Weekend Links 21-22 November, 2015

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TheNostalgiaoftheInfinite

The Nostalgia of the Infinite, Giorgio De Chirico, 1911

 

China

Asia

Europe

United Kingdom

United States

Americas

Terra Nullus

Commodities

Capital markets

Global Macro

…and furthermore…

Gunnamatta
Latest posts by Gunnamatta (see all)

Comments

  2. John

    Something of universal interest, but rarely acknowledged, came to my attention today.

    We all know that organisations are not supposed to discriminate against potential employees on the grounds of, for example, age, ethnicity, gender or religion. (It doesn’t mean organisations DON’T discriminate of course, it just means that they are not supposed to).

    As such discrimination is against the law you would think there would be no place for questions relating to such factors in the application process. (After all, if one cannot discriminate on the grounds of age, why ask the candidate how old they are?).

    This is the clever bit. They get to ask you all these personal ‘discriminatory’ questions and more (“tell us about you sexual orientation, cheers!”) and get to justify their collection of this information by suggesting they have an all inclusive “Diversity” policy by which they ‘monitor’ and ‘manage’ and ‘measure’ candidate diversity. This means…………..whatever the hell they want it to mean, depending on who’s asking (but not many DO ask – especially not job candidates).

    So what happens when the Head of ‘Talent Acquisition’ in an average, large, Australian Professional Services firm, for example (the kind of organisation most likely to ‘need’ this information) is provided with last quarter’s candidate profiles and establishes that, what, 90% of candidates were of either sex and in their mid 20’s to mid 30’s. (Just like 90% of their employees, in fact).
    What happens?
    Bugger all – that’s what happens.

    Meanwhile, an unseemly amount of candidates personal details reside with a company that candidates may have absolutely NO relationship with whatsoever (beyond being a failed candidate for employment).

    Whilst candidates are given the option to ‘choose’ whether to answer these ‘Diversity’ questions, would it surprise you to learn that the candidates who exercise their ‘choice’ NOT to answer these questions are MORE likely to be discriminated against and LESS likely to be employed (or interviewed) by the organisation?

    Why?
    “What exactly IS IT about your age, ethnicity, gender or religion (or sexual orientation, cheers!) that you don’t want us to know about? Eh?

    Got something to hide, have you?”

    • Janet

      And yet, The Government DOES discriminate! It has an Immigration Policy based on a Point System that included age, economic means and language skills etc, and actively discriminates against skilled employees that don’t fit into the Approved Trades category. (One reason why I ended up emigrating to NZ and not Aussie – and I’m English! I couldn’t get the points required, mainly on the basis of….age!)
      Surely, of all bodies The Government should have no prerequisites other than quantity if is to be truly non-discriminatory?

      • Escobar

        Tut tut, Janet

        We have enough Anglo-saxons thank you very much.

        We needed other grateful types to take orders and build stuff back then.

    • Wiley Wolf

      John, you are way on the wrong track, you discriminate every day, on your property.
      You keep telling us the quality of cattle offered is poor, Why dont you take every animal offered.
      Discrimination is everywhere, Making choices has carried each of us to where we are,
      some are doing well, others poorly. Discrimination at work.

    • Hector

      You’ve uncovered the paradox that lies at the end of postmodern social theory. Taken to their logical conclusion, in this case ” diversity theory” these theories end up self refuting, one way or another.

  3. Pfh007MEMBER

    One of the “beliefs” of capital free flow purists is that capital flows are like the wind and if they get in the mood to move there is nothing that man nor government can do to stop them.

    For the purist regulating the movement of capital is unnatural and doomed to fail because like the ‘wind’ capital just wants to flow and bring joy to all mankind.

    This of course is just one more bit of hogwash where a defective and damaging state of affairs is characterized as the natural order to deflect proper discussion of why and how the situation should be fixed.

    The links above show that ‘capital flows’ can be regulated without much difficulty if a country is minded to do so. China is sticking plugs in the ‘capital flow’ conduits faster than a small Dutch boy can plug a few dykes.

    It is not as though there is any lack of understanding of the measures that are employed to shift capital illegally.

    http://www.bloomberg.com/news/features/2015-11-02/china-s-money-exodus

    If capital flows could not be ‘managed’ then we would not have the problem of mercantalism where one country seeks to manipulate their relative exchange rate by exporting more capital than they import. Mercantalism simply would not work if the country exporting capital had no ability to regulate the capital inflows that would otherwise neutralise the capital export currency manipulation strategy.

    The last forty years and the business models of Japan, Germany, Korea, etc etc demonstrate that managing capital flows is a doddle.

    Locally it looks like there may be room for Penny Wong to back off from her wrong headed desire to wedge the witless Mr Robb from the right (and poke a stick at the Nationals) and argue for even faster unproductive exchange rate manipulating capital inflows.

    Mr Robb like any good ideological obsessive (and his former leader) is out on the hustings, clanking his neo-liberal chains and whinging that the government is showing some signs of reconsidering his massive nation wide “garage sale” of Australian assets to our trade rivals.

    http://www.smh.com.au/federal-politics/political-news/kidman-cattle-stations-andrew-robb-criticises-scott-morrisons-political-decision-to-block-sale-20151120-gl3vkb.html

    Take the hint Penny – the last thing the ALP needs is to participate in a bidding war in Mr Robb’s nutty and clueless neo-liberal ideological obsessions.

    • GunnamattaMEMBER

      Pfh you are talking about market purity – it is a belief system first and a rationale second for sure

      Many years ago I found myself in the weird position of outsourcing large chunks of a very large organisation to the private sector on the grounds that market efficiencies were somehow in someones benefit…….a batch of pointy headed neoliberal gargoyles one side advising management, a batch of heavy union officials who thought the halcyon days would never end, representing employees who mainly just wanted to job and knock and be able to afford life’s essentials and an organisation management sans cojones absolutely terrified of making hard decisions…

      I found myself doubting it in poetry one day

      The Joy of Productivity & Market Purity

      The tedium is not so much never ending as eternal
      And the blue haired aunts no longer slip the tongue
      The ship of state still seems to hold the kernel
      But a wheezing noise emanates from its one remaining lung

      St Ignatius had an answer tho’ he drove good men to drink
      Its said that St Joan of Arc simply never ovulated
      It seems the quest for purity still is a cause for which to sink
      And the utility at the margins is, as always, overstated

      The spider is on the board but legs are wriggling
      Perfection screams that all should be thus pinned
      What the baying wolves and chanting monks are saying
      Is that they know that someone somewhere may have sinned

      Tom Toms permeate the background as the strides reveal the schlong
      The Children eating Dingos enquire if there is nothing more
      The contract steeped in vinegar less they’ve left the indicators on
      The judges on the sidelines nod and wink and scream encore, encore

      Aghast the barest breast awaits the ritual to commence
      Splendid are the rows of peering eyes
      The Minarets always echo with the chiaroscuro dimmer on
      The reception always picks up when the old lady shows her thighs

      The moment’s quickly waning and the light’s becoming dim
      There may be a final victor in the struggle between the light and dark
      We might market test the bastards and pay homage thus to Him
      Though fashion is always over rated and nakedness always stark

      But the siren goes a second before we face the finality of a result
      The combatants relax, and cast their eyes to recommencement in the dawn
      With productivity levels maximised the day ends in near tumult
      And when we dine in Coober Pedy we stay well clear of the prawns

      Gunnamatta 2001

      • SweeperMEMBER

        The pointy headed neoliberal idealogues in Treasury and the productivity commission believe in market purity because most have never worked in the private sector. They’ve gone straight from the micro-economics course to Canberra. But Uni is a poor guide to the inner workings of the private sector. For example in which textbook does an efficient, profit maximising firm, operating in a competitive market where all actors have all price sensitive information, deliberately pretend it’s assets are impaired in order to stick it to a competitor/ taxpayer?

  4. St Jacques

    Aussie dead kangaroo bouncing high now. Amazing what a shot of ABS numberwang adrenalin and laundered foreign money can do. Gitts is now telling everyone to calm down, China ain’t melting, just slowing. Gittsy forgot to tell them that China doesn’t have to melt for Australia to do so, but let’s not get picky on Saturday morning. Last night some bloke at the pub was telling me iron ore had bottomed, that it was the 2009 again, time to go all in….

    • John

      Stew is always best for dead Kangaroo, though some in the back states of Yankee land (western MA for those that don’t get the reference) and PA swear that road kill pizza is the best. Personally, I treat it like a dead cat, though with the possibility of a higher trajectory. It may stay elevated for a little while as the international community is believing the Australian rebalance story and that China doesn’t matter. Until there is a shock is released figures, I can easily see it elevated for quite a time. When are the next ToT and CAD figures released?

      • China-Bob

        Ah yea Dining at the road-kill cafe, some of the best Texas style chili I’ve ever eaten was from the Road kill cafe. Texas speed bumps (aka Armadillo) we were out shooting pigs (rather unsuccessfully) when the opportunity arose to flatten a Texas speed bump, we had it quick smart in the Chlli pot with a heap of Poblano and and those small dried Cascabel’s along with smoked New Mexico and lots of Habanero’s to give it a little kick. Damn that Chilli was good the kinda of burning sensation that you just want to keep going.forever. Good friends, Cold beer and a huge bowl of genuine Texas chilli what a combination.

    • Mav

      Gittins! has the easiest job in the world (other than his moonlighting as a RE specufestor).. just show up at some bank sponsored lunch/dinner “conference” , fill his enormous boomer tummy with free food/booze and regurgitate in his article the next day on whatever the political/economic elites said the previous day (no questions asked)

      • St Jacques

        To be fair, I didn’t really read Gitty’s article, I can’t be bothered. I just looked at the headline to see what soothsaying message he was being paid for, then had a quick scan to see if my guess was near the mark. Westie on the other hand was well written and fun to read. The things high flying execs say to defend their tax dodges, lol.

      • V

        I think this feature needs to be added to Spruikbot 2.0, the ability to have a boomer capacity stomach in order to attend these junkets, consume the buffet and socialise prior to delivering a keynote spruik.
        For environmental friendliness Spruikbot 2.0 can just process the contents internally and deposit onto the flowerbeds as liquid manure on the way out of the venue.

    • ComingMEMBER

      Yes wtf is going on

      Aud back to 72.5?

      Is there some shenanigans brewing that we don’t know about

      I always thought the U.S. fed wouldn’t raise rates without some monetary manipulation to offset it: perhaps they will be directly intervening to prevent a USD breakout

      • scottb1978MEMBER

        My understanding is that it is because everyone still believes that Aus is a safe haven because it was in the past. As their currencies are devaluing they are pumping up ours. At some point reality will sink in and everything to do with Aus will have risk associated with it and we will enter our “doom loop” 🙂

        Sinking currency, losing our AAA status, crashing house prices, high unemployment. MB believe that it would get down to 45c which would be the point where all these things are having their biggest impact (~2-3 yrs).

      • LordDudley

        Patience… it’s just noise and volatility on the way down. This has already happened a couple of times on the way down from $1.12 AUDUSD.

    • aj.

      Exactly, how many time over the commodities slump, iron ore collapse and ToT collapse have there been completely confident talking heads from the MSM and the sell side telling everyone it’s all good. The facts are our ToT are collapsing and we have leveraged ourselves to the eyeballs for housing. There is nothing coming that can replace billions of dollars of minerals and asset sales.

      The MB guys nailed IO and they make a compelling case on the currency. The biggest risk to this model is China panics and goes full insane stimulus again, which will just be a reprieve to the inevitable and may do serious harm to China (who know this).

      Anyone with all their assets in AUD has just missed a 30% gain and will prob miss another 30%.

      • LordDudley

        I’d rephrase that; anyone with their assets in AUD has just taken a 30% loss and will probably take another 30%.

  5. Revert2Mean

    Re: your “Silver Losing Its Shine” link (above)

    From that article:

    Above ground stock levels are expected to shrink going forward amid a prolonged shortfall of supply versus physical demand. This will provide support to prices in the long run. “Declining total supply is expected to be a key driver of annual deficits in the silver market going forward,”said Rannestad.

    While such deficits do not necessarily influence prices in the near term, multiple years of annual deficits can begin to apply upward pressure to prices in the periods that follow.

    So not really losing its shine, is it?

    • Janet

      But silver is a result of other specific mining. The ‘above ground’ stock can be complimented by below ground production at the drop of a hat? For years, in the early days, silver was caste aside after ‘other metals’ mining as ‘not worth the cost of production’. Then photographic demand came, and has now largely gone. The same probably applies today?
      eg : “Most silver is produced as a by-product of copper, gold, lead, and zinc refining.”
      https://en.wikipedia.org/wiki/Silver

      • Revert2Mean

        But what if we cannot simply increase mining at the drop of a hat because of carbon emission limits? Mining is carbon intensive, and any serious attempt to limit emissions will see it curtailed, just through increased fuel costs if not direct taxes, and not to mention the fact that mining demand for basic metals will wane as the economy shrinks inevitably in a world trying to stop climate change? About 25 percent of the silver mined in the world comes from silver ores; 15 percent, from gold ores and the remaining 60 percent, from copper, lead, and zinc ores. The copper/lead/zinc fraction is very vulnerable to contraction, should economies slump (as in my view they inevitably will once the fossil fuel party is terminated).

        People don’t think of these things. Read my link on “can we afford the future” below.

        BTW did you see the articles on antibiotic resistance in the news recently?

        How’s this:
        Silver makes antibiotics thousands of times more effective

    • Jagster

      C’mon.. Just admit youve been on the wrong side of that trade and move on. Just like your views on AGW. No need to get all religious and preachy about it and try to convince the flock.. Absolutely nothing of interest to see here..

      • Revert2Mean

        I’m still up 44.45% on my precious metal investments … not sure what you’re talking about (as usual) 🙄

      • Jagster

        That’s a pretty shite return after 20 years! That’s less than 2% pa before allowing for inflation.. After inflation and your SUNK!! Much like your views on AGW..

      • Revert2Mean

        That’s a pretty shite return after 20 years!

        Da fuq? You be talkin’ smack! I bought most of my metals after 2007. You have a vivid imagination (which is probably why you are susceptible to whacky denier memes). 😆

    • Janet

      You could be right. But I recall the Hunt days, and the lines of people queued up outside the bullion buyers to flog off their silver for recycling ( where the expression comes in?!). There’s more ‘above ground’ stock than just the material that is yet to be refined. Just open any sideboard drawer or jewellery box and have a look!

      • Revert2Mean

        The Hunt bothers tried to corner the market and failed. Not really applicable to the world going forward as an instructive scenario, with silver supply due to contract and many new uses for the metal (solar, antimicrobials etc). From the USGS:

        [Silver is used in] bandages and pharmaceuticals for wound care, batteries, bearings, brazing and soldering, catalytic converters in automobiles, cell phone covers to reduce the spread of bacteria, clothing to minimize odor, electroplating, inks, mirrors, solar cells, water purification, and wood treatment. An emerging use of silver is in athletic clothing where biosensing silver fibers may be woven directly into the fabric. This athletic clothing transmits biometric data such as the wearer’s real – time heartbeat to a sensor that displays the data. Silver metal in fine powder form is also being used in 3D printing to make jewelry and various other items. Silver was used for miniature antennas in radio frequency identification devices that were used in casino chips, toll road transponders, gasoline speed purchase devices, passports, and on packages to keep track of inventory shipments. Mercury and silver, the main components of dental amalgam, are biocides, and their use in amalgam inhibits recurrent decay.

        You say:

        There’s more ‘above ground’ stock than just the material that is yet to be refined. Just open any sideboard drawer or jewellery box and have a look!

