Weekend Links March 1st-2nd 2014

ScreenHunter_01 Apr. 02 06.19

Global Macro / Markets:

Americas:

Europe:

Asia:

Local:

Other:

 

Comments

  1. Magnus Carlsen

    There once was a tool from Mt Gox

    Got corzined with seppu-coin pox

    He said with a bow

    Dissapeared cash cow

    A Ponzi scheme full of cocks

    • Ronin8317MEMBER

      Haha, nice!!

      Looking at the picture from the news conference, the smirk on the French CEO’s face is unmistakable.

  2. migtronixMEMBER

    ——— _ SECOND INSTALLMENT _————

    Having chartered a course, navigable only through the narrow creeks and streams that reflect as much the mode of medieval commerce as medieval thought – fragmented, noncontiguous, harried on all sides by waring factions and ecclesiastical prerogative – at length we reached that momentous watershed that ruptured forever the divide between men of God and men of thought, inundating western Europe with the great revolution against the seven-hilled fortress whose mission since the time of Constantine’s Council at Nicea had been strictly to discipline and prostrate all thought before it.

    As these ancestors of ours mounted their extraordinary sea-borne vessels and discovered passages unknown and worlds unseen, so too did they cast a permanent reckoning upon the literally maps of old Europe — a hilarious romp told through the unlikely prism of that lonely haggered old knight, nag underseat and hapless imbecile in toe, questioning cherished norms and moores through a previously unheard of satirical voice that borrowed more from Aristophanes The Clouds than Aquinas’ Summa Theologia.

    It was an unprecedented revolution in thought that for 200 years to come would see ravages of civil war in the Isles and culminate with the unfettering of Kings grasp from far flung soils and the decapitation of Emperors much closer to home — a brilliant, exhilarating, blood-splattered but triumphant resolve to fly the standard and sound the bugle call for the defense of free and frank expression.

    ——- _ END OF SECOND INSTALLMENT _ ————

    • interested party

      seems like you are having a crack at writing the future from your perspective through the medieval lense.
      If so…please please please can we have the moneylenders heads on pikes……please….with ravens tearing at the rotting flesh as you pass by…..???

      • migtronixMEMBER

        And I fear it will an interminably long night before we get the reprieve of day break

      • interested party

        I hear you, and it is possible that despots will rise during depression that can lead the masses to war.
        There’s tinder boxes all over the damn place with no end in sight.

    • interested party

      Mig,
      yep…….but lets wait a while..see what comes out of this.

      Could be this….
      “We’re being treated to the wisdom
      Of some puffed up little fart
      Doing exactly what I used to do
      Pretentions to anarchy and art
      He speaks the language of a warrior
      He mounts his misinformed attack
      He wears the clothes of a dissenter
      But there’s a logo on his back
      And it’s a hollow rebellion
      As rebellions mostly are
      It’s just another raging tempest in a jar”

      Don Henley’s “damnit rose”

      Or it could morph into something bigger that we imagine. On the recession-depression thing……if…and this is an if…we fall into recession here in Australia the northern hemisphere will most likely be in depression, so in that light, the link you shared will reflect on us much more frequently until one event gets traction somewhere and war starts. History repeats/rhymes….we may use smartphones but a hungry man is an angry man so some will revert back to tribal instincts.

      • It’s not the hungry men that frighten me… It’s the hungry men with hungry children.

  3. A tale of old people actually selling up to rent.

    “Forgo the rates, water and extra to insure the house, they were good to the tune of an extra $75 a week. A bottle of Turkey, five T-bones and three generic Cialis a week. What else could a couple of codgers want?”

    http://www.idiottax.net/2014/02/oldies.html

    • Thanks marked64, another amusingly written piece. I think your retirees might be at one end of the extreme though. From the Canberra Times…

      I am 64, my husband is 70, we are retired and live on combined fortnightly PSS super payments of $3038. We own our home outright, and have a $380,000 mortgage over an investment property worth $1 million, which earns $49,000 rent a year. We are thinking of renting out our present home, and renting a smaller place to live in so we can travel. Is this a good idea? Our pensions are tax free, so how would the tax on our rental income be affected?

      And…

      I am 58, my wife is 59 and we hold combined super of $370,000. We own our house, plus $20,000 in shares, and have a $140,000 mortgage on a property worth $700,000, which is positively geared and returns $24,000 gross rent a year. Could we use my wife’s super and dividends to pay off the mortgage, or should we refinance and pay the minimum interest over a longer term? Would a better option be to contribute $15,000 each to our super, although neither of our funds’ annual returns equals the cost of the investment loan?

      http://www.canberratimes.com.au/money/planning/renting-out-our-home-to-travel-20140225-33dk7.html

      • These two examples are probably in the top 20% the original article would probably be closer to the majority and a significant minority would be far worse off than that.
        Im sure Abbot and bum chums (as per their $30kpa super inputs) will be supporting the top end of town and dis-allowing the example of selling to rent for the lesser pensioners.

    • interested party

      That is the most lucid thing that fool has thought. What is the world coming to when the morons start making sense….?

  4. Interesting extract from that foreigners splurge on housing article

    “Offshore buyers bought a record 5091 established homes worth $5.4 billion last financial year, compared with just 647 properties worth $810 million in 2009-10.

    A further 4499 new apartments and homes worth $2.9bn were sold to foreigners off the plan last financial year – more than double the investment recorded three years earlier.”

    5091 existing homes last year and 4500 new apartments

    Almost 10,000 all up in ONE year.

    Considering an average auction weekend in Sydney might involve 300-400 auctions, it would appear that off shore buyers might be the reason the the RBA low interest policy suddenly started appeared to be working. Possibly, ultra low rates interest have not been what has been putting lead in the markets pencil. If that is the case then the RBA may have a very broken lever on its hands.

    If those off-shore buyers dry up (either they lose interest or Oz goes Canadian and blocks them) the impact on the market might be significant.

    I can’t find a link to the stats pack the Oz is talking about as it would be good to see what other data has been included.

    One assumes that actual figures could be higher if there is a lot of under reporting of transactions to the FIRB or off shore buyers are using local ‘proxies’.

    EDIT: Looks like it was the annual report that was pushed out the door yesterday.

    http://www.firb.gov.au/content/Publications/AnnualReports/2012-2013/_downloads/FIRB-Annual-Report-2012-13.pdf

    • GunnamattaMEMBER

      Chart 2.8 tells you everything you need to know

      Investment in existing residential real estate has gone from 0.56 billion in 2009/2010 to 5.42 billion in 2012-2013.

      When you think this is only stuff going through FIRB, and that anyone with a contact who is an Australian citizen or permanent visa holder, or is prepared to look at simply not notifying anyone (seeing as we know it isnt monitored courtesy of Chodley Wontok) isnt even going to be a look in on this chart, then that tells us about all we need to know.

      • GunnamattaMEMBER

        Thats right, they sent him an email telling him he was exempt after he gave them a fake passport, a fake visa number type (taken from their page which they have since removed) and told them it was an existing residential real estate location

        For anyone interested in a Chodley Wontok refresher

        http://www.macrobusiness.com.au/2013/03/firbs-foreign-property-buyer-fail/
        http://news.domain.com.au/domain/nonexistent-man-granted-leave-to-buy-598000-house-20130327-2gu0p.html
        http://www.scribd.com/doc/132398555/FIRB-and-the-Approval-Process-for-Foreign-Purchases-of-Residential-Real-Estate-in-Australia-March-2013
        http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22committees%2Fcommsen%2F83c48533-c20c-40a6-a729-c8a63af16db9%2F0001%22

        And for anyone wanting a frame of reference for Peters contributions this may be useful

        http://pastebin.com/irj4Fyd5

      • Yep

        If the recent rebound of the market was less about a few more RBA 0.25% cuts and was instead triggered by a rush of hot connected money trying to get out of China then a lot of local specufestors may have been drawn in by a bit of mainland market chum thrown into the market.

        While interest rate cuts have a lag – it was always a bit odd how they gained no traction for an extended period (just arrested the slide somewhat) and then suddenly started working. Perhaps they never did start working.

        Perhaps the off-shore buyers are the true Spanish fly in the market and we may have now developed a dependence.

        It is unfortunate how the FIRB only managed to finished the photoshop work on the Annual Report on Friday.

        Now there is a risk that all of that great work might get swallowed up by the news cycle by Monday. They will be most saddened. /sarc

        The FIRB should be required to release this data on a monthly basis having regard to its significance to the market (and macro economy) and it should be required to investigate the possible extent of non-compliance by some random investigations of a sample of recent unreported property transactions generally.

        Providing we have responsive and ample supply, I see no real problem in letting the CCP officials and friends build our housing stock, but I doubt that is how an increasing number of Australians will see a property market driven ever upwards by off shore buyers exporting their domestic credit bubble froth to our shores.

      • GunnamattaMEMBER

        I’m with you PfH.

        I dont mind if the CCP sends us their shiftiest and slimiest recipients from the graft and corruption in China – there is tonnes of room here. One of my relatives owns about 4000 acres near Ouyen (Northern Victoria) and I can help but think it would be a tad more lively if it was more heavily populated.

        Its when your own supply side rent seekers want to charge our future to pay for our opulent present that i get a tad miffed.

      • sorry Gunna, your effort was so badly botched that it always amuses me.

        If you understood the system you would understand my mirth.

      • GunnamattaMEMBER

        Well a small step Peter, botched maybe, at least Chodley was a small step forward towards establishing veracity.

        Prior to him there were plenty arguing (yourself amongst them) that FIRB was somehow rigorously oversighting applications by foreigners to buy Australian residential real estate, and that organisations like Austrac were rigorously monitoring and controlling who and how much money was being brought into Australia by foreign nationals.

        My importantly I recall others (yourself included again from memory) arguing that foreigners couldnt buy a place without ‘approval’ as the transaction system would pull them up.

        Chodley was just an hour or so’s contemplation after reading through one of Leith’s postings (after everyone had gone around the buoy a few times before), turn into an actual application. The expectation on the day was that there would be an email in a month or so identifying there was no Chodley, was no visa or passport, the place wasnt for sale. A following working day email saying proceed as you like was a turnup for the books.

        As I said to plenty of others at the time I would have been amazed if Chodley was the first or only experimental application. The fact that it hadnt made it into the press previously simply reflects on the quality of Australian journalism and the grip the real estate sector has on it.

      • Well that’s not true, I have never been in the ‘FIRB conducts rigorous oversight”camp – it’s pretty much an “ask and ye shall receive” process, you just made hard work of something that should have been easy and took it into the cloak and dagger world.

        Now you need:-

        1 A fake passport.
        2 A fake bank account.
        3 Transfer very large funds through the banking system in a fake name
        4 Counter the normal legal requirements of identifying a property buyer by the lawyers.
        5 Counter the normal 100 point ID requirements of banks if you wish to borrow, and then you need to fake income documents, fake bank statements, etc etc etc.
        6 Get around the very serious “Anti-money Laundering” and “Anti terrorism funding” legislation that this country has in place where all large transactions are tracked. It’s pretty serious stuff.
        7 Other requirements that don’t come to mind at the moment.

        I’m sure that the CIA could do all of that, but I doubt that Chodley Wontok had the resources at his disposal.

        I’m of the opinion that if someone had been less spy vs spy and simply done the request as a genuine non-resident they would have received the approval that you wanted to waive about, but that didn’t happen. That’s why I am amused.

        It’s not the job of the FIRB dept to fully investigate the bona fides of all applicants, that is a separate process at the time of purchase. The FIRB just hand out the “OK” stickers and they aren’t particularly concerned about one off house purchases of existing dwellings whilst the government policy isn’t against it.

      • GunnamattaMEMBER

        Well that buoy cant be gone around too many times – for those following Peters playbook is basically here http://pastebin.com/irj4Fyd5

        When it comes to LoL Peter is full of gags too – lets look at this lot

        Now you need:-

        1 A fake passport.

        Well that’s bull. You could use a perfectly legitimate passport from anywhere. FIRB don’t check. Does anyone else check? …Nup

        2 A fake bank account.

        Why would you need a false bank account? Using your own perfectly legitimate bank account is the way to go. FIRB certainly don’t check bank accounts, Austrac don’t either.

        3 Transfer very large funds through the banking system in a fake name

        No need to transfer in a false name. Why would you? I have moved AUD$100K plus sums about into and out of Australia a few times in the last 2 years without being questioned by Austrac once. If ever you were to be asked (and Austrac apparently ask about 5 in every 100 transactions notified) one of the standard replies is ‘Real Estate transaction’, and narry a question further is asked.

        4 Counter the normal legal requirements of identifying a property buyer by the lawyers.

        What legal requirements are you referring to? A name and proof of ID is all you need. A conveyancing clerk just wants to see passport (or drivers, fishing shooting license, bank account details, bills etc, proving Joe Bloggs is Joe Bloggs – it isn’t a requirement under the FIRB act – indeed under Australian contract law [see Hart v O’Connor 1985] people are presumed to have the capacity to enter into a contract, they don’t have to prove it unless asked, and as Chodley proved, nobody would ask).

        5 Counter the normal 100 point ID requirements of banks if you wish to borrow, and then you need to fake income documents, fake bank statements, etc etc etc.

        Huh? What if they don’t need to borrow and simply bring in the cash?

        6 Get around the very serious “Anti-money Laundering” and “Anti terrorism funding” legislation that this country has in place where all large transactions are tracked. It’s pretty serious stuff.

