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RBNZ’s Adrian Orr says financial markets aren’t pricing in geopolitical risks, which Defence Minister Judith Collins says are ‘as bad’ as during the Cold War

Public Policy / analysis
RBNZ’s Adrian Orr says financial markets aren’t pricing in geopolitical risks, which Defence Minister Judith Collins says are ‘as bad’ as during the Cold War
Christopher Luxon with Defence Force staff
Prime Minister Christopher Luxon meets with NZ Defence Force staff in Samoa (Photo: supplied)

In 1987, the Fourth Labour Government was worried enough about a nuclear war with the Soviet Union that it commissioned a study into how the fallout might affect New Zealand. 

“Although the likelihood of nuclear war remains small, it is still high enough to justify concern, given the severity of the impacts it would have,” the authors wrote in an introductory chapter

A survey from two years earlier had found 82% of New Zealanders were “strongly of the opinion” that some plans should be made for how to cope in the aftermath of nuclear war.

And so, the Government allocated $125,000 from the reparations paid by France for sinking the Rainbow Warrior to begin that process. The resulting report made the front page of the Auckland Sun under the alarming headline: “NZ helpless in a nuclear war”.

One plausible reader of that news story would have been a 30-year-old solicitor named Judith Collins, who now serves as New Zealand’s Minister of Defence.

Speaking in Parliament this Wednesday, the now 65-year-old politician reflected on that era in the context of her recent trip to meet with NATO in Belgium.

“Two days before that meeting, China launched an intercontinental ballistic missile that ended up in the nuclear-free zone of the South Pacific. That is for the first time in 44 years. Things are changing,” she said. 

New Zealand needed to be aware that it was “part of the world” and could be in the sights of that ballistic missile if the worst were to happen. 

“I mean, I grew up in the Cold War, and this is scarier than that—it's that bad,” she said. 

“People understand that everything is changing. We do not live in a benign strategic environment; I think that history will show us that we never really did.”

New Zealand’s invitation to NATO reflects the organisations’ growing perception of China as a threat and its interest in finding allies in the ‘Indo-Pacific’ — a triangle of territory which stretches from India in the west, to Japan in the east, and NZ in the south.

Mis-priced confidence

It is hard to say how serious the risk of war really is, but it is enough to worry Judith Collins and another of her contemporaries, 62-year-old Adrian Orr.

The Reserve Bank Governor has been attending the IMF’s annual meetings in Washington DC this week where these security concerns have been one topic of conversation. 

The IMF has said it is concerned about the “disconnect” between measures of geopolitical risk and financial market risk, as the two have been drifting apart in recent years. 

Orr told CNBC he shared these concerns and, as a central banker, was aware of the financial stability risk it could pose to the global economy and also New Zealand. 

“The geopolitical tension, you know, there's not much we can do about it, other than be as diversified as possible in trade and as resilient as possible and flexible in our financial system.” 

“But I do worry that a lot of asset prices at the moment are totally mispricing some of these geopolitical tensions and threats,” he said. 

Orr was particularly worried about global equity prices—rather than fixed income or currencies—which were priced for the “perfect run” while risks were “underpriced”.

Orr was also critical of a possible Trump presidency which could see even more protectionist trade policies being implemented. 

“It is poor, bad economics and people will suffer,” he said. “For us in New Zealand, 30% China dependent and [70%] the rest of the world, if we get stopped out of one of those because there's some angry fight in a far distant country; it's bad”.

A quick decline in listed asset prices might be relatively low on the list of problems for New Zealanders in the case of a hot war kicking off in the Indo-Pacific. 

The Covid-19 pandemic demonstrated how dependent the country is on these shipping routes which could easily be choked off in any confrontation with China. 

Short of an actual war, even an escalation of the ongoing trade war could cause costs for New Zealand’s export-oriented economy. 

Policy pivot 

The still-new Coalition Government believes the best way to prepare for this possible crisis is to strengthen trade links with the rest of Asia and its defence ties with the United States. 

Prime Minister Christopher Luxon described this to the Economist Magazine as a foreign policy “reset” which has been driving his frequent visits to South East Asia.

Diversifying diplomatic and trade links away from China is uncontroversial and has bipartisan support, but the military aspect of this reset has been more contentious. 

New Zealand effectively broke off its alliance with the United States in 1986 when it refused to allow US nuclear vessels into its waters and ports. It became a quasi non-aligned country.

In 2008, it signed a free-trade agreement with China which significantly boosted exports and incomes. NZ was sometimes described as being China’s “best friend in the west”. 

Critics of Luxon’s foreign policy pivot believe these western military alliances may be unnecessarily provoking conflict with China and eroding NZ’s independence.

Some would prefer New Zealand took an approach more like Singapore, which aims to be a neutral friend to both superpowers.

Despite its neutrality, Singapore has a powerful armed forces. This is something New Zealand lacks, due to decades of underinvestment and somewhat pacifist culture.

