Here are my Top 10 links from around the Internet at 10 to 7 pm, brought to you in association with New Zealand Mint for your reading pleasure.
I welcome your additions and comments below, or please send suggestions for Friday's Top 10 at 10 via email to bernard.hickey@interest.co.nz.
I'll pop any surplus suggestions I get into the comment stream.
1. G20 failing - Reuters reports the meeting of G20 leaders appears to be failing to find any sort of consensus or action on currencies.
China and America can't agree.
Everyone is grumpy with the Americans for their pre-emptive strike on their own currency.
The Americans and not many others are grumpy with the Chinese for holding their currency down.
Even trade talks between America and South Korea have broken down.
The G20 will agree to setting vague "indicative guidelines" for measuring global imbalances and hammer out the details next year, G20 sources said on Friday, effectively calling a timeout to let tempers cool after heated debate over currencies.
Negotiators labored until the wee hours of the morning to try to thrash out an agreement that their leaders can all endorse, despite deep divisions that were on public display in the run-up to the Group of 20 summit concluding on Friday.
G20 sources told Reuters deputy ministers had agreed on the wording for a final statement, but it is not expected to venture much beyond what was already agreed at a finance ministers' meeting last month.
The euro is falling fast and Irish bond yields have blown out.
The euro extended losses on Friday on fears Ireland may need a bailout just like Greece, while commodities eased as the U.S. dollar rose, hitting the pause button on a rally that pushed copper to record highs. Traders slowed their selling of euros a bit after knocking the currency down 4 cents in the past week, squaring up before a statement about Ireland that may be issued by Britain and France later in the day.
The possibility of a bailout for Ireland has significantly widened the difference of bond yields of high-risk European countries over those of Germany, and overshadowed a Group of 20 leaders' summit in Seoul, where a breakthrough on resolving global economic imbalances amid incongruent policies looked unattainable.
3. Roubini backs the Fed's QE II - Nouriel Roubini supports the US Federal Reserve's QE II and thinks those arguing for a return to the gold standard are weird.
Roubini made his case against the critics of quantitative easing very clear—and explained the dire consequences of inaction. "The biggest problem we're facing today is growth that is too low. And inflation that is too low. And if we don't do anything to prevent growth that is too low…then we're going to end up in deflation," Roubini said And how bad might that get?
According to Roubini, if the deflation scenario is allowed to unfold due to an absence of central bank intervention, "we end up like Japan: In a trap of near depression that can last a decade—if not longer."Essentially, opposition to fiat money generally—and QE2 specifically—always sees an inflationary bias and the government creation of money as problematic. Hence, the desire for the gold standard and other fixed rate regimes.
But according to Roubini, "Those kinds of arguments are totally senseless today."
4. Former SFO director hits back - Former SFO Director David Bradshaw has hit back in the NZHerald at current director Adam Feeley over his recent criticisms of the SFO's previous (lack) of activity.
I can't speak for what happened at the SFO in the two years before the present director's appointment. I would observe however, that the two cases he highlights as presumably showing the effectiveness of the office - Waipawa Finance and Versalko (the ASB employee) - were both substantially, if not entirely, completed by the "neglected" office. New Zealand has been well served over the years by a small but highly skilled and dedicated group of people in the SFO.
It has developed a reputation for having the utmost integrity in all of its actions. The director should look to build on that reputation rather than seeking to denigrate the achievements of his predecessors.
5. Grantham savages the Fed - Jeremy Granthan is a legendary investor who has been right more often than not about global markets. In this CNBC interview below he savages the US Federal Reserve's QE II and recommends holding cash to take advantage of bombed out assets in the wake of the markets armageddon to come.
HT Andrew Patterson. Well worth a watch.
By the way, Grantham also thinks Australian house prices are over-valued...
"It [the Federal Reserve] wants us to go out there and buy stocks, which are overpriced because bonds they have manipulated into being even less attractive," said Grantham, who is chief investment strategist of Grantham Mayo Van Otterloo.
"So, we’re being forced to choose between two overpriced assets. That is not always a terrific choice to make because there is a third choice, and that is, 'don't play the game and hold money in cash.'
