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| Last Updated: Aug 15th, 2008 - 11:26:43 |
Newsletters
:
2008 Newsletters
:
1 February 2008
Thought for the Day.
For the past six decades New Zealand has been on a downwards spiral - apart from a surge in the late 1990s due to the Roger Douglas reforms.
Labour has dropped us two more places down the OECD Income per Capita table. We join Turkey, Mexico and a few old communist countries.
The many articles contained in this web site tell a consistent story. Economic success is dependent on the entreprenuers and businesses within a society. The private sector produces jobs and increases capital which can then be used to expand these enterprises. Government can only tax more or less. Government takes a proportion of the capital generated by private enterprise and spends it more or less wisely. This slows down the process of capital formation and hence lowers the number of productive jobs generated.
To become a wealthy nation again we need to have less government, and our entrepreurs need to be left alone to just do what they do best - generate more capital and jobs.
Unfortunately our politicians are under the delusion that they are responsible for the economy and that they can swing on the levers of power and make us better off. They continually prove that they can only make things worse by their interference.
On top of this they control the money supply. It is pretty clear now that the bulk of the population understands that elections are now somewhat akin to the old fashioned lolly scramble (outlawed by Nanny State as being dangerous to kids) and that the idea is to vote for the party that promises you the most money. So last time Labour squeaked in by buying the student vote with loans of free money.
And, as we have discovered, the government has access to free money. This is money that has not been earned. It is money that is printed on paper or added to electronic accounts in the Reserve Bank. The Roman's "bread and circuses" were nothing compared with this scheme.
Unfortunately there is a down-side. Printing free paper money dilutes the value of money in the country and lowers its price. So it now takes more of these paper dollars to buy real things like houses. And an increasing proportion of the population cannot afford to buy a home for themselves anymore.
Oh well, never mind, we can always print some more money and the government can promise to build some "free" houses for those who will vote them into power.
Jan 31, 2008, 12:00
Newsletters
:
2008 Newsletters
:
1 February 2008
Index of Economic Freedom
We are now at number six in the world. Not too bad but the trend is down. The problem? Too much government!
Read the full report at this website:
[ Visit Website ]
Jan 31, 2008, 11:56
Newsletters
:
2008 Newsletters
:
1 February 2008
Anybody Seen Our Gold?
Politicians, Central Bankers, Bullion Banks, Commercial Banks and a vast array of Money Products Purveyors have succeeded in expanding the world money supply further than ever before. Money now involved in Credit Derivatives amounts to $US512 Trillion. How will this unwind? Will it form another "Credit Crunch"?
Without sound money the world is awash in a sea of paper. Some individuals have banded together and spent $250,000 putting this advertisement into the Wall Street Journal in an effort to bring the Bankers and Politicians to their senses.
We are in the middle of an interesting world event. Good Luck!
[ Visit Website ]
Jan 31, 2008, 11:36
Newsletters
:
2008 Newsletters
:
1 February 2008
A Creditors' Protection Bill.
Governments around the world are inflating their currencies by 10% to 15% per annum. Some are even higher - China being 20% and Russia is 50%. No matter how sophisticated the calculations around the Consumer Price Index and Government assertions that inflation is being held at 2% or 3% we can see from our personal experiences that inflation is much higher.
The first house I bought in Wellington was a modest 3 bedroom newish home in Wilton - a sort of average suburb. I paid $14,000 for this humble abode in 1971. 35 years later in 2006 it was valued by Quotable Value at $350,000. That is a rise in price of 10% per annum compounded. Inflation in New Zealand over the last 35 years has been 10% every year. Not 2% as the governments have so convincingly explained. This period includes time of very high inflation and also periods of recession.
If you want to know what the true rate of inflation is then look at how the government is inflating the money supply - particularly the M3 measure which includes most ways that the banking system can hold money. Cash is only a small part of this.
The effect of this continual increase in money supply is an insidious development where everyone expects that it must continue for ever. One effect is that people learn that it pays to get into debt. The simple reason is that an inflation rate of 10% halves the value of your money in 7 years. So $10,000 borrowed now will feel like only $5000 in 7 yrs time. Good for the borrower but bad for the lender.
Just think about the lender. The money he lends you to buy a house now will only buy half a house in 7 years. More fool him!
Being a borrower is good while the inflation is roaring away. However, in the periodic busts the opposite effect comes in to play. Your assets go down in price but the debts stay the same. Money to pay interest and repay the loan becomes harder to find - more expensive. Sometimes the asset becomes worth less than the loan against it.
This is the dangerous time.
Professor Reisman has some ideas on this question.
Jan 30, 2008, 11:44
Newsletters
:
2008 Newsletters
:
1 February 2008
Venezuela's New Bolívar
It is very instructive to watch other governments make wrong decisions and see the effects of their stupidity upon the poorer sections of their populations.
Mugabe is the current case in point showing how a socialist becomes a dictator and through ignorance destroys his country's economy. In order to keep going and pay his cronies he takes the simplistic action of just printing more money! Inflation roars away and the economy is destroyed.
The economist examines how the latest budding socialist, President Hugo Chávez of Venezuela, is slip-sliding down the slippery path to economic misery for the very people who think he is their saviour.
This couldn't possibly be happening to us, could it?
Jan 8, 2008, 10:38
Newsletters
:
2008 Newsletters
:
1 February 2008
'Spectacular Trial' Seen In Liberty Dollar Case.
The Chinese are worried about the weak US dollar. Recent estimates put their losses from the depreciating dollar on their $1.4 trillion reserves as $150 billion. Paper money is a problem and it is a problem that will just get worse.
Bernard von NotHaus has done things to raise awareness of this problem in the United States. For the last 10 years he has been minting and selling gold, silver and copper "coins" or tokens for trading with. This is his effort to show the benefits of a currency that will keep its value. (Kiwi Mint is doing the same thing!)
Unfortunately the land of the free and the brave does not seem to be so free any more and the FBI have decided that competing money is to be discouraged - even though the Constitution explicitly states that money shall be denominated only in Gold and Silver. The Constitution says this because they knew about the problems of paper money back in those days. They are now going to relive those experiences.
The FBI doesn't seem to give a Continental.
**** **** **** **** **** ****
From the Constitution of the United States, Section 10 - Powers prohibited of States:
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; ***make any Thing but gold and silver Coin a Tender in Payment of Debts***; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
Nov 21, 2007, 10:36
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