        Yeah right. A nation advertising its passports for sale for 5 million and reliant on foreign buyers of its residential real estate is going to get hung right up on anti money laundering. As noted above lets find out from Austrac how many people they have stopped from bringing money into the country in the last year shall we, and the sums involved? Do you reckon they are shaping up better than FIRB?

        7 Other requirements that don’t come to mind at the moment.

        …..that happens when the starting position is bullshido to begin with

        I’m sure that the CIA could do all of that, but I doubt that Chodley Wontok had the resources at his disposal.

        I’m of the opinion that if someone had been less spy vs spy and simply done the request as a genuine non-resident they would have received the approval that you wanted to waive about, but that didn’t happen. That’s why I am amused.

        Well I am sure that you would do a better job Peter, in fact I wouldn’t doubt for a second that you would be the perfect man to expose the hypocrisy involved in Australia’s setup vis foreign purchases of Australian residential real estate, just that waiting for you to get around to doing it may bring another load of questions….

        It’s not the job of the FIRB dept to fully investigate the bona fides of all applicants, that is a separate process at the time of purchase. The FIRB just hand out the “OK” stickers and they aren’t particularly concerned about one off house purchases of existing dwellings whilst the government policy isn’t against it.

        Agreed 100%. Some people thought it was FIRB’s job, and that that was indeed what they did. For those not as informed and aware as you Chodley helped just a smidgin to pose questions about what they did do, and why they were doing it (does anyone know why they do what they do?)
        I’ll check in again in a couple of hours for you Peter ………

      • Don’t worry gunna I’m not interested in a punishing debate over a point like this, it’s enough to know that maybe someone will learn something that might help them understand.

        Transfers through the banking system will be monitored and if necessary reported by the remitters involved, we don’t have to know the intricacies of the process. I’m sure that Austrac do audit a portion of the transactions, but any high risk transactions will be reported if the remitter adheres to the rules. If they don’t then the remitter itself will be fined as one was recently – http://www.austrac.gov.au/17december2013.html

        All cash transactions over $10,000 must be reported and even solicitors are not exempt from that – http://www.austrac.gov.au/files/guideline_no6.pdf

        In fact every bank, credit union, building society etc has the same reporting obligation. I never handle cash and yet I am obliged to do an AML/CTF refresher course every year, so yes I think that they do treat it seriously.

        I must ask though, you are a guy who is risk averse and won’t take a chance buying a house in beautiful downtown Geelong, so would you really take the risk of having an armed SWAT team beat your front door down at midnight and facing the legal ramifications and fines because you paid cash for Chodley Wontoks house?

        That seems inconsistent to me.

      • $5.4B/10,000k transactions per year, what’s that as a percentage of total real estate transactions I wonder?

        P.S. haha, a refresher training course, wow, they must take it seriously!

      • Fremantle JamesMEMBER

        Forgive me Peter, I am right on the edge of mobile range and the Mrs has ducked into a Pie shop which may not give me much time I understand your purpose is to distract people from contemplation of what FIRB does and why it may do it and to what effect and indeed possibly what implications this may carry. But I will continue with you as far as reasonably possible

        Don’t worry gunna I’m not interested in a punishing debate over a point like this, it’s enough to know that maybe someone will learn something that might help them understand.

        There is no doubt Peter, we are essentially peas in a pod on this one. I like helping people too

        Transfers through the banking system will be monitored and if necessary reported by the remitters involved, we don’t have to know the intricacies of the process. I’m sure that Austrac do audit a portion of the transactions, but any high risk transactions will be reported if the remitter adheres to the rules. If they don’t then the remitter itself will be fined as one was recently –http://www.austrac.gov.au/17december2013.html
        All cash transactions over $10,000 must be reported and even solicitors are not exempt from that – http://www.austrac.gov.au/files/guideline_no6.pdf

        In fact every bank, credit union, building society etc has the same reporting obligation. I never handle cash and yet I am obliged to do an AML/CTF refresher course every year, so yes I think that they do treat it seriously.

        You will not get disagreement from me there Peter. There is no doubt that everyone moving largeish sums of money about reports to Austrac. That reference you sent through tells me that they have about 280 people, and that last year they investigated and reported on about 1200 – give or take some dodgy maths that works out to about 4 per person in the organisation [I concede not always a flattering way to look at any organisation] – Now, as you say all transactions above 10K need to be reported. Peter I ask you how many transaction of such value do you reckon there were last year? Would you reckon more than 100K transactions? The question I pose is how many of those actually get seriously sniffed at once they are reported to Austrac? I note they do a large body of public awareness and education work. That would account for our differing interpretations on them. They are better staffed than FIRB [I understand an EL 2 and about 4 underlings] but may not actually be chewing over the volume of transactions any more than FIRB do the applications they process.

        I must ask though, you are a guy who is risk averse and won’t take a chance buying a house in beautiful downtown Geelong, so would you really take the risk of having an armed SWAT team beat your front door down at midnight and facing the legal ramifications and fines because you paid cash for Chodley Wontoks house?
        That seems inconsistent to me.

        Not sure where you are at there Peter. I see nothing in the Austrac report to suggest they have SWAT teams – and my guess on this would be that they would report to the AFP and get them [once the AFP have been cleared] to knock on any offending individual’s door. Then once we smooth that over I certainly haven’t bought a house here, and I don’t believe Chodley Wontok did either. To the best of my knowledge, and I am a man close to legal interpretations on these things, I have done nowt to contravene any money movement laws whatsoever. But that is your purpose – well done, you can distract the unwary reader from contemplation of what FIRB actually do and why. But I would pose it again, if FIRB do diddly squat with ‘applications’ by foreigners to buy Australian residential real estate, then what is it they do and why? And is anyone actually doing anything serious about foreign purchases of Australian residential real estate.
        Mrs is back with some neinish tarts. Back later old coq.

      • @ Fremantle James

        “Cash” transactions above $10,000 not “all” transactions – I think that you may have misinterpreted..

        You can refer your questions directly to the FIRB, I don’t work for them, nor do i work for Austrac.

        If you want a change of policy, you need to direct your attention to your federal member, they are the policy makers. Canada has just done what you seek, but I can’t help, I don’t make policy..

        Enjoy the neinesh tarts.

      • Schadenfreude

        I can tell you first hand that a lot of our clients are doing this.

        They act as agents for the client and fly back and forth to China when required.

        McMansion’s, multi-unit developments, apartment buildings…..take your pick, it is happening all over the place and FIRB couldn’t give a flying f***.

      • Next time I am Sydney (little China) I think I am going to hang one big turd on the front doorstep of one of those highrise buildings sold exclusively to the Chinese, dacks down and all. Maybe the new tenants can enjoy a bit of Australian slapstick culture and learn a thing or two (or maybe smell).

        One point that needs to be contemplated and has been discussed on this blog is that these highrise complexes are just not to the taste of the average Australian to live in, they are only to the poor taste of CHinese speculators who just cannot imagin anything but the same landscap/cityscape of China, after all they are sold these rat traps online with glossy photos and marketing jargon…….so when the Chinese speculators pack their bags in a few years after realizing there is not a cent to made in Australia in small and medium business and the only income they will receive is in Centrelink payments, Sydney will be left with Ghost buildings. I am sure the local Sydney youth will cover the joints with graffiti and splash a bit of colour around just to make em look a bit more at home, just a matter of time.

        Sydney Ghettos of the future. The FIRB and NSW Government fostering the progressive destruction of Sydney, bum chums.

      • When you add in the hundreds of billions of IOUs sold off shore by our private banks for residential mortgage lending and by the Federal Government to maintain the supply of middle class welfare it is no surprise that the $AUS has been out performing our limited capacity to produce stuff that other people want to buy.

        When the price of our IOUs turns south and they could do so very suddenly with little warning (it is a vibe sort of thing) – we may find ourselves with an extremely competitive exchange rate but our manufacturing sector already boxed up and on a boat to Thailand.

      • GunnamattaMEMBER

        Thats the essence of it.

        We cant have lower AUD and lower real residential real estate prices (themselves a major drag on the economy) unless we have economic/financial system collapse of sorts. By the time that happens the globally exposed side of the economy (apart from mining operations – 80% owned by overseas) will have decamped from concentrating capital in Australia, and presumably will be in a position to roger Australia and its then decisionmakers as the price for any return.

      • Exactly! At this point in time a lower A$ may just exacerbate our problems. Perhaps ‘highlight’ might be a better word but ‘fix’ is not one I would use.

    • Liu MianzhiMEMBER

      They kept a clean sheet!!!

      12,731 applications and not a single refusal.

      These international investors are geniuses, with incredible attention for detail. We should recruit them all – perhaps to run the FIRB to start with, then the rest of the country.

      I struggle to think of anything that I could do 12,731 times and get it exactly right every single time. Amazing effort over that sort of statistical sample.

      • GunnamattaMEMBER

        Yep! didnt even touch the sides of our chaste FIRB…..

        They looked at 12,731 times (including at Chodley Wontok) and missed the lot.

      • interested party

        My suspicions are that they have to be under some directive to turn a blind eye to just push them through. Our economy now rests on RE maintaining prices and as the numbers show, foreign money is the only buyer with any clout left to hold prices up. So, we are letting them in en-mass hoping to buy time for the local economy to pick up…hopefully before the foreign money dries up…
        To many hopes in that for my comfort, but that is how I see it.

        edit…This is starting to get a smell like madoff

  5. PF or anyone else in QLD able to explain what’s going on here? Seems a little strange.

    http://theage.domain.com.au/real-estate-news/row-breaks-out-over-price-guide-ban-20140228-33qia.html

    An almighty row has erupted between property agents who want to offer price guides for homes up for auction and those who don’t, as the Queensland Government prepares to outlaw a practice that buyers in NSW and Victoria take for granted.

    If the head of the Real Estate Institute of Queensland, Anton Kardash, formerly the boss of Aged Care Queensland, gets his way, agents will face a fine of almost $60,000 if they advertise a price guide.

    The chief executive of McGrath Estate Agents, John McGrath, believes some of the changes to the Property Occupations Act will take the selling of property in the state ‘‘back to the Dark Ages and impact negatively on anyone buying or selling a home by auction’’.

    • @ AB
      I haven’t followed the story in detail. To someone who follows the market closely it won’t make much difference, but a lot of people don’t follow the market and so they need guidance. Whether guidance from the vendors agent is the best possible source is debatable.

      My initial thoughts are that either we will see auction buyers confused and bids will be well under or over the mark, or maybe buyers will be forced to use a buyers agent or do some genuine research and become more savvy.

      Who know how the market will adjust.

      Remember that in Qld auctions are just not that popular – I have never chosen to sell by auction. The research that I have read suggest to me that auctions in Qld achieve a slightly higher price, but only just enough to cover the higher auction costs and advertising budget – so in my view that’s not compelling enough for me to go to auction unless I owned a house that was quite different.

      • “Whether guidance from the vendors agent is the best possible source is debatable.”

        True, but I would have thought some guidance is better than no guidance even if it’s only vaguely accurate. And surely there must be some hidden motivation to want to ban it completely rather than agents just choosing not to offer one.

        On a side note, I used a buyer’s agent when I bought my house last year and they were absolutely worth every cent. I reckon we saved more more than their fee just at the auction by having a professional bid for us (and intimidate some of the other bidders), let alone the market research and price guidance they provided prior to the auction.

      • Agree AB. Lack of guidance can cause a lot of wasted time and expense. If there is no guidance, even from the sellers agent as to a range, then you could spent $500 to $800 on a Valuer for no purpose whatsoever.
        I spent some time looking at a place at Buderim. Going on how the market was I reckoned about $660K might buy it with my top $690. Goes to auction…no bids because they opened with a vendors bif of $700k then another vendors bid of $800 and something k. Then announced lots of buyers at well over $900K just couldn’t bid on the day. (Four months later it is still on the market of course) However if they’d have said they wanted $800 to $1.1 or so it would have saved a lot of wasted time.
        Another case a friend was looking at a house. She had $500K. Agent said come it has to be sold on the day as if it was a distressed sale. One vendors bid of $750K no other bids (still on market of course…four months later!

        Maybe the lying b….ds should HAVE to give realistic guidance?

        Just thinkin…not married to anything!

      • Thanks AB – good to get that feedback on using a buyers agent. I probably wouldn’t in Brisbane, but would certainly consider using one if I was buying in unfamiliar territory.

        I’ve seen a lot of outsiders pay way too much on the Gold Coast many times because what they were buying looked cheap to them,but when they come to sell the gravity of their lack of ‘due diligence” becomes all too apparent.

    • migtronixMEMBER

      Here’s what I struggle with Gunna, everyone talks about credit like it needs to bear interest. Why?

      • GunnamattaMEMBER

        Well a casual glimpse at short term sovereign fixed income from Germany Holland Finland and Austria would suggest that just getting the dough back is often worth having investors pay for the privilege, and that really secure corporate paper returns equally little yield (actually it is a cost to those investing in it) as does UK Gilts, Fed paper..

        So I think a large part of the investing world has actually moved away from interest (although to digress I saw that the Norwegian Sovereign Wealth Fund – the embodiment of that which might have served Australia better than a massive private debt burden if the mining investment boom had been handled somewhat differently – chalked up a return of 15.9% last year)

        The question for me is, if it has moved away from an expectation of interest, what is it actually doing? and what are the implications of this for the global (and all local) economy, and to go back to Turner (a quite lucid thinker on these issues) we still need to work out what to do with a massive private debt overhang.