        Much less above ground stock of silver than gold (silver is consumed). Not many people have silver flatware anymore, most people use stainless steel. And the silver flatware you see nowadays from high end stores is just plated base metal.

      • Wiley Wolf

        In the Hunt days, I had a freezer full of kilo bars of silver. My mum couldnt hack the worry, thought every thief in Straya, would suddenly break in and pinch the freezer. (silver is not visible in cloudy ice)
        So, I sold the lot and bought Ariadne shares 23c, Sir Ron Brierley, went to a coupla dollars
        Never looked back since then. Made the money for the silver from Coca Cola machines on construction sites, Bagfuls of 20c pieces.
        Go Entrepreneurs.

      • nsw2206

        5 times more gold above ground than silver. Investor demand growing and will overwhelm supply eventually.

      • Jagster

        They’ll have their day in the sun eventually, but gold will probably see under US$800 and silver US$10 – where they will languish for years – before anything good happens. But dont worry. They wont be alone – coal, iron ore, copper, etc should do the same.

        When will India be the next China??

  6. John

    So, given there are 2 John’s posting, how do I update my screen name and Avatar to avoid confusion????

  7. skippy

    I liked how Wray and Mazzucato linked the two in their Mack the Turtle analogy.

    “Underlying all of this financialization was the homeowner’s income—something like Dr. Seuss’s King Yertle the Turtle—with layer upon layer of financial instruments, all of which were supported by Mack the turtle’s mortgage payments. The system collapsed because Mack fell delinquent on payments he could not possibly have met: the house was overpriced (and the mortgage could have been for more than 100% of the price!), the mortgage terms were too unfavorable, the fees collected by all the links in the home mortgage finance food chain were too large, Mack had to take a cut of pay and hours as the economy slowed, and the late fees piled up (fraudulently, in many cases as mortgage servicers “lost” payments). The “new model” was inefficient (too many fingers in the pie, all of them extracting value), highly risky (often Ponzi finance from the beginning with reverse amortization), and critically dependent on rising home prices. Even leaving aside the pervasive fraud, the model was diametrically opposed to the public interest, that is, the promotion of the capital development of the economy. It left behind whole neighborhoods of abandoned homes as well as new home developments that could not be sold.”

    Skippy… pour some cheese on it – https://www.youtube.com/watch?v=9j6VZzgWXoA&list=RDqNQK3C-ac1w&index=24 – Tequila – !!!!

  8. Revert2Mean

    Heatwaves in Australia will be more frequent and intense

    A database tracking the last 50 or so years of heatwaves shows that they are getting longer, more frequent and more intense in Australia. One of the climate scientists involved in the study, Dr Sarah Perkins-Kirkpatrick explains how and why.

    ——————–

    Can We Afford the Future?

    Clearly, the affordable future will be slower, simpler, and less mobile than Futurama daydreams of the 1960s. It will entail living closer to the land and using much less in the way of energy and materials than folks in wealthy industrial nations currently are accustomed to using. If we’re dropped headlong into that future with no preparation, we’re likely to see it as—and turn it into—a dystopian, post-apocalyptic nightmare. However, if we plan and prepare, our affordable future could actually be an improvement over the soul-destroying existence that pervades so much of urban and suburban America these days.

    —————–

    Don’t nuke the climate! James Hansen’s nuclear fantasies exposed

    NASA scientist James Hansen is heading to COP21 in Paris to berate climate campaigners for failing to support ‘safe and environmentally-friendly nuclear power’, writes Jim Green. But they would gladly support nuclear power if only it really was safe and environment friendly. In fact, it’s a very dangerous and hugely expensive distraction from the real climate solutions

    • Fyodor Dostoyevsky

      “Don’t nuke the climate! James Hansen’s nuclear fantasies exposed”

      I’m SOOO sick and tired of scientifically ILLITERATE greenies sprouting ignorant SHIT about fast breeder thorium reactors. Its monumentally STUPID to simply spread total fabrications regarding the environment in the hope to win over people. Why ? Because you are easily exposed and then all your good work is discredited along with your lying, inane, bullshit.

      Fast breeder reactors were developed 40+ years ago, one was built and it was CLEARLY the best choice for nuclear power, however it was abandoned because IT DID NOT PRODUCE ANY MATERIAL USEABLE FOR NUCLEAR WEAPONS.

      “Hansen’s views take little or no account of the real-world experience with fast neutron reactors (and Generation IV technology more generally). That real-world experience is littered with accident-prone, obscenely expensive reactors (and R&D programs) that have worsened waste and proliferation problems. Most countries that have invested in fast reactor R&D programs have decided not to throw good money after bad and have abandoned those programs.”

      These reactors can TAKE IN waste from standard reactors and have no waste product. Period. They were abandoned for reasons mentioned above, but also due to the problems associated with corrosion, which over the past 40 years have been totally overcome and they now present the very best option for base load power outside of renewables.

      These liquid fluoride thorium reactors CAN NOT MELT DOWN – any loss of power and the process simply stops, you can just turn them off like a light switch.

      China has thrown EVERYTHING AND THE KITCHEN SINK at developing these reactors with a twenty year time frame being reduced to ten in order to put these into mass use.

      http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100026863/china-going-for-broke-on-thorium-nuclear-power-and-good-luck-to-them/

      I personally believe the long term power structure will come from Graphene storage systems capable of running small cities for a year or more from a single container sized blocks delivered via freight from super farms harvesting solar energy along with distributed local / micor generation.

      That said – simply dismissing the facts, with outright lies – just destroys your entire credibility.

      Another source.

      http://www.theguardian.com/world/2014/mar/19/china-uranium-nuclear-plants-smog-thorium

      • Revert2Mean

        I’m SOOO sick and tired of scientifically ILLITERATE greenies sprouting ignorant SHIT about fast breeder thorium reactors.

        Er, the article you refer to was written by James Green who has a PhD in science and technology studies for his analysis of the Lucas Heights research reactor debates. Not sure if that qualifies him as “scientifically illiterate”.

        Fast breeder reactors were developed 40+ years ago, one was built and it was CLEARLY the best choice for nuclear power, however it was abandoned because IT DID NOT PRODUCE ANY MATERIAL USEABLE FOR NUCLEAR WEAPONS.

        Source?

        They were abandoned for reasons mentioned above, but also due to the problems associated with corrosion

        And so the reasons mentioned by Dr Green have also been overcome like the corrosion problems? I doubt it.

        These liquid fluoride thorium reactors CAN NOT MELT DOWN – any loss of power and the process simply stops, you can just turn them off like a light switch.

        And thorium reactors cannot be used/modified to produce bomb material?

        China has thrown EVERYTHING AND THE KITCHEN SINK at developing these reactors with a twenty year time frame being reduced to ten in order to put these into mass use.

        They are also going flat out for renewables. One of them will win the race and push out the other. China is the only country going heavily into nuclear, which is what you’d expect when the population has no say (totalitarian regime). A review of the 66 nuclear reactors ‘under construction’ worldwide shows that 49 are running behind schedule, including all five in the US and most in China. The long and unpredictable build times of nuclear plants, and the extra costs that ensue, are a compelling reason not to depend on the technology for either power or to mitigate climate change

        I personally believe the long term power structure will come from Graphene storage systems capable of running small cities for a year or more from a single container sized blocks delivered via freight from super farms harvesting solar energy along with distributed local / micor generation.

        That relies on unproven tech that we don’t really need. Good if it happens though.

        That said – simply dismissing the facts, with outright lies – just destroys your entire credibility.

        You don’t seem to have shown where Dr Green is lying. Shouting at me won’t help.

        More data for you:
        Part One: Economics Of Nuclear Power with Arnie Gundersen
        Part Two: Economics of Nuclear Power with Mycle Schneider

      • Thomas

        R2M

        Jim Green has a PhD in a field of social science, connecting science to communications and social values, he isn’t a scientist. Essentially, he is a science journalist. Kirk Sorenson, on the other hand, is. He has a Degree in Mechanical Engineering, a Masters in Aerospace Engineering and in Nuclear Engineering. You can watch him talk about Thorium at a Ted conference here:

        https://www.youtube.com/watch?v=kybenSq0KPo

        Also, it’s not that Thorium reactors can’t produce weapons grade materials, it’s just the the expenses to make the modifications to the reactor required to make it efficient enough for weaponisation is far greater than simply using current technologies.

        There are still problems with Thorium reactors, sure, but they’re not impossible to overcome and their problems are a lot more sedate than the inherent problems in current reactor technologies that we will never overcome. For instance, no matter how much we engineer them, it is not possible to guarantee a Uranium reactor won’t melt down, on the other hand, a Thorium reactor (specifically the MS/LFTR variant) operates in a molten state, its natural state is a solid, fairly stable substance.

      • Revert2Mean

        Thomas, you don’t get to be a professional PhD level science commentator like Green without understanding science. His special skill is being able to gather critiques and flaws in technology and showcase them, as he does in the case of thorium reactors.

        If you read and watch all the links I have given in this discussion, including watching the videos, you will surely see that this technology is not the way forward.

        Unless you are a paid shill or spruiker for the industry, of course, in which case you will continue touting for subsidies to make this uber-expensive pipe-dream a recipient of taxpayer largesse. 🙄

      • Thomas

        R2M, you misunderstand. Thorium is just one piece of the puzzle, real renewable technologies are other pieces. Energy generation should not be concentrated and centralised. If diversity in monetary investments is an ideal goal, so it should in most other instances of life. Nuclear has its place in the future and I believe Thorium reactors are the best for that place (so far). However, they should, of course, complement real renewable technologies.

        And your snipe about subsidies, I’m a socialist of the highest order. All citizens of the planet should have equal access to food, water and accommodation. As the saying goes, money is the root of all the evil. We now have the technological ability to do away with jobs and money, robots can make almost everything we need to live, ‘jobs’ should be something that we do because we want to further our understanding of ourselves and our environment, not for the acquisition of wealth. If some people don’t want to work, we should be able to support them, they still provide something to the fabric of the human experience.

        If we do away with the concept of monetary profit, your problem with expense disappears, all we have left is the pipe-dream, well, so what? Without money getting in the way, it’s just an exploration into humanities technological abilities.

        Would a paid shill advocate for the abolition of money?

      • Revert2Mean

        As the saying goes, money is the root of all the evil.

        Actually that’s not how it goes. It’s the love of money that’s the root of all evil. Money is neutral.

        Nuclear has its place in the future and I believe Thorium reactors are the best for that place (so far)

        I disagree, and I think the vast expense of research into these new reactors is simply not warranted. That’s money diverted from clean, renewable power development.

        Tell you what, calm down. The Indians and Chinese are knocking themselves out trying to get these 4th gen plants to work … let’s see what they can do. If they fail, we have not wasted money. If they succeed and it all works as advertised, we can learn from their mistakes and take a shortcut. Agreed? Only a shill would disagree with that.

    • Fyodor Dostoyevsky

      “Er, the article you refer to was written by James Green who has a PhD in science and technology studies for his analysis of the Lucas Heights research reactor debates. Not sure if that qualifies him as “scientifically illiterate”.

      And he is dismissing Hanson out of hand as a hack – head of Goddard, advisor to 5 US presidents, probably the most respected scientist on the planet who wrote the book on what needs to be done on climate change as he is the worlds leading expert on it. Do you have any clue what you are talking about ?

      “Source?”

      The entire point of my post was about credibility – and the first two things you write demonstrate a DEEP lack of knowledge on this issue, first by credentialing your pissant scientist over Hansen, and then requesting basic information on molten salt reactors – seriously mate.

      “During the 1960s, the USA developed the molten salt breeder reactor concept at the Oak Ridge National Laboratory, Tennessee (built as part of the wartime Manhattan Project). It was the primary back-up option for the fast breeder reactor (cooled by liquid metal) and a small prototype 8 MWt Molten Salt Reactor Experiment (MSRE) operated at Oak Ridge over four years to 1969 (the MSR programme ran 1957-1976). ”

      http://www.world-nuclear.org/info/Current-and-Future-Generation/Molten-Salt-Reactors/

      “And so the reasons mentioned by Dr Green have also been overcome like the corrosion problems? I doubt it.”

      Yes they have, we are now using molten salt in all kinds of energy storage such the large solar arrays in Spain – it is the BENCH MARK for storing thermal energy in solar arrays – are you seriously this ignorant ?

      “And thorium reactors cannot be used/modified to produce bomb material?”

      No, not if you want them to work. You seriously don’t even understand what is being said, how they even operate on a fundamental manner. Again – you are demonstrating a very typical boomer generation attitude that all nuclear is bad, no matter what.

      “…..The long and unpredictable build times of nuclear plants, and the extra costs that ensue, are a compelling reason not to depend on the technology for either power or to mitigate climate change”

      And yet they will provide base load power, providing an almost unlimited source of energy without any fear of meltdown or fissile nuclear material for weapons or waste being produced. The lead time has gone from 25 years down to 10 for production. You haven’t even BOTHERED to read the links provided.

      The very principle of long term renewable usage as it stands requires 90% increase in their installation combined with radical reductions in energy consumption – you have ZERO arguments and this one is the worst.

      “That relies on unproven tech that we don’t really need. Good if it happens though.”

      No, the technology has been proven – repeatedly. There have been 4 major advances in the last 24 months alone in mass production and energy storage this year alone. I know your entire approach to commenting on things is based on whatever gut feeling you have but as the entire thrust of my post pointed out it leaves you looking foolish. This one in particular.

      “You don’t seem to have shown where Dr Green is lying. Shouting at me won’t help.”

      If you had read my post you would see I had shown he was lying – absolutely and beyond all doubt.

      • Revert2Mean

        [Dr Green] is dismissing Hanson out of hand as a hack

        Er, no. I would hardly call his long, well-reasoned argument an “out of hand dismissal”.

        Do you have any clue what you are talking about ?

        Why the gratuitous insult? It adds nothing to the argument you are attempting to make. 🙄

        The entire point of my post was about credibility – and the first two things you write demonstrate a DEEP lack of knowledge on this issue, first by credentialing your pissant scientist over Hansen, and then requesting basic information on molten salt reactors – seriously mate.

        1) Dr Green is one of thousands on the anti-nuclear side of the debate (and this includes nuclear scientists like Arnie Gundersen). Hansen is in a small minority on the other. Disparaging Green will not cut it; you clearly did not watch the video links I gave you on the economics of nuclear power. Answer those.

        2) I asked you for the source of the statement that Gen 4 reactors were discontinued because, in your shouty voice, they “DID NOT PRODUCE ANY MATERIAL USEABLE FOR NUCLEAR WEAPONS”. The only source you have given so far is a true hack from a right wing rag, The Telegraph. Nobody knows the exact reason why those experiments were discontinued, but you can be pretty sure that if they were feasible and economically sensible, the US would have gone that way by now, especially given the threat we now face from climate.

        Thorium reactors just don’t add up. Do you seriously think that the US or any other country would pass up the opportunity to build these things if they worked reliably and as the proponents say they will? Get real, man. Even the Chinese, the current cheer squad for this technology, are stumbling around in the dark. From one of your own links:

        “… There is a lot that is still unknown about thorium but a lot of research is being carried out… It is certainly something that is well under way in terms of research … researchers are working under “warlike” pressure … We are still in the dark about the physical and chemical nature of thorium in many ways. There are so many problems to deal with …. Professor Gu Zhongmao from the China Institute of Atomic Energy cautioned against too much exuberance on so-called fourth-generation reactors. “These projects are beautiful to scientists, but nightmarish to engineers” etc

        Exposing the thorium myth

        Yes they have, we are now using molten salt in all kinds of energy storage such the large solar arrays in Spain – it is the BENCH MARK for storing thermal energy in solar arrays – are you seriously this ignorant ?

