Last Updated: Mar 25th, 2013 - 16:46:15 Newsletters : 2007 Newsletters : 26 October 2007 Thought for the Day We started out looking for the characteristics of a high growth economy. Fortunately for us there have been many examples of countries in the world during the last 2 or 3 decades that have changed from low to high growth and we can see what the factors are that achieved that result. New Zealand has achieved the opposite and as a low productivity low growth country we have just seen ourselves drop two more places down the OECD income per capita list to number 22. In 1999 we were rising nicely but that has all changed in the last 2 or 3 years. At this rate we will be dead last at number 30 by 2016. Meantime we have a world boom in danger of going bust on us. Stay glued to your seat - interesting things are afoot! Oct 25, 2007, 15:02 Newsletters : 2007 Newsletters : 26 October 2007 Whisperings of a Gold Conspiracy Our theory of economics based on the Austrian model shows that paper money will always debase to nothing - eventually. The incentive for politicians is always to buy the next election (in a democracy) and how better to do it than to spend newly printed money. Our labour government has almost doubled the amount of money in circulation since they have been in power. (See the Reserve Bank figures in our Statistics section). All nations of the world are now on this bandwagon. We may not be decaying as fast as Zimbabwe but we all have the same disease. Russia is inflating its money at 50% and has just recently had to institute price controls in an attempt to stave off inflation. When Mugabe tried this the goods just disappeared off the shelves and the shops now stay empty. After all who can run a viable business selling goods for less than their cost? Interestingly, more and more people are starting to notice this problem and to understand its cause. This from an academic in Jamaica: Oct 26, 2007, 10:11 Newsletters : 2007 Newsletters : 26 October 2007 Sub-Prime? So Over! One of the corollaries of our understanding of economics is that as Central Banks pump money into the system, so people look for more and more ways of using that money to generate profits. The entrepreneurs and money people become further and further away from real products and more and more esoteric in their sophistication. All this on leveraged money borrowed at cheap rates. Eventually, when the markets shift and people become uneasy about their financial situation, they want their money back (as shown so dramatically by the queues at Northern Rock on British TV) and the money ain't there. This is when boom turns to bust. But of course the Central Banks can hold the bust at bay for a while by printing more money - which they do. This is about where we stand today but it is interesting to see the things that some of the money-men get up to. The Chairman of Goldman Sachs, Henry Paulson, has just been appointed to President Bush's "team to hold everything together". What has his old firm been up to? Oct 25, 2007, 14:35 Newsletters : 2007 Newsletters : 26 October 2007 Money for Nothing Financial chicanery abounds. Fortunately, if you know what is really happening in our world of paper money you are in a position to safeguard your assets. You might also be in a position to profit from distortions produced by the banks and the money men of the western world. Every paper money system that has ever existed has come to a sticky end. The perturbations we are seeing now in the current "credit crunch" are just another example of the trouble that is building up for all of us. Can our Central Bankers do what no-one has done before? When will China make its move? Oct 25, 2007, 10:57 Newsletters : 2007 Newsletters : 26 October 2007 Hologram Tam & the Great Global Banking Swindle. Is the British Labour Government as good at printing paper money as our own Labour Government? Oct 17, 2007, 12:05 Newsletters : 2007 Newsletters : 26 October 2007 The Affordability Problem This is a speech at Architecture Week, on Monday 15 October 2007, at the Britomart Centre, Auckland. Our Labour government in 1999 declared that they would transform this economy into a high wage high tech. paradise and move us into the top half of the OECD. By 2003 it had become clear to us that their policies would have the opposite effect and we started up the Foundation for Economic Growth. Just this year the OECD figures came out and the Labour policies have moved us two places further down to number 22. Firmly down in the bottom third and only one place from the bottom quarter. Nanny State knows best what to do with our money. It takes as much as it can and proceeds to distort the economy with a large non-productive public sector - around 40% of GDP. After their policies have made the hope of a house an impossible dream to the average wage worker they decide that the answer is more command and control from Nanny State and her local government minions. Read this speech from Chris Carter and weep. See how government controls are extending into everything that we do. Local body rules make it harder and more expensive to build a home so the government decides that we need more rules to build cheap houses for half the population who can no longer afford them. The government will spend taxpayers market distorting the housing market and increasing the demand. This means more demand for mortgage money. Where will this come from when the Japanese carry trade closes down. Labour is doing everything in its power to reduce the value of our dollar and sometime soon they will succeed in a big way. Will the labour government then print more money to lend out as mortgages? What a fine pickle we are in! 750 people per week are fleeing to Australia at the moment - up from 600 per week last year. We are now watching the accelerating decline of New Zealand into the happy island socialist state of Aotearoa slowly sinking in the Southern Ocean. Oct 16, 2007, 10:47