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| Last Updated: Aug 15th, 2008 - 11:26:43 |
Newsletters
:
2006 Newsletters
:
21 July 2006
Thought for the Day
Our current world economy has many strains and fissures developing in it. The mighty US dollar is under stress and becuase it is the world's reserve currency this means that we all have problems.
Our New Zealand economy is not looking too healthy at the moment with a growth rate down to 0%, -0.1% and 0.7% for the last three quarters and a trade deficit of over 9% of GDP. A negative savings rate of -4% doesn't instill much confidence and the housing boom is on its last legs.
These current trends cannot continue so at some point they will stop; and there will be a "correction". This will go hard on some folks.
At this point people will call for change so here are a couple of ideas whose time may be arriving?!?
Jul 21, 2006, 11:47
Newsletters
:
2006 Newsletters
:
21 July 2006
Squanderville versus Thriftville
What with the rich list being produced this week I thought that we might benefit from the words of the wealthiest investor in the world. Warren Buffett made his money by investing in great businesses at a time when they were either cheap or at least still represented great value from future earnings.
His theories are simple and well worth reading and understanding but this is not about how to increase our wealth by investments but Warren's take on the American economy. New Zealand has similar problems to the USA with a housing boom, a monstrous trading deficit and the population all borrowed to the hilt and with a negative savings rate. Fortunately our government debt is not as bad!
There are lessons here for us.
Jul 19, 2006, 13:53
Newsletters
:
2006 Newsletters
:
21 July 2006
The Greatest Con in the History of Money
"It is only in periods of decadence that truth becomes complicated."
Henry Miller, American writer.
Inflation is caused always and everywhere by the creation of too much money - printing paper dollars and increasing credit supply to banks.
Currently our money supply (M3) is increasing by 7.9%. If some of this increase is "soaked up" by our growing economy at a current rate of say 1.5% then we must have inflation of around 6.4%. Even the CPI with its careful exclusions and calculations is showing around 4% per annum inflation.
That is, the government is reducing the value of your money at a current rate of 6.4% per annum. This is a tax on your efforts and savings!
How can we stop this theft?
I recently bought a book called "Money, Bank Credit, and Economic Cycles" by Jesus Huerta de Soto. All 900 pages of it. It is a fascinating read. This article gives some account of its contents in a rather forthright manner!
Jul 6, 2006, 09:42
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