        I asked not about corrosion, but about the OTHER PROBLEMS, to use the shouting you seem to like: “accident-prone, obscenely expensive reactors (and R&D programs) that have worsened waste and proliferation problems”.

        And btw, taking about ignorant, the Andasol Solar Thermal plant in Spain does not use the highly corrosive molten fluoride salts. So it seems it is you who is a buffoon on these issues.

        “And thorium reactors cannot be used/modified to produce bomb material?”

        No, not if you want them to work. You seriously don’t even understand what is being said, how they even operate on a fundamental manner. Again – you are demonstrating a very typical boomer generation attitude that all nuclear is bad, no matter what.

        Irradiation of thorium produces fissile uranium-233 which can be – and has been – used in nuclear weapons. What is there about this that you do not understand?

        And yet they will provide base load power, providing an almost unlimited source of energy without any fear of meltdown or fissile nuclear material for weapons or waste being produced. The lead time has gone from 25 years down to 10 for production. You haven’t even BOTHERED to read the links provided.

        LOL 😆 The target from the Chinese government is 10 years, but they are lost on the technology and will never hit that target. Much more realistic is the UK National Nuclear Laboratory that states that it will require “25 to 30 years” to obtain the full strategic benefit of the thorium fuel cycle (if it can ever be done). Now in your shouty voice: WE SIMPLY DO NOT HAVE THE LUXURY OF THAT MUCH TIME. WE NEED SOLUTIONS RIGHT NOW!

        Meanwhile, renewables can quickly be scaled, solar thermal plants provide base load power, and breakthroughs are happening all the time. That’s the way to go, no question.

        No, the technology has been proven – repeatedly.

        Where has “Graphene storage systems capable of running small cities for a year or more from a single container sized block” been proved? Link please.

        A final request, calling me a fool repeatedly in your posts labels you as just another tedious “Thor-Bore”, a tireless promoter of thorium who is untouched by evidence to the contrary and who tries to shout down all opposition. 🙄

      • Revert2Mean

        Ta, very interesting!

        And back at ya:
        Our Renewable Future With Richard Heinberg
        Richard Heinberg’s talk on “Our Renewable Future” is set among all the frightening news about accelerating climate change. However his message was serious but positive. He asks how our daily life will change as we fully embrace the era of renewable energy? How will we need to shift the ways we use energy – offering both opportunities and challenges.

        Download/listen (mp3 podcast, right click and “save as…”)

      • Jagster

        “Mr Krummel said the size of this year’s ozone hole was caused by unseasonably cold temperatures, rather than any additional damage to the ozone layer.

        “What really determines the size of the ozone hole each year is really the meteorological conditions and this year it is extremely cold over the Antarctic and by this time of year normally warm air is starting to egress into that area and this hasn’t happened yet,” he said.

        http://www.abc.net.au/news/2015-10-30/ozone-hole-over-antarctica-expands-to-near-record-levels/6898824

        Some data you just can’t homogenise for your own benefit..

      • Jagster

        NOAA refuses to provide Congress with e-mails on study claiming climate pause never happened: ‘What is NOAA hiding?’

        http://www.climatedepot.com/2015/10/26/us-congress-to-investigate-noaas-temperature-adjustments/

        http://wattsupwiththat.com/2015/10/28/ncdcnceis-karl-and-peterson-refuse-congressional-subpoena-on-flawed-pausebuster-paper/

        http://www.breitbart.com/big-government/2015/10/29/noaa-attempts-hide-pause-global-warming-disgraceful-cover-since-climategate/

        Despicable treatment of the masses, particularly the impoverished in the developing world, for the sole purpose of gaining support for a global Carbon Tax. What is NOAA hiding? The truth, that’s what..

      • Revert2Mean

        Some data you just can’t homogenise for your own benefit..

        Only a complete Cool it with the name calling please: Moderator EDB-QZ like you would point to an area of local cold weather and imply that it trumps the fact that we are now experiencing, globally, the hottest weather on human record. 🙄

        The NOAA emails are being demanded by Rep Lamar Smith. Do you suppose the $631,000 Rep. Smith has received from fossil-fuel-industry sources (www.opensecrets.org) is unrelated?

        Lamar Smith, climate scientist witch hunter

        Apparently eager to ride the coattails of Vin Diesel’s new movie, Rep. Lamar Smith (R-TX) seems intent on taking up the mantle of Witch Hunter by harassing the scientists at NOAA. These scientists published a study that joined a growing body of research debunking the supposed “pause” in warming, a trope regularly trotted out by deniers looking to argue against climate action.

        In his capacity as Chair of the House Committee on Science, Space and Technology, Smith has demanded a number of documents from NOAA and threatened them with prosecution if they don’t comply. He’s asking for the data and methods related to the study itself, which doesn’t sound too unreasonable at first. But when you learn that this information is already public, it seems odd that he would want to waste his and the scientists’ time demanding information that anyone with an internet connection can freely access.

        Another odd factor is that NOAA scientists already took time out of their busy schedules of doing actual science to personally explain the study to Smith. But all this wasn’t enough for him, so he is also demanding all the scientists’ study-related email correspondence. Smith is spending all this time, energy, and taxpayer money to chase these scientists around because he is a conspiracy theorist, and has publicly espoused the belief that scientists are deliberately manipulating the temperature record to manufacture the climate crisis. This unusual position might be related to the massive quantities of oil and gas industry funding that he receives—in 2014; Smith got more money from fossil fuels than he did from any other industry.

        For those that have been entrenched in the climate issue for some years, this will sound familiar. In fact, it’s almost identical to a situation faced by Dr. Michael Mann, in which a politician in a position of power took issue with science that disproved a pet climate denial myth. As a result, this politician, Virginia Attorney General Ken Cuccinelli, retaliated by going on what the Washington Post editorial board described as a “Climate Change Witch Hunt.”

        So let’s hope that, like in Dr. Mann’s case, the politician abusing his power isn’t humored with compliance. Because if the emails are released, we might have to live through another fake scandal. In fact, in a column in the Wall Street Journal, Holman Jenkins Jr. more or less admits that this is the denial industry’s strategy in his latest piece, in which he “just asks the question” if this is “The Next Climate Scandal?”

      • Smiley073

        and this year it is extremely cold over the Antarctic

        Yes, but even without checking I’m betting that this year will be somewhere near the top of the list of warmest years on record, globally. There seems to be no end to this cherry picking bullshit. It’s bollocks left-right-and-centre.
        How come you citizen scientist don’t ever publish your work. I’m sure there’s a Nobel prize waiting for you.

        … Yes it can be so frustrating arguing with people with the mentality of 14 year-old’s, that you want to chew your own leg off…

      • Smiley073

        http://www.theguardian.com/commentisfree/2015/nov/10/rightwingers-push-moral-coal-only-after-they-doomed-a-truly-moral-alternative

        It is far from obvious that coal is in fact the cheapest source of energy for India. Large parts of the country have yet to be connected to the electricity grid, and might do better to move straight to renewables. And the health effects of burning coal, serious in developed countries, are far worse in India. Pollution from coal is estimated to kill more than 100,000 people in India each year.

        There’s no self-interest in pushing coal is there? The renewable sector is only doing it for the money while the fossil fuel industry is doing if for the sake of humanity… right?

    • Fyodor Dostoyevsky

      Er, no. I would hardly call his long, well-reasoned argument an “out of hand dismissal

      No its sheer ignorance from someone who hasn’t got a clue about the science but is grinding the same old ignorant argument from boomers who are simply “anti-nuclear” no matter the technology. His arguments are simply wrong an every account – as I have demonstrated.

      Nobody knows the exact reason why those experiments were discontinued

      Don’t be so absurdly disingenuous. If you think the ENTIRE nuclear arms race didn’t happen then you are being a moron. If you think there was no incentivisation for weapons grade uranium, depleted uranium, etc, etc then you’re on crack. Of course it was a factor and only the most totally disingenuous deceitful person would ever try and argue other wise.

      Again my argument is about how rabid anti-technology ranters like yourself, ruin their reputation by presenting falsehoods and spurious arguments instead of sticking to the facts. There is a great deal of similarity between the behaviour of yourself and climate denialists who simply REFUSE to accept the facts and instead reach for the absurd.

      US would have gone that way by now, especially given the threat we now face from climate.

      Please. The united states has been at the absolute forefront of climate denialism, they are the world petroleum power house and have obstructed all attempts at change and integrating new pathways at every single turn – again, demonstrating your willingness to sacrifice all credibility on the altar of misguided idealisms.

      Do you seriously think that the US or any other country would pass up the opportunity to build these things if they worked reliably and as the proponents say they will?

      As I have PROVEN the United States have already built them over 40 years ago and the Chinese have put their development on a war footing for implementation within the decade – so yes, countries ARE taking them seriously. Yes there are still issues to be worked out but that is the entire point of throwing all their energy into RESEARCH to develop them.

      And btw, taking about ignorant, the Andasol Solar Thermal plant in Spain does not use the highly corrosive molten fluoride salts. So it seems it is you who is a buffoon on these issues.

      Really ? My god. Please – the point I am making is how those on the side of global warming fighting against the ignorance from the delialists should not resort to the same ignorance, lies, half truths, distortions and almost total ignorance of the science and facts as it does MORE DAMAGE.

      Andasol Solar Power Station

      Andasol has a thermal storage system which absorbs part of the heat produced in the solar field during the day. This heat is then stored in a molten salt mixture of 60% sodium nitrate and 40% potassium nitrate.

      Just astonishing.

      Irradiation of thorium produces fissile uranium-233 which can be – and has been – used in nuclear weapons. What is there about this that you do not understand?

      Thorium reactors can be combined with uranium to produce this yes, but so what – we can produce as much weaponised uranium as we ever need. The point is we can build them with ZERO waste, that is what they are working on in order for them to be widely accepted. How can you not understand this.

      There is ZERO concern about a thorium reactor being modified for the production of nuclear weapons materials, none – because this is already happening on a vast scale. Its so irrelevant. The point is can we produce these reactors so that they produce ZERO weaponisable nuclear material, and no nuclear waste – YES.

      That is the point. That is why they are striving to construct these things so that they can be exported to nations who simply would not have the technology or capacity to modify them in, and if they tried they would fail, and if they failed there would be no nuclear melt down – they simply switch off. Thus enabling countries who are decades behind to immediately have vast quantities of power far exceeding anything renewables offer in the blink of an eye allowing them to modernise.

      LOL ? The target from the Chinese government is 10 years, but they are lost on the technology and will never hit that target. Much more realistic is the UK National Nuclear Laboratory that states that it will require “25 to 30 years” to obtain the full strategic benefit of the thorium fuel cycle (if it can ever be done).

      Great post. No making a fool out of yourself at all.

      Meanwhile, renewables can quickly be scaled, solar thermal plants provide base load power, and breakthroughs are happening all the time. That’s the way to go, no question.

      How many advanced modern countries are 100% renewable including baseload power ? None. Absolutely ZERO.

      They can not be scaled up, that is a flat out lie, they can not supply the needs without massive and huge global investment on an insane scale. Further to this the FUNDAMENTAL premise that this could EVER be achieved would also a require a global wind down in energy use on an incredible scale. Read Hansen and you would understand this. It simply does not add up.

      Finally I have been working on global warming with many of this countries leading proponents since the early 1980’s. I have been immersed with those at the absolute forefront of the debate. So don’t think for a second you are somehow more enlightened on this issue than me – you are not – you are deeply ignorant and utterly driven by myths and idealism and represent exactly the type of mentality that drives the global warming denialists.

      You are choosing selectively, ignoring all evidence which destroys your entire argument, and then attempting to simply ridicule concrete examples which prove you wrong.

      You’re an absolute disgrace to those who are trying to find solutions to global warming, the very VERY worst of the worst, you should be ashamed.

      • Revert2Mean

        So, this post proves once again that you cannot engage in conversation or debate without resorting extensively to personal invective, so I will cease this interaction, after making these brief comments:

        1) You don’t seem to understand the difference between the various molten salts. Do some research on how highly corrosive molten fluoride salts are, then tell me why they are not used at Andasol.

        2) After at first denying that thorium reactors can produce isotopes that can be used in bombs, you now admit that yes, they can. So no, we cannot use them all over the world to solve energy problems (despite your risible assurance that developing nations won’t know how to do use the U-233 … ever heard of Pakistan?)

        Yes there are still issues to be worked out but that is the entire point of throwing all their energy into RESEARCH to develop them.

        Huge understatement … tell you what, Thor-Bore, get back to us when this tech is working as advertised. That should be, oh, in 2050 or so. By then the ship will have sailed and the world will be using mostly renewables. Cheers!

      • Escobar

        R2M

        “Why the gratuitous insult? It adds nothing to the argument you are attempting to make.”

        Pot kettle Black. It’s actually your MO.

        Didn’t you just call Jagster a turnip?

      • drsmithyMEMBER

        So, this post proves once again that you cannot engage in conversation or debate without resorting extensively to personal invective […]

        Wow.

        That’s right up there with flawse complaining about other people using “personal abuse”.

        I’m not particularly bothered by a bit of flowery language but, fucking hell, if you’re going to dish it out, don’t dare complain, or try to use it as an excuse, when other people give it back.

      • Revert2Mean

        Not using anything as an excuse, Smithy, but when my interlocutor insults me IN ALMOST EVERY SINGLE SENTENCE, I take exception. So sue me. 🙄

        To wit:

        sheer ignorance from someone who hasn’t got a clue about the science but is grinding the same old ignorant argument… Don’t be so absurdly disingenuous … you are being a moron .. you’re on crack … only the most totally disingenuous deceitful person would ever try and argue other wise…. demonstrating your willingness to sacrifice all credibility …… making a fool out of yourself …. that is a flat out lie… you are deeply ignorant and utterly driven by myths and idealism and represent exactly the type of mentality that drives the global warming denialists. … ignoring all evidence which destroys your entire argument… You’re an absolute disgrace to those who are trying to find solutions to global warming, the very VERY worst of the worst, you should be ashamed.

        The most galling part of this is that he is the one who is wrong, demonstrably so. I don’t mind being insulted by someone who is right, but to be abused so thoroughly by a person who is guilty of all the things he accuses me of, well, that just takes the cake.

        If you can show where he was right on even one point, I’ll take that back

        Didn’t you just call Jagster a turnip?

        Yes, with good reason. If the cap fits, wear it. He is promoting denialism, something the mods here should not even allow to be posted.

  9. desmodromicMEMBER

    Re articles in Global Macro, if consumers are hoarding cash and not spending, why is an interest rate hike seen as a negative for consumer spending? Interest rates are irrelevant is they have the cash. A rate hike may even prompt them to spend more if they are earning more on their cash stash. Or am I missing something?

    • Joe

      That’s the way I am thinking.
      I have cash but refuse to spend it because IR are too low. If I spend my savings get eroded.
      Conversely if one has a lot of debt one is probably not spending in anticipation of higher IR. When things are abnormal people respond accordingly.
      Let’s get rates up, crash the RE market do a reset and move on.

    • Charles Ponzi

      Savers like myself have responded to low interest rates by spending less in the hope of one day being able to retire. What pisses me off is that responsible people who are trying to plan ahead for their own future are being thrown under the bus so that property prices can be propped up with low interest rates.

      The only good news is that I am paying thousands less on income tax to a government that spends money against my wishes on military operations that make the world worse for everyone on the planet apart from those few who are making billions selling and producing weapons.

