Last Updated: Nov 19th, 2009 - 11:07:39 Newsletters : 2008 Newsletters : 31 October 2008 Thought for the Day In one week we go to the polling booth and elect a new government. Here we are in the midst of the biggest bust since 1929 (probably bigger then 1929) and all our leaders are busily minimising the consequences. They seem to believe what the economists are telling them. "Print more money and give it to those in need." This message seems to have been well learnt from previous flirtations with financial crises and the population is not scared to keep on keeping on as best they can with borrowing and buying houses or whatever is the boom of the moment. The boom is caused by increasing the money supply artificially with printed money - in our case it is printed in Japan and borrowed over the carry trade to fund our housing boom. Now the Japanese want their money back and the Reserve Bank is going to take over the mortgages. Where will they get the money? From TAXES?? No worries, they will just print some more paper and pay for it that way. The tax-payers will not even notice. In September 1999 our money supply (M3) was $99billion. By September 2008 it had expanded to $206billion. More than doubled in 9 years. That is why houses cost twice as much now compared with 1999. The dollar is only worth half as much. According to most economists the answer to the bust we are now beginning to experience is to put more money into the system. The Americans are doing it like crazy. Even sending out a $600 tax refund to everyone in order to keep the spending up. Our politicians are proposing to give money to those who lose their jobs and can't pay the mortgage. What a wonderful system. We can't go wrong. The government will fix everything with more money. I don't think that there are more than one or two politicians in New Zealand who really know what is going on. An interesting perspective is the next story about a book and a film of a true story from WWII. Back in those days the people in charge certainly knew the difference between REAL Money and paper money! Good luck with your voting. No doubt we will all get what we deserve. Oct 31, 2008, 10:58 Newsletters : 2008 Newsletters : 31 October 2008 Krueger's Men During the 1940s the Germans decided to counterfeit a large number of British pounds with the idea of diminishing the value of the pound and ruining the British economy. I would like to ask you a question. "What is the difference between the German Nazi Hierarchy printing lots of British pounds and distributing them free around Britain and Ben Bernanke printing lots of dollars and distributing them free around the USA?" Think carefully before answering! The article is attached or you can see the original at: http://www.curledup.com/kruegers.htm Oct 31, 2008, 09:05 Newsletters : 2008 Newsletters : 31 October 2008 OECD Ladder Too Steep For NZ To Climb Have we really done our chips? Under our Labour led government we have continued the long-term slide to the bottom of the OECD. What will it take to be a wealthy nation again? Can we do it? Will Labour's policy of more government intervention do the trick? Or is this the problem in the first place? Watching the (sub) Leaders debate on Monday night I realised that 5 out of 6 of them were tied to Nanny by very firm apron strings. Only Rodney was of the opinion that less government would be a very good idea. When David Lange was forced to convert us to a modern market economy after Muldoon's failed efforts, the economy boomed. With much less government we became a growth oriented country and started getting much higher growth rates. This is what pays for our schools and hospitals. Economic Growth! But we succumbed to the free money blandishments of socialism and the will to work has been slowly sucked out of the work-force. After all, why work more when the government gets most of it? The rot sets in. On Monday night Nanny Green advocated raising the minimum wage to $15. Nanny Maori and Nanny Progressive nodded agreement and tried to look wise. Why stop at $15? Why not make it $20 then those at the bottom would be in the middle instead. Maybe they should raise everyone's wage! Why stop with lowest paid? After all, if Nanny State can print dollars on a whim then there is no problem. And after a few years we will all be billionaires like all those happy Zimbabweans. How do we come to put these economically ignorant people in charge of the economy? We must be mad. [ Visit Website ] Oct 28, 2008, 11:23 Newsletters : 2008 Newsletters : 31 October 2008 U.S. Has Plundered World With Dollar, Chinese State Paper Rages You can fool all of the people some of the time and some of the people all the time, but you can't fool all the people all the time. Oct 27, 2008, 11:45 Newsletters : 2008 Newsletters : 31 October 2008 Taiwan Dumps Fannie, Freddie -- and Uncle Sam? And the "Other" China doesn't seem too impressed with US securities either! Oct 27, 2008, 09:20 Newsletters : 2008 Newsletters : 31 October 2008 Japan's Desperate Bid To Kick-start Economy The world is now dancing to the old Limbo Stick tune. How low can you go? Paper money is cheap to print and they are giving it away! Oct 26, 2008, 11:49 Newsletters : 2008 Newsletters : 31 October 2008 Fed Official Can See Interest Rates Close To Zero So the Americans are following the Japanese down the interest rate path to oblivion. One difference is that the Japanese have 15 Trillion Yen in the banks and the Americans only have a sea of red ink. Should be an interesting ride for the rest of us! Oct 26, 2008, 11:44 Newsletters : 2008 Newsletters : 31 October 2008 The Gold Problem Ludwig von Mises once again says it all. Last year our government held an enquiry into the cause of inflation. After a great deal of learned discussion from their tame economists I doubt they were any the wiser. They certainly didn't respond to my humble offerings and they did not let me know of their findings. I really would like to know what they decided. But - no matter - it is obvious that they treat economics like politics and religion. It is what you believe that is important rather than what is true. It is all part of the new education system that our PC masters are trying to institute. Children should be allowed to develop their own belief systems rather than to try and understand the thoughts of wise MEN?!?!? down through the ages. Here in one article we have a very clear assessment of how we came to be in this Credit Crunch and how we can arrange our affairs so as to solve this problem and not have the boom/bust cycle continually destroying so many people. Unfortunately the Bankers and Politicians have many tame economists who can confuse the unwary and together this triumvirate can continue to rule without concern for the welfare of the population. Very unfortunately they do not realise that the financial systems of the world are becoming synchronised as the Central Bankers work more and more in concert to stop the system collapsing. At some future bust the "Crunch" will overwhelm the politicians, the Bankers and the economists and the world will be in danger of entering a new "dark age". Just like from 500AD to 1000AD but maybe a bit more technological. Maybe like Mel Gibson's Mad Max world! Won't that be fun! Oct 24, 2008, 19:51 Newsletters : 2008 Newsletters : 31 October 2008 Quote for the Week "The system of banking [is] a blot left in all our Constitutions, which, if not covered, will end in their destruction... I sincerely believe that banking institutions are more dangerous than standing armies; and that the principle of spending money to be paid by posterity... is but swindling futurity on a large scale." Thomas Jefferson - Source: stated in 1811 when President Jefferson refused to renew the charter for the First Bank of the United States (the 2nd central bank chartered by Congress in 1791). Aug 1, 2008, 01:32