"And cash has what people don't appreciate fully. And that is its 'optionality.' In other words, if anything crashes and burns in value—say the U.S. stock market—if you have no resources, it doesn't help you. If the bond market crashes, and you have no resources, it doesn't help you. And what cash is is an available resource. It buys you the right to buy the U.S. market if the S&P drops from 1,220 today to 900, which is what we think is fair value."
“The Fed has spent most of the last 15, 20 years manipulating the stock market, whenever they feel the economy needs a bit of a kick,” he added. “I think they know very well that what they do has no direct affect.”
6. 'Don't make other people take the medicine for your disease' - This is a quote which captures the mood of Chinese and other emerging countries seeing the Fed's printing blowing up inflation bubbles and currencies in other countries.
“Don’t make other people take the medicine for your disease,” Yu Jianhua, a director general at China’s Ministry of Commerce, told reporters in Seoul late yesterday.
“Quantitative easing will have a very big impact on developing countries including China.”
7. 'The drugs won't work' - A Bloomberg survey has found that 75% of global investors believe the US Federal Reserve's latest round of quantitative easing won't work.
Investors are more favorably disposed to the policies adopted by the European Central Bank than they are to the Fed’s. Two-thirds say the ECB acted wisely in deciding last week against taking additional action to stimulate the region’s economy.
Fewer than half think the same of the Fed’s decision to buy more bonds.
“The ECB looks like the most responsible central bank as QE becomes inefficient if everyone does it,” Joel Kahil, an investment analyst in London for insurance company Amlin Plc, said in an e-mail. “And the same applies if everyone does competitive devaluation that would lead to protectionism.”
The results of the poll underscore complaints by officials from China, Germany and Brazil, who say the Fed’s Treasury- purchase plan may jar other economies while failing to fuel U.S. growth. German Finance Minister Wolfgang Schaeuble called the move “clueless” and suggested it was aimed at driving down the dollar.
8. 'Vee haf vays of making zee bondholders take a haircut' - Bloomberg reports nervousness is growing among bond investors in Europe about being forced to take losses on their holdings of bonds in the PIGS (Portugal, Ireland, Greece and Spain).
If confirmed, this would cause carnage of European debt markets, and possibly wider.
Irish government bonds tumbled for a 13th day on mounting concern that the nation will be forced to restructure its finances. Spanish bonds also headed for a 13th day of declines as data showed the nation’s economic growth stalled. French Finance Minister Christine Lagarde said yesterday that investors must share in the cost of safeguarding sovereign debt.
Peripheral nations’ bonds have dropped since European Union leaders agreed on Oct. 29 to consider German Chancellor Angela Merkel’s proposal for a permanent rescue mechanism that would involve restructuring with losses for private holders of sovereign debt. The proposal is part of discussions to create a permanent crisis facility to replace the rescue fund created in May after Greece’s near-default.
9. The 'Rocket Docket' courts - Matt Taibi, the Rolling Stone reporter that painted Goldman Sachs as the Vampire Squid of the world's financial markets, has written about the fraudclosure crisis in America with his characteristic flair, anger and detail. It is a must read.
This "rocket docket," as it is called in town, is presided over by retired judges who seem to have no clue about the insanely complex financial instruments they are ruling on — securitized mortgages and laby rinthine derivative deals of a type that didn't even exist when most of them were active members of the bench. Their stated mission isn't to decide right and wrong, but to clear cases and blast human beings out of their homes with ultimate velocity.
They certainly have no incentive to penetrate the profound criminal mysteries of the great American mortgage bubble of the 2000s, perhaps the most complex Ponzi scheme in human history — an epic mountain range of corporate fraud in which Wall Street megabanks conspired first to collect huge numbers of subprime mortgages, then to unload them on unsuspecting third parties like pensions, trade unions and insurance companies (and, ultimately, you and me, as taxpayers) in the guise of AAA-rated investments.
Selling lead as gold, shit as Chanel No. 5, was the essence of the booming international fraud scheme that created most all of these now-failing home mortgages.
10. Totally irrelevant video - An amazing swarm of bees on a tree in New Zealand. HT Blair via Twitter.
11. Even more irrelevant video - The Indian remix of Incey Wincey Spider. HT NZKoz via twitter.
Muntazir credits himself an awful lot.