      • China-Bob

        Not taking a cheap shot, but can’t you see that the Supremacy of Saving is a huge part of the problem were in today?
        I’d suggest that all real savings are productive, this suggests that the Equity model of capital accumulation produces far more “savings” than are ever possible through the credit/debt mode of paper wealth accumulation. Yet we’ve engineered a financial system whee when the SHTF it’s Equity that takes the biggest hit while traditional credit/debt style of savings are not only protected by liquidation order they’ve convinced the populace that these “savings” should also enjoy a tax-payer backed guarantee.
        IMHO macro-economic savings are can only occur when our economy becomes more externally productive, if your accumulated capital is not working towards this end then it’s simply not savings.

    • Andy!

      Oh come now… such logic is too simple to work… and just because it worked for decades upon decades is not a good enough reason for it to continue to work today 😉

      Solution:
      Raise savings rates
      Raise mortgage rates
      Remove taxation of savings interest earnings (inflation-neutral grounds)
      Mean reversion of property prices (50% nominal)

  10. Wiley Wolf

    Some takeaway notes from Links.
    As the disorder in the Middle East strikes at the heart of Europe, it is notable that the West’s has failed to establish a secure international environment for the perpetuation of its values and way of life. The most urgent example of this is the eruption of Islamist terrorism.

    The French Legions once kept the peace in the Islamic world, but there have never been any stable successors to the defunct Ottoman, British mini empires (land grabs)
    This is the fault of the European colonialists who, in the death throes of their own empires, created artificial states ripening for dissolution.
    Their American successors have failed as well, saying “We won a great victory, but fouled up the end game.” This “fouling up” is a continuous thread running through American military interventions
    leaving the newly “freed” countries in shambles.

    The Military Law of Diminishing Returns. However much military hardware a superpower owns, decay of the will to use it is the same thing as a decay of effective power. After a time, it ceases to over-awe.
    But the European Union has gone farther down the pacifist road than the US. It is a flabby semi-state, with almost no frontiers, where humanitarian rhetoric masks spinelessness.

    The decline of the West is juxtaposed with the rise of the East. The fragility of the international political order is diminishing the global economy’s prospects. This is the slowest recovery from a major slump on record. The reasons are complex, but part of the explanation must be the weakness of the rebound in international trade. In the past, trade expansion has been the world’s main growth engine, but it now lags behind the recovery of output (which is itself modest), because the kind of global political order hospitable to globalization is disappearing.

    A world divided into political blocs will become a world of trade blocs, sustained by protectionism and currency manipulation. And yet as trade relations become increasingly politicized, our leaders continue to urge us to gear up to meet the “challenges of globalization,”
    Few question the benefits of cost-cutting through automation. In both cases, politicians are trying to force adaptation on reluctant populations who crave security.
    This strategy is not only desperate; it is also delusive, for it seems obvious that, if the planet is to remain habitable, competition in economic growth must give way to competition in quality of life.

    • Fyodor Dostoyevsky

      “Their American successors have failed as well, saying “We won a great victory, but fouled up the end game.”

      The United States has been waging unrelenting wars in the middle east since day one. There has never been any attempt to initiate freedom or democracy – from the 8 year war, Desert Storm, Gulf War, its an endless assault of warfare perpetuated by the US military – not the people of the middle east or Islam.

      “The decline of the West is juxtaposed with the rise of the East. The fragility of the international political order is diminishing the global economy’s prospects. ………………….etc”

      The primary reason for the collapse of the west and rise of the east has been the destruction of the working and middle class as corporations have outsourced their production to cheap labour – thus destroying demand amongst this class, destroying jobs, increasing reliance on the state, destroying living standards, and at the same time enabling the rise of the east. A deliberate global assault on the wealth and power of the middle class which has for a long time represented a clear threat to the hermetic power of the corporation and regulatory capture. It has been methodical and deliberate and enabled by western political classes enraptured with simplistic and failed Friedman ideas of trickle down economics coupled with perversely misleading idea of globalisation which is nothing more than attempt to destroy the power of states and the cost of labour.

      • Wiley Wolf

        FD you are correct.
        It is rubbish chucking out week up here and the footpaths are covered with consumer products which have failed since last years cleanup. All sorts of household now junk, from Harvey Norman, K mart etc every marketeer of rubbish cheap evolving country produce.
        the outsourcing of our manufacturing to those who make junk, and now include VW and Jeep in that list, have ruined the mid manufacturing sector. Those punters who have bought 3 cheap fans in the last 3 years, would have been better off with one good one in the first place.
        Lessons to be learnt everywhere.

  11. tripsterMEMBER

    On the topic of illegal foreign ownership, I have little doubt that this property was purchased illegally

    http://www.domain.com.au/news/point-piper-mansion-offloaded-by-son-of-former-chinese-vicepresident-zeng-qinghong-20151120-gl3bg8/

    and the “mysterious off-market transfer” they refer to, to someone with an anglicized Chinese name is likely to be an attempt to hide beneficial interest in the property through a PR holder with some kind of non-registered dealing…

    Anyone know where we can report this kind of stuff? It amazes me that Fairfax just seems to report is so blatantly without conducting any investigation into such obvious concerns.

    • Revert2Mean

      Echoing the call for innovation by new prime minister Malcolm Turnbull, Varoufakis said Australia should redirect its economy from “rent” in the shape of selling commodities to “entrepreneurial profit” in the form of greater innovation.

      As a solar insolation superpower with a vast internal desert, the “greater innovation” we are uniquely located to offer the world is utility-scale solar technology. But we are doing NOTHING! 😡

      • Wiley Wolf

        Some verse from Mig re my surfing project.

        Finally– We have conquered THE OLD MAN.
        We have taken Neptune’s prize, the white battalions of the endless army of the sea.
        We have restored the gift of ever rideable waves to surfers,
        As new born Prometheus is FOR THE AGES

        Behold a Mercury a Surfing Mercury.
        His heels are winged, and in them is the swiftness of the sea.
        From out of the sea he has leaped upon the back of the wave, and
        He is riding the sea that roars and bellows and cannot shake him.
        But no frantic outreaching and balancing is his.
        He is impassive, motionless as a statue carved by some miracle out of the sea’s depth,
        And straight on toward shore he flies on his winged heels and the white crest of the breaker.

        So I am doing something about innovation, the project will be up and running next year
        what are you doing??? Nah Free medical.

        By the way the Sun owns insolation, you cant be an insolation super power.
        More homework needed.

      • Revert2Mean

        By the way the Sun owns insolation, you cant be an insolation super power. More homework needed.

        You weird, foolish old man! 🙄

        Australia is a world superpower in solar, that’s well known. See this map

        Australia’s combination of:

        ►Massive insolation
        ►Educated population
        ►Developed nation status
        ►Good infrastructure
        ►Metals availability
        ►Top class universities
        ►Low population
        ►Vast uninhabited regions with low ecological value (not rainforests, like the Amazon, for instance)

        …make us UNIQUE in the world for the development of utility scale solar.

        So I am doing something about innovation, the project will be up and running next year. what are you doing???

        Sorry, what are you doing? You seem to go on and on about some amorphous “project” (for your own gain, if your history is any guide), but you don’t seem to be able to summarize it in one intelligible sentence.

        You have no idea what I am doing about anything. Even my comments here are influencing people’s thinking, so don’t assume you know about what I am up to. Suffice to say, I am not trying to line my own pockets, which tends to distinguish me from you.

      • aj.

        Good for you WW. Having worked in the ‘innovation’ space in the FIRE sector for many years I can categorically confirm that when australians talk about innovation they mostly mean someone else working hard and taking risks and them rentseeking off the back of it. The biggest and best change would be to reward the risk-takers over the rentseekers…

    • alterbrain

      I was double checking noone has posted it before I did. I person I take seriously. I’m very concerned about this run up in AUD, because it will make the fall look bigger. We ‘ought’ to have been below .70 by now except for the cheer squad expecting a rate hike because it’s all so awesome.

    • ComingMEMBER

      Thanks rod!
      I booked my ticket for the 29th at the opera house

      That is actually our wedding anniversary but my wife said we could go as it is in the afternoon (will go out for dinner directly after)
      I knew she was a keeper

  15. TailorTrashMEMBER

    Question for the tech savvy ……when ever I click on a link on this site ….I go to the link ….but cannot get back to the MB site with out going out of the link and going
    All the way back into MB site and then searching and scrolling back to the point from where I left …………this is a tad irritating every time I go to a posted link
    ………is this this something with the MB site ……..or something in my set up …….I access MB on my iPad …..(via my home PC I guess .)

    • ITAgMEMBER

      More importantly, many thanks to Gunna and DE for the effort and time they put into putting Weekend Links together.

      Hopefully HnH and UE are able to throw them a bone (or beer) occasionally for their much appreciated efforts that make weekend reading/updating a priority.

      • GunnamattaMEMBER

        Thanks for the cheers Gents,

        I consider MB about the squarest call on the Australian economy and its idiosyncrasies, and the only one free of a spectacular and desperate reliance on covering for those channeling diminishing wealth being earned by the country (and earned in the most part by foreign owned entities who dont want to pay tax here, and dont want to employ Australians) into the worlds most insanely priced real estate (and the banks which facilitate that – for fees being creamed off every last avenue coming into or leading from that dynamic) . For the most part I see Australia’s mainstream media – particularly 3 commercial TV networks, 2 major radio networks and two major print media networks, – as being essentially about palliative care for a nation/society (don’t worry, it is the best of all possible worlds given the situation we are in, a few pieces to make you feel economically better, and a few pieces to exhort taking the medicine) that thinks sitting in the couch (in a policy sense) is all its capable of or needs to do.

        DLS and LvO throw up data backed, conceptually measurable and challengeable pieces which I think most Australians ought to be aware of, and that the regulars here tend to raise questions, make observations and discuss issues in a way I wish more Australians did. Add CB’s very thorough daily run over the market – where else could you actually get something like that? – and I tend to the view that a few guys (throw in DE and CM, add some pieces from the Idiot and whoever else has time/inclination to generate some content) working from their garage (or bed) come up with something which is conceptually honest, is closer to real journalism than half the junket funded bullshit you will see in Uncle Rupert or Domainfax’s pages, and genuinely informative. More importantly it is, for mine, focused on changing policy for the better for Australia’s economy, and is cognizant of the fact that for their kids (and mine) changes have to be made and should have been made some time ago.

        The links I throw up on weekends tend to come from a wrap up thrown together for banks in the UK which gets circulated by analysts and the like – it helps awareness of the macro. I consider it an honor to throw up some weekend links for MB and get some discussion happening…..

      • TailorTrashMEMBER

        Just got my bill for the next 12 months subscription …….best investment I make in running my own SMSF ………..excellent source of knowledge and the big picture …and a I get to vent off occasionally ……….keep up the good work all mentioned …….I hope our countries leadership reads this service too …

    • GunnamattaMEMBER

      My apologies gents, I have sorted all the links to open in a new tab.

      Normally I do this but recently a couple of times I have used my wifes computer to do the links rather than my PC (I must confess to being a PC man) and had forgotten to do the links in an ‘open in a new tab’ mode – a couple of hundred clicks then and I think all of them are sorted.

      • Revert2Mean

        a couple of hundred clicks then and I think all of them are sorted

        Just a few clicks in a good text editor with find/replace….. try UltraEdit, Brackets or EditPad Pro

  16. bzunicaMEMBER

    Here is a story that I think readers of this site would like. I get to teach Yr 12 Maths and you do a lesson on home loan repayments. So I open a repayment calculator and put in 5.5% interest on $400k over 25 years and it comes up with just over $550p.w. and then you put it up to 7.5% and it goes to almost $700. The kids start swearing under their breath. Then the bright kid goes “$400k isn’t gonna buy you anything in Sydney, you need to double it” so I double it – repayments go past $1500p.w. and they swear outright (It is the only lesson I allow swearing). At the end the same bright one says “We can’t buy anything – we are totally screwed” – that is a lesson where you feel like you taught them some applicable Maths 🙂

    • ComingMEMBER

      I’m more worried that basic arithmetic is part of the year 12 maths curriculum

      Is this a special school?

      • Ronin8317MEMBER

        General Maths. 50% of students are below average by definition, these kind of maths have its uses.

      • StatSailor

        You need algebra to do that calc and exponents.

        I note that deriving the formula from scratch is taught to actuaries in second year uni so a discussion on mortgage payments doesn’t automatically mean the maths is basic.

      • bzunicaMEMBER

        This is general maths, so kind of maths for life. Approx 40% of Year 12’s do this level. Couple that with the 20% who do no maths at all then more than half the Year 12’s don’t do any serious Maths. This is why we have a massive STEM education problem in this country. This is why most of these kids are opened to being swindled when they get some cash in their pockets.

      • Jagster

        bz – That’s disgusting. Back when I did Yr12 only the numeric illiterates did “Maths in Society”. Now it’s 40% of students?!? With 20% doing no math at all.. Future Marks for the unscrupulous.

        So the kids of today have swapped studying Imaginary Numbers for the Imaginary Arts. How sad..

      • StatSailor

        If the kids leave high school mastering algebra and pre calc sufficient to work out mortgage payments with pen paper and a non programmable calculator it’ll keep them in better stead than learning calculus and complex numbers and forgetting the lot five minutes after the exam. Like the classic Aussie engineer who did a course on partial DEs but can’t find the derivative of e^x by the time they start their first job.

      • bzunicaMEMBER

        I’m going to have to burst the thought they can work out repayments on paper. They use a table which shows them a number for given interest and time settings. So essentially the formula is amount borrowed = number from table * repayment amount.

      • StatSailor

        Fair enough – I was mostly expressing scepticism that the biggest problem wrt maths education is not enough kids do the highest math. As well as trying to stick up for ‘maths for life’ which seems a valuable study pursuit.The number of people who couldn’t use the table you describe who are in the workforce is pretty huge and seems by far the bigger problem than the lack of people who can’t integrate by parts.

      • drsmithyMEMBER

        Back when I did Yr12 only the numeric illiterates did “Maths in Society”.

        In the ’90s when I was at High School, I would have thought ~40% was a typical percentage of students doing MiS. Kids doing the harder sciences like Chemistry and Physics did Maths B(~50%), and very few did Maths C as well (10 students started in grade 11, only 7 of us made it through to the end of grade 12 in my year of about 90 seniors).

    • Ino

      What? did no smart-ass mention to you “negative gearing”? Don’t you know it’s the way to untold riches?!

      Seriously though – that’s an awesome anecdote! This is what I wold call “doing God’s work”! 😀

    • Andy!

      Well done! You are truly brave educating these students in this way, knowing full well that this calculation will likely prevent them from leveraging up to buy and therefore causing them to become ugly, 2nd class doomers unwelcome at BBQ’s and shunned by general society.

      • bzunicaMEMBER

        These guys are probably 10 years away from seriously considering a property purchase, so I hope things may have settled down by then and BBQ talk might be more about the Cricket or Footy rather than IP’s and reno’s

      • PantoneMEMBER

        They are young. Wait til they grow up, then they’ll learn that renting is throwing money away and get themselves into a world of pain. Unless it all goes tits up before then. Here’s hoping.

    • GavinMEMBER

      But you can just pay interest only. Because prices only go up. So it is fine, better than renting ;).

      /sarc

      I’ve done same calculations and found that to buy the house I rent would cost 60k in interest only p/year. I rent at about half that.

      In this case rent money is not dead money.I really want the youth in this country to get mad and take to the streets to protest the current situation and what is being expected of first time buyers like myself.

      But the way clearance rates are going in Sydney perhaps the whole thing will go sour before too long?

  17. interested party

    A problem for the ages.