      • What? Not sure I understand your question? If you have zero interest you get unlimited credit one form or another. The problem is that interest is not high enough. Interest should be high enough that one dollar of credit created = one dollar of savings…more or less.(fundamnetally)
        You do get security factors. People in China saved because of inadequate (well …lesser) social welfare and health systems. I don’t have the answer to all the problems that’s for sure but as far as credit goes….every dollar that is created and then commands some resource use, without accompanying savings postponing use of the resource, hastens the end of our finite world.
        Our problems of Current Account Deficits result dorectly from running zero to negative RAT rates for nigh on six decades straight.
        Ray Dalio is worth reading on the topic of credit creation in response to IR’s. The so-called airy concept ‘velocity of money’ is actually credit creation at every step within the private sector.

      • migtronixMEMBER

        @flawse that’s nonsense! If I give you store credit to settle at the end of the month it bears no interest, I don’t have to save anything and it doesn’t mean I’m going to let you walk out with everything in the shop. Further, depending on your credit rating, I can use the negotiable instrument to get credit elsewhere at close to face value of the note. Again no interest charged. Why is that so difficult for you to grasp? I know Op8 has tried over and over to clue you in on it…

      • drsmithyMEMBER

        Here’s what I struggle with Gunna, everyone talks about credit like it needs to bear interest. Why?

        * To constrain supply.
        * To make bankers rich.
        * To make everyone else poor.

        I’m sure there are others, but those seem like the obvious ones.

      • migtronixMEMBER

        @drsmithy that’s the only thing I can come up with, no interest equals no spread to eat

      • Yes, drsmithy – that pretty well nails it. We are going through that part in the long historical cycle where the most vulnerable right up to the rungs of the middle class are absolutely being squashed under the thumb to keep ’em compliant, to maintain margins and profit share. This never ends well. Never has, not going to this time around.

      • @flawse,

        “every dollar that is created and then commands some resource use, without accompanying savings postponing use of the resource, hastens the end of our finite world.”

        Every dollar that is created, owing itself + (uncreated) interest, drives the competition to monetise (ie, convert from natural capital, into electronic “capital”) finite resources.

        Why?

        So that the debt + (uncreated) interest can be repaid.

        http://www.youtube.com/watch?v=EEZkQv25uEs

        http://sacred-economics.com/read-online/

        Usury itself is the driver causing us to consume EVERYTHING today, without care for consequences tomorrow.

        I know you don’t/can’t/won’t see this. But it is reality.

        It is the fundamental truth of how the world’s economy functions.

      • migtronixMEMBER

        Interest bearing credit works EXACTLY the same way the only difference is the ticket is getting clipped over and over.

        EDIT: Yeah Op8 I’ve come around and agree, f*#$ the competition aspect interest bearing credit — offered as you say — was the “invention” of the Venetians who by it ended up owning Europe! I’ve been reading “Economic and Social History of Medieval Europe” and the markets — free markets no less — of Concorde, Ypres, Champagne etc functioned perfectly well for centuries w/o it.

      • Who is going to provide credit if there is no incentive (return) for doing so?

        How would bad debts be covered if there is no return from lent credit to cover them?

        Just think about it from a personal perspective… how much credit are you prepared to extend to me sans interest?

      • migtronixMEMBER

        @BB Uh as much as I think I’ll get back without incurring me a noticeable loss. How is it any different? How are the loses at banks covered by spread that goes to profit. To say nothing of the fact you can just literally type over the loses.

        I’ve never lent money to anyone with interest and I’ve lent lots so …

        Why would the banks EVER need to be “bailed in” if what you say is true?!?

        EDIT: If I’m expecting you to deliver me x bails of normandy wool – highly prised once – why wouldn’t I give you credit instead of letting you go to my competition for it?

      • migtronixMEMBER

        And as Op8 rightly says all of this was begun with OFFERED interest — which makes the liabilities of the banks bigger not smaller as you suggest.

        Its actually really simple — so for not twigging on earlier Op8

      • @migtronix,

        Yep. I trace all these troubles back to the early-mid 1500’s, when Pope Leo X — born Giovanni di Lorenzo de’ Medici, second son of Lorenzo the Magnificent — first began to formally weaken the Church’s stringent prohibitions on usury. Aided and abetted in that, in the same period, by King Henry VIII of England.

        http://www.amazon.com/Usury-Christendom-The-Mortal-that/dp/0970378491

        Remembering that Islam prohibits usury too, it is worth noting then that there was a very lengthy period in world history — more than a 1,000 years — where charging usury on lending (anything) was contrary to the laws of the land.

      • migtronixMEMBER

        @op8 the problem was, in that time frame, with the fall of Constantinople and before the extraction of large amounts of PM from the west there was a shortage of gold in Europe — and all the Monarch used an effective gold standard, that broke them all!

        Traders at those markets I mentioned never used gold, the used IOUs and it was perfectly adequate because people had reputations to uphold rather than wontenly sully then.

      • @mig,

        Yep. Those advocating for a return to the gold standard, and those calling to replace the USD with a new world reserve currency “backed” by a commodity basket of some sort, are all either (a) dangerously deluded / ignorant, or (b) dangerously knowledgeable … of how easily a “backed” currency can be manipulated for nefarious ends.

        I give you the currently emerging scandal re bankster collusion on the gold price a a case in point 🙂

        I am yet to see any remotely plausible argument to dissuade me from the view that anything other than a primary focus on the total elimination of usury from the “money” system of a nation / economy … again … is an exercise in futility.

        EDIT: “it was perfectly adequate because people had reputations to uphold” … ah ha!! now I see what you meant above, about coming around to my POV 😉

      • @mig, I was talking about institutionally provided credit, so perhaps the personal example I threw in confuses things somewhat.

        What incentive is there for banks to lend credit without making a profit on the spread between interest paid to depositors vs received from borrowers?

        How do they provision for bad debts without profit? (I am not saying they do this adequately to avoid bailouts)

        How do they employ staff to lend credit without profit?

      • @BB,

        In a digital age, when almost all “money” is electronic bytes, why are banks (as we know them) necessary at all?

        Why could they not be eliminated entirely, and (eg) replaced by either (a) government, or (b) not-for-profit entities, issuing “credit” / bytes according to predetermined rules (ie, so as to ensure sufficient “currency” for population, size of productive economy, genuinely productive new enterprise, etc?

        And why could the “money” needed to pay for the operations of the “bank” (not-for-profit) not simply be made out of newly-created “money”, as demonstrably required, with that amount factored into the calculations inherent in the predetermined rules mentioned above?

        At the end of the day, “money” is just rules. I seem to recall we had a guest blogger here at MB some time back arguing this very point. Since it is just rules, we CAN change those rules.

        EDIT: Mig, that book you’re reading sounds interesting, is this it?

        http://www.amazon.com/Economic-Social-History-Medieval-Europe/dp/0156275333

      • @IP,

        Yep, can’t believe I only just came across this guy in recent weeks.

        Saddens me to agree with his bleak assessment of what we are inevitably set to face in the ever-nearing future (8:28). I wish I could share his detached calm about the long run future, after the SHTF … I hate to see unnecessary suffering.

      • dumb_non_economist

        If you go back to the late 60s early 70s the corner shop usually ran (had to!) a credit book paid wkly/mthly, no interest.

      • migtronixMEMBER

        @dne exactly! And the only reason they don’t now is because of CCs that do charge interest! Such bs

        EDIT: op8 jinx!

      • @d_n_e

        Spot on. Great example, actually! Even into the late 70’s / early 80’s this was not uncommon; I can recall this from my own childhood in a small rural town.

        And even later than that, building supply firms offered short term (EoM) interest-free credit to tradies. I recall this too, since my old man was manager of a small building firm, and I earned pocket money in school holidays labouring for some of the tradies.

        Even today, a mate is a TV aerial / sat. dish installer, and gets all his supplies on interest-free credit terms.

        Thank you for reminding me of all these examples d_n_e … just one more set of evidences supporting the view that usury is NOT necessary for an economy to function harmoniously.

        Quite the contrary.

      • drsmithyMEMBER

        For all my growing agreement with Op8 about the evils of usury, I must confess I struggle to see how a world with free – effectively infinite – credit could function unless said credit was Government managed. Which brings with it a fairly substantial moral hazard problem.

      • migtronixMEMBER

        But drsmithy that’s what we do have now, 2 . 5 trillion Yuan created in a month

      • Banking is the perfect mechanism for upward wealth redistribution, and what better way than to force people’s real wages down as much as possible, keep inflating the value of the one key asset they require (a home), strip them of their capacity to fight back, and then extend them the credit (with interest) they require to actually participate in the society their labour builds.

      • @drsmithy,

        The “problem” of managing currency supply in a usury-free economy is a non problem. Especially now, in a digital “money” and electronic banking world. There’s lots of ways to do it. Yes, government managed is one possibility — absolute transparency and accountability two keys needed for that to work, along with education, so the population understands the basic dynamics of “money” creation (and the perils of usury).

        There are also lots of ways for it to be done via the private sector too. I even have my own alternate system idea, that I’d have out there already if not for a total absence of technical capability.

        Do not be put off by the pro forma scare-mongering (eg, the “it will all end in hyper-/inflation” unicorn, etc) that is trotted out to defend the usury industry status quo.

        Those who trot out these fears usually do so in ignorance, as a matter of doctrine/ideology, and not of understanding.

        EDIT: “..a world with free – effectively infinite – credit..” — The problem of understanding begins here, when folks incorrectly leap to the conclusion that “free” money = “infinite” money.

      • @dumb_non_economist

        Interest free deals are still available, see Harvey Normans and other large home goods retailers, it’s all built into the price though…

      • migtronixMEMBER

        @BB why the f#$k would I ever buy gold, which like you I do, if I thought interest bearing credit works the way you suggest? I’d have to be a f*##king idiot!! I buy gold precisely because its unencumbered by 3rd party “interest”. FFS.

      • @mig, not sure I understand your comment.

        I agree with some of the comments above, that the rules could be changed & we could have a monetary system without interest, but that is not what we have today. What we have today is a system that requires interest to be charged on credit as the banks who issue loans to the private sector would have no way to survive otherwise.

        If your intention with the original question was to draw attention to the possibility of a change to the global monetary system, it was something I missed.

      • @mig, @drsmithy,

        When looking at the world right now, with the massive “credit” creation going on, I think it very important to place that in context, and not to draw incorrection conclusions as to any implications for a wholly different set of circumstances (ie, a usury-free economy).

        IMO, what is happening now, in the Big Picture, is that we are living in a world where policy makers are madly scrambling, hoping to achieve one or both of two objectives:

        1. Prevent the global debt pyramid from imploding outright (ie, default on obligations to, and perhaps moreso, between the banks, whose activities now dominate all economic activity);

        2. Find a(ny) way to kickstart “growth”, in the twin mistaken beliefs that (a) this is possible, and (b) any “growth” will somehow pay down / reduce the debt pyramid, in time.

        Hence, we see massive inflation in “credit” creation — first and foremost aiming at point 1. — but only very limited impacts on achieving those objectives.

        Firstly, because the total debts, globally, are now far too large to ever be paid down via “growth”. The sooner the world accepts this, the better for everyone.

        Secondly, because little if any of that new credit has gone into genuinely productive enterprise.

        And thirdly, because even if it did go into productive enterprise, the dynamics of usury are such that those enterprises would only get the credit under a usurious contract. Meaning, they would have to “rob Peter to pay Paul” (in terms of the macroeconomy) in order to pay it back. Problem: the rest of the economy is too burdened with its own debt+usury obligations to have anything to be robbed of. Or, not anywhere near enough, anyway.

        Despite this, we see (even before the GFC) the rise and rise of mechanisms that all are aimed at keeping everyone’s (banks, government, businesses) ship afloat — interest-only loans are a perfect example.

        In the West, most of the recent massive credit creation by central banksters has simply relieved the self-professed Masters Of The Universe usurer class of trillions in “toxic”, worthless-from-Day-1 speculative “assets”. Because there are now only limited places they can “invest” the trillions they have been given for their toxic “assets”, it has mostly been parked back at the Fed (with a healthy chunk of loose change going out in executive bonuses, naturally). Sure, some has gone into blowing asset bubbles in assorted sectors, but in the main, the West’s massive credit creation is sitting on the sidelines, because there’s simply not enough “credit worthy” people and/or projects to lend to. We have reached the limits of “growth”.

        In the East, some of their massive credit creation has (apparently, largely) gone into domestic “infrastructure”, importing what they need to achieve that (resources), and, buying up ever more natural resources and other real assets abroad.

        Credit creation, without usury, where occurring in the absence of a world already burdened by unsustainable total debt loads, is not axiomatically predestined to the same futile (and problematic) outcomes we are presently watching play out.

      • interested party

        BB, why should the banks survive??????
        They are needless parasites… when reality is that if society say ‘no more’ then we can change how we live, interact with each other, and our environment. We don’t need to clear the next acre to generate ‘growth’ just to feed the beast.

        EDIT: beat me op8…great post above. You are getting traction here, well done.

      • @BullionBarron,

        Just so you know, I’ve long been a bullion buyer, for much the same reason/s as migtronix pointed out (unencumbered by 3rd party claim). Some would incorrectly accuse me of being a gold bug; this only a temporary choice, not an ideological stance, and one taken in view of world circumstances.