61 Comments
FYI Simon Johnson at Baseline Scenario on how the Basel III process is a disaster
“Many bankers oppose increased equity requirements, possibly because of a vested interest in the current systems of subsidies and compensation. But the policy goal must be a healthier banking system, rather than high returns for banks’ shareholders and managers, with taxpayers picking up losses and economies suffering the fallout."
Here are the deepest thinkers — founders and mainstays of the entire field of finance — finally standing up and saying: Enough of this nonsense. You may wish to pretend that keeping capital requirements low is a good idea, but you should understand that this is pretense and bad science, pure and simple.
FYI John Plender at FT.com. Fascinating history lesson. HT Boatman via email
While the world has so far avoided the extreme loss of output experienced in the Great Depression, history suggests, among other things, that competitive devaluations and capital controls are the inevitable consequence of surplus countries failing to take any responsibility for global payments imbalances.
The lessons of the 1930s are also relevant to the Chinese currency peg to the dollar. In the early 1930s China was on a silver standard. This had been in use since the country’s experiment with paper currency collapsed as a result of inflation and civil war in the late 14th century. When the US Treasury moved in 1934 to help American silver producers by buying silver to boost the price, China’s currency rose in value, leading to an outflow of silver and savage domestic deflation.
China went off silver in 1935. Its new paper currency then became the vehicle for one of history’s greatest hyperinflations as the country struggled to finance the war with Japan. The monthly inflation rate at its peak reached 2,178 per cent. This paved the way for the communist takeover
http://www.ft.com/cms/s/0/75561136-edd2-11df-9612-00144feab49a.html#ixzz152rqsw1K
Number of the week: 10,2 Trillion
http://blogs.wsj.com/economics/2010/11/06/number-of-the-week-102-trilli…
FYI here's a rap about the currency debate. Amazing really. Painful, but it shows how widespread this debate is now. HT Robert via email.
We need Scribe and Alan Bollard to get together for a good discussion...
http://www.youtube.com/watch?v=IGYAhiMwd5E
cheers
Bernard
FYI from Roubini on the debate about currency intervention and Capital controls.
Of course, currency appreciation should not be prevented altogether. When justified by economic fundamentals, the exchange rate should be allowed to rise gradually. But when a currency’s appreciation is triggered by capital inflows that represent the asset-diversification preferences of advanced-economy investors, it can and should be resisted.
http://www.project-syndicate.org/commentary/roubini31/English
cheers
Bernard
FYI here's Andrew Leonard at Salon on how Obama is indeed a liar and a fool. I've been saying this for over a year now...
Obama's tax cut surrender The richest Americans can breathe easy. Their taxes won't go up -- not now, and probably not later
http://www.salon.com/technology/how_the_world_works/2010/11/11/white_ho…
"Capital controls are now orthodox"
Even the New York Times is reporting about the rise of capital controls in currency markets
http://www.nytimes.com/2010/11/11/business/global/11capital.html?_r=1&ref=business
Over the years, foreign capital flowing into emerging markets has played a crucial role in helping finance roads in India, factories in China and buyers of luxury cars in Brazil.
But as the sums have compounded and led to more market volatility, fast-growing countries have begun to worry that short-term investment will push up the value of their currencies, make their goods less competitive in the global market, and lead to asset bubbles that will be painful to deflate.
Once a core policy commandment of the so-called Washington consensus and held dear by the United States Treasury, the International Monetary Fund and global investment banks, the belief that unfettered capital flows are a boon for everyone — including the country on the receiving end — has been dealt a major blow.
Short-term investment is now increasingly viewed as something that needs to be controlled.
“The world has learned about the perils of free market finance — global financial liberalization just does not work as advertised,” said Dani Rodrik, a political economy professor at the John F. Kennedy School of Government at Harvard. “Just as John Maynard Keynes said in 1945 — capital controls are now orthodox.”
in light of this, I don't think so! It's not just 'free market' that's in trouble, it's all finance.
http://earlywarn.blogspot.com/2010/11/iea-acknowledges-peak-oil.html#mo…
Take a look at the dark blue, Bernard. It's been and wented - that's the energy that underwrites everything - they've admitted it.