Collins’ cold war speech in Parliament was likely about laying the groundwork for a big lift in capital spending in future budgets as the Defence Force updates its kit for potential future assignments and/or conflicts. 

Foreign Minister Winston Peters told Newsroom he was bidding for an increase for both diplomatic and defence spending in Budget 2025. 

“People, when you talk to them, look over your shoulder in many ways … [at] what’s behind you, and if it’s just talk, that’s a very difficult conversation position,” he said.

Treasury documents showed Defence was requesting $4.4 billion of capital investment in the next budget, as of March, although noted this was likely to change as a review was underway.

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139 Comments

"....if we get stopped out of one of those because there's some angry fight in a far distant country; it's bad”."

Am I alone in thinking that the English used here by Orr is rather sloppy? Imprecise?

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...juvenile?

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The sinking of the Manawanui has robbed NZ of a large chunk of military hardware in one fell swoop.

I am really looking forward to hearing what caused this disaster. Human error, equipment malfunction or a combination eg malfunction combined with a delay in dropping anchor.

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Winston will know..someone went off for a coffee..

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Information has been strangely lacking. I'm surprised it has gone so quiet. What are our journalist doing? Get out there and gather some scuttlebutt.

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I wouldn't hold your breath, when has RNZN ever been open about its follies?

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The investor of today certainly seems to be sleep walking into the zone of sudden and abrupt loss. One warning in plain sight is the price of gold where others are heavily weighted that something nasty is imminent. 

Todays investor "It might not even happen, it will probably be meh. It's just negative spin"

Seasoned investor observing todays investor "it's already begun and I'm adjusting my finances accordingly"

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Thousands of wannabe investors in this country might benefit from picking up a good book written by a seasoned investor every once in a while, instead of keeping their reading list limited to property listings.

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Any recommendations? 

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'The Psychology of Money' is excellent

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The investor of today certainly seems to be sleep walking into the zone of sudden and abrupt loss.

If there's a sudden and abrupt loss, there's not many "financial" investments that'd insulate you from the carnage in the wider economy. Almost impossible to determine that contagion effect, in such an interlinked global trade and financial system. You'd more likely need trade items, or the ability to create them.

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Well put.

And if it was particularly bad I'd imagine that liquidating foreign assets would become impossible. For a period of time.

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I think you are correct. The emphasis should be on IF.  If you really believe it is a real possibility then NZ bonds are your best bet. You will be paid. I personally don't believe a trade war will occur, even it Trump is elected, unless he also controls both house of congress and all Republicans in congress follow his orders. Possible yes, but not likely.  It is not in any country's interest to disrupt trade.

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Gold, unless kept under the bed, isn't much use. If one's gold is held by someone else, there's little one can do stop guvmint from appropriating it for 'national defense' purposes and giving you an IOU in return. If whoever held your gold is on the winning side, you may get it back ... eventually. Not so for the losers though. 

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No need to bring me into it RP :)

A seasoned investor? Todays investor? Who exactly are these?

Are they any different from those buying tulips, buying into the stockmart in the 1920's, 1980's, the dotcom bubble, the property bubble? 

It would appear todays investor is more heavily protected today. But it's the big financial institutions that have the most protection.

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And when that protection goes away

Hoo boy

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"Short of an actual war, even an escalation of the ongoing trade war could cause costs for New Zealand’s export-oriented economy."

I find it curious that after decades of a persistent trade deficit we continue to tell ourselves we are an 'export orientated economy'

 

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Correct. We're a trade-oriented country with the second smallest exports to GDP ratio in the OECD.

Exports per capita were steadily declining since the UK joined the European trade bloc and went into freefall over the last decade when we began importing consumers as a means to grow the economy.

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We're a million miles from being able to function economically without trade.

We're export orientated for this reason, I guess the term might lead someone to think our economy was dominated by exports, when it's actually 60% or so consumption.

If there was an actual large global conflict, our balance of trade would likely shift heavily in our favour, as it did during WW2, where we emerged to be one of the healthiest economies on the globe. 

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our balance of trade would likely shift heavily in our favour

No braincells were troubled in coming up with that comment.

I don't know if you are aware but a lot has changed since WWII.

1) For one, we're exponentially more dependent on energy-intensive imported consumption (first world economy) and very complex supply chains to keep our domestic economy and export production going. A basic laptop takes 71 cross-border transactions to produce throughout its supply chain (materials, tools, IP and services included).

2) Back in the 1940s, the US and British Empire were a lot more dominant in global trade and controlled the majority of oil and industrial production, so we were on the right side of the global conflict. Not even close to that being the case anymore.

Everything else aside, our farmers might struggle to produce anything with only 21 days of diesel held in onshore reserves.

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Agreed. A couple of subs parked offshore would cripple NZ within a few days. We'd not even get to 21 days.

Yet another reason we should be going hell-for-leather electrifying everything we can in our energy systems.

And yet, our glorious, forward thinking guvmint is actually increasing our dependence imported energy?