        As a matter of principle, I believe that “currency” (medium of exchange, unit of account) and “money” (store of value) absolutely need to be functionally separated. Hence, demurrage (or “negative-interest”) currency. Our present financial system — and almost all economic theory — conflates these distinct functions, and demands that all three be satisfied under one system, using one “form”. The “store of value” function — for electronic digits, FFS! — is “satisfied” by offering usury on deposits.

        If folks want to save (store of value), there’s lots of real things they can use for that. Including PMs.

      • migtronixMEMBER

        Something of a book-end on this is the reflection that once a mans word was his bond/credit but now its the banks word and they lie through their teeth quite openly — look where we’ve got to in the 30 years of bank “credit” run amok?

        @BB my point is why would anyone ever hold gold they can’t do anything with if interest bearing credit is so well managed that I get a risk free return?

      • migtronixMEMBER

        Interesting game Monopoly, its now clear to me that it failed miserably at its apparent purpose. We all play Monopoly everyday and everybody seems to think its real.

      • “once a mans word was his bond/credit”

        Wonderfully stated insight there Mig. The entire topic, beautifully summated.

        Noted, for future reference.

      • dumb_non_economist

        I’d say most small businesses back then all had a credit book when it came to customers. Milk and bread when it was home delivered was weekly credit as it was sometimes with the fruit & veg truck. I made a bit of illicit pocket money out of that (milk). Oh the shame!

      • dumb_non_economist

        BB,

        Ha, not just built into the price, but inflated!

        When credit was extended back in the day, it was at the listed price. I guess a shop owner may account for that, but my guess is that most of their stock was on “credit” anyway.

        Back then the shop credit was usually until payday!

      • The answer to this whole thread is that only gold can extinguish the debt… If you don’t understand this, you don’t understand the 5,000 year concept of gold being money.
        Even at this late stage, if the US actually still has 8,500 tonnes of gold, they can turn around and say that gold is backing their currency at US$10,000 per ounce and get back to business.

      • “…why would anyone ever hold gold they can’t do anything with if interest bearing credit is so well managed that I get a risk free return?”

        @mig, I would say that is a false premise to begin with, there’s no such thing as a risk free return.

        ———————

        “Even at this late stage, if the US actually still has 8,500 tonnes of gold, they can turn around and say that gold is backing their currency at US$10,000 per ounce and get back to business.”

        @athalone, what would a Gold backed dollar (fixed at $10,000oz) really solve?

        261,498,926 ounces x $10,000 = $2.615 trillion

        Now they have a less flexible currency and still have a $17.5 trillion dollar debt to repay… I don’t see that as a viable solution or the likely endgame (to the current monetary system) and it certainly doesn’t extinguish the debt.

      • migtronixMEMBER

        @BB @mig, I would say that is a false premise to begin with, there’s no such thing as a risk free return.

        That was my whole point man, you’re saying why would I put money in a bank (term loan) if I’m not getting offered interest – but by accepting the offered interest I’m entering into a compact to have the bank loan against my money at high enough clip to be able to pay me my interest, in doing so I agree to the bank inflating away the very money I’m supposedly getting back which is an insane bargain, because must inflate it away just to be able to play the game as you pointed out to keep credit in the system. And even at that they regularly fail at which is why everyone with sense has bullion.
        The whole thing is stupid and when I buy equity its effectively a loan bearing no interest and still a fair amount of risk so what the problem?

      • You won’t hear any argument from me regarding the non sustainability of the existing monetary system, but even without bank involvement and without a debt based monetary system, why would I lend my capital to someone else without a return?

      • migtronixMEMBER

        @BB You won’t get any from me that of course you’ll/anyone will want a return, but why does it have to be usurious — owing more and more over time.

        We can come up with every kind of financial instrument you can think as long as its tied to interest-bearing credit, surely we can come up with some — low equity, low risk, low return etc etc — that can satisfy your risk averseness and still return something but without your money inflating away at the same time.

      • Great discussion chaps.

        @BB … I think a big part of what needs to take place, is the shifting to a very different viewpoint on the idea of “return”. That is, the idea that it is a good thing for me to “get something for nothing”. An increase of what is mine, without labouring for it.

        Once we allow ourselves to forgo the now endemic belief (which is embedded in the usury-based money system) that “yield”, “return”, “interest” on an “investment” of “capital” (w/o personal labour) is a good and noble thing, one that is of benefit to self and (somehow) to society as well, then everything changes.

        IMO this change is very gradually taking place anyway, thanks to ZIRP. When the situation is now such that “cash” in an at-call savings account or term deposit (a) is a loss-maker, receiving a return less than inflation + taxes, AND (b) is clearly not risk-free, viz FSB / G20 “bail-in” regime, more and more folks are coming to see that return OF capital is all that really matters. Complacent, lazy greed (for returns-without-labour) in the “capital” sphere is very slowly being rendered obsolete. At the grassroots level, at least. And that is the important ground for change to begin.

        As Migtronix points out, we all (?) commonly lend money to relatives, friends, people we trust, w/o expectation of a return. We of course hope for return OF capital, but to ask for interest as well, we innately feel would be to take advantage of our fellow.

        OTOH, the relative, friend, person we trust, innately feels it to be a matter of Honour ( ‘eh Mig? 😉 ) to repay the debt owed. There was a time, not so far removed from this generation, where this was how much commerce operated. No reason why it cannot be so again.

        Like mig, I’ve often lent money to others, only hoping for return of capital. I recall an incident where I lent a mate a 5 figure sum; he repaid a modest chunk within a couple of weeks, but after 2 years, when he had not paid any of the outstanding back, and it was obvious that he was taking advantage of my generosity by splurging on unnecessary and excessive personal consumerism, rather than repaying me, I confided the concern with a mutual friend, who then chose (in empathetic outrage) to act as proxy in employing peer pressure to oblige our friend to pay me back. This, in my view, is how a community should operate in the monetary sphere; plenty of lessons to be observed regarding Trust, Honour, Responsibility, Patience, Respect, Friendship, Sharing, Mutual Benefit, etc. Indeed, this is how community DID operate, once upon a time, before the rise and rise of usury-based “capital-ism”.

        By the way BB, just want to add that your comments @ 11:45pm and this a.m. inspire an even greater respect from me than before, since it is now obvious to me that you see the bigger picture more clearly than I had presumed, and are not simply a “gold bug” apparently believing (per @athalone) that gold, and/or a gold standard, is the panacea for all systemic ills.

      • “..by accepting the offered interest I’m entering into a compact to have the bank loan against my money at high enough clip to be able to pay me my interest [Op8: and, make a profit for themselves] , in doing so I agree to the bank inflating away the very money I’m supposedly getting back which is an insane bargain..”

        Well observed @mig.

        You really do get it now, viz. the clever deception of offered usury, and the consequent logic that competition between “free market” currencies won’t do it; you still have to ban the practice of usury by law to eliminate the evil.

        Woo hoo! I will now pat myself on the back, for being a minor agent of Light and Understanding, for one person at least 😉

    • Gunna, did you read Dirk Bezemer’s comment at the end of that piece?

      “…the rise in private debt since the 1990s is NEGATIVELY correlated to GDP per capita growth.”

      Well worth following the link to read his paper on this too:

      Credit Is What Credit Does: A Functional Differentiation Of The Credit Growth Relation

      http://www.rug.nl/staff/d.j.bezemer/research

  6. It’s a good model, the financa guys tell the gov they need to inflate themselves out, they drop rates, leverage goes through the roof and the finance guys clip everything basically risk free?

  7. Sir Joh must be smiling in his grave at what’s happening in QLD. Newman and Bleijie really are his ideological heirs.

    http://www.abc.net.au/news/2014-02-27/move-to-limit-ideological-objections-to-qld-mining-projects/5289246

    The Queensland Government is looking to restrict who can object to mining applications, in a bid to crack down on what it calls philosophical opposition to projects.

    Currently any group or person can object to applications, potentially sending the decision to the Land Court.

    • migtronixMEMBER

      Ha ha ha ha well if your objection is only philosophical what do you think your trying on mate? This is ‘straya.

      In defence of the indefensible!

    • interested party

      Thanks Nudge…..good link. You can see the breakdown he speaks of in action in many spots globally now.
      Good question also, how close indeed.

    • Yep! Another article by a self-entitled moron, living in the Nation’s capital with all its subsidised facilities and welfare, who knows absolutely nothing about farming, and even less than nothing about practical economics, probably hasn’t ever lived anywhere else but Sydney or Canberra, coming up with anti-Abbott tripe for the sake of it.
      Then he’s quoted here as some sort of independent expert…oh bloody lovely!

    • How I lost my father to The Australian and The Bolt Report.

      Imagine if you were 3d1k’s one kid? Oh the shame!

    • In Australia they join GetUp – a cabal of crotchety malcontents craving chaos from the confines of the couch.

  8. Is anyone else surprised that Gold has not rallied more in the past few days given the evidence that DB have been supressing it for most of 2013 (zero hedge covered the story well yesterday), and given the mounting political tensions in Ukraine?

    • I noticed the pullbacks are limited & marked more over time. I can only presume that the suppression rolls on but that maybe they’re not getting their way in a pronounced way right now.

      If they could bust it like MtGox they would.

      • Interesting, going forward, now that info is out there, I wonder if players not in on the fix might try to squeeze out the suppression, I’m thinking along the lines of the hedge funds forcing Amaranth to unwind the long gas trades, LTCM, JPM Whale trade kind of scenario.

        Could be a long shot… maybe I’m just hoping that will happen!!

      • migtronixMEMBER

        Bingo Nudge! The arbitrage, with the knowledge out, is compressing — as arbitrages do.

      • Wouldn’t be surprised to next read that DB & Co in fact were not doing purely for traders to maximise their bonus but to accumulate a large long position at good prices.

      • interested party

        and ultimately the cure for low prices is low prices. Price will pop…when..?…how much..?
        Hold physical and forget about it.

    • I think it’s important to differentiate between ‘price suppression’ and ‘price manipulation’, see this quote from the Bloomberg article:

      “In 2010, large moves during the fix were negative 92 percent of the time, the authors found.”
      http://www.bloomberg.com/news/2014-02-28/gold-fix-study-shows-signs-of-decade-of-bank-manipulation.html

      So it’s possible the price was manipulated at the time of the fix, but that doesn’t necessarily suggest the price of Gold was suppressed over a longer time frame as a result. Here is a chart from 2010:

      http://www.kitco.com/LFgif/au2010.gif

      • I guess where it looks suspicious (possible manipulation) is that gold trended down sharply and then eased off and even retraced its loss after June month end and December month end.. which coincides with the dates the profit pool is struck to be shared amongst traders.. certainly were the dates at the firms I have had the displeasure of working for…

    • interested party

      Discount the tension in Ukraine as an input. If that thing blows up big-time and spreads( imho it will calm down rapidly from here) then oil is a moon shot so all energy burning industries will suffer. What you pick up in any AU price rise will dissolve in energy costs I reckon…..

    • @ Quant4

      In the end it doesn’t matter… You look at the Insider, John Exter’s inverted pyramid and realise that eventually all that ridiculously huge amount of printed money has to be reflected in the gold price, and that the only possible solution to taming both politicians and central banks is to go back to the gold standard.

      • @ interested party
        Interesting video with a gentle man recounting what he has learnt from his own philosophical search.

        The philosophical side
        When I was 18 (1970) I was involved in a boating accident…sent out ‘Mayday’, then onto rubber dinghy, then 8 hours huddled on a small rock during the rest of the storm waiting for help that arrived next morning.
        I spent most of my University years doing my ‘search’ into religion and philosophy, and just scraping through exams.This is something that everyone goes through in their life, usually after realising their mortality.
        Better to do this through vast reading rather than you tube.

        The generosity side
        I’ve tried to live the idea ‘that the prosperity of a generous man never fails’ ever since.

        Negative interest side
        I’ve been getting this on my money for the last 12 months of retirement.

        Could you please write back and simply explain how any of this pertains to my comment about the importance of returning to a gold standard?

      • interested party

        athalone yes, happy to.

        From my perspective (for all that it is worth), most of the reports and comments here are just noise in the bigger picture…mine included. The bigger picture being a very long process as described in the clip.
        The monetary system has changed much over the last 100 years, and I assume you know the history involved as you mention the gold standard. The gold standard, or more succinctly, returning to it will not happen for several reasons. Firstly, to do so will give China and Russia a huge head start in finance( due to the massive accumulation of gold). The west will not allow this. Secondly, the system is “owned” by the politicians and central banks alongside the supranational corporations. They will not kill what they have designed and built.
        Thirdly, and this is from the viewpoint in that clip, this is a finite planet and people are waking up to this fact. I suspect that people are in the early process of rejecting ‘money’ as a belief system and way of life and are aware of the failings of how we live. In that light, I think that the window of opportunity to re-instate the gold standard has passed us by. If gold were monetized and the system reset, the game cannot continue due to resource depletion anyway.

        I hear you on the negative interest point. More of that on the way I reckon, alongside haircuts and cash theft.

        In the recent past, yes, most of my education involved books, conversations, listening and not speaking then reflecting on what was said, yet here we are conversing over copper wires and a keyboard…so I don’t discount you-tube as a source of learning in that light(not saying you have).

        On the fellow in the clip…..I think that this is deeper or more than a philosophical subject. I see it as truth. Many people I have had contact with have expressed a feeling that something is wrong with life as we now live it, but have not been able to put a name to it or put their finger on it. This clip goes some way to fixing that.