The light blue is 2/3 fantasy, and probably more, because the financial world won't long survive that dark blue decline. It's not a matter of growth, it's a matter of survival, ere long.
What a pity schools of economics forgot to teach that essential wee fact.
The question is: Can finance be organised to address a PERMANENT recession?
Watching those involved currently, I'd have to say no. I'd bet on it, but......
Yeah, and they are hopelessly optimistic about that fantasy. Some nice analysis on the oildrum about the failings of their methods; http://www.theoildrum.com/node/7102
This really should be given the attention it deserves.
http://www.worldenergyoutlook.org/docs/weo2010/key_graphs.pdf
The last slide gives you an idea of energy inputs for OECD countries. I'd be interested to see how anyone sees economic growth when we collectively have to get by on progressively less and less energy.
The writing really is on the wall for exponential economic growth.
No:1
It seems to be America versus rest of the world:
German Finance Minister Wolfgang Schäuble, said Fed’s decision was “undermining the credibility of US financial policy.” and accused it of hypocrisy, for accusing the Chinese of manipulating exchange rates and then themselves artificially depress the dollar exchange rate by printing money
Glenn Stevens, the governor of the Reserve Bank of Australia, referred to the loss of American global economic domination, the “ongoing shift in the world economy’s centre of gravity towards Asia” and the economic rise of China, which is now Australia’s top export destination. (Export to China 23%, USA and NZ around 4% each)
Brazil, whose finance minister accused the US of sparking a global currency war, announced the doubling of a tax on foreign purchases of Brazilian bonds in order to contain the flood of speculative dollars driving its currency higher and creating the danger of asset bubbles and inflation.
Just love it...so like Noddyland's property market, still.
"Selling lead as gold, shit as Chanel No. 5, was the essence of the booming international fraud scheme that created most all of these now-failing home mortgages".........how's our very own mortgagee listings fiasco going....banks still drip feeding in their 'penny dreadfuls' are they. RB and govt worried sick the peasants have discovered the extra fingers in the peasant wallets...stealing all the while...on the back of 'borrow borrow borrow and splurge' it's the Kiwi way no more.
Hugh Here's that SMH story on nervous Australian home owners... http://www.smh.com.au/business/tense-nervous-mortgaged-20101112-17r3j.html
cheers
Bernard
I appreciate you are paid to do this, Hugh, but it takes up a lot of space, and it's all the one thing.
Even that would be OK if it was a correct thing, ie the truth.
This is a case of the planet (have you bothered to look at that blue cliff I pointed Bernard at, or does your continued assertation require a head permanently in the sand?) having run into the peak of good-quality energy supply.
As it underwrites every truck of concrete, every tanker of milk, and all parts in between, those young folk are going to be poorer, on average, that your and my generation.
It;s nothing to do with Texas - unless it be a combination of oil money, and useless spaces. Norwith red-tape, that just evolves out of a combination of civic safety (building codes/earthquakes for example) and land-use ajudication. Nothing new there, either, the Otago Goldfields had 10 and more in the queue for water-rights, waiting for the incumbent one or two to relinquish.
IPrices may well come down, and by as much as Bernard opined - even more - but unless you take into account the reduced income-power, your assertations lack relativity.
What WILL go on, is the 'wealth trickles upward' process that is a free-market, less and less corporates, bigger and bigger. No more middle-class- expectations turned to dreams and memories.
It's already happening - can ye no' see?
JP, if you points holds then given the US consumes more oil than all its enemy currency countries collectively it has some leveage with middle east oil producers.
AndrewJ, Califonia may now be bailed out as the Rebublican Govonor is gone. Print more money baby!!!
I think the Fed had a secret meeting in Las Vegas and decided while we still have some leverage lets go all in and take out the competitor countries...put it all down and go for broke...we only need to ensure we are at the top of the heap when the dust settles.
I'm sure any FTA with them result in the small country being totally screwed...commercial sabotage next, they are scarred of Fontera in the Dairy industry in the US., use some naval seals and delievery some foot and mouth to our competitors?? Don't think It may not happen in a ever desperate world. Look what desperation in a country like Israel has resulted in.