Short-sighted at best. Friggin' treasonous at worst.

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Exactly. Some here are taking the "we feed the world" political slogan quite literally.

Our actual contribution to the world in wartime is going to f-all and we could count ourselves lucky if global shipping companies don't completely ignore us and we don't starve without energy imports.

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Do none of you know anything about history?

In a global conflict, private shipping companies are appropriated for war efforts. If the things we produce are scarce, and in high demand (compared to say, nice sunnies or a disposable kids toy), then shipping becomes prioritized for those in demand goods. And the supplies to produce them.....

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"Do none of you know anything about history?"

Clearly more than you as the paragraph following that pompous ad hominem is just nonsense. Good luck trying to 'appropriate' private ships that are 'owned' by neutral countries. There's are many reasons why so many ships are under a 'flag of convenience' and global conflict is one. They, like most things in war, will get used by the highest bidder.

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So in another global conflict, there definitely wouldn't be a merchant navy?

Good to know.

Where do all the private ships get their fuel from in a time of war? Who guarantees their security? Can they just dock at all the same places they could in peacetime? How would the submarines distinguish them from an allied transporter? How easily can they perform maintenance if supplies and parts are prioritized for military use?

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Golly. So many questions from someone who claims to be an expert on history.

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It's a list of things it sounds like you didn't consider into your reasoning.

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A global conflict won’t be anything like the past. If its global then its probably nuclear and all bets are off.

Very unlikely to be a global conflict.

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If it's nuclear this discussion is totally moot.

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Yes, it was moot from the start. As there won’t be a global conflict. Could be some nasty regional ones though. They will only go global if they go nuclear

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Agreed. A couple of subs parked offshore would cripple NZ within a few days. We'd not even get to 21 days.

There's 1/4 the amount of submarines today than there was during WW2.

It takes a decade to build a modern military submarine. In the 40s it was half a year.

International freight tonnage is exponentially greater than the 40s. The allies lost around 1,600 merchant vessels, yet managed to survive for years. Things get through.

NZ isn't likely to be a contested space worthy of much submarine attention. Although many of our trading partners will be. 

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I was thinking just a couple of 1940s subs is all that would be required. ;-)

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If they managed to get that far, undetected and unmolested, and managed to evade our ASW capabilities for long enough, they might be a nuisance.

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Might I respectfully suggest you do a bit of study on submarine warfare? WW2 tech with some cheap upgrades still works well today. Lookup Gotland.

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Might I respectfully suggest you do a bit of study on submarine warfare?

Diesel submarines are range limited compared to a nuclear submarine. To support a protracted diesel submarine campaign against New Zealand, you would need some form of supply source nearby, undetected.

In a global conflict, with more valuable targets and enemies in Asia, the Americas, The Middle East, and Europe, and a limited number of submarines worldwide, perhaps you can enlighten me what would make NZ a significant enough target for an enemy to expend the resources on us, instead of almost anywhere else.

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No braincells were troubled in coming up with that comment.

This is an unnecessary comment from you. I can't accurately predict how another global conflict is going to play out, but I do have a formal education in this, and have accessed memory in my brain to relate how things have played out several times in the past and tried to relate it to the world in 2024.

The braincells you have accessed to write such a response aren't in the spirit of open discourse and understanding. 

For one, we're exponentially more dependent on energy-intensive imported consumption

What do you think happens to discretionary consumption in a time of serious protracted war? 

The nature of our economy would shift substantially. Much of the activities we take for granted would cease. Our labour pool would shift from being one based around consumerism to wartime production.

Things would get expensive, but we'd need far less of them.

Back in the 1940s, the US and British Empire were a lot more dominant in global trade and controlled the majority of oil and industrial production, so we were on the right side of the global conflict. Not even close to that being the case anymore.

The number of mouths of our allies has increased exponentially since WW2.

At no point am I saying such a scenario wouldn't be fraught by many issues. But on balance of things, a remote industrialized nation is at a decent production advantage in the time of a war ravaged world.

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You know it's not the 1940s anymore? 2025 is calling.

The world is exponentially different to the 1940s and comparisons between what NZ did 60+ years ago, and what we could do now, are loaded with historical baggage that simply doesn't apply to today's NZ.

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- Recently developed Asian superpower. Dependent on external resources for continuity. Getting pushback from the current hegemon

- authoritarian European regime undertaking land grab, gets bogged down

- trouble in the middle east threatening fuel security

Certainly rhymes a bit. And the physical geography of the world hasn't altered much in 80 years.

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The world isn't that much different to the 1940's. Sure we've got a lot more technology but humanity appears much less capable. And our politicians and "leaders" even less so.

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It's so quaint that you class NZ as "a remote industrialized nation".

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It's the most apt description.

Sounds like you're a sole trader, or some sort of limited partnership. I'd still call you a business, but obviously you're no magnificent 7.

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Not so sure were there another large global conflict - as I don't think we would emerge as a sovereign nation. 

