David Chaston details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that the Italian debt spiral is careening out of anyone's control.
Overnight, yields on Italian bonds soared to the highest level since the introduction of the euro, sending 10-year debt yields above 7% and putting the euro-zone’s third-largest economy well into the danger zone.
Just to pay their interest, the Italians now need a budget surplus of almost 11% of GDP and they are 'only' running surpluses of 4% or so.
No one wants to lend when the funds will only be used to pay the interest on previous loans.
The situation is unsustainable even in the short run and the Italian parliament's emergency moves to pass another austerity package looks as useless as all the previous moves.
This is what contagion looks like.
The problem for the world is that Italy is too big to be bailed out by other EU members, and neither the US nor China show any enthusiasm to step up.
IMF chief Christine Lagarde warned of the risk of a “lost decade” for the global economy unless nations act together to counter threats to growth.
The US dollar surged overnight, especially against the euro. But it also rose against 'risk' currencies like the NZ dollar and our dollar buys only 78.5 US cents this morning, more than a cent less than yesterday.
The news is all about financial stability - Europe's lack of it. Here in New Zealand, the Reserve Bank releases its latest assessment of New Zealand's financial stability this morning. Our high debt levels and low growth have some similarities to the European troubles and how our politicians and professional policy makers respond is an issue we all should engage with. Bernard Hickey is in Wellington and will be reporting from the Reserve Bank on New Zealand's financial stability soon after 9 this morning.
No chart with that title exists.
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Also reported here by ZH "Did Merkel just usher in the D mark?"
http://www.zerohedge.com/news/did-merkel-just-usher-deustche-mark
Also this in the German press:
German exporters consider the euro to be overrated. "We can live without the euro"
Germany knows the eurozone is going to break up; Sarkozy too that's why he's paddling like hell to make sure France is on the right side when it happens.
Anyone who thinks debt is good for the economy, had best state their case now, before we all see how toxic this poison really is. This could not happen without debt, interest is the killing blow.
Got friends and family? Got good neighbours, community? These are going cheap right now.
How do they make the money?
Nothing will change if fractional reserve banking is not abolished.
Our thinking, writing and talking goes round in circles if the root of the problem is not erradicated.
I just put this out there, everybody has to make up their own mind.
http://www.youtube.com/watch?v=eQT2K75auuU&feature=player_embedded
I'm preapeared for either case, and assuming both. At the moment I'm clearing debt (6months to go), got farmland and livestock, a house, and garden. Things that are real have value, and you can't hide that, stocks and bonds are just paper and rely on faith, look what happens when people loose faith. My cows are still the cows today as yesterday, Italian bonds are not. I like gold but my wife wont let me buy any 'till we pay off our debt. And for the last week I've been short the Dow, glad they are finaly OTM.
Inflation can't really happen until there is a ready and willing buyer for a massive amount of govt bonds. Untill the ECB does this we will have a debt caused depression, the NZD would be a good indicator for USD/EUR debasement, it would be difficult to have hyperinflation in NZ given there is only about 80bln of govt bonds floating around. Unless the RBNZ starts buying govt bonds I'm not sure how it could happen.
I could be wrong, what I do know is that debt is unsustainable, and the endgame for debt is here, right now.
good to hear
i would like to clear my debt but i'm at the wrong end of a 30 year mortgage with wife and 2 kids under 4 so we are doing what we can. paying mortgage off in12 years (10 to go) - we are unsure (doubtful) that we will get to the end of the mortgage when we get the severe financial crash (depression) that really now must happen.
our garden is 95% edible (only 5% 2 years ago) and we have aquired skills and knowledge to grow plants, trees and veges - what works and doesn't etc.
having some pm's is our plan b - it's our contingency or restart fund if we lose the house (lose job etc.) - its only a modest amount but it's something. our cash is in an offset account helping reduce our interest payments and is there ready to pull out if we see the writing on the wall (self induced default - hey everyone else is doing it...) we can stash that cash away or put it into something tangible if/when needed.
so the cash is for deflation, pm's for inflation (hyper) and purchasing power retention.
there are mostly deflationary pressures around at the moment and high energy costs (oil) dictate this along with the choking debt (and the deleveraging required to undo debt) support this - but deflation was the case in other localised hyperinlfationary events deflation before hyperinflation - such as argentina. so we feel is only prudent to have a bob each way.
hyperinflation is the loss of faith in the currency. bernanke has said he wont let deflation happen - he cant with the amount US debt. current debt and future liabilities are already too high combined with a future of low/ no growth/ recession/depression to afford deflation to happen. US $ is the reserve currency of the world so it matters what they do obviously.
enjoy
It pisses me off no end that politicians are forced to act by crises,rather than applying their own stated principles of "good governance" etc.Households are expected to balance their books but governments are an exception?