"More than 100 workers at Affco's Wairoa meatworks have been laid off, just weeks after returning to work."herald
That'll be the recovery the banks are spinning!
More 'good' news from Europe: http://www.bbc.co.uk/news/business-11740908
"The pace of economic recovery has slowed in Europe's major economies, according to official estimates."
WAIROA is in trouble, i doubt the works has a future, they truck stock for hours to this plant and im not prepared to send my cattle 4 hours on a truck to get killed and then have the meat shipped miles back by truck to the nearest port, dont even mention my lambs. Affco ran Wairoa works as an employment agency to boost an impoverished town with social problems and were encouraged to do so by the incumbent Govt of the day. Talley's have a different view.
The banks dumped more farmers in this area on Friday, some large family farms for sale for the first time. The old 'ring and sting on a friday'
"The banks dumped more farmers in this area on Friday"
AndrewJ, Got some detail on that I can chase up? Please email to bernard.hickey@interest.co.nz
cheers
Bernard
point 5 litened to this.....
http://www.cnbc.com/id/15840232/?video=1640401359&play=1
well worth litening to, pdk....around 19mins....
regards
Goddam even the Saudis are now starting to admit peakoil
http://www.emirates247.com/news/region/saudi-oil-analyst-disputes-high-…
''Husseini said that because of these “caveats”, a more realistic forecast of global crude oil supplies based on proven reserves, field maturities, new technologies and sanctioned projects yields what he described as a production plateau that levels off at around 87 million bpd from 2013 through 2019 and declines thereafter to nearly 83 million bpd by 2030''.
If he's the guy I think he is, he's ex-saudi's state owned oil company who had/has in depth knowledge...in some ways he paints a fairly rosy picture, that of little decline, which is interesting because "outsiders" seem to expect 5% decline starting this decade....
regards
"European officials are encouraging Ireland to accept a bailout to restore confidence in its solvency and stop the spread of financial-market turbulence to other euro members, according to senior EU officials.
Many European policy makers increasingly believe that early action on Ireland would be better than waiting until markets force the country's hand, recalling that repeated delays in coming to Greece's aid this spring led to a near-collapse of investor confidence in the whole euro zone, officials say".
http://online.wsj.com/article/SB10001424052748703560504575612593174135232.html?mod=googlenews_wsj
12 months to the election!.....can Goofy harvest enough of the envy vote on promises of thieving from the better off and passing out some goodies...or will the fx trader hold the tottering coaltion together?
The property ponzi economy is being injected with fresh credit and a wave of bank advertising aimed at the peasants and desperate to inflate the bubble to make the 'covered bonds' look secure...Meanwhile the rural land price collapse gathers pace and the banks are screaming for govt intervention...their answer?...sell to foreigners..sell sell sell.
Business borrowing?....falling ever falling because this sector understands what it means to be farmed by the banks....and they know higher rates are on the way.
Those higher rates are going to lead to gallons of red ink spewing through the bank balance sheets as the bubbles implode no matter what Bollard and Key get up to. The end game is coming.
"covered bonds", what a joke....to me its more CDSs....toxic.
Im not very impressed with JK, but I fear Labour would be far worse.....there will be huge pressure for them to accelerate handouts....and being the good little social engineers they are, it will happen....
Farmed by the banks, indeed, these guys need to be put back in their cages, I suspect I will vote for whom ever promises to do so....I think they are our biggest threat, maybe NZF will beckon.....
I think JK will hang on, but ACT supporters who voted National last time will drift back, so I think ACT's % will increase making it hard for JK and team to appear moderate, if that shows up in the polls, JK maybe toast, but its a huge swing back....Green's meanwhile are looking more and more like a nasty red boil that needs lancing....
It is all about bribes....no one feels they deserve pain, it has to be personal benefit and instant gratification now, how shallow we have become.
regards
Wolly : I believe that ACT voters will drift back to National . Leaving Rodney plus one , or two . He's a canny campaigner , and John-Boy will give Rodders a clear path to win Epsom again .
The Maori party are natural allies of Labour . As are the Red-Green show , of course .