    From a high altitude historical perspective, IMHO we have a suicidal savings glut. The savings from productive enterprise in the last 200-500 years were largely directed towards the new world, exploration, and conquest. The world is now, for the most part, “discovered” by savings…….and still, the savings grow.
    They must, it is like we are hard-wired to do this. Anthro’s would agree I suspect.

    Now, some people save and expect a return, while others direct surplus to real estate and others to equities. If seen through this lens, there is a case for rising prices for everything if savings continue to grow…..or there is an alternative that has the savers stepping back from hoarding and living under the understanding of “enough”…..diluting the need for excess savings….however…this comes with strings attached. See below….

    I am of the opinion that much of the problem of excess savings has been spawned by the mass movement of people to the cities, and through that process, people give over to a third-party/s the task to supply them with sustenance…all for a price; giving rise to the need for savings. It is a logical thought process and stands to reason that if you stop working then how do you feed yourself? Who pays for the costs of living if no savings are there to draw down? and you have no way to supply the basics of life….

    Push this out a bit and there you have the superannuation industry. This is all part of the big picture. What better way to run a business than to have it mandated….and ….the captive sold the idea that you cannot ever have ‘enough’…………..so..…the environment/ecology/habitat dissolves around us as we strive to obtain this utopian level of savings. Savings are killing the ecology, and that is not a ‘greenie’ statement at all…we need this ecology to survive yet destroy it to maintain a savings rate…….huh???

    I have a question for the readers…..
    is it possible to have “peak savings”…..and if so, what does it look like?

    I see this modern life as a sort of vehicle, ( and taking into consideration that debt creates the deposit/saving…blah blah blah ) one that is fuelled from savings and is approaching a critical mass “runaway” event….the end of the track if you will (there is the peak savings relevance). This may explain the RE market somewhat…..too much cash chasing to few assets….so prices can only boom.
    The only way off this train that I am aware of is through permaculture. It is the only logical way to supply many if not all of your needs…….but…. you don’t have that ability in the city ( attached string from above)

    Another question…….
    What will give out first….the ability to save?…or the environments ability to supply us with sustenance?

    • Wiley Wolf

      IP, good thoughts, and very relevant.
      The whole world is awash with money, maybe not someone’s savings, maybe credit extended by a bank.
      the LEvel of and value of savings is indicated by interest rates. When money is valuable as a tool for a business to grow, it is expensive and this interers rated are high. say 20% at times
      When there is money up to your eyeballs and no one wants to take the risk with borrowing some as the ability to repay is too risky, the banks cant give the stuff away and thus interest rates are low. Historically low, as the climate tragic s would say “lowest in recorded history”. And here is where we are today, money now has no value, so all the inflated values for RE have no real basis. Gold may be a defensive measure, but not yet. We need a collapse first.
      The environment will give out before this is solved.

      • interested party

        Do savings have ‘worth’ if money has no value?….or….how much savings is ‘enough’?
        and if I save all this money…and the environment gives out before I get to spend it……what was it all for?

      • Janet

        I suspect that your question has its answer in the writings on here some time back by blogger Deep T (they are archived) Savings, which in any form are assessed as money (Gold is worth $X, so is your house etc) are essentially a ‘set of rules’ not a thing. What has transpired over the last few decades has eroded the ‘worth’ of savings because The Rules have been both broken and changed. Once that happens without correction it renders savings ‘worthless’ as WW writes above, and until there is that ‘correction’ that in essence will be a reinstitution of The Rules of Money, then prices may rise or fall, but money will have no worth until its price ( the interest rate) reflects the risk of doing business. If savings are ‘worthless’ there can’t be a glut of them? (Ref: http://www.macrobusiness.com.au/deep-t/ )

      • interested party

        “maybe not someone’s savings, maybe credit extended by a bank.”

        You can draw a direct connection from bank derived credit…via a purchase….to a sellers account and if the total sale amount is above the sellers holding costs, then that equates to savings from the point of view I am sharing.

      • interested party

        Thanks Janet.

        Interest rates have a connection to the environment through the required growth to supply the extra cost, so the argument you present does hold until we run out of “new world” to monetise. I have trouble visualising the next chapter.

        “if savings are worthless there can’t be a glut”? Eventually…yes I would agree but I can connect savings to the rising RE prices that many here at MB are concerned about. Most if not all financial/investment decisions are made so you have “more” later on down the track….so should qualify as savings.

    • Revert2Mean

      Gee, IP, that seems a bit obtuse old chap. Surfeit of saving? Forgetting the mandated super (who knows what will happen to that money or even if it will still be there in a decade or so), where are these huge savings? Yes, since the GFC, saving rate has risen on Oz in response to a less certain outlook — households made the prudent decision to wind back spending and prepare for the future. Sensible, IMO.

      Households with high debt levels have also cut back on spending. Sensible again.

      Savings have gone up in households with a higher level of education, because smart people know what’s coming.

      This may explain the RE market somewhat…..too much cash chasing to few assets

      No, it’s too cheap cash chasing too few assets.

      I think you may be confusing “savings” with “credit”, in general.

      • flyingfox

        I think you may be confusing “savings” with “credit”, in general.

        Because the financial worlds seems to care less and less about such a distinction.

      • interested party

        ( and taking into consideration that debt creates the deposit/saving…blah blah blah )

        edit to add…
        Hardly obtuse I think. Follow the crumbs from the actual saving back to the earning event…….that event was a small part of what we call “economic growth” and that event took a small nibble out of some environment somewhere on the planet…..
        You bought a new house…nice entrance doors, solid timber..hmmm……New Guinea Rosewood……..looks fantastic.
        Where did that timber( part of the growth equation) come from?….and…how long can this keep going?

      • Revert2Mean

        IP, totally agree that humanity is mining a dwindling resource (Mother Nature) and using Ponzi credit as the financing source. Gotta end, the sooner the better!

      • Andy!

        “No, it’s too cheap cash chasing too few assets.”
        +1. Raise savings and mortgage rates.
        The “glut” is just an excuse for the extreme underpricing of debt/savings. There’s an immense number of people signed up to 30 years of repayments on their debt, a captive audience if you will… suggest the ratchet be pushed up for the next 2 decades and enable required rebalancing & correct encouragement/discouragement of savings/debt behaviour.

    • Charles Ponzi

      What savings glut?

      ‘Highly indebted households do not appear to have any real savings for discretionary spending to boost economic activity, nor to weather a severe economic downturn, thus increasing the future probability of credit defaults. In short, Australians have been living a credit-fuelled lifestyle well beyond their means, indicating slowing income growth and rising unemployment are portents of future financial instability.’ Bubble Economics (Paul D. Egan and Philip Soos)

      • interested party

        Charles,
        Savings come in many forms. Most financial decisions are made with the intent of having “more” at some later date…therefore to think of them as a form of saving is not odd imho. And if you push that out a bit, you can see why RE has gone up in relative price, but not in value. The move to the city has forced people to save, and that mindset supports RE through a degree or two of separation. That is the basis for my glut angle.
        Your comment has presented another question for me though…….assuming my idea is accurate, how do city folk reconcile the savings connection to housing prices?……we know how irrational people get in the equity markets when prices reverse.

    • flyingfox

      Great thoughts IP and along the lines of what I am thinking as well….

      More thought out and long winded post will follow this evening when the wife is away and I have some spare time but what you say regarding

      I am of the opinion that much of the problem of excess savings has been spawned by the mass movement of people to the cities,

      I think is only half the story. The move to a urban lifestyle coupled with the baby boom and subsequent bust (relatively) means that the move from natural assets (children looking after parents in large families, farming land, communities etc) has largely migrated into financial assets.

      More importantly though, we have always maintained a pyramid structure to the population since the industrial revolution so there were more demand from the younger generation than there was savings of the older one. As the population as a whole gets older you get more savings until the point where these either start getting spent or redistributed leading tooo…

      is it possible to have “peak savings”…..and if so, what does it look like?

      Yes….we are almost there. This buildup of the “savings” and related CB “printing” has caused a drop in the price of capital (super is a great example). IMHO, once the boomer generation stops savings and starts using up their pile of cash we will see the peak (maybe 2025?).

      • interested party

        “IMHO, once the boomer generation stops savings and starts using up their pile of cash we will see the peak (maybe 2025?).”
        …and what of the state of the environment and it’s ability to sustain life as we know it at that late in the game?

      • flyingfox

        Personally the environment will be fine as long as the old growth model (people and stuff) is not shifted into high gear.

      • dumpling

        Charles, so why do you want to keep your money in the paper currencies that can be printed by the central banks, which is destabilizing the global economy, and has played a leading role in bringing the world economy to the brink of catastrophe?

      • Charles Ponzi

        @ Dumpling–‘Charles, so why do you want to keep your money in the paper currencies that can be printed by the central banks, which is destabilizing the global economy, and has played a leading role in bringing the world economy to the brink of catastrophe?’

        I don’t want to keep my money in paper currencies that can be printed by the central banks!!!! At this stage in my life I cannot afford heavy losses.

        Burying gold and silver in my garden does not seem very practical or safe. Gold can also be confiscated by the government. Gold does not earn any interest and difficult to use as a form of payment.

        Bitcoin has safety issues and not easily used as a form of payment.

        Buying real estate during a property bubble could be a costly mistake that would leave me without enough assets to retire. Putting all my money in real estate would leave me vulnerable to a drastic price correction. Also, real estate does not earn interest and I cannot go to the store and buy a loaf of bread with a few bricks. I don’t want to be cash poor as a retired person with no money for proper food. A house requires constant repairs and tax payments that can be costly in the future–If you don’t pay your taxes the government can take your home.

        The stock market is too volatile for someone my age to recover from potential huge losses.

        I don’t have enough to invest in fine art.

        If I had millions of dollars I would simply diversify and buy some good farm land, buy an investment property, purchase a few items for my fine art collection, keep some cash under my bed, bury gold in the garden and speculate in the stock market with money I can easily afford to lose. If I had millions, I would put solar panels on my roof (can’t do that now as a renter), grow my own organic food in my big backyard with free-range chickens…..

      • interested party

        Charles,
        Can I ask where you rent?……on a house block or unit/apartment?
        I only ask as I may be able to suggest possibilities to help.

      • dumpling

        Charles,

        There are always opportunities even if one looks no further than the blue chip stocks in the ASX;

        In 2009, it was WES
        In 2010, it was TLS
        In 2011, it was COH
        In 2012, it was JBH
        In 2013, it was BKL
        In 2014, it was CCL
        In 2015, it is WOW

        Of course, losses are always possible in stocks – so it may not be a good idea to go 100% stocks.

        What would “heavy losses” mean in your dictionary? I mean, would a 10% loss be heavy? How about 20%?

      • Charles Ponzi

        @ Dumpling: ‘What would “heavy losses” mean in your dictionary? I mean, would a 10% loss be heavy? How about 20%?’

        A 10% loss on my savings would total my yearly salary (pre-tax). So yes, 10% loss would mean a significantly delayed retirement. On a fixed income I have no way of generating more money through my labour to compensate for losses. Any loss must be followed by corresponding reduction in spending.

        A 10% loss may also be followed by further losses in the following years ,which would be catastrophic as far as being able to support myself during retirement.

        As I get closer to retirement my willingness to take on risk diminishes significantly. Time is not an infinite resource. I am also in a profession that requires high energy and gets harder and harder to maintain with each passing year. I come home exhausted and worn out at the end of each day.

      • Charles Ponzi

        @ Interested Party: ‘Can I ask where you rent?……on a house block or unit/apartment?
        I only ask as I may be able to suggest possibilities to help.’

        I am currently renting a home with a small backyard in the city a few short steps from work. We were pushed out of the last two rentals as the landlords suddenly wanted to sell. We have experienced the joy of open weekend inspections while renting!!! We have also lost two gardens after purchasing soil and planting crops.

      • dumpling

        Charles, I asked these questions to see if you have already quantitatively assessed your risk appetite – which should help you design a portfolio that suits your risk appetite.

        Of course, one’s risk appetite should diminish with one’s age – ever greater proportions of one’s net worth should shift from wealth generation (the likes of growth stocks) to wealth preservation (the likes of precious metals) with time.

        Some stocks, like BRK-A, can achieve both though Buffett is getting old himself and a downside of only owning BRK-A is that you wouldn’t put as much thought as you should.

      • interested party

        Thanks Charles,

        If your kind of work is transportable, is it possible to relocate to a smaller town and purchase a place outright? If so, then consider taking a Permaculture design certificate course and establishing a sustainable system on your own place. The more you can do yourself, the less you need cash…..and the less cash you need, the less you need to work and the easier it is to retire. Look at it through the process of’ enough”.

        The older a well designed permaculture system becomes, the more productive and stable it becomes. It gets easier as time moves forward.

        If you cannot relocate, then consider wicking beds……you can take those with you if you do have to move. Learn how to put a “Berkley method” compost heap together and you have no need to purchase fertilisers, soil, or any thing else. My system runs on it so I can recommend that process.

        I would go the first option if possible. Contact a permaculture group near you if possible. Focus on sorting out the necessities of life before playing with financial boondoggles…sorry Dumpling. Life becomes very sweet when financial anxiety causing distractions are removed from the equation.

        http://permacultureaustralia.org.au/directory/

        A question for everyone……
        If what you are doing is unsustainable……….then why are you doing it?

    • BeduglMEMBER

      ‘Money is not a thing, it is not even a process. It is a kind of shared dream. We dream that a small disc of common metal is worth the price of a substantial meal. Once you wake up from that dream, you can swim in a sea of money.’

      ~Terry Pratchett

      • interested party

        I read recently a quote and cannot recall who or where it came from but is quite apt….
        It goes something like “you are so poor…all you have is this money”…
        apologies to the original author…

      • BeduglMEMBER

        Another good one from Sir Terry – he is one of my favourite authors

        “They’d saved the city with gold more easily, at that point, than any hero could have managed with steel. But in truth it had not exactly been gold, or even the promise of gold, but more like the fantasy of gold, the fairy dream that the gold is there, at the end of the rainbow, and will continue to be there forever provided, naturally, that you don’t go and look.
        This is known as Finance.”

      • Revert2Mean

        IP:

        “Some people are so poor, all they have is money.” ― Patrick Meagher

        Bedugl, great quote. “Provided you don’t go look” … it’s estimated that there is 100x more paper gold than actual metal. All’s well … until we are forced to deliver the metal. 😮

      • skippy

        Money is not an illusion…. never has been…. it has always been an – Act of Law – dictated by the state….

        Skippy….. Graeber’s 5000 years of Debt is a good starting point in fleshing out the historical perspective imo.

  18. 3d1k

    Generation Whinge and Boomerphobia

    “…the twenty- and thirtysomethings who blame the baby boomers for their every financial, social and personal screw-up don’t actually rough up old folks and snatch their stuff. But they do spend an insane amount of time weeping and moaning over how the boomers had it really good, and they have it really bad, and plotting new ways to make these cosseted fogeys cough up some cash or space to help young people out…”

    http://new.spectator.co.uk/2015/11/boomerphobia/

      • 3d1k

        I didn’t write it Duddles. Just putting it out there as MB gets more than its fair share of boomaphobics. You complain a lot. Funny, you always tell us you’re living la Vida Loca…somehow I seriously doubt that…a little ‘doth protests too much, methinks”.

        Next time you see someone in a crowd holding a Free Hugs sign – take them up on the offer. Duddles Needs Cuddles.

      • LordDudley

        And what a lame response that was. The Spectator is a UK rag only read by blue rinse conservative old farts.

