Last Updated: Nov 19th, 2009 - 11:07:39 Newsletters : 2008 Newsletters : 11 July 2008 Thought for the Day In Wednesday's DomPost I read an article entitled, "Time To Change Interest Policy" - Reserve Bank needs to focus on targets other than inflation. The Authors, Kel Sanderson and Ganesh Nana of Business and Economic Research Ltd (BERL), are proposing to change the law so that the Reserve Bank is able to focus on more than inflation. They are not very specific but think that exports, employment and the trade deficit also need controlling. They are encouraged that Trevor Mallard and Winston Peters are willing to "look at changing the Reserve Bank Act." They do not explain how changing the Act would work to control these other things. They do not show that the Reserve Bank can actually achieve the stated aims. They seem to be flying a rather ugly kite on behalf of the politicians who think that more control is the answer when we have already seen that it is the problem. I call upon the politicians or the economists above to show how this proposal would work in running the economy better. I doubt that they can. Jul 10, 2008, 18:43 Newsletters : 2008 Newsletters : 11 July 2008 Corporate Taxes Suffocate Growth Now that we are dragging the chain with growth of -0.3%, perhaps we will get more government focus on just exactly what does contribute to growth. The case for cutting taxes is quite clear as this article explains. A full blown recession may help to concentrate political minds. Will Dr. Cullen's efforts be enough? [ Visit Website ] Jul 10, 2008, 18:37 Newsletters : 2008 Newsletters : 11 July 2008 Vietnam Real Estate Trade Sees Some Shift To Gold Vietnam has certainly been through interesting(!) times. This is perhaps the reason they do not hold much faith in paper money and some are using gold as money. The American FBI recently confiscated the gold and silver of a dealer who was minting silver tokens - coins - and encouraging people to use them as money. This is strange when the constitution specifically requires money to be only in the form of gold or silver! Anyway, here's an article about the happenings in Vietnam. Jul 9, 2008, 13:57 Newsletters : 2008 Newsletters : 11 July 2008 TIPS Flunk Inflation Test As Fuel, Food Overtake CPI One of the problems of paper money is that its value is uncertain. As the governments print more and more around the world so inflation rises and rises. Actually these days they just change a few numbers in their Treasury and Central Bank computers and lo' and behold - money from money heaven! But serious investors are becoming concerned. The value of money is declining and the statistics used to adjust for this inflation are being jiggered to suit government policy more than to reflect reality. Now some major money investors in the USA are starting to make noises and to shift money out of government "inflation proofed" securities. Our government uses the CPI as a measure of inflation to compensate us for New Zealand's inflation rate. Can this possibly be a true measure of inflation? If the money supply is increasing by 10% while productivity and immigration are each increasing by 0.5% then surely inflation is going up by 9%? Or something close to that? Managers charged with investing serious billions in fixed interest securities are also looking at this question and moving their money accordingly. Wouldn't you? Jul 9, 2008, 11:34 Newsletters : 2008 Newsletters : 11 July 2008 The Buck Doesn't Stop Here; It Just Keeps Falling Oil, suggests influential energy consultant Daniel Yergin, is "the new gold." Money is not retaining its value anymore. Here is a view from State-side. Jul 8, 2008, 15:46 Newsletters : 2008 Newsletters : 11 July 2008 Beyond Brain Drain New Zealand is experiencing a brain drain of alarming proportions. The last time we suffered this problem was when Muldoon was in charge and he famously remarked that this was increasing the IQ in Australia as well as New Zealand. The fact that he was plain wrong was forgotten. But this is an increasingly globalised world and people are welcome in many places across the globe and some of these are more attractive than Aotearoa. Also, for some countries, the amount of cash sent home to families from relatives overseas represents a significant proportion of external trade. Manpower has recently made a survey of this phenomenon with interesting results. Are nations states becoming less relevant as people and money become more mobile? Will people continue to gravitate towards higher paying jobs and lower taxes? - You bet! Jun 26, 2008, 12:14 Newsletters : 2008 Newsletters : 11 July 2008 Quote for the Week “Economic initiative cannot be left to the arbitrary decisions of private, individual interest. Open competition, if not wisely directed and restricted, actually destroys wealth instead of creating it... The proper function of the State in the Fascist system is that of supervising, regulating and arbitrating the relationships of capital and labour, employers and employees, individuals and associations, private interests and national interests... More important than the production of wealth is its right distribution, distribution which must benefit in the best possible way all the classes of the nation, hence, the nation itself. Private wealth belongs not only to the individual, but, in a symbolic sense, to the State as well." Mario Palmieri, The Philosophy of Fascism, 1936 Jun 20, 2008, 18:57