If Winsome re-emerges with NZ First , as I predict he will , that gives Goofy / Klinger / Cunny the strongest hand to play . Key is gone-burger . Fold 'em and weep '
But as Les Rude says , the f*kking bollocking idiots deserve to lose . They waited 9 years for power , then spent the first 2 years merely upholding all of Labour's promises and welfare bribes .
Wolly? um no.
You forget if National hadnt promised to be moderate then they quite possibly wouldnt have got in....National have learned as did the HC brigade earlier, most voters are around the centre, and these are un-like their parents not "loyal" to a party for life. They see voting as who will give them the most. So if you want to govn you have to be around that centre....
We shall see on ACT, Rodney has been a fool, which I suspect he was all along....once he could get his fingers in the pie he was off....which made him look even more grubby...
regards
True enough steven but the Nats could have come clean 2 years ago..."we promised this and that but the GFC and our very own property ponzi bubbles of insanity mean we have no option but to pull the rug out. In three years you can judge us on whether we did the right thing today."
Instead we have this ongoing BS programme wrapped in endless spin about export recovery!...utter shite. The economy remains an unbalanced turd dependent on property speculation and foreign property buying and the RBNZ has applied policy aimed at making sure the flow of cheap credit into the residential bubble is maintained. That's what the 'covered bond" crap is all about. The CFR was always a scam...a bit of spin for public consumption.
Is it any wonder that business borrowing is falling. Rural borrowing has tied many producers to being farmed by the banks in a cycle they cannot escape from. An even greater number of households have been sucked into the bubble. And the overall debt mountain is bigger....for fecks sake...where else can this go but down a dark hole.
There is no bloody way this economy can generate the wealth to pay down the 250,ooo,ooo,ooo stinking pile of debt.....think about 5% on that total.....that's 12.5 billion in finance costs alone pa....and the mountain is still growing....so what happens when the export returns do a flipflop...as they will.....the debt bills do not stop!
And then we have the certainty of running into higher rates....move that % to 7 and see what happens....move it to 9!
Wally - the pollies absolutely have a problem.
Gotta preach optimism, or vanish without trace.
Folk of that ideology hoist with their own petard.
I did an op/ed on it recently:
http://www.odt.co.nz/opinion/opinion/135743/time-now-fireside-chat
For Captial controls.
"Part two of Triple Crisis blogger Kevin Gallagher’s interview with the Real News Network on why many developing countries are adopting capital controls as a countermeasure to the Fed’s proposed quantitative easing and why the IMF is supporting them."
It seems to be working....
FT agreements would stop this.....so the US likes it of course.....South Korea put in place controls, they would have to remove them for a FT with the US to take place or be sued.....
Q, once a FT is in place, how hard is it for a country to legislate it out?
regards
Plan to re-balance NZ economy shredded ? Jeepers Bernard , is it only lattes you're on when this stuff spills out of your thought processes ! As useless as the Nats are , they have had only 2 years in the hot set . And the GST hike a mere 6 weeks of implementation .
Your jounalistic hyperbolic cup is spilling over , methinks . Luckily the ediitor at the NZ Harold is big-hearted enuff to accept your " we need a new plan " ramblings .
Whatever the US does in " QE ll " is a mere pee pee in the giant urine bucket of their economy . The extra $US 600 billion may barely be noticed ! Who needs America anyway , when we're about to score the coup of a free trade agreement with Russia .
............... Ladas for butter : Sweet !
Must see: Quantitative Easing explained
http://www.youtube.com/watch?v=PTUY16CkS-k&feature=player_embedded
For those who have never heard about it, or for those who have heard it but really did not fully comprehend it - yet -
and there are many, including all the politicians of the world, who are constantly repeating the "growth" mantra.
The end of growth:
http://www.postcarbon.org/article/178709-the-end-of-growth
For impatient readers, scroll down to "The simple math of compounding growth"
Apologies to those who are in the know and think this is a useless repetition.
Gertraud - I made this comment below earlier on the G20 issue, which points to the same direction mentioned in your great video. Economic growth and any other obvious economic issues related to the story isn’t the real issue - it is political. Personally I think one isn’t wrong to make the link to world politics particular to the
Middle East. This region is just on the verge of exploding. $600 billion for what ? Armament industry !??