I recall a Canadian uncle of mine who worked for Caterpillar internationally his entire life/career (i.e., big infrastructure sales deals in just about every country on the globe), telling me before I got married and moved down here that NZ was just two big farms - one north and one south.  Being a girl from Chicago - he thought I was nuts :-). 

He did visit once I got here, and golfed his way around the country. He was very pleasantly impressed in that regard. And, he particularly enjoyed the small country courses where you had to shoo the sheep off the greens - lol.  And he was immensely impressed with the fact he could book a flight on our domestic carrier airline, NAC in those days, to the Marlborough Sounds and land on a grassy paddock, where the pilot had to "buzz" the sheep off the runway before landing.  

His point was, we don't manufacture anything of substance - we have nothing to offer others/other than animal produce and a quaint society within a stunning landscape.  And any aspirations we had beyond that would never materialize, but - he added - "the world will always need to eat".

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It was mentioned recently that NZ had sent more rockets into space last year than Russia. Your uncle was wrong. New Zealand has possibilities not glimpsed by many of it's conservative citizens.

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Yes, that's an amazing exception, for sure.  Real tech/industrial innovation that is location-dependent (i.e., deep south hemisphere airspace for launches).

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"We're a million miles from being able to function economically without trade."

That is true of most economies.....there is probably not a single nation state that can provide all that it needs/wants onshore....it is also not the implication of the phrase 'export orientated'

Roughly one quarter of our GDP is derived from exports. You may also wish to revisit the BoT position around WW2....it wasnt that flash and we wernt 'saved' by booming exports.

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I read this and question whether I am making the right call to move to a more aggressive Kiwisaver fund. Everyone tells me ‘in the long run you will be significantly better off’ but does that apply in this new global order, that is very different to the relative stability of 1990-2020?

Or am I being paranoid?

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Damien Grant has a gloomy perspective on the changing world order 

https://www.stuff.co.nz/politics/360459648/damien-grant-circus-american…

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HouseMouse, it depends on whether you're currently satisfied with your lot or you are not. I can imagine if/when it all turns to custard some will regret having lost a lot and others grateful they still have their lot. 

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I'm 70+ and have around 10% of my investment assets in a fairly aggressive fund. House I live in excluded. Depends on your risk appetite. Only regret i have is not investing five or so years ago in US Defence industry. Someone always makes money with the likely prospects of war and even during war. Might be a bit late to buy some of the yellow hard stuff.

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I thought the same thing about Covid, but boy was I wrong!

There have always been wars possible, even between 1990-2020 there were conflicts, just none of them really took off (which may be the case going forward too). Its hard to know what to do really, and would a conservative fund be much safer. 

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Yeah you are probably right

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"You pays your money and takes your choice."

Right now stocks have very high price to earnings valuations. Not something I am comfortable with.

However  there are all sorts of factors at play including the inflow of Kiwisaver money such as yours and the advent of Sharsies. 

These did not used to happen. ie Due to these, there has been a step up in investment in such products.

I'm an old fart and favour the kiwisaver cash fund, term deposits and kiwi bonds. Namely nothing close to a get rich quick scheme.

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I'd say go aggressive.  I think you've got another 2 years of relatively low-risk, higher gains.

Note: totally unqualified opinion :-) just a gut guess.

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NZ increases defence spend to prepare a war with China.

that sounds crazy.

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It could be considered somewhat futile

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...or for our own security it will be considered that we're playing our part. It now looks like our already debt ridden country doesn't have a choice. 

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Similar to climate change efforts I guess. Negligible impact, but a commitment to the greater cause

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= virtue signalling 

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I think joining NATO is futile. If NZ were under direct military attack, things are so bad globally no one's coming to help us. So it'd be somewhat of a one way street, as we'd be compelled to give our resources to a more likely attack on another NATO country.

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I agree. Why should we expect the US to help us out if we don't spend any of our own money on military. 

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In the long term China would love to have ownership of NZ due to our proximity to Antarctica.

Plus we should align ourselves with Oz as much as possible to present an equally ominous foe so that we don't get targeted.

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In the event of another global or significant Asia/Oceania regional conflict it's possible to envisage a point at which NZ applies to join the Australian Federation

COMMONWEALTH OF AUSTRALIA CONSTITUTION ACT - CLAUSE 6 Definitions.

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Why would Antarctica be a prize?

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End stages of oil there’s bound to be plentiful under the landmass there

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Resources

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Indeed it does sound crazy - and if instead we decided to declare ourselves pacifist/neutral, non-aligned - we still need more military spend, but it would be an offence force.(i.e., proactive protection/patrol of our EEZ from international pilferers and cheats) as opposed to a defense force (i.e., armament escalation).

 

 

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Good article - glad the new Government is proactively thinking about this. Is the globe moving away from free trade/globalization and into a more protectionist posture?

