like Jamaica would benefit from becoming virtually self-sufficient in producing their own staple, countries in this situation are sadly not ever going to achieve this without something like protectionism. The problem for them is that they are unlikely to be allowed to make this choice for themselves, and will probably be bullied if they attempt to do so.
No, such protectionism isn't exclusively a positive policy either.

Re #3 - this is Pure Patch Protection from the Plannerista.  A Plethora of People who have a rich history of utopias turned to distopias, and unintended consequences, who nevertheless peddle their Peculiar Paradigm of Planning Populism, despite the Prolific Proof that Preferences trump Planning.
Alain de Botton, in 'Religion for Atheists' has a much more nuanced take on the causes of and cures for urban anomie, and I'd trust an ethical philosopher over an academic zonerator any day, meself.  Particularly one who has, so to speak, skin in the game....
Doz udders are all High on P.....

de Botton has quite a good read with The Architecture of Happiness. One of his points is the allegation that people in Venice are no happier than anywhere else for all their wonderful architecture. Also has a good chapter on the difference between the appreciation of modern vs classical. Seems people like the cool and calm of modernist when life is uncertain and changing, whereas classical dominates in cultures that a established and assured.
and who bought property where?
The smart ones know.

Fascinating - yes, the smart ones know!!!!!
And he could afford to pay above the odds - and likely hedge his bets too.

This is the telling bit to me, and what I have commented on before. "Renewable energy, water and land conservation, permaculture, and transit-oriented development are all examples of what I would call improved software applications, but they are still written to run on our old, growth-based operating system."
Out alternative power and storage systems fall into this category to me, but his follow on from that is also correct.

He has a valid point:  I built a new house to address the lack of future resources.
That's open to the accusation of being oxymoronic, and quite rightly.
The think-on is is that anything done from here on, has to be sen as a use of finite fossil resources. A concrete pad, for instance, should be seen as being able to go 1000 years, not 50. No reason there can't be 3-4 structures on it over that time - floors will always be flat.
That's the kind of obligation we should be having to future generations  (Alex, you reading this?) but the inability of the Chris-J types - the majority - to 'get it', suggest that the system has to collapse first. Whether there is a window of opportunity to discuss the valid way forward, at that point, I doubt. Too many screaming folk not wanting to drown, which tends to shorten their strategic vision.

Well I sort of agree with your last comment but I wonder whether the human animal is just 'wired' like most other animals - that is our basic instinct being survival in the here and now.  And altho your strategy has been to prepare via a largely self-sufficient ambition - others have chosen the asset accumulation route as their insurance policy regarding the future. 
I think it remains to be seen which will be the best strategy for the term of an individual's lifetime - and through inheritance that of our 1-2 generations of direct descendents.  Those who have accumulated up large look to be more secure to me than those who have not from where I'm sitting.  As I said above, Cameron's wealth provides him with more options.  Altho having said that the latter path (which by design widens the gap between the haves and have nots) is most certainly not serving wider humanity well.
But if the question is simply - who (and who's immediate descendents) is more likely to survive the big bang when it happens ...or, to put it in a biblical sense - will the meek ever inherit the earth? .. it doesn't look likely :-).

Kate - yes, the Vandals sacked Rome (so goes the myth). Rome had had her 'peak energy' about 300 yeras before, though. Wasn't much to sack. So were the Vandals 'fitter'? Or were the Romans 'more declined'?
I suspect the smart thinkers - like Cameron - reckon on there being a major conflict, or and escalating series of same. Given the locality of the prospective protagonists, t'aint rocket science to see that the safest place is as far away as you can get.
John Wyndham saw it that way, Nevil Shute too.  He's in good company.

#3. We have a decaying community because we have urban designs to ensure it. Population density needs to be around 30-60 people per acre which, ironically,  we probably had on our quarter acre when the average family was large. However this sort of density would only work if the motorcar was eliminated from most of our daily activity, the tacky rubbish we call medium or high density now is not the answer.

Days to the General Election: 26
See Party Policies here. Party Lists here.