      • Hi interested party… Your words make a lot more sense than the heart-felt video.

        We baby boomers thought we could change things too, but real life gets in the way… Going to work, putting the rubbish out, paying the bills, looking after the kids, then the elderly parent, and now the grandchildren (Thursday and Friday for us).It’s a twisted path, this tortured course… with no time to save the world.
        And the next generation was never any good 😀

        In the last iteration of our current circumstances (1930s) there was a huge change in attitude to money….as there has always been throughout history.
        There is nothing new under the sun.
        Life will get gradually better after the capitulation of markets.

        “On the fellow in the clip…..I think that this is deeper or more than a philosophical subject. I see it as truth.”
        —interested party

        “The truth is in the forgotten nuances… not in the logic of the narrative”
        —Ernest Renan

      • interested party

        Nice.

        “We baby boomers thought we could change things too, but real life gets in the way”
        I don’t want to change the world, but I acknowledge that the world is changing around us and we have no control over this. The tone of your comment tells me much……to change something assumes control of something. Our arrogance as a society through ‘control’ has led us to this point;and I have played my part also.
        ‘Real life’ is what we have manufactured in worshiping the god of money and debt. We are trained in this from a young age and it is reinforced throughout our lives through a constant narrative pushed through bought and paid-for mainstream media, and so is accepted as normal.

        I should elaborate on ‘truth’.

        I see the message as truth, not so much the underlying vehicle as such. The information resonates with me logically, and I will grant you this, I have a very well developed dislike towards banks, high level bankers ( or facilitators) and any collusive industry that clings to the teat of the financial control of society, giving me an inherent bias with these subjects. I try to contain it but mostly fail.
        So getting back to the original subject…gold…it may play a part in the next monetary system ( I hope so, I hold both pm’s). I strongly suspect the gift economy is the next in line though. Gold will play a minor role in this as a means of value storage, not so much as ‘money’ or a facilitator of exchange.

      • Interested party

        The days of affluent mindlessness are over.
        People’s lives will contract to the family as during the 1930s.
        Families will work together… to look after each other, and as in the 1930’s countries will look inward.
        This is just the cycle of the world and will never change.

      • interested party

        I completely agree, and I welcome it.
        Sounds like you think/suspect depression is on the way.

  9. Much respect for Royal Bank of Scotland.

    http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10664372/RBS-has-lost-all-the-46bn-pumped-in-by-the-taxpayer.html

    “Royal Bank of Scotland has lost all the money invested in it by the taxpayer six years ago when the lender came close to collapse.

    The bank has confirmed its total losses since its bailout have now drawn level with the £46bn pumped into it in 2008 in return for an 81pc stake.

    RBS made a loss last year of £8.2bn, its sixth consecutive annual loss, taking its cumulative losses to £46bn.

    The scale of the losses means that all the capital provided by the taxpayer has now been used up dealing with the toxic legacy assets on the bank’s balance sheet.”

    “Despite, the loss RBS said it had put aside £576m to pay staff bonuses for 2013.”

    • interested party

      At least the bastards are up front about it. Our lot silently rape us every day..

    • migtronixMEMBER

      Ha ha ha ha noooo. Its good to be the thief!

      And they’re threatening to bail ii the scotts go indy!

      F#$king c#@t pricks, can’t make it up 🙂

      • If the Scots go indie, I’ll be seriously tempted to go back to my ancestral lands and buy. Why?

        Why not? Sure as heck not going to buy RE in Oz!

      • MsSolarFelineAU

        If the Scots go indie, I’ll be seriously tempted to go back to my ancestral lands and buy. Why?Why not? Sure as heck not going to buy RE in Oz!

        Mr Opinion8red, I am considering the same course….it would be good if they could tell the invaders to bugger off. au backed SWF to kick-start the Alba New World Order?? 😉 Flat tax rather than a GST and 3000-odd pages of a Tax Code (as we in Australia suffer)? Just chuckin’ ideas around…

      • notsofastMEMBER

        Opinion8red, MsSolarFelineAU,

        I don’t know your position but have you thought if Scotland goes for Independence then they might not be prepared to accept you back. You might not be “Scottish” enough for them?

      • drsmithyMEMBER

        I look forward to a suitable excoriation of the Scottish Government as “PC”, “hypocritical” “moral relativists”.

      • migtronixMEMBER

        @drsmithy dear lord smithy I assure you it was entirely a light hearted observation, I applaud the Scottish for extending the openness. Sometimes it scares me to think of the person you think I am.

      • migtronixMEMBER

        @drsmithy You know perfectly well that the PC/moral relativism was in regard to halting a loan to be spent on health care in a country ravaged by Aids, some of whose sufferers are no doubt gay — thats the moral relativism – just putting that out there.

      • @drsmithy,

        FWIW, I didn’t respond to your comment to that thread the other day, because it was, in my view, patently ridiculous, and borderline contemptible. Indeed, if it were not for the fact that I KNOW you are more intelligent than that, I’d have been sorely tempted to think it an example of lamely trolling for a fight.

        In a nutshell, you tried to infer that my observation of the blatant hypocrisy and moral relativism inherent in the behaviour of those who preach “tolerance” choosing to pressure (to the point of genocide) a 3rd party on purported moral grounds, somehow represents a condoning of the 3rd party’s behaviour.

        Puhleeease!

      • drsmithyMEMBER

        FWIW, I didn’t respond to your comment to that thread the other day, because it was, in my view, patently ridiculous, and borderline contemptible.

        Mmmm.

        That’s what I think of those who feel the need to label something they don’t like with meaningless epithets, rather than try and have a discussion about whatever it is that’s actually important.

        The “PC” bullshit you appeared to be mindlessly agreeing with is intellectually lazy. You know better.

      • migtronixMEMBER

        @drsmithy

        The “PC” bullshit you appeared to be mindlessly agreeing with is intellectually lazy. You know better.

        You’re the one who jumped in to defend the indefensible in the first place, with non sequitur I might add, how is op8 the bad guy in this?

    • AB.. I can vouch that the wastage at these kind if firms is on a level you cant imagine.. unless you have worked in this environment as well!

  10. @Mig, nah not Glenncore, I’d rather not disclose… I’m super paranoid in this day and age of spying… Not that I don’t trust the guys at MB, but they do have my email address and god knows what can be tracked down if an interested party really wanted to know!

    • migtronixMEMBER

      I worked for a Lloyds sub in London for a spell but I was a backroom geek and was never allowed to touch the money — though they paid me handsomely not to 🙂

    • interested party

      Q, smart to stay quiet.
      Financial types have a habit of getting disappeared lately.

      and I don’t want to know…lol.

  11. dumb_non_economist

    I’m surprised this hasn’t had a run here.

    Gold scandal in Dubai with E&Y involved. Who whistle blows, the western guy or the local “camel jockey” partner? The local, E&Y London do their best to circumvent any odious report. Obviously when they employed him they didn’t realise he had integrity.

    http://www.theguardian.com/business/video/2014/feb/25/ernst-young-whistleblower-conflict-gold-risks-video

    There was a written piece on this also at the Guardian, but can’t find it

    • notsofastMEMBER

      Migtronix,

      “There are no signs for concern yet,” said Cohen, “but the West needs to make it clear to Ukraine that how it is seen depends on how minorities are treated.”

      Why just the West?

      Why not other countries as well?

      If this world is going to work out well all countries need to pull their weight on respecting minorities and also with openness and the acceptance and fair treatment of different people. Surely this is not such a difficult concept for Mr Cohen to work out.

      Which brings me to my next point, maybe the world isn’t going to work out too well???

  12. HnH Martin Ferguson was well received by an enthusiastic and supportive audience. An entirely different reception to that Gillard received on her occasional forays to Perth.

    MUA a rogue union ( love to know what All The Way With a The MUA Shorten thinks of that ); IR needs an overhaul as does regulatory burden. Special provisions should apply to large projects to ensure timely and cost effective delivery.

    http://australianpolitics.com/2014/02/28/martin-ferguson-calls-for-more-ir-reform.html

    If only he had been leader…

    • Why is everyone treating Marn’s statement as some sort of ‘seen the light moment’? It well-known in Marns Ministry the only thing he was interested in was life post politics and spent most of his time courting future employees. You’ve been duped 3d.

    • GunnamattaMEMBER

      Interesting link there 3d1k

      Great to see that after all those years looking after the interests of the working man he can Martin can still become such an overt ‘company man’ like that at the drop of a hat.

      You and I have known if for ages. But it is refreshing to see that out there so plainly put. Maybe one day the unionists of this world will wonder about the marginal utility of their union movement in being a grooming school for the Whig faction of the ALParatchiks.

  13. migtronixMEMBER

    “Chapo’s arrest will have no effect on drug trafficking,” said a former senior Drug Enforcement Administration (DEA) official under presidents Bush and Obama. “If you are making a car and suddenly 15 people on the production line die, it is going to take a while to train new people. But if the CEO dies, it is actually no big deal – the machine is going to continue.”

    Yes the DEA actually said this.

    “Chapo is a terrible man, but I think it was a mistake to arrest him,” said a retired salesman. “The politicians let his organisation grow and now it is the only thing that protects us from other cartels, like the Zetas, who are even worse.”

    That does sound familiar.

    True or false, the notion of a deal helps bridge the gap between the mythology of the man who built a global empire and $1bn personal fortune trafficking marijuana, heroin and cocaine after escaping from a high-security jail 13 years ago, and the portly, middle-aged detainee with died hair they saw on TV being marched towards a Blackhawk, his head bowed.

    Nothing suspicious there.

    Charges in Brooklyn alone allege that between 1990 and 2005, Chapo and his deputies conspired to import more than 120 tonnes of cocaine into the US.

    But only drug smugglers do that not their helpful money laundering local branch of Wells Fargo.

    “The standard statement is ‘this is dealing a tremendous blow to the organisation,’” said Longmire. “But you later find the majority of the people who have been rounded up are back on the street because there was not enough evidence and they were selling dime bags on the corner.”

    Ladies and Gentlemen I present you the perennially successful War on Drugs.

    http://www.theguardian.com/world/2014/feb/28/el-chapo-arrest-drug-cartel-mexico-chicago

  14. The man leading the “independent” investigation into the Manus Island death?

    And who has already provided a report clearing Manus staff in the past?

    The same man who declared there was no conflict of interest at the Great Barrier Reef Marine Park Authority?

    So independent that he spent years working as a senior bureaucrat in Howard’s government and was very close to Ruddock (a former Immigration Minister) of course.

    I quote from God’s Own Newspaper for 3d1k’s benefit (http://www.theaustralian.com.au/business/legal-affairs/cornall-steps-down-from-top-post/story-e6frg97x-1111117135820):

    “The department was given the task of implementing the Howard government’s national security agenda, and Cornall was adept at the role — being made an officer of the Order of Australia in 2006 for his contributions to public policy, “particularly counter-terrorism arrangements in a changing global security environment”.

    After Philip Ruddock was appointed attorney-general in 2003, many considered they were almost joined at the hip.

    There were perceptions that during the final years of the Howard government, the two men grew too close. In March last year, Cornall mounted a spirited defence of the Howard government’s new control orders.”

    Yes, truly his own man and one who clearly should be trusted with an independent review. Trusted in the “Yes Minister” sense of independent.

    • A sensible appointment. Clearly has understanding of associated and peripheral considerations. He will perform in a competent and professional manner.

      • interested party

        you forgot to add ” and will deliver the prescribed outcome as expected”

      • migtronixMEMBER

        It was sensible, a predetermined waste of taxpayers money and dignity should be expedited by an obviously co-conspirator — why bother hiding anything anymore? Nobody cares and media wouldn’t know what the conflict of interest from good etiquette.

        EDIT: Quite right IP

  15. dumb_non_economist

    How do these people get elected?

    “In the early 1990s, Lockman was active on the issue of abortion. He became a director of the Pro Life Education Association and in 1990 was quoted as saying “If a woman has (the right to abortion), why shouldn’t a man be free to use his superior strength to force himself on a woman? At least the rapist’s pursuit of sexual freedom doesn’t (in most cases) result in anyone’s death.”

    Plus many more.

    http://www.salon.com/2014/02/27/republican_lawmaker_very_sorry_he_said_men_should_be_able_to_rape_women_if_abortion_is_legal/

    Edit: a link from the “I lost my dad” link.

      • dumb_non_economist

        exactly, he needs to be raped with a 12″ dildo, it may give him a new perspective.

    • there needs to be some kind of intelligence/rational comprehension test before anyone is allowed into positions of power in politics, and the same test needs to be given to people who are allowed a vote, like driving, voting should be test based.

      I say this because some of the reasons I have heard over the years people give why they are voting for x candidate is borderline insane…

      • migtronixMEMBER

        borderline? In some more conservative locales you’ll quite often get the “because God told me this is a good man/woman” — that is literally hearing voices and taking it to the ballot box.

  16. Crimean PM asks Putin for help with “keeping the peace” …

    http://news.yahoo.com/crimean-leader-claims-control-asks-putin-help-070848315.html

    And that following this alleged incident …

    http://rt.com/news/russia-crimea-sieze-gunmen-344/

    How timely.

    I am vividly reminded of the Yes Prime Minister episode, “A Victory For Democracy” –

    ****

    Israeli Ambassador: Well, Jim, what are you going to do about St George’s?

    James Hacker: You know about that?

    Israeli Ambassador: Obviously.