I didn't know China had test fired a, intercontinental ballistic missile into the "nuclear-free Pacific zone ", but then neither did I know there was a "nuclear-free Pacific zone".  Had to look it up - didn't know a treaty had been signed some time ago;

https://teara.govt.nz/en/map/32709/south-pacific-nuclear-free-zone-trea…

One would have thought that missile landing in our back yard would have been headline news here - maybe it was and I just missed it.

It's been quite some time since we've considered ourselves a 'notional' pacifist nation.  Peters is right, we can't have our cake and eat it too.

Personally, I'd go for making our pacifism more deliberate/stated - and prepare for self-sufficiency in our isolation - but yeah, that's a bit of a utopian view. One thing for sure, our lifestyles and our economy is geared toward being an export nation without looking more seriously at those imports we are absolutely dependent on. Our balance of trade is likely to deteriorate much, much further given the way the world looks to be going - any responsible government would be talking about and planning for this tenuous, developing situation.

A very difficult question these days - but if the world gets divided up as in the game of Risk - which authoritarian regime would we prefer to be a vassal- state of?  That is the crux of the question.

 

 

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Headline news? Yeah, nah. Our media have more trivial things to occupy their minds and the masses hungry for trivial and brain-dead content 

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So you didn't see any news about it either!?? 

Yes, I get and agree with your sarcasm - I did however read a lengthy article in the Herald about Luxon's wife's Samoan market shopping purchases, though.  Most interesting - the most expensive thing she walked away with was a beautiful wooden carving gift, given to her by one of the local stall holders who was just so honored that she (driven to the market via limo with a security detail) took the time out to do some shopping.  In other words, because she bought trinkets - she was given an absolute treasure of a piece of artwork/craftmanship.  The irony was not lost on me. Well worth a read - lol.

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Yes I did see news about it. I follow international news more than NZ. There was plenty of coverage of it internationally.

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Wow - interesting. Doesn't say much for TVNZ's One News and our local (on-line) print media.  Might need to switch back to Al-jezzera :-).  Unfortunately, have been binging on the US election and all the trials that (annoyingly and astonishingly) haven't progressed.  .  

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I find Japan Times good for Asia Pacific. Although not perfect, I generally find BBC, The Guardian, CNN and Al J collectively good sources. I must look at Singapore’s, having visited the city state several times I always found their rag to be very good

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It's the Kiwi way of Life that Judith Collins grew up in that's at stake! Those halcyon times when a family aspired to a home on a 1/4 acre block in the new, relatively close-to-the-CBD suburbs. And what does that Way of Life on 1/4 of an acre look like today?

"The building is on a parcel of land just under a quarter acre.....a resource consent variation had been loaded to include a further 13 ground-floor units alongside the 22 apartments already under construction in the building."

https://tinyurl.com/37pht9n5

Just a tad different.

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Switzerland has mountains. NZ has oceans. We have no need to pick sides.

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I think we know that the days of natural defence are long behind us. Neville Shute might have been closer to the mark with "On the Beach"

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For conventional warfare it still stands. Projecting power, either naval or air, is extremely difficult even today. The bulk of Chinas fleet has a range of 1,000 miles. To get a significant amount of manpower this far would require substantial refuelling and supply resources China could struggle justifying.

In a Nuclear conflict, I recommend everyone watch the 80s film "Threads". There is no contingency to overcome that.

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Direct assault or invasion of NZ is a strawman argument against defence spending.  Disruption to trade via conflict in the wider region, attacks against allies and partners and blockades are much more probable threats.

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Yep, Threads was very, very worthwhile. On the Beach was good too (as end of the world romances go) but far less confronting than Threads.

   

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Unfortunately we probably do and in fact we probably already have because we are such an export driven economy. Guess what country is top of the list for our exports ?

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I think you mean import-driven. Our exports are mostly premium goods that make a rounding error of the imported food in China. Most will survive without shipments of butter, kiwifruit and high-quality cheese.

Our economy on the other hand will plunge back into the stone age without shipments of Chinese technological goods and Indian IT exports.

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Premium goods? Logs and milk powder are premium now?

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'the ‘Indo-Pacific’ — a triangle of territory which stretches from India in the west, to Japan in the east, and NZ in the south.'

A tortured triangle, the product of Pentagon imaginations. Shouldn't it be a quadrilateral including Diego Garcia? Or run it out to take in Djibouti.

And let's not leave out America's 51st state, Israel.

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Or is America a state of Israel?

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How does any strategist look at our position in a volatile world and decide that the answer is cosying up to the US, remaining totally reliant on imported fossil fuels, oh, and letting our most critical infrastructure assets fall to bits while we build roads to nowhere.

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Answer - there’s no strategists in the house!

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You don't think the answer is cosying up to the US? It certainly sounds like the best idea to me...

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We don't need to cosy up to anyone.

Many countries remained neutral in past global conflicts and continued to trade with whoever would buy their stuff at the best price. If the US or China didn't want us to trade with whomever the 'enemy' was they could simply buy all that we produced. And most likely, they'd need to, as their capital, both human and financial, would be directed at producing other stuff.