        As for the personal attacks on my personal lifestyle… I’ll allow readers to form their own opinions on that. I only take you up on your opinions, whereas my lifestyle and family are apparently a source of point scoring for 3D. As usual, covering yourself in glory yet again, 3D.

    • The Traveling Wilbur

      The Song of the Silver Surfer

      With body molten and board set hard
      His form glitters on the breaking crests
      Vantage point gained his vision roams the distant horizons
      Hands outstreched, arms poised in readiness,
      Tattoos of Wrath
      and Khan emblazoned manifold upon his breast
      One last push of the Board of State
      as the sharks and bogans slowly circle neath the murky waters
      ‘Tis now’, ‘Tis now’ is the cry that rises.

      And the wave tops
      And so the Surfer falls
      From such heights as most dare not to dream it began
      Slowly, inexorably the descent was made
      From Lord of the estates real
      Supported by a Board of silver,
      Stage by stage did that rampant instrument, to which much was owed, disolve,
      Its power fading, its shine no longer reflected in the form of its rider,
      To leave a darkened, wizened form
      Resting, beached darkly upon a foreign shore
      At a prominence unseen and on a land untended.

      Sadly, tearfully the Surfer rises,
      Locks of silver now flecked with white,
      Form now bowed without its might.
      Vision still clearing, unseen voices are heard approaching,
      Sharks and bogans both encroaching.
      ‘Why, why? What need will this fulfill?’ the querulous voice of the Surfer raises,
      And in the eyes of the encirlcing throng blazes,
      The answer there embedded all along,
      As one they voice it, in a long-forgotten brotherhood of song… “Equity. Equity. Equity!”.

  19. 3d1k

    Oh Dear. Now The Conversation joins the negative gearing fray – and manages to get it horribly wrong. Better to argue for policy change with sound reasoning rather than contorted statistics trying to paint negative gearing as only of benefit to the wealthy. This is simply not true. Back to the drawing board Conversation and Natsem.

    • LordDudley

      Funny, 3D, you’re all against welfare, except when the asset rich oldies receive it unnecessarily because their PPOR is exempted from the means test.

      It’s very instructive.

    • 3d1k

      Not against welfare as a safety net at all. Against bottomless pit ideas like NDIS. Some of Leith’s ideas for addressing accessibility to the pension should be considered.

      Mining is not Rentseeking. Not in the slightest.

      • aj.

        There’s books written on the tax rorts of the mining houses, and add all the taxpayer subsidies… Big mining is as big a rent-seeker as the next global corporate.

        Don’t forget that our mining industry is 85% foreign owned! They have as much interest in Australia as the Royal Society of Ice Fisherman…

    • dumpling

      When Kelly O’Dwyer stated “Average income earners largely are the people who do get to take advantage of negative gearing”, she was referring to the number of negatively geared landlords because she is a pollie who worries about her chance of re-election. And she is right. The median taxable income of the negatively geared landlords is $60k according to the 2012-2013 ATO data cited in the Conversation article – meaning half of the negatively geared landlords have the taxable incomes of less than $60k.

      These are the people who are most desperately dependent on the existence of negative gearing – because the amounts of NG deductions constitute far greater proportions of their total income / net worth than those of the wealthy.

      Thus if there is any significant resistance to the abolition of NG in the electorate, that cannot possibly be attributed to the wealthy negatively geared landlords (i.e., those in the top marginal tax rate bracket) who only constitute less than 10% of the total negatively geared landlords.

      The governments, the LNP ones or the ALP ones, have vested interests in keeping NG alive, but that is a separate story.

      http://www.macrobusiness.com.au/2015/11/its-a-stamp-duty-feast-for-the-nsw-government/#comment-2439008

      • StatSailor

        Median individual income in Australia is $57k so it seems NGers are indeed better off than the rest.
        Meanwhile if any subset of NGers are indifferent to its existence the electoral logic of keeping something of benefit to only 9% of voters seems very strained considering the two party preferred split of their current vote is presumably about 50-50.

      • drsmithyMEMBER

        Taxable income can be very different to gross income. That is, after all, the point of negative gearing.

        These are the people who are most desperately dependent on the existence of negative gearing – because the amounts of NG deductions constitute far greater proportions of their total income / net worth than those of the wealthy.

        More likely the removal of NG would mean little to them in real terms as they are losing more than they will ever make back, but have been sold a story of tax avoidance.

        Thus if there is any significant resistance to the abolition of NG in the electorate, that cannot possibly be attributed to the wealthy negatively geared landlords (i.e., those in the top marginal tax rate bracket) who only constitute less than 10% of the total negatively geared landlords.

        But carry vastly more than 10% of the political clout.

      • dumpling

        @drsmithy

        From the article; “there are 1.26 million (10%) taxpayers who negatively gear” also “About 85% of taxpayers don’t have a rental investment”. Also the fraction of the wealthy “NG investors” and that of the wealthy “non-investors” as the fraction of each category are similar.

        What makes you think that the wealthy “NG investors” who are 10% of the total wealthy have greater collective political clout than the wealthy “non-investors” who constitute 85% of the total wealthy or the wealthy positively geared landlords who I logically infer to constitute 5% (100-10-85) of the total wealthy?

      • dumpling

        PS

        “More likely the removal of NG would mean little to them in real terms as they are losing more than they will ever make back, but have been sold a story of tax avoidance.”

        Spot on – and I bet they are stupid enough to vote against the abolition of NG or to write to MPs threatening to that effect.

        I always thought NG was plain stupid albeit legal – just like smoking, gambling, overeating, excessive drinking, among other things.

        But Prohibition does not work. The only way to avoid these traps is to get educated – which is precisely what I have been advocating on this site.

    • interested party

      from the link….
      “realizing the healthy normalization of free market forces crucial to genuine capital formation, authentically derived from bona fide industrious productivity generating actually earned savings, the very life blood essential to inducing legitimate and sustainable growth.”

      That process was all good and dandy while there where “un-discovered” continents and islands to conquer……and exponential growth was just a pipe dream. There is no such thing as sustainable growth. To be sustainable…something must die to make way for something new…..and on and on.
      Money does not fit this paradigm. It is not of this world and that is why there are so many issues related to it.

    • skippy

      Austrians entire philosophy is built on the corner stone of – inflation – with out it the entire edifice crumbles.

      • interested party

        Bloody oath……it validates life-choices and behavioral feed-backs. I got a few surprises on the savings bit up above.

      • skippy

        IP…. those that funded the Austrian school pretty much invalidates its entire ad hoc social philosophy, as a political advocacy group and not one of intellectual rigor nor academically honest. It cheery picks history to craft a narrative which benefits its – original funders – in establishing a societal template that ensures, by indoctrination, a controlling share in crafting the social narrative….

        Skippy…. people read Mises’ian dogma like a religious cult…. its prescriptive from an exhilio perspective… yet in absurd juxtaposition wails against authority in human affairs…. down from the mountain as it were…

      • interested party

        Skippy, I have to come clean here and admit that I mis-read Austrian…….originally parsed it as Australian. My bad……but left it as is……..because it fits the narrative oh so well.

  21. tonyddMEMBER

    Some excerpts, Prof. Fels

    Professor Fels is confident that more will come forward “once payments arrive in the pockets a greater number will come forward.”
    For the 7-Eleven whistleblower the problem of wage fraud is more complicated than the business model.
    “The corruption and desire to break the law is so ingrained in some of these franchisees that we can have the best business model in the world and they will still find a way to enrich themselves at the expense of the workers,” he says.
    With 1.3 million workers in Australia on a visa, this is a problem.

    http://www.brisbanetimes.com.au/business/retail/7eleven-crunch-week-looms-for-troubled-chain-20151119-gl32ff.html

    Those who have committed offenses should be prosecuted and have their visas revoked on the basis of ‘character’ simply we don’t want people like that here! I hope they lose all of there investment and then get the flick.

  22. tonyddMEMBER

    Earlier this week I received a phone contact from a RE agent asking if I was still (7 years since we last spoke) looking for a house to rent!

    2443

    • Wiley Wolf

      DD that is it, that is the canary, now the renters are chasing tennants.
      Game over, just sit back an wait for the collapse, the balance of power is now with the tennants and the longer they hold out the better their position, for a collapse of the renters.
      Watch how those guys go for each others throats when the Bank makes the repossession call.

      • Andy!

        Awesome. Might have some sense coming back to the rental market… it’s only relatively affordable compared to buying – still an absolute rip detracting from spending/investment elsewhere in the economy.

      • TailorTrashMEMBER

        House in the street I’m renting in ( north shore ,Syd ) as I await that ” never been a better time to buy ” opportunity ( which is not here yet by a long shot …..) ….has been advertising for lease for about 6 weeks now ………mind you it’s not the prettiest house …..but if the great shortage is there then I’d expect it to have occupants ………every week that goes by must be pain for some “investor” …………perhaps his potential tenants are taking up the crap apartments that are springing up around it ………….so sad to see a beautiful Australia ……..that was ……..disappear into a landscape of concrete desolation ………..we should be proud of ourselves …..we were given a blank canvas ….and instead of turning out a work of art we turned out graffiti ……..with out the class of a Banksi ………………pathetic really …….!!

    • Wing Nut

      We haven’t lived in Darwin for 6 years and still get the odd email from Ray White. We figure that when things are good you never hear from them but when they turn, out comes the ‘never been a better time to buy’ spam.

      • John

        Too true WIngNut, I am getting bombarded by groups on the Gold Coast. I helped my nephew out 5 years ago when I moved back to OZ to find a rental property (18 at the time and his dad would not act as a guarantor for him). Pretty funny business, some nice units tho and also a lot of for sale ones as well.

    • Djenka

      @ TonyDD

      Same experience I have in RE sales.
      Up until about a month ago, only random circular emails.
      Now, weekly calls and daily emails of impeding auctions…

      I already had a go at one particular agent pushing real hard, with private inspection at late hours only to cancel it minutes before the time – several times. He keeps calling again.
      Is that a sign of desperaton?

    • DarkMatter

      Overall, KickStarter has been quite successful. Many projects have worked and delivered. Some projects will fail, and in many cases it is caveat emptor. There are some really suspect ones – like the Zano. If you are an engineer, you would look at that and see lots of problems. Add to that the fact that Zano is targeted at the naive and weak minded (selfies) and you have a recipe for disaster.

      On the other hand, I kickstarted Wasteland 2 – a remake of the 1980s classic game by professional dev studio headed by the original designer of Wasteland. He was looking for an alternative to the big studio model of software development, and he proved it worked. I kickstarted Occulus – delivered as promised. The $9 computer .. delivered on time as promised.

      What you are saying is unfair. Crowdfunding is not an online shopping service. Its a public gamble and if you are naive or weakminded you should stay away. Anyone who sends off $100 for a magic pudding and gets nothing can’t go squeal to the media about how they were cheated. Same for the $400 electronic esky. The backers are idiots and no sympathy from me.

      Kickstarter is at least an interesting experiment. Its a social / psychological event, not a shop.

    • StomperMEMBER

      Satyajit does good work – his book is a must read and foreshadows what is to come. Not for the fainthearted!!!!

    • dumpling

      “Ordinary people are complicit; refusing to acknowledge that maybe you cannot have it all. They sense that the ultimate cost of the inevitable adjustments will be large. It is not simply the threat of economic hardship; it is fear of a loss of dignity and pride. It is a pervasive sense of powerlessness.”

      Yes, but this is not new – that has always been the case – and most people do not make any adjustments because they falsely hope that the government will somehow take care of them. Once things turn south and they are put on notice that the government cannot do what they had earlier hoped for, they over-react and call for a demagogue who tells what they want to hear – that all their hardship is somebody else’s fault and that they can blame the scapegoat the demagogue prepared for them. They are stupid enough not to realize that suitable places for them are inside concentration camps.

      BTW, did you read “Rich dad, Poor dad” which was a best seller about 15 years ago? Its content is as relevant today as it was back then.

    • skippy

      LOL…. it was the industrialists and upper wealth bracket that wet its pants in the GD… it removed the Bernays chimera they had crafted to glaze over the rest of society and amass huge fortunes in the process. The persistence in GD was largely a factor of their intransigence to drop the ridged Kantian perspective and seek methods which would alleviate the growing social unrest and capital destruction.

      Yet again we see this theater play out all over again but on a manifold scale…. sadly the environmental conditions are nothing like that past…. as such the remedies are not as easily come by….

      Skippy…. Seems like the plan is to double down on failure…. whilst repetitively chanting the same truisms…. good luck with that….

      • interested party

        “as such the remedies are not as easily come by….”

        Mate, this time there will be no backstop.
        It will come down to every man for himself. How you come out of it will reflect how you planned and acted before it turns.
        Answer = permaculture + community

      • skippy

        IP,

        MMT basically means as long as there is no inflation, creation is limitless w/ an eye to resources, broader social factors such as distribution and capital investment out comes are another story. The drama it seems is the quality of private sector issuance and aforementioned out comes from it.

        Yeah community and perma are part of a mix which will be beneficial, one being a natural behavioral handbrake and the other better control over a basic need at a regional level.

      • LordDudley

        Well that was informative! Another sterling post from the sad and wrong about everything 3D. Honestly, 3D, you’re a waste of blog space. You’re the most dull and tedious ex-shill (they’re not paying you anymore, are they) around. Enjoy the unemployment, 3D. Ha ha ha ha ha!

    • TailorTrashMEMBER

      And the number of houses with asking prices on them on Domain just keeps rising ……..whatever happened to ….lets go to auction so the suckers bid each other into the realms of the ridiculous ………..please ,please …..buy our house …..we only want $1,699,999.99 for our little crumbling damp south to rear asbestos containing shit hole ……..it’s never been a better time to buy ……….get in quick before the chinese government do the job that our government is incapable of doing ……and stops the flow of stolen money …….please ,please ,….buy our little shit hole …….come on ….come on ……fellow Australians we need you now ……..please ……please …..

      • GavinMEMBER

        So beautiful isn’t it? I wonder when reality will set in? Expecting over 1M for any house in Sydney outside of Double Bay seems ridiculous anyway… Expecting 1.6 is just funny.

    • bzunicaMEMBER

      My suburb went 0/7. 3 months ago it would’ve been 6 or 7/7. No one is even going to opens anymore. If you haven’t sold by now you need to limit expectations.

    • Quentin

      Sydney is obviously heading for a correction. The inner suburbs still doing ok (not really growth but not heavily backwards) while the outer suburbs would have investors that purchased earlier this year sweating bullets as it well and truly corrects. Although, ultimately the drops will come to the inner-city, just later…

      The real question is when do the first lot of buyers step up to the plate for some price support? Further to that, will the support be enough to at least stop the fall? Considering the 15-20 bps bank raise was only a month back, after this weeks buyers would have sought finance, still feel there is a bit of a way to run…

      The real concern is not falling prices. It is falling prices being the last rights of the construction boom and then subsequent unemployment. The ‘death spiral’ of falling prices + rising unemployment is a nasty beast…

      • flyingfox

        The real concern is not falling prices. It is falling prices being the last rights of the construction boom and then subsequent unemployment. The ‘death spiral’ of falling prices + rising unemployment is a nasty beast…

        This! and the fact that there any notion of a shortage , especially in the apartment market, is about to be blown sky high once the buildings start coming online….also I suspect we are about to see many off the plan apartments not settle, especially those bought by foreigners.

  30. 800psi

    I’ve pencilled in 54% as the point where the penny drops that prices and sentiment are unambiguously falling; that there was a bubble; that the bubble has popped. The real estate event horizon.

    • Wing Nut

      Reckon there’s a few sweat needs forning on a few brows of the Domain poster property inventors, you know,, the ones who have 15 properties, $2 million in debt and a stagnating market. Might be a few equity increase calls or additional collateral injections made by the banks soon.