    James Hacker: Not a serious problem, is it?

    Israeli Ambassador: Isn’t it? Your information must be better than mine.

    James Hacker: Don’t be silly. Mine comes from the Foreign Office.

    Israeli Ambassador: Israeli Intelligence says that East Yemen are going to invade St George’s Island in the next few days.

    James Hacker: What? So that’s the connection.

    Israeli Ambassador: Your Foreign Office have agreed with East Yemen that they’ll make strong diplomatic representations, but do nothing. In return, the Yemenis will let you keep your airport contract after they’ve taken over.

    James Hacker: There will be uproar!

    Israeli Ambassador: That’s only the start. I happen to know from our ambassador in Washington that the Americans are going to support the present government of St George’s.

    James Hacker: In the U.N.?

    Israeli Ambassador: No, in battle. On St George’s Island. They’ll send in an airborne division backed up by the Seventh Fleet.

    James Hacker: The Americans? Invading a Commonwealth country? The Palace will hit the roof. And I’ll look ridiculous. Why didn’t the Americans tell me?

    Israeli Ambassador: They don’t trust you.

    James Hacker: Why not?

    Israeli Ambassador: Because you trust the Foreign Office.

    James Hacker: Oh, I see. What can I do about it?

    Israeli Ambassador: Jim, you have an airborne battalion on standby in Germany that is not now needed for the NATO exercise.

    James Hacker: How do you know?

    Israeli Ambassador: I know. Now, if you were to send it to St George’s Island, it would frighten off East Yemen. They’d never dare invade. Of course, it’s not for the Israeli ambassador to advise the British Prime Minister.

    James Hacker: And he wouldn’t take your advice anyway.

    [picks up phone]

    James Hacker: Get me the Foreign Secretary and then the Defence Secretary, please.

    [hangs up]

    James Hacker: A wonder the Foreign Office didn’t cover themselves. Maybe they did. They gave me several boxes tonight. I’ve been through them all except this one. I wonder if this could be it, “Northern Indian Ocean Situation Report”. 138 pages, it must be it.

    [phone rings]

    James Hacker: Hello? Yes, Ronnie. I want the president of St George’s Island to extend an invitation to Britain to send an airborne battalion on a goodwill visit. No, just a friendly gesture. Goodwill. Yes, at once, please. Thank you.

    [hangs up]

    James Hacker: He seemed to think that 800 fully armed paratroopers was an awful lot to send on a goodwill visit.

    Israeli Ambassador: No, it’s just an awful lot of goodwill.

    ****

    In this case, could it be that the Russian “goodwill visit” was already there. And now that they have it locked down, this alleged incident provides cover for their being there … ?

    • interested party

      Mig,

      The US will just bark at the gate. Piss and wind…..which is a good thing.We don’t need idiots at this time.

    • GunnamattaMEMBER

      The troops involved are apparently the base protection unit from Sevastopol (a massive Russian naval base – home of the Russian Black Sea Fleet) which is leased to Russia.

      While I have no doubt about Russia’s military capability in quickly taking hold of Crimea, and I have similarly little doubt that a large percentage of the population there (but by no means all, there will be a sizeable minority against) would have no problems whatsoever becoming part of Mother Russia again there is the question of what it means for Russia’s relations with the rest of the world from there. If they do brazenly take hold of Crimea (as opposed to allowing the locals to secede from Ukraine themselves) then it is going to be a major thorn in their foreign policy side for some time, and that will be likely to flow through to their economy. The ostensible cause for Russian intervention will be of course specious, but no more specious than other calls for intervention in Iraq or Afghanistan, or Ossetia/Georgia in 2008 – we live in a world full of specious excuses

      It is possible they are sizing up whether Eastern Ukraine (quite solidly pro Russian in my experience. If you pop into Dnepropetrovsk or Kharkov you wouldnt actually be aware that you werent in Russia) is of a mood for splitting. This has been mooted tonnes of times before, but has never seriously got off the ground. It is the home of most of Ukraines heavier industry (of the type the Russian appreciate – even if it isnt particularly competitive) and much of its coal (again always appreciated in Russia). Much of the industry there will already be owned by Russians.

      My guess is that the Russians may be just stirring the pot to see what leverage they can get over Ukraines new rulers. Here the issue will be gas transit routes and a seriously big bill owed by Ukraine to Russia (primarily Gazprom). Russia would (in my opinion – but there will be those against) let go of the bill if they gained effective control of the gas pipelines which run across Ukraine carrying Russian gas into Europe. So much of a hassle have these been that the Russians have largely funded and constructed the North Stream (already completed – across the Baltic straight into Griefswald in Germany) and South Stream (completed next year – across the Black sea to Bulgaria, then into the Balkans). The problems with gas routes across Ukraine are essentially the Ukrainians have not really conducted maintenance (impairing the system reliability and effectiveness) the Ukrainians represent a choke point which they have squeezed a couple of times in their gas disputes with Russia/Gazprom (ie prevented gas being sent by Gazprom to Europe from reaching customers there – much of Europe was doing cold showers during a new years contract dispute each year from 2006-2010) Ukraine tends to swipe a fair bit for their own use, and they expect to be be paying considerably less than Gazprom wants to charge (reflecting Ukraines historical part of the Soviet Union – although on this I tend to the view the world cant have it both ways. It cant claim Gazprom isnt privatised/corporate enough and then claim it isnt giving mates rates to Ukraine )

      The other thing I would note is that the one thing the Russians wont be keen on is taking military hold of a place where they need to subdue a local population, particularly where they would be under no illusions whatsoever that the US and EU will be highly likely to fund whatever insubordination subsequently ensues – which bring us back to them seeing how the locals play it out (at the risk of sounding soft on Russians I would also add that given there are so many Ukrainians/Ukrainian descended punters in Russia a prolonged military presence (quite likely to involve terrorism and social ugliness – dont forget that a Ukraine independence movement continued in the Soviet era until the mid 1950s, as well as the penchant for some Ukraine independence types to have strong anti jewish, anti polish overtones) isnt going to be all that popular.

      At the level of the Russian macro economic backdrop the RUB has been sold off heavily, which actually helps Russia’s budget position (almost all their exports are priced in USD and all domestic outlays are in RUB), and you can be sure that any military action, or even pretty warm diplomatic action, will be felt straight away in the crude price worldwide – Brent circa 109/bbl – presumably enabling talk of tapering or rate rises to be parlayed off into the future.

      There may be some advantage for Putin domestically (in the short term at least) from increased isolation from the rest of the global economy – the Russian economy has been soft and it may allow some chance of an industrial/military stimulus to come into play, thereby allowing restiveness due to the economy to be toned down – Russia has massive reserves with both the Central Bank (for financial system purposes) and national welfare fund (a couple of varieties of SWF for pensions and generally buffering the economy) and has virtually no international debt (having bent over backwards for a generation to pay off the rest of the world the Soviet era debts – something which underpins considerable popularity for Putin and Kudrin). One would assume that as national leader when the military comes into play there would be a popularity boost for Putin too – so kiss goodbye to any liberalism hopes/marches on the streets of Moscow (though I personally tended to see these as a forlorn hope). Over the longer term though it would be bad news. Russia needs investment in infrastructure and more widely, and it will simply evaporate (well it has largely evaporated already – and look at the discount just about all Russian internationally listed companies trade at compared to peers from almost anywhere) and presumably Russia’s enduring issues with capital outflows (even if these are largely money laundering by companies who reinvest it in Russia) can be expected to worsen.

      Dont forget there are other regional fruitcakes in play in Georgia [and the outcomes in Abkhazia and Ossetia may be what Russia has in mind here with Crimea) and Belarus too, plus the TransDnestr, Moldovia, Romania barney. This could all get very messy, but I would add that in Russia it is something of a tradition to make their geopolitics messy, and it may be a messiness which has a book entry as an unstated large factor.

      Just for the record my Mrs is Russian, my kid was born in Moscow, but her family is Russian and Ukrainian and has relatives both sides (and pro and against separatism currently), I still do a lot of work for Russian related interests, though these are my thoughts and nobody elses.

      • interested party

        Thanks for the education Gunna….humbling.
        I said as much to op8 last night and will reiterate my sentiments to you also….I hope you and yours get through this ok. I have a son who spent time in Afghanistan fighting someone else’s war for them so have some semblance of how you must feel.
        Keep well.
        Your informative posts are well received this side of my screen. Thanks.

      • migtronixMEMBER

        @Gunna: I second and echo IP’s sentiment on the personal and appreciative fronts.

        As for the broader context its absolutely a pipelineistan play and I think Putin is just a far far better chess player than anything the Americans are apparently capable of putting up. Just like Ossetia in 08 this was manufactured at the outset on of an Olympic Games with a fair helping hand of Israeli IDF (see link provided earlier) and just like last time Putin just gets shit done and puts and end to all prevarication!

        Putn 2 – US 0

        Pipelineistan still looking like a Russian game at the moment, I look forward to the next piece from Pepe Escobar.

        EDIT: BTW does that still make your son Gunnavitch? 😉

    • More than a h/t i reckon – that’s a long slow bow to Op8.

      That is a fantastic use of an hour (although i dodged the beer and looked to a glass or two of rum)

      The presenter is a great performer that links in so sweetly with the US folk tradition, and the message is simple. Stop thinking about money the way you have in the past.

      For someone that worked in the FIRE industry (like so many do these days) it just never ceases to amaze me how little i understood money. From day 1, i understood the destructive value of it, but never the underlying structure.

      I reckon you could be running your own blog op8 on just this topic – doesn’t have to be prolific or vitriolic, but just a source of information. I mean really, who goes to a f..g burger store or food processing co. to get their understanding of nutrition, yet we all go to the banks and the finance industry to get our understanding of money…

      What people most need to understand, what Op8 bangs on about, is punched home nicely here:

      “when money is through interest bearing debt, there is always less money then debt”

      For me that is all you need to know.

      But for those short of an hour another couple of crackers:

      “what happens when there is nothing left to convert into money” (on the monetisation of environmental wealth)

      “more and more of their life energy goes into servicing debt” (on the structural failing of the current monetary system)

      • interested party

        aj,

        Judging the arguments below, it seems the message has been lost on some, hijacked by b-b no doubt getting hung up on minor details, but never mind. The second part to the clip is informative also. I applaud op8 for his tenacity on chasing this subject and as he has said, it disturbs him, as it does myself.
        Glad you got something out of it.

        edit…..sailor jerry is damn good drop.

      • IP,

        I wish that all those who (eg) agree with some of the past articles here on MB regarding “bullshit jobs”, could all be sat down to watch that video, and this part in particular (from 44:40sec) –

        http://youtu.be/76x4GuQCpsc?t=44m40s

        Thanks to you and AJ both, for the kind comments. Yes, I do feel very strongly about this topic … obviously 😉

        The sheer wrongness, the fundamental immorality of it, and in particular, the multivarious forms of suffering that it causes — for ALL of us, as a sentient species capable of so much better — greatly disturbs me.

      • This discussion has been very interesting.

        The major problems I see with the worlds economies today are not so much the interest on debt
        but more on what the debt has been used for -> mass consumption of unnecessary things.

        As I previously stated along with the need for some form of interest (a reasonable and fair level matching inflation) to compensate for inflation,
        systems that shun interest like Islamic finance replace interest with a lenders share in profits.

        Personally, I’d much rather pay the interest than giving up a share of the profits
        as my ROI has far exceeded any interest rate I’ve ever paid on margin loans.

      • Hmmm b_b. That is a simplistic understanding of banking. Firstly, nearly all money is debt i.e. a promise to pay, secondly, you seem to be assuming that all interest is recycled into the system and reused as principal to pay down debt – some is actually used to create more debt.

        The point is, there is a structural shortage of money that creates a perpetual shortage, at any point P+Int is greater than total assets.

      • Quant4,

        “The major problems I see with the worlds economies today are not so much the interest on debt but more on what the debt has been used for -> mass consumption of unnecessary things.”

        You have to look deeper at this.

        The reason for the outcome you point to — mass consumption of unnecessary things — is interest-on-debt based money.

        Usury-based money actually means there is artificial scarcity of money (currency). It means that total Debt is ALWAYS greater than total currency in circulation. Thus, everyone in the economy is compelled into competing for the currency that IS in existence. In consequence, everyone looks for ways to “sell” something to others — cut down a forest, invent a new widget, invent a new “service”, etc.

        Meanwhile, to keep the whole show ticking over, the banks are also incentivised, to keep looking for new borrowers, and/or, to push more debt on to the same borrowers. In either case, if the bankers fail to keep growing the total supply of “money”, the whole system begins to collapse.

        Combine these drivers — citizens competing for money, and bankers looking to push more debt — and the long run consequence is the invention of ever more (mostly unnecessary) “consumer” “goods” and “services”. The whole world has become a great big creative machine, one that is ever more urgently searching for new ways of converting anything and everything into a “saleable” “good”, in order to feed the beast.

        The root of it all, is a money system where all legal, government-sanctioned “money” is created in the form of debt principal, owing itself PLUS uncreated, non-existent usury to the lender.

        Usury is the root CAUSE of misallocation of “wealth”, of consumerism, of materialism, etc etc.

    • Did not watch it all, but the idea there is more debt than money is false. The loan creates the deposit. Debit equals credit – always.

      Interest accrued is simply more loans and by definition more deposits.

      So how can everyone pay back their loan? Two points

      1 in the private sector, for all loans to be repaid all deposits must be extinguished. This is unlikely.