Sorry JJ, your thinking is a product of the old Great British Empire. (You know it no longer exists, right?)

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The US would hang us out to dry in minutes if we lost trade for siding with them - after leveraging our problems to get agreement to us being a base for their ships etc of course.

The obvious move here is neutrality, energy sovereignty, and making sure we stay present on the world stage pushing for a rules based order (which is disintegrating in front of us)

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There's not the technology available today to supplant our requirements for fossil fuels. We still need them, and the US would be the most reliable source. Getting them from Europe and the Middle East would be a shit show.

I guess maybe we could tow a harvester with a dozen Leafs.

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That comment is beneath you to be fair. We need to reduce our exposure to volatile fossil fuel prices and power games - that means increasing our energy sovereignty. Of course we will still need some.

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I'm largely talking about a wartime economy.

Although even if say, there was a limited conflict and oil went up 10 fold, the sorts of things we can do under renewables still pales to what we need fossil fuels for - medium and heavy industry, international and domestic freight, etc. The change to dynamics would be extreme.

Even Germany, a country with immensely more technological, financial, and political capability, is struggling to marry the large amount of renewables it has expended on into viable industrial output. The concept is all good, but it seems like we haven't actually developed the practical application in a meaningful way, industrially.

Do you know a way to tow a 10-20 tonne harvester for hours on end electrically that'd work here, and still be economically viable under current global trading conditions?

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If we were a functional society that planned for the future what would we do? My suggestions

1/ Put solar panels on every rooftop

2/ Build pumped hydro schemes for electricity storage

3/ Electrify as much infrastructure as possible

4/ Reinstate a refinery to process the diesel and heavy equipment fuels we need

5/ Encourage offshore oil and gas exploration

6/ Get into drone production - do joint ventures with the Ukrainians

7 /Invest in a joint venture company with Dawn aerospace to strap missile launchers to their edge of space craft and use these craft as the basis for a defense aeroforce.

8/ Subsidise local ammunition production and start missile development projects

9/ Re-establish NZ owned merchant vessels using some of the new Solar/Wind assisted vessels now available.

10/ Re-establish a state loans and credit institution

Energy self reliance and a deterrence force that uses our distance from other countries to our advantage is basically all that is needed. We have the resources, the brainpower and the capability. All that is needed is an intelligentsia with a bit of imagination and a political class with a bit of practical common sense. In the 1940's we actually, sort of had those qualities in our leadership at the time.

 

Russia is giving North Korea the means to miniaturise nuclear devices for their rockets and this is very much an American own goal. Instead of supporting the Ukrainians and finishing off Putins fantasies of ever expanding empire the US decided to dick around. Now they are going to get more than they bargained on.

In a small scale tactical nuclear war it's more about where the wind is blowing and whether you live in the Northern or Southern hemisphere.

We probably have as much to fear from refugees trying to escape the fallout as the Chinese incrementally expanding their empire.

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An advanced functional species would have the knowledge and awareness to evolve past war, and our current economic and financial thinking.

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Impressive thoughtfulness.  Refreshing bigger picture stuff.

So, if I get it right - you propose two key flanks: increase energy independence and upscale expenditure in small (inexpensive), but smart. local, near-shore and border-defense technologies?

 

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Wow Mr Orr a DGMer

Ukraine a mess, Iran under attack, messy middle east

China has a limited window to start up something...

 

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I think there’s a reasonable chance that Ukraine will be settled if Trump wins. Give Russia the parts of Ukraine it currently controls. Not sure if that is the best outcome, as it rewards an aggressor, yet at least lives would stop being lost?  (in the short term at least)

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There'd have to be fairly robust security agreements, and Russia is probably still going to be highly resistant to them.

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Are you on drugs?

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Such an intelligent response. Would you care to elaborate?

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The NATO countries - and most in the Euro zone - are extremely unlikely to agree to any 'settlement' that leaves Ukraine out of NATO. Meanwhile, Pootin is extremely unlikely to agree to any settlement where Ukraine is in NATO as it'd be a massive 'fail' given that was his pretense for invading. Thus Trump really doesn't have the bargaining chips many 'Mericans believe he does as even 'Merica pulling itself from NATO won't make much difference. Much like the cold war ... It's far easier to wait for another of Russia's economic implosions and/or a 2nd Perestroika.

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They could have a binding security agreements/non-aggression pact. So like a compromised, psuedo-NATO like agreement.

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Yeah, that’s what I am essentially alluding to below

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You mean like the ones Ukraine had prior to being invaded, first by stealth, then in 2014 (annexation of Crimea), and finally in 2022 ? Think that'll work a second, third, etc. time? (The full history here.)

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Thanks for an actual reply rather than xxxx. And for Frank’s benefit, what I said has been speculated on by some credible commentators.

