Last Updated: May 14th, 2010 - 14:57:13 Newsletters : 2010 Newsletters : 12 March 2010 Thought for the Day The world wide paper money game roars on unabated. How is it possible for a small country (New Zealand) to thrive and prosper or even survive in such an uncertain world? We search for an answer but we are not certain of finding one. If we look at our Reserve Bank statistics (on our website) we see that our M3 money supply has been booming ahead ever since they started to keep track of it. It seems that a modern economy can only keep going if we continually increase the money supply - and not by 2% or 3% but by 8%, 10% and even 15% and more. Once or twice in the last 20 years has the money supply dipped into the negative slightly (-0.1%) - until recently. At the end of November our money supply had gone negative by 1.8% pa, at the end of December it went down by 1.1% and at the end of January it was -4.5% year on year. This is unprecedented. What does it mean? I enquired of the Reserve Bank who responded in part, "The real sector driver of the slowing trend in broad money aggregates since late 2008 is one of slowing aggregate economic activity, broadly measured by GDP growth, and a correlation, often only weak in econometric analysis in New Zealand, is found over cycles in GDP growth in many economies." That is, slower economic growth causes the money supply to contract. But isn't it the absence of cash that causes businesses to slow down their activities? - Thus causing a diminution in GDP? Certainly Obama thinks so as he is solving the slower growth by printing and issuing trillions of dollars. I find this "chicken and egg thing" a little confusing and will try to find out how this happens. Wish me luck! Mar 12, 2010, 13:26 Newsletters : 2010 Newsletters : 12 March 2010 Alan Greenspan So, here is a video interview of the master. What has he got to say? [ Visit Website ] Mar 11, 2010, 18:26 Newsletters : 2010 Newsletters : 12 March 2010 Our world balances on a sea of debt The truth is slowly coming out and even top newspapers are starting to print it. [ Visit Website ] Mar 10, 2010, 17:23 Newsletters : 2010 Newsletters : 12 March 2010 Bailout Mutiny Looms With Iceland’s Taxpayer Vote This raises some very interesting points of principle. Why should ordinary citizens who are careful with their money end up paying for the problems created by greedy bankers and sloppy regulators? So far New Zealand seems to be escaping this problem. [ Visit Website ] Mar 10, 2010, 16:39 Newsletters : 2010 Newsletters : 12 March 2010 Fed Audit Bitterly Opposed by Treasury A fascinating fight in the highest of circles. Will the people win? This from The Huffington Post: *** *** *** The Treasury Department is vigorously opposed to a House-passed measure that would open the Federal Reserve to an audit by the Government Accountability Office (GAO), a senior Treasury official said Monday. Instead, the official said, the Treasury prefers a substitute offered by Rep. Mel Watt, D-N.C., and would like to see it enacted as part of the Senate bill. The Watt measure, however, while claiming to increase transparency, actually puts new restrictions on the GAO's ability to perform an audit. Treasury Secretary Tim Geithner, Assistant Treasury Secretary Alan Krueger, and Gene Sperling, a counselor to the secretary, held a briefing Monday with new media reporters and financial bloggers during which they discussed the Fed audit and other topics. Under the briefing's ground rules, the officials could be paraphrased but not quoted, and the paraphrase could not be connected to a specific official. HuffPost reporter Sam Stein lodged what he called a "formal complaint" against the ground rules. The complaint was noted and the briefing began. Asked whether he supports the House-passed measure to open the Fed to an audit, which was cosponsored by Reps. Alan Grayson, D-Fla., and Ron Paul, R-Texas, a senior Treasury official said he is intensely opposed to it. The official said the measure would undermine the independence of monetary policy and could restrict the ability of the Fed to act in times of crisis. He said that the GAO already has audit authority and that the chairman routinely testifies before Congress. He said he supports full disclosure when it comes to the scale of Fed lending and wouldn't draw a bright line around auditing certain activities, but wants to make sure the Fed maintained its independence. A lack of independence, he said, could lead to inflation and otherwise undermine progressive priorities. He said, however, that he would be supportive of efforts that would help the Fed earn back some of the credibility it has lost over the past few years. HuffPost asked if central bank liquidity swaps - foreign currency trades worth hundreds of billions of dollars - should be subject to an audit. The official said that the identity of the countries that received dollars was made public as was the amount each got. It worked well and was good policy, he said, and opening it to audit could undermine its future effectiveness. The purpose of the swaps, he said, was to make sure that foreign central banks had enough dollars to meet their obligations. The effort kept interest rates low, he said. A member of Congress, told of the unnamed Treasury official's comment, asked not to be named and said that Geithner, a former Fed president, should recuse himself from Fed audit legislation discussions, given that the audit would cover his own actions during the crisis. And Rep. Grayson