      2 Government deficits = private savings. The private savings pays the private interest and pays down the loans.

      But how does the government pay back their loans?

      In a pure fiat issuing country like Australia, the government can never run out of its own fiat. So the private sector loans can always be serviced (in a macro sense) and repaid so long as the government runs an appropriate sized deficits. Any Interest on government debt simply adds to private sector savings.

      The external accounts complicate this a little, but the concept is still the same.

      • migtronixMEMBER

        And where does the money for the bank to clip the ticket come from? Deposits? Liabilities? Something isn’t netting out and over time it balloons as we all know so I can’t believe you’re still trying this idiotic line.

      • Mig,

        I’ll explain.

        Imagine a $100 loan creating a $100 deposit. The borrower bought a house, the the seller receives the deposit.

        Assume the mortgage rate is 6% and the deposit rate is 3%.

        After 1 year, the loan balloons to $106. The deposit is $103.

        The difference is credited to bank employees and shareholders via dividends or book equity (which is deposited in the bank).

        So after one year
        Loan = 106
        Deposit = 103
        Bank employees (say) 2
        Bank shareholder 1.

        It all balances. Always will.

        The interest and loan can be repaid either by;

        1. The loan holder doing some work for the depositor. This reduces the deposit and the loan by the same amount
        Or
        2. The loan holder doing some work for the government. The deposit holder keeps his deposit, the loan holder reduces his loan which is offset exactly by a government bond. (Bank asset swaps from private loan to govt bond).

        BTW, If you don’t understand something just say so. Getting upset and calling people idiots will not advance your learning.

      • @b_b This all works as long as people keep taking out debt and have faith in the fiat. I don’t think this can continue ad infinitum like you suggest.

      • @b_b,

        Forgive my curtness following. Frankly, I’ve had enough of your prevaricating bullshit. You, friend, are an enemy of the truth.

        In a nutshell, this is the heart of it. You keep reverting to this starting point —

        ” The loan creates the deposit.”

        Your deception, whether willful or ignorant I cannot say, begins right here.

        The loan creates the PRINCIPAL.

        It does NOT create the interest component that must be repaid too.

        The subsequent customer Deposit (ie, bank Liability) equals ONLY the PRINCIPAL amount of the loan.

        But the Debt owed (ie, bank “Asset”) equals the Principal … PLUS an uncreated, non-existent sum of “interest” owed.

        You are wrong.

        Everything else you say subsequent to this initial manifestly false beginning principle, is simply propagating falsehood by way of blurring the fundamental issue.

      • migtronixMEMBER

        I understand mathematics well enough to know that you can’t invent from nowhere what isn’t there — if the generation is the liability there is no enough left over to clip the ticket, your unsound logic notwithstanding.

      • Opinion 8

        Read my post after mig. It explains the interest component of the loan (ie: the bit you struggle with).

        The interest is just another loan which creates a further deposit. I don’t care to repeat this all over again. Just read my second post and learn some basic accounting.

      • migtronixMEMBER

        I don’t care to repeat myself you’re doing math wrong!

        The proof are readily available out there and even Einstein himself remarked upon the matter.

      • @b_b,

        I did read your post, and understand it perfectly.

        “The interest is just another loan which creates a further deposit.”

        Thank you. I can rest my case.

        This is a deceptive restatement of how the basic function works, but a telling one.

        Whether you realise it or not, what you have stated concedes the central point I made, in bold type.

        The interest component is NOT made at the time of a loan (principal) being created, and a customer receiving a Deposit in that principal amount.

        EDIT: Therefore, the total Debt IS greater than the money in existence to repay it.

        The only way that the Interest component can come into existence, is by the making of ANOTHER loan … of Principal … which itself owes even more uncreated Interest / Usury.

        Thank you for making my case for me.

        Now, with respect, f**k off with your deceptive, loquacious BS.

      • Mig – it is not Maths, it’s accounting. Blocking you ears and closing your eyes does not alter reality. Read my post an critique it if you want. Or go away and actually learn the monetary system. Denial is a waste of time.

      • Opinion

        Ok you se to agree. The statement that debt is great than money is false.

        Great

        No sure why you are so upset?

      • The only issue I can see with no interest on loans, whilst it works well for small $ purchases with a short duration repayment cycle,
        it would not work with a large purchases with long duration repayment cycles, i.e a house.
        If party x lends $400K interest free to party y for 20 years, the principal $400K will be eaten away by inflation.
        It wouldn’t be in anyones best interest (padon the pun) to lend $400K to get back less than $400K in real purchasing power.
        For interest to be fair to all parties it should roughly equal the inflation rate of the day.
        A large spread above or below this fair value mark and you just have wealth transfer and purchase power arbitrage.

      • interested party

        b-b

        I have sat back and tried to get my head around your concept. I wonder if you are caught up in the ‘money can never run out’ theme….and quite rightly we never can run out. How that money is created is where this system is going to fail. It is far to simplistic to argue that the debt creates the deposit. Interest yet unpaid should not be considered a credit/asset/deposit…it remains and will remain a debt until paid..and therefore the total of interest payable must come from future earnings/growth.
        It is a shame that your dogma has prevented you from understanding the greater picture well described in the clip and that you still cling to a belief that will most likely harm you in the long term.
        Yes…in a sense, the loan creates the deposit….but look at the bigger picture here…step outside the money system and look “at it”….it’s flawed, it’s failing, it’s undeniable.

      • migtronixMEMBER

        Why do I call you an idiot b_b?
        First I’m not trying to advance and argument mathematical correctness is not an argument that needs advancing.

        For thing to net out simple logic dictates A union (not)A = 0

        A = set of all liabilities
        not A = set of obligations
        and when I say all I mean all worldwide, universe wide whatever.

        So if the single entity loans it self $100 it has $100 to spend on it self – so far so good – but it does not ever have the $3 to ticket clip itself with – booooo – so your solution is lets create that $3 all over again just so we can ticket clip ourselves.

        Thats why I call you an idiot.

      • Ip

        Thanks for being the first to respond without the abuse.

        Iam happy to respond to any critique of the post to mig (showing how loans and interest does get repaid). But no one yet seems to be able to come up with any argument beyond “it just can’t be” and “fck off”

      • Mig – you are losing the plot. Who said anything about lending money to themselves. Go back to my original post and come back with a sensible response. I hate wasting my time.

        The difference between the interest paid and received goes to the bank in wages and profit. Not sure how many times I have to say it?

      • @b_b,

        “Ok you se to agree. The statement that debt is great than money is false.”

        Err … comprehension fail dude. Reread what I wrote.

        I leave it to readers to decide for themselves.

        And btw, you can f**k off with the sly attempted putdowns of others’ arguments, viz. “learn some basic accounting”. It is you who needs to do this, friend.

      • migtronixMEMBER

        For things to net out that equation must be satisfied period end of story, no matter how much you contort your mind with dividends paid are someone else deposits nonsense it all must net out.

      • b_b.

        Double entry accounting goes much further than the fundamental debits = credits.

        http://accounting-simplified.com/double-entry-accounting.html

        Your statement

        “Interest accrued is simply more loans and by definition more deposits.”

        Is confusing to say the least unless all you meant is what when interest accrues, double entry accounting requires two entries to be made.

        The entries made to record the accrual of interest are not to the loan account and the deposit account.

        That plainly makes no sense as the borrower cannot spend the interest that is charged on the loan (which you call a deposit) and the interest itself is not part of the loan.

        Interest and principal are two separate issues.

        What Op8 and others are pointing out is that, unlike the making a loan which creates a deposit, incurring interest does NOT create a deposit (i.e. the creation of 2 accounting entries to record the interest accrued is not the same thing as creating accounting entries to record a loan)

        If subsequently the lender and borrower agree to ‘capitalise’ the interest accrued that is done by the making of a new loan consisting of a loan and deposit entry. The deposit created is then applied – by way of another 2 entries to the payment of the accrued interest on the original loan.

        In this way the deposit account for the new ‘interest’ loan is drawn down by an entry and the account for the accrued interest is paid down by an entry. The corresponding entry, to the entry to pay down the accrued interest account, is the recognition of income entry.

        By doing so, the bank has now recorded that it has received payment for the accrued interest. (The payment came from the new ‘interest’ loan )

        Of course there is still interest accruing on the original loan but now there is also interest accruing on the new ‘interest’ loan account.

        Thus the charging of interest does create an obligation that cannot be met from deposits ‘created’ by accounting entries arising from the granting of the original loan.

        It is the way that the charging of interest drives demand for more loans and the need for people to acquire the means to pay their interest obligations that concerns Op8 and others.

        I don’t agree that a complete bans is necessary or practical but I am definitely in agreement that the banking system needs a choker collar fully deployed.

        Hope this is clear.

        By the way b_b I think you may find this site interesting – it has great potential as a way of constructively using the power of fiat currency to diminish the current role of private banks with regard to the money supply.

        http://www.systemicfiscalreform.org/Home

      • Thank you @pfh007, for another of your excellent explications of the subject.

        @b_b, my apologies for the curtness shown above.

        To add further to pfh007’s comment, Steve Keen’s work on explaining how the banking model / double-entry accounting works is well worth your time too. Recommend downloading his Minsky development software, and having a good look at the way in which the double-entry accounting model actually works in banking practice. It is as per pfh007’s comment, and not so simplistic as you make out –

        http://www.debtdeflation.com/blogs/2014/01/15/some-sample-minsky-models/

      • Yes, well explained by Pfh007.

        b_b said (which is wrong or at best poorly explained):

        “Interest accrued is simply more loans and by definition more deposits.”

        While the reality is:

        Interest accrued simply requires more loans and by definition more deposits.

      • drsmithyMEMBER

        The only issue I can see with no interest on loans, whilst it works well for small $ purchases with a short duration repayment cycle,
        it would not work with a large purchases with long duration repayment cycles, i.e a house.

        Yes, this is also the part where it starts to break down for me as well.

      • drsmithy,

        IMO, the battle is already beginning to be won, when an individual has

        1. correctly recognised a root problem, and
        2. moved on (as you have), to consideration of the +’s and -‘s of eliminating it.

      • migtronixMEMBER

        @drsmithy why should a house that can be built by handful of people in a matter on months on land thats as vastly unused as Australia cost you so much that it takes 2 people 30/40 years to pay off? The fact you’re being offered the 30 years pushes up the cost in itself.

        Also Maiden Lane I & II was hundreds of billions of no interest loans thats much much more than a house loan.

        Railroads were built on 0 interest loans, freeways, bridges, its really not a problem.

        EDIT: And I don’t why you guys have a problem calling someone an idiot when that person is clearly trying to insult your intelligence and doing it really really badly — throwing away one of the most fundamental rules of logic and mathematical proofing.

      • drsmithyMEMBER

        why should a house that can be built by handful of people in a matter on months on land thats as vastly unused as Australia cost you so much that it takes 2 people 30/40 years to pay off?

        It shouldn’t.

        It seems quite reasonable it would cost a sum that would take one person 5-10 years to pay off, however, which leaves the same question hanging. Even with land at practically zero cost, you’re still looking at a $150-250k for a house to be built.

        Plus, this has been focussed on mortgages, but what about large scale lending (10s to 100s of thousands) for business ventures ?

        Railroads were built on 0 interest loans, freeways, bridges, its really not a problem.

        Yes, but those are public infrastructure. Not quite the same thing as a private home (or a business).

      • drsmithyMEMBER

        Intergrate something alone these lines into your model and see how you go. Pretty cool idea.

        I need more time to properly digest that, but the solution there basically seems to be that the “mortgage” lender becomes Government.

        So their position is that only Government should “lend”, via the creation of new money ?

      • @IP and OP8

        Are your reservations about the current system against interest on money or the money creation process via credit issue? You can still have interest on money under different money creation schemes.

      • interested party

        F F

        The word ‘reservations’ is not strong enough for what I feel.
        Interest does not exist outside the eff’d up constructs of our monetary system, and this ‘interest’ serves no one else except the people at the top, at no cost to them, but at great cost to individuals, societies, and humanity.
        I am far behind op8 on this subject information wise, but have had a deep rooted hatred for banks since my teens…and have only recently discovered the reason behind it. Never underestimate intuition.

      • The90kwbeastMEMBER

        Long time stalker but first time poster here. Re: b_b’s/Migtronix/Opinion8ted’s discussion surrounding debts and assets, may I add that Opinion8ed’s comment is bang on the money:

        “The loan creates the PRINCIPAL.It does NOT create the interest component that must be repaid too.”

        Steve Keen, as noted, has done significant research into this and I find it quite remarkable that so many in Economics and Finance do not comprehend double entry accounting in much of their understanding or models. Consequently it seems the importance that interest and the role of debt plays in our debt driven is notably underestimated.

        Say a bank lends you $100 at 5%p.a. over 10 years. You do not make, for simplicity, any repayments in that time frame until the end of the 10th year when the whole balance is repaid inclusive of interest. The entry for the above at the point of making the loan is (from the bank’s perspective):

        Dr Loan Asset $100
        Cr Bank reserve/cash $100

        Now, to the point of interest. Over the 10 years $63 in interest will have accrued on the loan payable by you to the bank. But this is not reflected anywhere in the bank’s balance sheet!! So to repeat, it is only the $100, not the $163 inclusive of interest, that is reported as an asset for the bank. Yet you really owe $163 to the bank! The $63 is reflected as income on the bank’s profit and loss statement.