    • James

      They used Singaporean wealthy as an example of foreign buyers. Are Singaporeans seriously their biggest cohort of foreign buyers of the type of foreign buyer they are trying to portray?

    • Revert2Mean

      The article seems to bemoan the fact that Australian society does not condone the wealthy secluding themselves behind high walls in elite, gated enclaves so as to keep from having to cross paths with bogans and tattooed riffraff in their daily life. Shame!

    • LordDudley

      This type of thing is why Australia is in serious trouble. In the US, people write articles about what the next invention/innovation will be that American companies will sell to the world. No-one here (at least in California) talks about getting rich from oil or dirt or houses. It’s software and hardware and cars and aircraft and new forms of energy and new business models that get investors excited here.

      Property development is valuable and useful, but ONLY as a complement to a growing economy, and only for the housing services it provides.

      Anyhow, I doubt it much large-scale property development will happen in Australia for some time; the downturn will hit first. Having said that, it would amuse me no-end if some clever Chinaman did manage to get approval for a gated community that would house 150,000 people like the one mentioned in the article.

      • ErmingtonPlumbingMEMBER

        “Property development is valuable and useful, but ONLY as a complement to a growing economy, and only for the housing services it provides.”

        The same statement should be said by replacing property development with “financial services” and housing with “finance”

        At least property is “real” and difficult to dissapear,… unless your area is prone to sink holes of course.

        http://imgur.com/kxO4i.jpg

    • ScottMEMBER

      Perhaps I am from a bygone era but the idea of living in a Truman Showeque community where maintenance of my home was dependent upon a Chinese corporation to whom I paid an annual tribute seems unattractive. Nor do I think I’d appreciate the company of neighbours who thought that was a good idea.

      • LordDudley

        Agreed 1000000%. Keeping the cockroaches in… Ha ha ha!

        Plus, gated communities are an indicator of a highly unstable society.

    • LordDudley

      Will this really change anything? The brokers will simply provide stop and good-till-cancelled orders to their clients, instead of the exchange. All I could imagine it doing is adding a bit of extra margin to these order types. Am I missing something?

    • GunnamattaMEMBER

      Thats interesting. I dont do enough trading to actually use them, but have used them int the past (as a safety). Have the Nasdaq or NYSE said why they are ditching them? What are your thoughts about why they are doing it?

      • nyleta

        Well, I think for once they really are concerned for retail investors, they don’t have many left now and as you know before a crash you often get swings of 3%-5% daily. These sort of orders can be lethal in such markets if you don’t watch the snapbacks like a hawk, this isn’t easy if you have a day job.

        Also the performance of ETF’s in August was an eye-opener. A lot of the big boys got stuck in ETF’s with the component parts summing to more than the NAV of the ETF’s. I happen to believe that ETF’s are fools gold and the way many are attached to large mutual funds is capable of ruining the liquidity of the markets at critical times, though I don’t pretend to understand the mechanism I believe this is meant to help ETF holders somehow as well.

        http://www.fa-mag.com/news/nyse-eliminates-stop–gtc-orders-23911.html

        EDIT: I originally had the part about the NAV of ETF”s backwards, sorry.

  34. Wiley Wolf

    Real Engineers stick the boot into Financial Engineers.
    Over the last 35 years, the economic growth necessary to increase living standards, increase wealth and manage growing inequality has been based increasingly on rising borrowings and the financial engineering of juggling numbers rather than the real engineering of making items of value.

    Financial Engineers dreamed up a reliance on debt-driven consumption. It resulted in global trade and investment imbalances, such as that between China and the US or Germany and the rest of Europe.

    The Punters asked for, and weak governments allowed the build-up of retirement and healthcare entitlements as well as public services to win or maintain office. The commitments were rarely fully funded by taxes or other provisions.
    Cracks started to show in this model in 2008, the crisis then was a warning of the unstable nature of these irresponsible arrangements. Since then there has been no meaningful change.
    Since 2007, global debt has grown by US$57 trillion, or 17% of the world’s GDP.In many countries, debt has reached unsustainable levels, and it is unclear how or when it is to be reduced without defaults that would WIPE OUT LARGE AMOUNTS OF SAVINGS.
    Imbalances remain. Entitlement reform has proved politically impossible
    Finance, Insurance and Real Estate (FIRE) activities dominate many economies.

    The political solution (Malcolm Turnbull) is “extend and pretend”, whereby everybody conspires to ignore the problem, cover it up, or kick the can. His strategy is that government spending, lower interest rates and supplying abundant cash to the money markets would create growth. (and put a pile of money in their own pocket) His dream is for a high wage high cost society.
    We now have volatile price bubbles in shares, bonds, real estate and even fine arts and collectibles. Even beer, now at $6.00 a schooner. And,, Dominoes “crispy pizza” is so thin you need a micrometer to measure its thickness.
    Our problems are now compounded by lower population growth and ageing populations; slower increases in productivity and innovation; looming shortages of critical resources, such as water, food and energy. For most, the effect of these is unemployment, reduced job security, the deskilling of many professions and stagnant incomes and the black shadow of technology and robotics
    Home ownership is out of reach for many. Retirement,a luxury for all but a few, reflecting increasing difficulty in building sufficient savings. Living standards are going down the toilet.

    Future generations will bear the bulk of the cost as they to tackle these problems.Governments will not open up about the magnitude of the economic problems, the lack of solutions and cost of possible corrective actions to the electorate. Politicians have the mantra no one ever won an election by telling voters it had come to the end of its “providential allotment of inexhaustible plenty”. Politicians work on the basis “when the situation becomes serious it is necessary to lie.
    For them the “permanent lie is the only safe form of existence”.

    The Punters are in this as well by refusing to acknowledge that maybe you cannot have it all.
    They sense that the fallout from this will be extreme. It is not simply the threat of economic hardship; it is fear of a loss of dignity and pride. It is a pervasive sense of powerlessness.

    It is probably beyond the ability of us real engineers to fix the problem before the crash, so fasten your seat belts.

    • LordDudley

      We can’t fix it, but we sure as hell can get out of the way and let the crash fall upon those who engineered it, and those who cheered it on believing they’d be rich, rich, rich, at the expense of those who came later.

      Bring it on!

      • Janet

        But are those of us smart enough to be prepared, prepared enough to survive?
        Having ‘enough’ lasts about 10 years from what I see about me. So multiply however old you are by however long you reckon you’ve got left to breathe air, and that’s how much you’ll probably need. If you’re 40, you’ll probably need 5 times as much as you think is ‘enough’…..
        Most people….aren’t going to make it though unscathed if it gets really bad.

      • interested party

        Janet..
        Having enough needs unpacking……enough of what?
        I can argue the point that if you grow and do most of what you require….enough takes on a totally different meaning.

      • Janet

        Perhaps that what I thought when I bought a farm! Okay, I farmed flowers (peonies for the Japanese market) and lease the bulk of it out to a contractor for wheat and barley. But after 1 good year 3 average and 1 bad,’ 5 years of basically working for nothing, guess where the money came from? Yep! Selling the land at 4 times what I’d paid.
        When I thought ” There must be more to life than this?” 25 years ago, when I looked at the days dealing sheet, and the right was bigger than the left, so it was a profit, someone should have told me “No there isn’t!” -(hence the farm.)
        “Enough” for most people is enough financial strength to survive. That’s why, as I suggested above, most people won’t make it through, unscathed….

      • interested party

        Janet,

        “Enough” for most people is enough financial strength to survive. That’s why, as I suggested above, most people won’t make it unscathed….“

        A basic tenet of my question is to offer alternative thoughts to the mainstream deer in the headlight acts.
        Why do we all work? I submit that it is to provide food, shelter, and clean water…acknowledging different levels of sophistication that have associated differing costs.

        If you are serious about having enough……..permaculture provides that…. in a sustainable way.
        You avoid ticket clippers…mostly…..and you learn/carry true life skills that will see you through the times ahead, and that is something that the average worker relying on a financial solution cannot lean on. I agree that the best of the financially driven lifestyles are behind us, and instead of fretting about how to maintain the un-maintainable, I believe we should look forward and adjust lifestyles, expectations, and values to meet the challenge.
        It can be done. The question is……but will we?

        Disclaimer here……I have already made my adjustment. I am here to help others.

    • DarkMatter

      The big problem is acknowledging that there is are fundamental flaws in the current economic models. Can you imagine Malcolm Turnbull coming out and explaining to his fellow Australians that the growth and consumption models are actually broken? He would be written off as a loony.

      So, here is the problem. Lets say that the current models do break into pieces. How can we rebuild a better society if the rebuilders can’t get their thinking out of the 19th century? There are a few economists (as above) who are forward thinking, but will anyone listen to them? It may take 50 years of economic turmoil to flush out the bad ideas.

      • Wiley Wolf

        DM, here is the (topical ) problem.
        You may remember in the battles of WWII where we were all fighting over not at least who should own Syria, That Foxy Rommel had the Allies in all sorts of problems. He was winning all the battles and the Pom Generals were making all the mistakes. In desperation all the Generals were sacked and that no bullshit, heavy hitter, Montgomery was installed. Plus Hitler made it a bit harder for Rommel about then, but we damn near lost that Western Desert War.But before all the Pom Generals were relieved of command, many, many soldiers were killed, the whole joint was blown to bits and apart from the oil wasn’t worth 2 bob.
        Seems to me that is how democracy works, the punters need to really feel the pain (near death) before their faith changes. Robots may not be so afflicted.

      • interested party

        WW,
        “Seems to me that is how democracy works, the punters need to really feel the pain (near death) before their faith changes.”
        To be fair, many if not most punters see no problem. You have your thoughts on the climate subject and you make choices based on those thoughts. Change the subject to housing and a typical punter acts the same….why fix something that ain’t broke? This behavior supports your thoughts on the system needing to collapse before meaningful change can happen….ooorrrrr……the system doesn’t collapse and we all look like dills…….

      • Wiley Wolf

        IP, Lord D sets it out for you
        “This type of thing is why Australia is in serious trouble. In the US, people write articles about what the next invention/innovation will be that American companies will sell to the world. No-one here (at least in California) talks about getting rich from oil or dirt or houses.
        It’s software and hardware and cars and aircraft and new forms of energy and new business models that get investors excited here.”

        You are like a gold fish testing the edges of its glass bowl, you have set up your environment to be self sustaining, but you are still anxiously scanning the perimeter of your fort.
        Take a tip from an experienced hand. The economy will fall over, the sustainable basis for the current model is not effective. Like feeding your fish sugar cane billets. You seem to be doing the right thing after all sugar is fattening, but long term it is ineffective and deadly.
        Be patient it will fall over soon. That Baltic Dry Index is more than ominous.
        And once a few sugar cane farmers up there start walking off farms, you will know for sure.

      • interested party

        WW,
        Agree with much of that.
        Lordy does nail the issue well.
        On the local scene, the cane farmers will grow cane even if the mill falls over……old habits die hard. It is all they know how to do. A hopeless situation.
        It is an economic slow melt up here, but I reckon the locals have a good chance of getting through the initial fall……it is what comes after that has me thinking.
        I have contingencies for most of what we need, and can do without what I cannot make or grow myself if need be. I am starting to gather like minded people and getting their blocks under permaculture. Up here……we will be fine. I worry for the city folk…two of my boys are included in that.

    • skippy

      WW,

      “The Punters asked for, and weak governments allowed the build-up of retirement and healthcare entitlements as well as public services to win or maintain office. The commitments were rarely fully funded by taxes or other provisions.”

      Sorry WW your causation is inaccurate if not worse, reverse. Firstly the governments are weak meme is ludicrous, just look at the rise of plutocracy and the security state and as far as your entitlements biz goes, looting by financial oligarchs is not a case of a funding nor tax problem.

      Skippy…. Control Fraud is not a case of “Punters gone mad [aka citizens]” its a case of powerful vested interests gaining Control of the State…

      • skippy

        WW,

        Hopefully a transition to a societal purview based on this eras knowlage base and not one grounded in antiquity – peacefully – or we might just screw the pooch and so much for the next generations opportunities….

  37. Charles Ponzi

    @ Dumpling: ‘What would “heavy losses” mean in your dictionary? I mean, would a 10% loss be heavy? How about 20%?’

    A 10% loss on my savings would total my yearly salary (pre-tax). So yes, 10% loss would mean a significantly delayed retirement. On a fixed income I have no way of generating more money through my labour to compensate for losses. Any loss must be followed by corresponding reduction in spending.

    A 10% loss may also be followed by further losses in the following years ,which would be catastrophic as far as being able to support myself during retirement.

    As I get closer to retirement my willingness to take on risk diminishes significantly. Time is not an infinite resource. I am also in a profession that requires high energy and gets harder and harder to maintain with each passing year. I come home exhausted and worn out at the end of each day.

    My goal is to preserve the wealth I have built up mostly during my younger single years when I was not supporting a family. If interest rates stay low for the next 10 years and if the cost of living continues to rise, my retirement years will be significantly compromised. One million dollars is not a huge sums of money today–and it will not likely have as much purchasing power in the future when I retire.

    My money in the past grew due to the wonders of compound interest. Today my money is not keeping up with inflation–and yes I count house prices and rent, electricity, school tuition fees, medical fees…

    When I look at Japan I see my own future. Zombie banks with interest rates kept low for decades are lethal for Japanese savers who despite frugality must eat away at their savings until there is nothing left–and most Japanese do not have the good fortune of dropping dead soon after retirement. I don’t think most people calculate how much money they will need in the future once they no longer have a steady salary.

    Many baby boomers assume that they will be able to fund their future retirement from the sale of their home. What if house prices crash when you need to sell? What if thousands of other baby boomers entering retirement are forced into selling their homes all at the same time? What if there are very few young families in the future with good salaries and steady work? What if there are no rich Chinese buyers when you need them the most? Chinese buyers may dry up the same way that Japanese buyers started disappearing when their property bubble burst.

      • dumpling

        PS

        Episode 49

        Disclaimer: All characters and events in this Episode -–even those based on real people–-are entirely fictional. All celebrity voices are impersonated…..poorly. The following Episode contains coarse language and due to its content it should not be viewed by anyone.

        Not so long ago in a galaxy not so far away …..

        Yoda: How feel you?

        Anakin: Cold, sir.

        Yoda: Afraid are you?

        Anakin: No, sir.

        Yoda: See through you we can.

        Mace Windu: Be mindful of your feelings.

        Ki-Adi-Mundi: Your thoughts dwell on money.

        Anakin: I miss money.

        Yoda: Afraid to lose your money I think, hmm?

        Anakin: What has that got to do with anything?

        Yoda: Everything! Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering. I sense much fear in you.

  38. Charles Ponzi

    My recent comments are not appearing–so apology if my long rant is posted twice after a long delay.

    • Wiley Wolf

      It was Paul Keating who said Australia needed to move from being the lucky country to being the smart country. But the government didn’t help that and Australia still has a problem taking ideas to the next stage.”
      Keating had it right, but the punters voted for freedom, the right to be wealthy without the knowledge, and now we have Turnstile and the Liberal Legacy
      If the Labor mob get a decent leader and team, they will romp in. (but i don’t know how they will fix anything, maybe just stop things becoming worse)

      • aj.

        No chance – Labor are corrupted beyond redemption. Unions are rotten to the core and the ALP Right is owned and controlled by the property industry.

        The best chance is that Australians look through the fast food marketing of the Labor Party and vote for someone else.