But then we go along with it while times are good.It's like putting in a new kitchen when the old one was perfectly good but your foundations were rotten.
Klinger will love this
"THE jobless will have to work for their benefits under a tough, US-style programme announced by David Cameron yesterday.
Anyone unemployed for more than two years faces a 30-hour-week for no extra cash under the PM’s “workfare” plan.
Those who refuse to do the compulsory work will lose their benefits."
seems reasonable...two year warning...pretty generous isn't it! Expect this UK move to be copied down here.
Sounds like a brilliant plan for decreasing wages and productivity. Why hire and train somebody to do a good job, when you can just get slave labour at the taxpayers expense? Never mind paying independent cleaning contractors a fair price to maintain your premises. Ditch 'em and get a succession of unmotivated randoms paid for by the govt. If you're really lucky Small Family Cleaning Business Inc. will go out of business and you can get them back for cheap under workfare. Genius!
France going the way of Italy?
"About 800 rare giant snails have been frozen to death after a technical glitch in a Department of Conservation cool room in Hokitika. The snails were some of 6000 taken from the Stockton Plateau several years ago to make…" herald
"oops...thought that was the Whitebait freezer."
Shhhhh....don't let the snail out of the bag skudiv...DOC are flatout on a solution to speed up the rate of reproduction...so they can be farmed...and as you say exported to the frogs...there is to be a contest to invent a Maori name for them..and a fight to figure out who owns them!
"This will unravel everything our forebears have painstakingly built up and repudiate all that they stood for in the past sixty years," one EU diplomat told Reuters."This will redraw the map geopolitically and give rise to new tensions. It could truly be the end of Europe as we know it."
http://globaleconomicanalysis.blogspot.com/
What they built up amounts to a mountain of idiocy wrapped up in dogma. Violence within Europe never went away...look at the Balkans!...so unravel....repudiate...redraw...get on with it.
everyone needs a few of these
http://news.yahoo.com/us-military-adds-armed-robotic-helicopters-fleet-…
Europe pushes Italy into the abyss It has taken three trading days since the failure of the G20 summit to detonate the explosive charge on Italy's €1.9 trillion (£1.6 trillion) bond market, the world's third-largest stock of public debt. http://www.telegraph.co.uk/finance/financialcrisis/8880306/Europe-pushe…
Yeh Skiduv,
Everyone in virtually every developed country thought the FIRE economy could deliver them a free lunch. Since the 1960s nobody any longer wants to get their hands dirty and do a days worth of real work, especially in Europe. Both the United States and European have offshored their industrial productive capacity to first the Tiger Economies in Taiwan, South Korea, and Japan, in the 1960s and 1970s but once those country's economies had matured, the responsibility was offloaded onto Mexico, Indonesia, Malaysia, China, Thailand, and now Vietnam, but they won't be allowed to develop any further. And what little manual work that absolutely needed to be done domestically fell on desperate migrants from Africa, the former Soviet satellites, and in the United States, once its agricultural sector imploded in the wake of NAFTA, Mexico.
Change topic!
This made the news today in The Age newspaper - can someone point this jorno to interest.co.nz... to get the real story..
http://www.theage.com.au/business/nzs-housing-slide-a-pointer-for-australia-20111110-1n828.html
Another day and another slice of pork...eat it quick to this one rots quickly.
"A Labour-led Government would invest $75m over four years to put laptops into the hands of 31,000 year 7 to year 13 students" herald
Hear that you lot.....a free gift...oops no sorry it's not free...you get to pay for it for the rest of your life...how you like them apples?
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