        Hence why Opinion8ted continually refers to usury as being such a problem as interest is control over your future disposable income and thus a transfer of power really from you to the bank. A two second look at any loan calculator is sobering.
        https://www.ubank.com.au/ubank/web/money-tools/calculators/uhomeloan-calc?_afrLoop=50173825649000&_afrWindowMode=0&_afrWindowId=gkqytc0t_14#%40%3F_afrWindowId%3Dgkqytc0t_14%26_afrLoop%3D50173825649000%26_afrWindowMode%3D0%26_adf.ctrl-state%3Dgkqytc0t_42

      • migtronixMEMBER

        @the90KWBeast: Thanks!!! I’d been trying to say that but frustration was apparently preventing me getting it out. Appreciate it 🙂

      • The90kwbeast,

        As you are a first time poster, let me be first to extend a very warm MB welcome … all the warmer since you are clearly a comrade-in-arms on the usury issue 🙂

        We need all the help we can get!

        EDIT: D’oh!! Mig, you beat me to it.

      • migtronixMEMBER

        @the90KWBeast: and lets take your example one step further which to me is the real meat and potatoes – what if with the $100 you borrowed you put back in the bank as a term deposit – now where does the bank get the money to pay YOU interest if you never make a payment? So they’re operating fraudulently offering you something they can’t possibly make good on!

      • The90kwbeastMEMBER

        No problems guys and thanks for the welcome! It’s a big hurdling block it appears for those not well versed in accounting (without sounding pretentious I’m a newly minted CPA) to get their head around but hopefully I made some sense!

        I would be very amused to see what the Big 4 bank’s asset balance would be if interest outstanding on all loans, based on current repayment schedules and interest rates, were NPV’d and included in their total asset balance. I see in 2012 the total assets were already an absurd $2.66 trillion for the Big 4… imagine the interest outstanding on all the debt owed as future income to the banks! It would have to be hundreds of billions… what a claim on future disposable income indeed.

        Cheers,
        Kurt

      • @OP8 and IP

        Thanks. It will take me some time to digest the links etc. The idea of no interest currently does not sit well with me because I can’t think of a way to fund large capital ventures as per smithy’s earlier post. Also since interest is the base for ROE measurements, I don’t know how such a system wold function in terms of ROE. Will there be such a thing as an investment? as savings?

      • interested party

        FF,
        It comes down to who you are in the end.
        Interest/ursury has broken the common bond between fellow-man and turned us all into competitors. We compete for every single item in our lives, with the banks watching on, taking a cut, at every moment…every transaction.. of yours and my life. Some of us will say enough, and some will carry on regardless. Change will occur when the majority say enough.

        edit …..to add that the process of funding large capital ventures is part of the problem. It is this desire for more that is driving the machine, pushing us to clear more forest, burn more oil, out-compete the next bloke.

      • The90kwbeastMEMBER

        @ Migtronix

        If:

        a) you were the only customer the bank ever had
        b) $100 was all the bank could loan i.e. when it started shareholders contributed $100

        yes it would be bankrupt. It would have cash at bank of $100 at the point where interest on your TD is due, however the bank would owe you $103, even if you owed the bank say $106 ($3 TD interest, $6 loan interest) but you were a bad and didn’t pay even your interest, let alone principal. So it still only has the $100 you deposited back.

        Assets $106 less bad debt $6 interest = $100
        Liabilities $103 ($100 capital plus $3 interest owed to you).
        Deficit: $3. Uh oh.

        Of course in practice lending reserve requirements would stipulate that say 20% must be retained (5:1 leverage). So in the above case really the max the bank could lend would be $80, not $100. Which in theory sounds safe. But what if you actually borrowed $300, didn’t pay any back, then invested $100 back into the bank, or even invested nothing and simply didn’t pay… along with all the other customers who did the same…. leading to this:

        http://en.wikipedia.org/wiki/Fractional_reserve_banking

        Lending to the moon!!

        But I digress..

        Cheers
        Kurt

      • @IP

        I see. My reservations are with how a world and system of government and economy similar to the current one would function without interest.

        I’m definitely with you in regards to changing everything. Harder to do though.

      • flyingfox,

        “The idea of no interest currently does not sit well with me because I can’t think of a way to fund large capital ventures as per smithy’s earlier post.”

        This is a non problem. There are many ways to fund large capital ventures, without resorting to the evils of reliance on interest-bearing debt money.

        History offers us many examples, perhaps none better than The Miracle of Wörgl (Austria), in the Great Depression.

        Not only was this “miracle” achieved w/o interest-bearing debt money … it was actually achieved with NEGATIVE-INTEREST (ie, demurrage) money.

        I strongly encourage anyone who has doubts that all economic functions can be achieved in a world where usury (positive interest) is eliminated, to learn all you can about this example, and the many copy-cats that sprang up.

        Unsurprisingly, it only ended when the Central Banksters, seeing the obvious threat to their power monopoly, had these currency systems banned by the government.

        http://www.lietaer.com/2010/03/the-worgl-experiment/

        Silvio Gesell, the originator of the idea of “Stamp Scrip”, was a humanitarian visionary genius whose book “The Natural Economic Order” should be read by everyone, in my opinion.

        Especially by all those here on MB who fire up about Australian real estate prices.

        http://en.wikipedia.org/wiki/Silvio_Gesell

      • The90kwBeast,

        It’s worth noting that Australia does not have any monetary reserve requirements for the banks.

        Capital reserve requirements, yes.

        Monetary reserve requirements, no.

        http://www.federalreserve.gov/pubs/feds/2007/200754/200754abs.html

        So if our banks have capital reserves, does that mean everything is ok?

        Not if you are a customer with a cash deposit in the bank.

        The problem here is this.

        Capital reserves relate to the question of the banks’ capacity to absorb investment losses. It is a kind of reserve that is meant to protect shareholders in the bank, against the bank making losses on its investments. That is why the capital reserve requirement is essentially composed of a % of shareholder funds, that are held against the value of the banks’ “risk-weighted assets”.

        Monetary reserves, on the other hand, relate more directly to the question of the banking system’s capacity to absorb a run on customer deposits. That is, a good old fashioned bank run, where people lose confidence in the safety of the bank/s, and try to withdraw their cash … en masse.

        In the twenty-four OECD countries that do have monetary Reserve Requirements, the banks are required to hold a certain amount of their customers’ cash deposits as reserves against customers’ withdrawals.

        In the six countries – including Australia – that have zero monetary Reserve Requirements, essentially the central bank is the ultimate backstop.

        Meaning?

        If too many of us decide to go to the bank at the same time, and ask for our money on deposit – they don’t have it.

        This helps to explain why, during the GFC’s Peak Fear period in late 2008, the Reserve Bank of Australia had to supply billions in extra cash to our banks –

        http://www.theaustralian.com.au/news/features/tonnes-of-cash-were-salted-away/story-e6frg6z6-1225882001496

      • interested party

        FF,

        The current system will not function in that format( no interest). That is why you are seeing geopolitical strife across the globe right now. The system is in it death throes yet not many see it. The riots are for the vast majority centered around energy. Mid east – oil…..Crimea/Ukraine-gas…Syria.-gas…Venezuela- oil…Iran -oil The fracking that is happening…..the environmental cost is huge, all to feed the machine so people/business can make the next interest payment on their debt.

        What happens when this machine starts to run in reverse? We cannot make that payment?

        jeeze op8…your a bloody hard act to keep up with!

  17. migtronixMEMBER

    I just learned of this article about 30 minutes ago, which is why I’m addressing it “only” now (I apologize for not continuously monitoring Twitter at all times, including the weekend). I have not spoken to Pierre or anyone at First Look – or, for that matter, anyone else in the world – about any of this, and am speaking only for myself here. To be honest, I barely know what it is that I’m supposed to boldly come forth and address, so I’ll do my best to make a few points about this specific article but also make some general points about journalistic independence that I do actually think are important:

    And so they are.

    https://firstlook.org/theintercept/2014/03/01/journalistic-independence/

    • interested party

      Pfh007

      There is an interesting divergence of thought and actions from Meltfund in his narrative. His earlier works appear to support change toward a more equitable outcome for the general population, then in his latest work he seems to have gone completely belly up and is now pushing his wheelbarrow in the opposite direction. I believe there is much more to this individual that what presents on screen. He does make me sit and think…i’ll give him that much.

      • Ok, I hadn’t really picked up on this properly, but it does seem possible from this interview below that Robin Smith’s Meltfund is indeed a vehicle for highlighting the inequity of not taxing land properly.

        http://www.youtube.com/watch?v=AS_9_Kj8AiY

        High concept performance art. Either that or he has gone off the deep end.

      • IP,

        I think Meltfund is intended to illustrate the folly of the current system.

        By taking the idea of privatising economic rents to the extreme in all its hyper absurdity it demonstrates the need for change. Though because hyper absurdity is quite close to reality Meltfund is striking very close to the bone.

        Few reading Meltfund (bar a few we can all name) are likely to be thinking

        “Yeah baby that is me – building a giant property portfolio and extracting economic rents and eating truffles”

        Most read it and think that really really sucks.

        Note that the Meltfund business model does not involve holding economic rent property rights and collecting rents.

        All it is about is buying property rights (a mortgage is a right in respect of property) at a low price and selling at a higher price.

        If meltfund actually does trade – and I have my doubts – then it is possible that if someone read the Meltfund site and got excited and rushed up to Meltfund to buy a property right (a repo property) to secure their personal little chunk of economic rent nirvana – then they might have cause for complaint re the Meltfund hi-vis spruiking of the joys of economic rent rights over property. But I don’t think there is much of that going on.

        Think of Meltfund as black label ‘insert random spruik forum’ on red cordial day and enjoy.

      • interested party

        “Though because hyper absurdity is quite close to reality”

        jeeze, aint that the truth.

        So I can get off the couch now, can I?
        Thanks, doc.

  18. chink in armour

    Greetings all,
    Just reading through FIRB 2013-13 Report http://www.firb.gov.au/content/Publications/AnnualReports/2012-2013/_downloads/FIRB-Annual-Report-2012-13.pdf
    (pg 40) 3. Privately-owned foreign investors — real estate
    “Foreign persons should notify the Government and get prior approval to acquire an
    interest in certain types of real estate. An ‘interest’ includes buying real estate,
    obtaining or agreeing to enter into a lease or licence, or financing or profit sharing
    arrangements.”
    ======================================
    So that is the chink in the armour, ie. “An ‘interest’ . . financing or profit sharing”.
    ======================================
    Any foreign buyer who have invested ‘under-the-radar’ in RE here through local investor clubs, proxy buyers, are standing on shaky ground.
    Any journalist(s) who want to cement an independent career, need only infiltrate one or two local proxy-buyer networks/investor clubs that accept foreign funds (without registering details of foreign sourcing) in exchange for equity in existing residential real estate.
    ==================================
    Bring this whole house of cards down.
    ==================================
    Make the FIRB accountable and not just some pseudo-rubberstamp for FIRE and foreign buyers.
    The alternative is to do what is being done now – nothing, and watch the place undergo a slow slide into Sinofication of inner city suburbia and a quickening of the dog-eat-dog pace of life.
    ==================================
    Recommendation for Journalist:
    Any journalist or students of journalism at university (perhaps as class assignment) conduct an investigation into what is clearly developing into a rout – the sell-off of suburbia to foreign buyers. If one has contacts, look for some whistle-blowers inside FIRB, RBA, APRA, etc.

    • “Any foreign buyer who have invested ‘under-the-radar’ in RE here through local investor clubs, proxy buyers, are standing on shaky ground.”

      How shaky is it when the rules are not enforced? Gunnamatta aka Chodley Wontok demonstrated the uselessness of the FIRB, and I don’t think anything has changed since.

      The idea of exposing the whole game is good, but unfortunately, with a government in bed with the FIRB, and too many vested interests all for selling out the country to foreigners, all it will do is substantiate something we already know.

    • interested party

      oh great…all we need is a permafrosted north korea loose in the streets.

      edit… I totally agree on the comment below the article…best they pull the head in.

    • GunnamattaMEMBER

      Great spot,

      We can be sure the Europeans are likely to make more annotations to the draft than our smear it in KY jelly and smile and ‘thank you massah’ approach.

      • GunnamattaMEMBER

        Ukraine Russia changes the whole context of this before i even gets discussed.

        Europeans are in much stronger negotiating position just because of VVP actions IMO.

      • Article 4: Market Access, section 2.

        Jeeeeeezus!

        EDIT: Didn’t see your Edit mig. F*ck me, we’re both on to that one quick 😉

        EDIT 2: Yes, nice find IP.

      • migtronixMEMBER

        @IP that was funny ha ha
        Article 57 Specific Exemptions
        Nothing in this Agreement applies to activities conducted by a central bank or
        monetary authority or by any other public entity in pursuit of monetary or exchange
        rate policies

        How did that sneak in there?

        @Gunna; I dare say you’re right there, the US is need this more than the EU at the moment.

      • migtronixMEMBER

        twitter, one of the discredited conspiracy handles I follow.

        Chapter 2 is a doozy

        EDIT: limitations on the total number of operations or on the total quantity of output
        expressed in terms of designated numerical units in the form of quotas or the
        requirement of an economic needs test8

    • GunnamattaMEMBER

      That cheering will get weirder and weirder when China utters some words about Russia’s right to protect minorities in Crimea/Ukraine to fend of any action in the UN Security Council……..