All Fair points. Yet I still think there’s a possibility that Europe will cede without Ukraine NATO membership.

There’s no good options. I can’t see necessarily why ceding a little bit of Ukraine for the sake of peace is worse than others. It’s obviously far from perfect.

Russia’s enemies can make it clear that any further invasion of Ukraine territory will not be tolerable, even without NATO membership.

If a Trump led government pulls back military aid massively, might not the ultimate result be far worse eg. The whole of Ukraine captured and controlled by Russia.

If the status quo continues, it could be years of fighting, hundreds of thousands more lives lost, and still no resolution 

 

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The end will be reach via some form of diplomacy. It's just hard to tell when and why, which will dictate much of the leverage either side can bring to the table.

If I were taking a blind punt, 18-24 months. Mostly on what I am led to believe about the changing nature's of either sides ability to wage war. Russia has depleted vast amounts of it's Soviet surplus, and has to source hardware from allies with even more antiquated militaries. While at the same time, Ukraine is modernizing its own military (albeit slowly) using more advanced hardware (still not cutting edge, but decades newer) from a larger pool of allies.

But way too many variables, fog of war, etc.

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You mean like the 'agreements' Ukraine had prior to being invaded, first by stealth, then in 2014 (annexation of Crimea), and finally in 2022 ? Think that'll work a second, third, etc. time? (The full history here.)

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It’s a fair point of course. But what’s the alternative? Do you have a suggestion? 

I think I will conclude (before heading to the football) with what is a lame, yet true, conclusion - it’s a wicked problem

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Like I said ... Cold War, take 2. Russia's economy will implode. Only this time, China will be vying with the rest of the world to pick up the pieces.

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Ukraine was never actually ever going to get into NATO in the first place. Zelensky is an idiot in believing the USA would ever let them in, the USA was just shit stirring and they just cannot stop poking the bear. If Trump gets in the war will end, not because he is a great negotiator its because he will cut the proxy war funding and the Ukraine will fall on their face.

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The bear is weak and getting weaker. You need to keep up with non-Kremlin news. They're in real trouble. The outcome is assured no matter how much Pootin pretends he's creating a new world order with BRICS.

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Wrong as long as they have untold gas they are sweet. The western media has just as much propaganda as rest of them, brainwashing you to always believe there is an "Enemy". BRICS will just go from strength to strength, it will take time maybe another 5 years. The USA will get more and more aggressive trying to hold onto ultimate control, they are the ones in serious trouble and its starting to show in areas they cannot hide like 10% of the Boeing workforce being laid off.

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Wrong as long as they have untold gas they are sweet.

The likes of Venezuela and Iran would disagree.

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The USA tried to hobble Russia by blowing up the gas pipeline. A second line was going in and the income stream was literally millions of dollars a day. Due to their geographical location they just now sell it elsewhere. I really wouldn't go comparing Russia to Venezuela, they are in a growing number of failed states.

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Which is what Russia becomes if it's down to solely living off oil.

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Nope, not in that part of the world. China and India are just screaming for energy and Russia is selling it to them, they cannot fail. Russia is pretty corrupt but not as corrupt as Venezuela. The USA is surrounded by countries in even more trouble than they are and hence the mass illegal migration problem. I mean if you wanted to solve the Gaza war and screw Iran at the same time you would dump all 2 million from Gaza including all the Hamas fighters including their weapons into Tehran and then we will see how much the Iranian's really love and support them.

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Nope, not in that part of the world.

In any part of the world where a nation wants to become a pariah oil state.

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It looks like a Trump win could be on the cards, as Harris is getting desperate,  pulling in Michelle Obama and Beyonce to help her out.

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Trump on Rogan was great, now Harris your turn?

 

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One candidate dodges bullets.

The other dodges questions. 

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You missed and one dodges debates

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Kamala on Rogan would deserve some salted butterscotch popcorn. Sadly though the Dem’s won’t allow her near that podcast..  

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Did you manage to get through all three hours?  I watched it live (I think) and did 2.5 hours (by which time it was 12.30am here) and just had to give up.  It was like having a fireside chat with your grandfather telling you the same stories you'd heard time and time again.  For example, he spent nearly 15 minutes describing in detail Musk's amazing 'catch' of that returning rocket hardware - step-by-step visual description of it... and of course, most listening would have seen it for themselves in a 2 minute news clip - lol.

And I had to laugh at what handsome - "fine specimens of men" - the two pilots that flew him into Bagram were; "better looking than Tom Cruise". Hahahaha. Having just followed on from his fascination with Arnold Palmer's penis the day before... hmmm. Weird.

And then there was the Lincoln bedroom - what was that around 45 minutes of blathering on about how 'overwhelmed' he was with that? - and that was his response to the first interview question (and it had nothing to do with - what did you think about the White House as a house!).  Rogan wanted to know how different he found government management vs private sector management - and was trying to get at 'why was your first 6 months so chaotic with executive members of your own team coming at going at such a great pace of turnover'?  In other words, why did you hire so many "wrong" people for the jobs?