  40. Rod77

    I mentioned early last week that Saudi Arabia, is behind this fanatical Islam and Terrorists they sponsor. Seems NY Times Editors agree allowing this one through the keeper.
    I also noticed Mrs CLinton made reference to the involvement of Saudi citizens without implicating the Royal Family.

    The U.S was friends with Saddam then they bombed him. At some stage whoever is really running this show may decide their usefulness has come to an end.

    I just wonder if this is the beginning of the change. Maybe someone should tell the guys in S.A that when you suck with the great satan you need a long straw..

    http://www.nytimes.com/2015/11/21/opinion/saudi-arabia-an-isis-that-has-made-it.html?action=click&pgtype=Homepage&version=Moth-Visible&moduleDetail=inside-nyt-region-1&module=inside-nyt-region&region=inside-nyt-region&WT.nav=inside-nyt-region&_r=0

    • interested party

      Tin hat on tight here…..
      When the oil reserves in SA run out…….there will be a mushroom cloud over the desert. Call it a stop loss.

    • Revert2Mean

      Wahhabism, a messianic radicalism that arose in the 18th century, hopes to restore a fantasized caliphate centered on a desert, a sacred book, and two holy sites, Mecca and Medina. Born in massacre and blood, it manifests itself in a surreal relationship with women, a prohibition against non-Muslims treading on sacred territory, and ferocious religious laws.

      The world we are moving into —the world of Peak Everything, global warming, overpopulation and financial collapse— has no place for this sort of thinking. It needs to be abandoned, or those that follow it must die. Sorry to sound brutal, but the time for religious fundamentalism is long past.

      • interested party

        “Sorry to sound brutal, but the time for religious fundamentalism is long past.”

        Dude, that is all many of the bastards have left to cling to….across the entire religious spectrum.

    • Wiley Wolf

      Rod, the US is now impotent, it is Mr Putin running the show now.
      Big changes ahead, Unless Trump gets elected.

      • Fyodor Dostoyevsky

        If Trump gets elected expect to see the US officially change their standard from the Stars and Stripes to the bed sheet.

        China has now thrown its weight behind its main ally – Russia – and is backing them in Syria where the Russians are running 2,500 sorties a day including the largest fastest strategic bombing fleet in the world backed by 150,000 ground troops.

        Trump. lmao. Ivana or Donald ? Trump or Duck ?

      • Rod77

        What the U.S game is at the moment I cant say. My curiosity extends to S.A they are the ones financing fanatics, How long before the U.S cuts them .
        They don’t need the oil any more it seems.

    • Fyodor Dostoyevsky

      21 Jan 2014
      As Western leaders publicly push the Syrian regime and the opposition to the Geneva II peace conference that begins Wednesday Washington has also been quietly supporting moves by Saudi Arabia and Qatar to give weapons and cash to rebel groups to fight al-Qaeda’s Islamic State of Iraq and al-Shams (ISIS) in Syria.

      http://www.telegraph.co.uk/news/worldnews/middleeast/syria/10588308/US-secretly-backs-rebels-to-fight-al-Qaeda-in-Syria.html

      August 31, 2014

      The U.S. offered nonlethal aid to the Syrian rebels and eventually covertly armed them, going so far as to operate a training camp for rebels in northern Jordan.

      http://thediplomat.com/2014/08/iran-didnt-create-isis-we-did/

      The US has been right behind the entire thing from day one. Anyone who thinks otherwise is quite simply – DELUDED.

      • Wiley Wolf

        FD you are correct. Like the dust up in the Western Desert in WWII, we didn’t find out the truth until anyone of senior rank who would have been embarrassed by their shortcomings had died.
        This current skirmish is probably just the opportunity for war games by the big militaries, to get the toys out and have a play, without risk to greenies whinging about the damage to the environment.
        Been that way over there since Alexander the Great.

    • Revert2Mean

      Pure pragmatism. We need to throw the rubbish overboard; no millstone around our necks as we approach an evolutionary bottleneck 😮

    • Wiley Wolf

      Mate good find. the problem for B Hill is that frigging Cubbie cotton. The evaporation losses from that place would fill all those lakes down south. Govt subsidies and bullshit built that place Barnaby Joyce et al. That cotton out there is environmental vandalism ploughed large.
      Havent been up to Tully for about a year, but record tonnage on top of a sugar glut. the sugar price can only go to an all time low. For a few dollar more, I saw the Toft Bros take sugar cane harvesters to Brasil, if only they had the nose of the drug companies and withhold supply, we in Qld NSW would still be profitable in sugar. But I think sugar’s days are numbered, they do immense damage to the reef and people. Big problems for the current Labor govt, still MIA.

      • nyleta

        Yes, sugar fields are impossible to sustainably fertilise. Burdekin Dam is the sleeper, already at 50% if the wet misses big they will be pumping to Townsville, Moranbah also depends on it. A lot of the food bowl dreams being presented depend on the Burdekin Dam which is already over-allocated.

      • John

        Like I said many times, our ag practices will make us the dust bowl of Asia long before we become the food bowl of Asia

      • Wiley Wolf

        Jonh, and all, well how come if a few mug punters like us can see the issues, how come the experts paid to do the assessments, are still letting it occur.
        As IP says If what you are doing is not beneficial, why continue.
        I see punters here every day,where the bank has taken control of their property and they are selling off the contents on ebay, so they have enough to pay to put the valuable stuff in storage.
        They have that 1000 yard state of the shell shocked, zombie like going about their activities
        Surely the whole country cant be so afflicted.
        The performance hasnt yet really started.

  43. Rod77

    R2M, I always knew AWG was incompatible with capitalism..seems it is also incompatible with human life in general.

    I wont be submitting to the R2m AWG Theocracy. You will have to kill me R2M

    • Revert2Mean

      WTF? Are you a weekend drunk? Bit early in the day isn’t it? As the Duff Beer manufacturers say, “Binge responsibly” 😆

  44. Ronald

    Does anyone know why baby formula is going so well right now but general milk powder isn’t?

    What’s in baby formula and milk powder are vastly different things and not just products from cows?

    • Janet

      It’s who the end user is? When you only have one child, poisoning it with suspect product is something to be avoided….

    • gregonomic

      My wife and I have just been asking the same question. I saw it mentioned somewhere – probably a MB comments thread – that Chinese parents don’t trust Chinese-made formula, ever since the melamine scandal.

      So I guess they trust foreign-produced formula more?

  49. 3d1k

    MB Team – blog gets unwieldy with this number of comments – need to bring recent comments back and option to go straight to top/end of page. Cheers.

    • The Patrician

      Agree + reattach reply box to relevant comment.
      Why has no one from MB team ever responded to reasonable requests for explanation re this?
      We all want to see the site improve.

    • The Traveling Wilbur

      Alternate, simpler, solution to reducing the number of comments: You could just stop posting crap?

      • The Traveling Wilbur

        LOL. Good one haroldus. But, to remove all doubt, I was directing that previous comment at another, not your good self.

        PS actually, on reflection, I think 3d is the voice that, in this instance, should be listened to. M H should take note and respect the wishes of his account holders. After all, 3d does have more of them than anyone else on this site. Accounts that is. Not wishes.

    • GunnamattaMEMBER

      I tend to agree, I know the gents have had some guy working on the site of late. I asked at some point about getting the recent comments back and I understand that is the intention, but it just hasnt happened yet.

      With the weekend links pages they have sort of developed a life of their own. DE did one earlier in the year which chalked up more than 400 comments, and from memory the last few weeks (which i have done) have chalked up more than 300 comments. That starts to get a lot of comments for a blog site to handle.

      A couple of times in the past I have thrown up Sunday macro posts to try and move some of the pressure off into another post, but I dont often have the time.

    • Dan

      I always thought it’d be great if we had an MB sub-reddit with each post corresponding to an article on the blog. That way we could hold threaded discussions, it’d also increase the potential audience for the blog.

  51. BradleyMEMBER

    We went and saw “99 Homes” yesterday and can highly recommend it. An urban horror story of our times which may well befall many punters in our own Aussie dreamland if they don’t pay attention to the risks they are taking. For the record, in Brisbane, it is only showing at one cinema despite some tv advertising which I saw afterwards. About 60 patrons with 90% being over 55, like me. Hardly going to start a revolution at this rate but should deter most from a ‘career’ in real estate.

  52. Revert2Mean

    Kunstler (Author of The Long Emergency) talks to Chris Martenson and Adam Taggart, authors of Prosper!: How to Prepare for the Future and Create a World Worth Inheriting. Both Chris and Adam were corporate executives who dropped out to pursue more a resilient way of life in a rapidly and increasingly hazardous changing world. Chris Martenson began that phase of his career with the video and later book titled The Crash Course, which undertook to explain the dangers of contemporary banking, finance, and money-creation. Chris and Adam maintain the front and back ends of the PeakProsperity.com website, which features weekly articles and two excellent podcasts on issues pertaining to what Kunstler called “The Long Emergency.”

    http://traffic.libsyn.com/kunstlercast/KunstlerCast_272.mp3

    • Muz21

      JHK’s podcasts have just been getting better and better over the past 12 months. Dave Collum was a cracker, likewise Steve from Virginia. For those with an open mind it’s definitely worth giving a few minutes to.

    • interested party

      R2M,

      Many thanks for putting this up.
      I would love to see how many readers here actually spend the time to listen to this.
      They are describing my present life. It is hard to beat.

      Kudos..dude.

  53. John

    Very serious question: http://m.smh.com.au/business/retail/wage-fraud-pizza-hut-franchisees-using-sham-contracts-to-underpay-drivers-20151120-gl3p7q.html

    With a large number of service jobs being shown to be under paying workers, what happens when they are forced to raise driver payments. How many “franchisees” will got out of business and how many other companies in this sector will be exposed? If the only way to pay the wagesis to raise prices, will this lead to an increase in our inflation? Is under paying common for contracted truck drivers? If so, will this issue ripple through our entire economy before or after the car industry demise?

    • John

      If this is an endemic issue, will this usher in a wages reset or, because of our elevated property, will Australia remain with high wages and slowly fade into insignificance as we price ourselves out of the global market? May be we can open up new markets on Mars, but even they might be put off by our real cost structure.

      • John

        Perennial debate Skippy. I have no idea on that one. I expect compared to Mars we may be cheap 😉

        I have no problem paying wages and benefits for our employees, most are well above award and I can say most are more productive than expectations. Those few that weren’t tend to leave on their own, as the team does not tolerate a dead weight. We have very little price elasticity that we control, therefore we need to be cognisant of ever cost saving possible and productivity improvement we can use.

      • skippy

        John…. unless your prepared to have a larger heterodox examination… I would simply state… local markets can not be just wantonly ascribed macro because of reductive methodology.

        Skippy… wood chippers make bad uplift machines…

      • John

        True Skip, but I am searching for an answer to the original question. My industry has the same competition problems, inherently more risks from external factors, but I do not cry poor and under pay. Some operators do for the pickers, that is true. So again, is this under award payments an endemic issue in Australia or is it isolated to poor performers. My suspicion is it is endemic, but I am searching for facts vs hunch in this case. And then ideas on what this would mean for Australia in the short-term. Again, my hunch is that if this breaks apart prior to the car industries demise, the ramifications could be ugly for the economy.

      • skippy

        John…. If I may be so simplistic as to evoke Gresham’s Law w/ the observation that competition for the sake of it, in the framework of survival of the fittest…. is misplaced…

        Skippy…. with the understanding that last hundred years, at a minimum, does not make that an easy case of events….. humans….

      • John

        LOL – I snorted a Flaming Fire cocktail up my nose when I read that one Skip. Based on that reply Skippy, it is time to Short Australia – couldn’t happen to better candidate. We can’t even be competitive in the game of life let alone the game of business. Nietzsche’s land my arse, Australia is the land of the Long White Moron, that which does not bubble, can’t be worth doing (apologies to Nietzsche and my now empty glass)

      • skippy

        Just to expand on that it might be nascent to consider the market should not have such dominate leverage in all things human, sure its the engine of invention, tho were at a point that it can’t be just for the sake of it.

        There is always the consideration of – Pubic Utility – whilst firewalling the most egregious aspects of wealth creation for the sake of it, unless the purists crack a fat.

      • John

        About the only “philosopher” I am aware of aside from possibly Descartes who knew they were full of it and admitted it at the end. unter menschen springs to mind. But he does have some great quotes that can be misused for what ever evil purpose a despot needs. And I guess I went through the whole philosophical view on life in my uni (1st and 2nd spells) life but in the end just learnt to love the bomb. Doesn’t mean I don’t rage against the machine, but it is often the Ghost within and the need for speed that drive the actions we take (the triumvirate, me, myself and I).

      • skippy

        I hope this illustrates my point…

        willtopower

        I don’t usually do moral philosophy on here; except, that is, when I’m pointing out the implicit moral philosophy inherent in certain economic concepts. However, I recently came across something that I found so interesting that I felt I had to comment on it. The only way I can justify this is that I know that some of my readers — or at least one of them — gets very uncomfortable when I make criticisms from this point-of-view and what follows may be of interest in this regard. I will try to tie this back to economic by the end, I promise.

        The ‘something’ in question that I found so interesting was the following video on Youtube. It is an interview with Cody Wilson; the man most responsible for distributing software packages online that allow people to create firearms using 3d printers. I suggest watching the whole video before reading the rest of this post.

        Wilson’s Wikipedia page gives the impression that he is some moron anarcho-capitalist but watching the video you can clearly see that this is probably not the case at all. Rather he is quite clearly a Nietzschean of some form or other; this is confirmed by the following clip in which he, rather hilariously, suggests that Glenn Beck should read Michel Foucault. I think that Wilson’s Wikipedia page reads the way it does because it was edited by pro-gun advocates in the US, the majority of whom, as everyone knows, are on the libertarian Right.

        First I should say: Wilson does support some nonsense, such as the internet fad known as Bitcoin. Bitcoin is based on a naive view of the world where the Believer convinces themselves that a system of interacting, ‘free’ people can self-regulate (usually based on some fantasy ‘non-aggression principle’). Implicit in this view is the idea that people are Naturally Good. All the turmoil in the Bitcoin market should be seen as a modern version of Robert Owen and the Utopian Socialists’ attempt to create a perfect society. What actually happens in such situations is that selfish people come in and basically start stealing and wrecking stuff and those that are naive enough to believe in the Natural Goodness of people get the short end of the stick.

        https://fixingtheeconomists.wordpress.com/2014/05/14/cody-wilson-and-the-language-of-power/

        Skippy… so John is the currant temple fixated on violence or benevolence to everyone seeking to survive….

      • skippy

        Just felt I had to say as an ex military sort I get where your coming from and hope you don’t take it the wrong way, you have my respect, not that it has great significance, just one bloke to another thingy….

      • John

        Skippy, we have both spent time in the most inhospitable areas of the US of A, and have seen the degradation in social norms, morals, ethics, etc etc over just the last 10 years to know that the problem is more than just a passing stage of the empires lifecycle. Greed in all its forms is inherent in the system, nah I would go as far as saying is the system, that the greatest threat is from within. All external events are merely massaged to focus on the need to increase the security blanket protecting the gains of the upper echelon. There is no benevolence in spirit, those that do show it suffer a Darwinian fate. As you advance in years, I am told you grow more mellow. Well not me, I am seriously turning into the grumpy old man Clint Eastwood played in Gran Torino. Too many 3 letter acronyms in my past associations tho never direct employ.

      • skippy

        Lmmao at Gran Torino… yet it is our duty too…. if need be… diminish our selves… to provide a future for all…

        Skippy… half the problem is the debate is founded in tropes and not academic [FU profit mills] discourse… and then whack on a bit of ethnic bull shit…