said he finds Treasury's opposition to the audit troubling. "There is a growing feeling on the part of real Democrats that the president is getting bad advice from people who have sold out to Wall Street," Grayson said. "And opposing a measure that passed overwhelmingly in the House with bipartisan support at the [Financial Services] committee level, based up on legislation that now has 317 cosponsors in the House, shows that the president may be getting bad advice." The idea that the Fed's mission would be undermined by an audit, Grayson said, "is a scarecrow erected by people who want to cover up the actions of the Fed for their own purposes, including those who actually have worked at part of the Fed, to prevent accountability at any cost." Geithner served as president of the New York Fed during the financial crisis. "It's interesting that the Fed regards the simple fact that people find out what it does as somehow being unduly restrictive. We are a government of laws, not of men," Grayson said. "It's certainly no surprise that banking insiders at Treasury don't want transparency at the Fed," said Jesse Benton, a spokesman for Rep. Paul. "They are wrapped up in the central bank shenanagins too, and do not want their wheelings and dealings out in the open any more than Alan Greenspan or Ben Bernanke." *** *** *** Ryan Grim is senior congressional correspondent for The Huffington Post. Mar 10, 2010, 10:30 Newsletters : 2010 Newsletters : 12 March 2010 GATA Appeals to CFTC to Act Against Manipulative Shorts "GATA today delivered to the chairman of the U.S. Commodity Futures Trading Commission, Gary Gensler, a letter from GATA Chairman Bill Murphy, appealing to the CFTC to act against the concentrated and manipulative short positions in the precious metals markets. The commission is expected to hold a hearing this month on establishing position limits in those markets." George Soros claims that gold will be the "Ultimate Bubble". How interesting. Mar 9, 2010, 14:53 Newsletters : 2010 Newsletters : 12 March 2010 I, Pencil The classic story of economics. Note the part played by government! [ Visit Website ] Mar 9, 2010, 09:23 Newsletters : 2010 Newsletters : 12 March 2010 Lord Monckton Speaks Out Lord Monckton is a fabulous speaker who tells the truth like no other I know. He recently spoke to sell out audiences in Australia. What he has to say is the most important topic in the world today: Freedom. Without democratic freedom economic wealth is not possible yet there are major forces at work in the world today stifling debate about these subjects. Do you remember David Bellamy - that engaging biologist in BBC TV? He refused to toe the politically correct party line and has been refused any access to public broadcasting. Beware of when the politicians try to control our internet. Lord Monckton asserts that Obama has already tried. Amazing isn't it. This story is amazing. [ Visit Website ] Mar 6, 2010, 16:06 Newsletters : 2010 Newsletters : 12 March 2010 Detroit Homes Sell For $1 Amid Mortgage and Car Industry Crisis An English newspaper has a look at property in America. A Realty reality check! [ Visit Website ] Mar 5, 2010, 13:04 Newsletters : 2010 Newsletters : 12 March 2010 Some Thoughts on Supply-side Economics "There is no "socially desirable" level of work or of saving and investment other than what individuals freely choose as desirable. And unless the case for "supply-side" economic reform is modified to reflect an argument for individual freedom, it may very well serve as a means for even greater state control over the economy and not less." Governments in general aren't really interested in the well-being of the individual citizen. They are mainly interested in being in charge of things and increasing their power. It is just human nature. Nothing to worry about. It is just that they are having trouble understanding that when they increase taxes past a certain point their tax take reduces. One would think that they would make efforts to find out what tax rate would give them maximum return. The New Zealand tax department did employ an external consultant to determine just that number and the article is to be found on our web site. Perhaps the IRD could send you a copy! The result was somewhere between 15% and 25%. Precision is not possible. Maybe Sir Roger's 20% flat tax rate was right on the money after all. [ Visit Website ] Mar 4, 2010, 15:22 Newsletters : 2010 Newsletters : 12 March 2010 US Dollar Money Supply Is Underreported So what does hyperinflation look like? [ Visit Website ] Mar 4, 2010, 15:02 Newsletters : 2010 Newsletters : 12 March 2010 City of Angels on Brink of Abyss Well, the truth is out. When the bust is on the governments who promise to look after the poor just do not have the income to fulfill their promise. In fact they cannot even pay their workers and so they fire them and thus create a new raft of poor. Unless they can borrow or print money. Governments have resorted to the printing press or debiting and crediting accounts in the back of the computer which also creates money from nothing but cities and boroughs cannot do this. After a while they also cannot borrow.Our government is borrowing $240,000,000 per week and keeping the staff going. How are our local councils doing? We will find out in due course. Meanwhile the American cities are going broke. [ Visit Website ] Mar 4, 2010, 13:17 Newsletters : 2010 Newsletters : 12 March 2010 Gold Companies Impatient With Import Blocks Can you imagine why the