Foundation for Economic Growth - Newsletter

.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Search

Last Updated: Aug 15th, 2008 - 11:26:43

Newsletters : 2007 Newsletters : 14 December 2007
Thought for the Day

Never in the history of human finance has so much been owed by so many to so few.

With apologies to Winston Churchill.

******** ********

"Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."

Ben Bernanke, "Deflation: Making Sure ‘It’ Doesn't Happen Here" - November 21, 2002


Dec 11, 2007, 09:25

 Newsletters : 2007 Newsletters : 14 December 2007
Fed's Money Helicopters Take Off For Europe, Britain, Canada

The world is awash in paper money. We have seen many countries in the past struggle with paper money and the resulting economic problems, but now we have many countries all experiencing the problem at the same time.

As always the solution from the Central Banks is to print more money and issue it as fast as possible. We are sinking in a sea of debt and the answer is more debt.

This is making it very difficult to have a thriving economy. New Zealand has an extra problem as our government's policies are already dropping us down the OECD income per capita tables. At the moment we are only above Korea, Czech Republic, Portugal, Hungary, Slovak Republic, Poland, Mexico and Turkey. How long before we are down with Mexico and Turkey?


Dec 14, 2007, 10:38

 Newsletters : 2007 Newsletters : 14 December 2007
Mortgage Rate Freeze Aims To Conceal Fraud By Banks.

The plot thickens.


Dec 11, 2007, 09:22

 Newsletters : 2007 Newsletters : 14 December 2007
Global Property Run Down

AMERICA'S housing market is sickly. The S&P/Case-Shiller national index, the broadest measure of house prices, fell by 4.5% in the year to the third quarter, the biggest drop since the series started in 1987. The Economist's quarterly round-up of house prices suggests this malaise may be spreading. In Ireland, prices fell by 3% compared with a rise of over 15% a year earlier. Prices in Britain dropped in October by 0.8%, the biggest monthly decline since 1995. But housing markets in some emerging economies and in Asia seem unaffected. And in Sweden and Australia, where central banks raised interest rates even after the Federal Reserve started to cut rates, prices are rising rapidly.

 [ Visit Website ]
Dec 11, 2007, 05:14

 Newsletters : 2007 Newsletters : 14 December 2007
Are Carbon Emissions the Cause of Global Warming?

There is nothing like finding the truth for winning an argument. Except when it comes to politics and Climate Change.

Our politicians are preparing to spend $$$billions to no good effect while our economy teeters on the slippery slope to the bottom of the OECD.


Dec 10, 2007, 16:38

 Newsletters : 2007 Newsletters : 14 December 2007
Sweden Upbeat On Asset Sale Despite Credit Woes.

Reuters: Reporting by Niklas Pollard, editing by Will Waterman

The home of modern socialism prepares to privatise government owned companies!


The assets set to be sold in Sweden's biggest ever privatisation remain keenly eyed by investors, despite the recent credit crunch, the minister in charge of the process said in a newspaper interview on Thursday.

Financial Markets Minister Mats Odell also repeated the government might look sympathetically on the idea of Nordea , in which it owns about a fifth of the shares, taking part in consolidation to create a major player in the banking sector.

Odell told Swedish daily Dagens Nyheter that while the interest from potential buyers regarding Vin & Sprit (V&S) was given more publicity, the government was also being contacted about the other stakes. "Those that are interested in Telia (TeliaSonera) don't make the same kind of public announcements, but rather get in touch with the ministry and the firm itself. That is true also of Nordea and the other firms," he was quoted as saying.

The proposed sale of V&S has attracted interest from U.S.-based Fortune Brands , France's Pernod Ricard , unlisted firm Bacardi and Britain's Diageo Plc , as well as private equity firms.

In total, the government plans to sell all or part of six wholly or partially state-owned firms, including mortgage lender SBAB, bourse operator OMX and real estate firm Vasakronan. Odell repeated that the creation of a major banking player in the region, perhaps including Nordea, could benefit Sweden. "I want to take into account that it would not hurt Sweden if we were to get a really major bank," he was quoted as saying. "This does not refer to Nordea specifically, but in Nordea's case as well, one should not work against such a scenario."

Speculation flared this autumn about a tie-up of Nordea and Swedish bank SEB after a newspaper said SEB was poised to buy a state-owned stake in the firm. Nordea Chief Executive Christian Clausen told Reuters last month the group was open to talks with other European banks about a merger that would take it to "the next level".


Dec 10, 2007, 11:08

 Newsletters : 2007 Newsletters : 14 December 2007
Europe's Internet Troubles

The government is well on the way to sorting out Telecom. Unbundling, rearranging the company and price controls. Will they have the intended effect?

Not according to the Austrian Economic theory as described by Ludwig von Mises in 1929.

Maybe the government will have to re-nationalise Telecom to "solve" the problems they are now about to introduce. Just like the Railways!


Dec 5, 2007, 12:51

Can we fix it?