----------
One cannot be silent about the latest development on the world stage.
A week ago I wrote why the 3rd of November will make it into the history books. Although not being an expert in that field, I have great concern about the development.
On November 3, 2010, the Federal Open Market Committee (FOMC) decided to expand the Federal Reserve’s holdings of securities in the System Open Market Account (SOMA) to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate. In particular, the FOMC directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of
New York to purchase an additional $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. http://www.marketoracle.co.uk/Article24003.html
China’s provocation and the avoidable starting up of a massive currency war by the
USA are only accelerating the collapse of “Western Economies” and others - a stupid move - leading into more serious wars.
(e.g. Larry Summers economy adviser of Obama says: Protectionism makes people poor.)
http://en.wikipedia.org/wiki/Federal_Open_Market_Committee
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8tiXZ1vO5jw
http://en.wikipedia.org/wiki/Federal_Reserve_Bank_of_New_York
Who/ why are those people making such rather, unusual, strange and from a distance self- destructive moves – can someone help me out please ?
---
World military expenditure rose in 2009, reaching an estimated $1531 billion, an increase of 5.9 per cent in real terms compared with 2008, and 49 per cent higher than in 2000.1 This represents approximately 2.7 per cent of global gross domestic product (GDP)—the ‘military burden’—or $224 per person.
2 The sharp increase in the military burden—from 2.4 per cent of GDP in 2008—is due to the increase in real military spending, the fall in global GDP and an increase in the value of the US dollar, which magnifies the impact of the high US military burden on the global figure.
http://www.sipri.org/yearbook/2010/files/SIPRIYB201005-AB.pdf
More evidence to what I mentioned above: The United States will store an additional $400 million in emergency military equipment in Israel.
http://www.jta.org/news/article/2010/11/11/2741699/us-to-store-more-weapons-in-israel
On your issue about growth, I completely agree with you. I think the way the world is going protectionism will automatically reduce growth and push countries to self – sufficiency.
Politicians/ economists talk about growth, which is in fact often then not “Uneconomic Growth”.
And to quote from this article - for those like GBH and AiF who can't see the scam carried out by the banks to steal the wealth of nations.
"Finally, we have created monetary and financial systems that require growth. As long as the economy is growing, that means more money and credit are available, expectations are high, people buy more goods, businesses take out more loans, and interest on existing loans can easily be repaid. But if more new money isn’t entering the system, the interest on existing loans cannot be paid; as a result, defaults snowball, jobs are lost, incomes fall, and consumer spending contracts—which leads businesses to take out fewer loans, causing still less new money to enter the economy. This is a self-reinforcing destructive feedback loop that is very difficult to stop once it gets going.
In other words, the economy has no “stable” or “neutral” setting: there is only growth or contraction. And “contraction” is just a nicer name for Depression—a long period of cascading job losses, foreclosures, defaults, and bankruptcies.
We have become so accustomed to growth that it’s hard to remember that it is actually is a fairly recent phenomenon."
Many say 'doomers' or 'malthusian' , or 'shouting environmentalists' (that from the Sunday editor of the SST), or commies, or whatever - and presumably feel that by doing so, they've put the messengers down to a point where they don't have to be taken seriously.
It's denial, by any other name.
It's amazing how times change and we become immune to all around us.
A couple of years go we only ever mentioned Billions - now we see Trillions everywhere and no one blinks. These are REALLY big numbers - as in a pile of dollar bills to the moon and back twice for just 1.6 T !
I suspect the issues we now face - and that includes NZ are far deeper and more intractable than many realise.
Think a few years down the track with our foreign debt - $ 246 B and rising and higher interest rates - ireland here we come !
Happy little thought for a Monday
Keep up the great work Bernard
Have just finished reading the Matt Taibbi "Rocket Docket" piece. Utterly compelling (and worth repeating in future Top 10 lists, at least until the Rolling Stone article is out). That guy has to be one of the best investigative journalists around.
So the Big Banks are not just too big to fail, they're apparently also too big for fraud?
What exactly does it mean for the Rule of Law when even the Justice System treats it as a pesky inconvenience...
... perhaps it's time to go long on guillotines. And Knit World.
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