|Last Updated: Mar 25th, 2013 - 16:46:15
Thought for the Day
To obtain the highest sustainable growth rate we must have first rate infrastructure.
Is it true that Wellington has the bumpiest streets in the country?
Is it true that Wellington has bumpier streets than any other capital city?
Sep 1, 2006, 15:49
Global Financial Instability
Those of you who had shares in the late 1980s will know first hand about the effects of a "Bubble" in the economy. We have seen the bubble in "Web" technology during the 1990s in America come crashing down with the NASDAC dropping from 5000 to a bottom of around 1200. Now we are about to see the Housing Bubble in America cause more than a few financial problems for middle America.
This is nice to observe from a distance with perhaps a certain smug superiority but unfortunately when America "sneezes" the rest of the world "catches cold".
We have our own "Housing Bubble" here in New Zealand and at some stage it is going to deflate. Slowly or quickly is hard to say.
These inflationary bubbles are caused by the money controllers printing too much money. As Milton Friedman put it "inflation is always and everywhere a monetary phenomenon". Our money supply is increasing by about 8% each year which gives the government more money to spend without the pain of taxing us but unfortunately this extra money dilutes the value of existing money and so we get inflation and houses cost more. We are not getting richer - it is the money which is losing its value - the house still has the same value as before!
Countries all over the Western world are busily inflating their currencies trying to make their exchange rates cheap so they can export more goods and the world is now awash in paper money.
This leads to many problems and can be fatal to economies.
Such actions do not produce sustainable growth - they produce bubbles. The attached article examines some of these effects.
Aug 29, 2006, 10:17
In the previous article I used the term "sustainable growth" to mean a growth rate that we could achieve year after year and which is big enough to take us back up to our rightful position of third in the world wide wealth stakes. This seems to me to be a valid and useful use of the term "sustainable".
In contrast, the aging socialists of the United Nations use the term sustainable in a twisted way which helps them get control over our actions.
Socialists continually twist the meaning of words and use them to pervert meaning. In this way they grab control of the political agenda and most people do not even realise that this is happening.
Socialists have commandeered the word "liberal" for themselves and their ideals. People think that they mean open minded and freedom of action by this term but the socialists really mean the same old claptrap as before: "from each according to ability, to each according to need" which produces the old communist countries with command and control economies slowly losing their wealth and ending up poverty stricken.
However, for-warned is for-armed.
A wealthy economy is only attained and maintained by economic growth.
Aug 28, 2006, 19:20