And then we had an hour on MMA adoration and history.

It was a really worthwhile fireside chat if you have the time and mental patience to stick with it for three hours.  

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Two months ago I was picking an easy Harris win, now its just too close to call. I have a bad feeling that Trump could get back in but it all depends on who's spin you choose to believe. The Americans are getting ever more desperate and as Trump was better for the economy he may have the edge. Basically the second Biden took over it all pretty much turned to shit from the get go as Trump left behind the Covid mess and that impossibly stupid Afghanistan timeline withdrawal.

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Trump is very cunning, getting the Arab vote, and chatting with Joe Rogan (who has millions of followers).

He does say some bizarre things though, like the US could increase tariffs on imports, and using the tariff money, they can do away with income tax!

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It would appear that the USA has more laws than anyone else in the world but you can get on TV and tell as many lies as you want. I guess so many Americans are so stupid they actually believe him. I guess the best we can hope for is that Trump is now so mentally impaired he forgets where he put the nuclear launch codes.

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It's not "so stupid they believe him" but rather it is "so indoctrinated".  MAGA is a cult - in every historical sense of the word - they are blind followers. MAGAs don't believe their own eyes and ears.  He should have to give the GOP their name back, because MAGA is not the GOP.

Rupert Murdoch is the enemy from within. Without Fox doing the indoctrination day-in-day-out - he'd never even have got the nomination again. 

If Kamala wins it will be on the coat tails of the disaffected GOP (non-MAGA) members.

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Easily indoctrinated = stupid, in my books

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Yes the two just go together. Smart people can think for themselves, problem solve and think outside the box when required.

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Yet we've had these geopolitical risks since the end of the Cold War with mini wars since.

This is more fear mongering and existing institutions of power trying to maintain their control.

The big winners in all of it will be the financial institutions. 

Maybe Orr knows the financial stability narrative is BS, he just can't openly admit it.

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Yup. I'd agree.

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Sounds like you have no idea what is unfolding out there. We haven't had tensions like this since World war 2. 

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Or the Cold war at the very least. 

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Total fear mongering from the USA by the media, its all a result of them losing power and trying to turn China into the enemy. Fear is the best emotion to use to control people, its worked for thousands of years and religions are based on it.

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What exactly is unfolding out there? It's all misinformation, lies and half truths. Nobody knows what is unfolding, it's all mass speculation.

The economic and financial system is broken. Globalisation/colonisation has not led us to utopia as the masses were led to believe. We're the wealthiest we've ever been in history and the poorest.

Constant middle east conflict since the end of the Cold War and most of it from US foreign policy. But don't question the Israel conflict because of thousands of years of religious BS.

So no-one learned from any of our history hence we're repeating it. Any tension is being cleverly crafted.

It's all ego issues. Maybe the simplest solution would be an MMA ring for all the ruling elite and world leaders to sort it out. Or send them all into a room with a measuring tape and biggest dick wins.

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So no-one learned from any of our history hence we're repeating it. Any tension is being cleverly crafted.

Any time I hear people talking about political injustice over minor domestic policy, I remind myself the larger global players accept in cohesion that it's acceptable to wield the ability to destroy much of life on earth in short order.

Does deterrence work indefinitely? Maybe, until someone gets desperate, dysfunctional, or fanatical enough.

It's still caveman stuff out there, just with pointier rocks and sticks.

It's all ego issues. Maybe the simplest solution would be an MMA ring for all the ruling elite and world leaders to sort it out. Or send them all into a room with a measuring tape and biggest dick wins.

That wouldn't resolve the ego problem. There's faster ways and shorter ways, although it's also not something you can foist on another.

It seems like we need leadership, but the problem is that modern politics lends itself strongly towards attracting the wrong sort of people, on either side of the political spectrum. How can that be reasonably overcome? I don't honestly know. Some sort of psychological vetting for candidates? Raise better people?

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World war 3 is just a matter of time. 

This or next decade for sure!

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I wouldn't be so sure. Expect the 21st century will ultimately belong to China though. Go to Niue to see how they can take over a country without firing a shot.

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Yeah. Why would china actually start a fight.

They simply need to sit back.. encourage the USA to continue to build an unsustainable debt pile and elect fools, keep building their own armed forces and extend their economic control over smaller nations.

The US will crumble under its own debt over 15 to 30 years and gradually lose its power geopolitical and economically and we will wake up dependent on China who will buy up cheap western assets.

It's a much better strategy as they won't need to pay to rebuild the west's infrastructure (like after a war) and will retain all the working age men to work for them.

War is old skool

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We are not able to build new hospitals fit for purpose why bother defending the country. We already spend more on prisons than the Army. Not sure what the Navy is doing now, last time I looked they had not done a single non compliant boarding. As for the "The New Zealand War Party of the Sky" they at least have the capability to hunt and kill a sub, just not sure our government would authorise it.

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