Vietnamese government is having trouble with the importation of gold? [ Visit Website ] Mar 4, 2010, 12:54 Newsletters : 2010 Newsletters : 12 March 2010 Is The Recovery Real? The American recovery from the current financial bust is playing out for very high stakes indeed. There is a very good chance that America will not recover to any sufficient state to be able to promote the once almighty Yankee dollar as the world reserve currency. World leaders are already asking the question. The Chinese economy will become very large and dominant but would the world powers accept a currency run by a dictatorship? The Euro has inherent problems which are coming to the fore with the threatened separation of its member states due to the Greek financial problem (not to mention the other PIIGS). That leaves the IMF and the World Bank - controlled by the United Nations perhaps? Could Helen Clark and other UN leaders solve the world's money problems? Perhaps ordinary people will solve things for themselves by doing as the Vietnamese are doing - using REAL Money as illustrated when they buy houses for gold. They know the value of gold but are not sure about the government's money! Interesting that the Chinese are using TV advertising to persuade the people to purchase gold and silver. Why would a socialist state promote the use of REAL Money to its population? How inscrutable. [ Visit Website ] Mar 4, 2010, 11:57 Newsletters : 2010 Newsletters : 12 March 2010 Don't Bet on a Recovery America is the largest economy in the world and has been the driving force of world prosperity for as long as I have been alive. As the British Empire faded with WWII so the American Empire strode to world domination. But now, the American economy is faltering. They have been following the Keynesian theory of solving the bust after the boom. Japan tried this in 1990 and the government there pushed money into the economy and build huge concrete projects in an effort to get the boom back. What they have managed to achieve is a 20 year (so far) slow bust as the population tries to get out of debt and find a steady REAL job. (A REAL Job is one created by an employer who voluntarily pays an employee who agrees to accept the money. Both working to mutually acceptable conditions.) These REAL Jobs are different from government created jobs. REAL Jobs earn REAL money and profit for managers and owners. Government jobs take more money from taxpayers than is paid to the employees and profits don't even enter into the equation. REAL Jobs create wealth and government jobs destroy wealth. But all that aside this story is about America. If America follows the Japanese into a long slump then where goes the world? More important where goes New Zealand? Can we learn? Mar 4, 2010, 11:15 Newsletters : 2010 Newsletters : 12 March 2010 The Next Madoff Scandel Times 100? Gold and Silver are REAL Money. They are the original materials that have universally been used as money since time immemorial. One major reason for their use as money is that they retain their value. A value that derives from their scarcity. Paper money on the other hand is the opposite. Our governments are printing more and more paper money as pressure rises from the population of the nation states for a free living. This is the "bread and circuses" of that last great failing empire - Rome. If you want to know what the intrinsic value of paper money is then try and buy something with a $100 Trillion Zimbabwean note. Originally our paper money was a note saying that it represented an equivalent value of gold held at the issuing bank. And the bank would pay out in gold if you took your paper in to them. Now our paper money just represents government debt. Very few people these days store it under the bed. We all know that its value is ebbing away. But it doesn't stop there. Even the inventory notes from banks saying that the holder has so much gold stored on his behalf at the bank are not what they seem. This article explains what is happening and when the general public becomes aware of the fraud perpetrated on them the outrage will blow the banks apart. It will not be pretty, but gold will begin to attain its true value and there will be "blood in the streets". The Reserve Bank of New Zealand holds no gold. Mar 3, 2010, 11:36 Newsletters : 2010 Newsletters : 12 March 2010 You Can Call Him Al ... But Al Won't Call You Back Rodney Hide is accusing NIWA of changing temperature data to show warming then after sending the results to their friends in East Anglia of accidentally losing the basic data. The press is starting to catch up with Al Gore and his "inconvenient" truth. He won an Oscar and a Nobel prize for this work. What does this say for the big institutions of our world? (What did Obama get his Nobel prize for, again?) Sooner or later the truth will out. [ Visit Website ] Mar 1, 2010, 14:09 Newsletters : 2010 Newsletters : 12 March 2010 The Sovereign Debt Disaster This is like the weather forecast. A quick summary of the current situation and the forecast for "tomorrow". [ Visit Website ] Feb 25, 2010, 09:47 Newsletters : 2010 Newsletters : 12 March 2010 Quote for the Week Talking about all the financial derivatives etc that America has been touting in the last few years: All you really need to know about structured products is this - it's the 99% of structured products that give the good 1% a really bad name. Harry Markopolos [ignored Madoff whistleblower]... from page 63 of his book No One Would Listen. Feb 20, 2010, 15:22