Last Updated: Nov 19th, 2009 - 11:07:39 Newsletters : 2008 Newsletters : 4 July 2008 Thought for the Day One of the benefits of the Internet is the instant communication around the world that it provides. This means that we can see what other countries are doing to their economies and learn of the results as soon as they begin to show through. If we are smart we can learn from this! Jul 4, 2008, 05:22 Newsletters : 2008 Newsletters : 4 July 2008 The Volcker Myth It seems as if inflation is here to stay - everything is getting more expensive; except houses and businesses. Property and shares are dropping in value. So how does Alan Bollard solve this problem? This problem is a world wide one. Nathan Lewis proposes a solution for the USA. Would it work here? Jul 3, 2008, 13:51 Newsletters : 2008 Newsletters : 4 July 2008 Election 2008: The Achilles’ Heel of Obamanomics David Lange and Co., reversed a 30 year economic decline in New Zealand and the National governments in the 1990s managed to keep the free market policies in place so that we had reasonable economic growth into the 2000s. However the Clark/Cullen government with their Nanny state proclivities for legislation, rules and regulations soon reversed the trend. In 2006 we dropped two more places in the OECD wealth list. Continuation of these socialistic policies has now brought us into recession. We don't know it yet because the economists can only predict into the past and we need to wait for another three months before they can predict that the second quarter of 2008 has been one of negative growth - ie shrinkage. Of course with the varying value of the money that we use to measure success it is sometimes difficult to say just exactly what is going on. However I cannot see how the second quarter can be better than the first. Hence my confident prediction. Very soon the Clark/Cullen government will run their first deficit. The economy is shrinking, sheep and beef farmers have been struggling for three years, companies are closing down and/or going off-shore and people now do not have as much purchasing power as before. Demand for wage increases will rise but the ability to pay them will fall. Dr. Cullen's tax receipts will decline. Then we move into deficit accounting. The government controls more and more and we are back in the "good old days" again. What's the betting that the Cooks and Stewards union will be on strike at the ferries for Xmas! Meanwhile, how will the USA fare under new leadership. This is important to us because if the USA goes into serious decline (which seems inevitable) then we are in serious trouble. Batten the hatches a storm is brewing! Jul 2, 2008, 11:31 Newsletters : 2008 Newsletters : 4 July 2008 Cooperation: How a Free Market Benefits Everyone Here is a description of a "Law of Economics". This is something we know to be true by theory and in practice. whenever we repeat this as an experiment we get the same result. The Law of Comparative Advantage is described clearly here and as a result we understand that we all should work at our own "specialty". If this Law is True then socialists and capitalists should agree to adopt it. And we do! Labour agrees that free trade is a good thing and signs up with China. National signed up with Australia 30 years ago. Does the Green Party agree with this law? I do not know. Perhaps they might tell me! [ Visit Website ] Jun 30, 2008, 17:31 Newsletters : 2008 Newsletters : 4 July 2008 Bashing Business Slovakia's strong economy may be hurt by anti-business policies. Shades of New Zealand! Jun 30, 2008, 17:07 Newsletters : 2008 Newsletters : 4 July 2008 Bear Bailout Shows Fed Doesn't Follow Normal Rules For Its Own Books The Central Bank can keep other banks out of trouble by supplying them with cash when they need it. The Federal Reserve of the USA is supporting Bear Stearns by accepting $30 billion of suspect mortgages for a $29 billion loan. But what are those mortgages really worth. The Fed has only $40 billion in capital. It is keeping the mortgages "off balance sheet". Isn't this the problem that Bear Stearns (not to mention Enron) faced? Can the Fed go bust? What happens then? Rely on the good old tax-payer again! I understand that the Reserve Bank of New Zealand will now also hold mortgages as security for illiquid banks. This paper money system is becoming more and more interesting. Jun 26, 2008, 13:18 Newsletters : 2008 Newsletters : 4 July 2008 Follow The Leader When we see the entrepreneur in action we can see the power of capitalism at work. This is not consumers desperately borrowing to buy yet more goodies that they do not need. This is the real benefit of capitalism providing new technologies that are better and easier to use and cheaper! It is also interesting to see how the entrepreneur leads the capitalist revolution. They invent something new and THIS creates the demand which they then proceed to supply. A new industry is born and new jobs are created. This produces the wealth of a country - not paper money provided by Central Banks and lent on to property developers. Jun 13, 2008, 14:12 Newsletters : 2008 Newsletters : 4 July 2008 Quote for the Day "Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power which knowledge gives". James Madison Jun 4, 2008, 05:25