Not as PM of NZ.

If you served in a real nation in three four year terms you would be taken considerably more seriously.

Clark is no Margaret Thatcher, which the UN has exposed. By normal peoples standards, she is on the dole queue applying for a job as the police check is being scrutinised. fortunately for her, former employees police records won’t count against her.

That should cheer New Zealand up.

I suspect that you are on the money, so to speak.

I’m not sure if you followed a thread we had going a couple of weeks ago, but here’s another link to a rather wry but sobering video where Glenn Beck parodies Al Gore’s An Inconvenient Truth to explain just how worthless the US dollar currently is:
http://www.youtube.com/watch?v=lNS8IY_Td14

Electricity has an awful lot of areas that mean it’s not a free market – the bulk of generation is owned by the government (in theory us) they are the price setter

You cannot change your lines company – there are rules that the lines companies have to follow to value their assets that then let them charge more – they spend a lot of time trying to work out how to price their assets up – some of the approaches used are dubious at best

I love the “We have to put prices up now in order to justify the **next** power plant we might build in a few years time” approach – it just shows how not a free market we have – particularly as they still have to pay the government a dividend – a commercial company takes a loan (or pays out of cashflow) – justifies it on the return over 50 years (for a power station) and off they go. I would quite like to charge my customers extra now so as I can buy an extra xxxx in the future for them, of course.

Electricity prices relationship to fuel prices is interesting as we have the bulk of our electricity generated by renewable means. So why aren’t the prices then related to the cost of the asset (return on build $, maintenance etc or replacement cost) that does the renewable generation?

The point the report makes around the Electricity Commission not being suited to address competitive issues seems quite accurate considering the above. I agree that the EC is part of the problem we have with power in this country but I don’t agree with Transpower being the solution for investment decisions. They haven’t shown a good history here.

Ditto – so lets play “Spot the Difference”

http://keepingstock.blogspot.com/2009/02/camera-never-lies.html

I’m as right wing as most but I think we need to recognise that while free markets are “economically efficient” they are also very unsentimental things that can cause a lot of pain and dislocation. And electricity is one (critical) service where we can do without that pain and dislocation. For example, among other things, in a true free market:
* The price of electricity would need to float, so all domestic users would be exposed to the spot prices. Fine if the lakes are full. But I wonder what the advocates of the free market will say when their electricity costs more than $1.00 a unit in a dry winter?
* Rational suppliers in a free market would ensure there was an overall shortage of electricity, and would only provide it to those prepared to pay a premium price.

Fundamentally the price of electricity is driven by the price of fuels, which in turn is driven by the availability of fuels. So until we get access to a lot more water and gas and coal at cheap prices then electricity is going to seem expensive to a lot of people.

That’s not to say we shouldn’t tweak the industry structure a bit. Personally I think we need a degree of coordination across the sector, synching the long-term investment in generation and transmission. And that probably involves some economically & environmentally inefficient decisions to ensure security of supply (like putting a big coal-fired plant in Southland … since there’s no thermal baseload currently available in the South Island).

And we certainly should take a close look at the shonky thinking that “We have to put prices up now in order to justify the **next** power plant we might build in a few years time”.

That brings the total bailout package up to $8.5 trillion (including the $700 billion Wall Street bailout… $600 billion to Fannie and Freddie… $168 billion in stimulus checks… the list goes on).

To put this into perspective, that is more than the U.S. spent on:
• the New Deal – $500 billion
• the invasion of Iraq – $597 billion
• the entire lifetime budget of NASA – $851 billion
In fact, it’s more than all of these combined… and that includes throwing in:
• the $256 billion they spent on the S&L bailouts of the 1980s
• the $217 billion that was spent on the Louisiana Purchase; and
• the $454 billion that was spent on the Korean War!
When the financial crisis exploded early last year, investors worldwide began rushing for the exits. EVERYONE wanted to exchange their stocks, funds and commodities for cold hard cash.

And it wasn’t just individual investors. Hedge funds, hit by redemption demands from investors, were forced to liquidate their positions in exchange for cash (to the tune of $400 billion).

In a single 30-day span, investors yanked $127 billion from U.S. stock and bond mutual funds, seeking the “safety” of Treasuries and cash.

But the rush to cash didn’t stop there. Even with yields sinking below the S&P 500, the demand for Treasuries soared… all helping to drive the greenback up 21% in just five months.

All this has created what could be the biggest bubble in the financial world today… the bubble in the U.S. dollar! It’s a disaster just waiting to happen… waiting for that “tipping point” event to set off the fireworks.

The Fed is expanding the U.S. monetary base by more than $11 billion a day since September, to nearly $1.5 trillion. That’s an increase of 79.02% since October of 2007. On an annualised basis, the “run rate” – the increase of dollars in circulation – is soaring by 369.92% per year! Unprecedented in history!

That $8.5 TRILLION in bailout cash is about to flood into the global economy. And when that happens the “Bailout Bombshell” will finally torpedo the dollar… wiping out TRILLIONS in American wealth all at once.

Bottom line: Anyone holding U.S. dollars – in cash, in money markets, in Treasuries – is in the “blast radius.”

February 24th, 2009 at 1:38 pm
#PhilBest

“China is going to continue buying US bonds and with reserves and foreign assets of perhaps $2 trillion or more isn’t it a little ironic that the capitalist west is going to end up in hock to the communist east.”

Cha, I prefer to describe China as a post-communist economy where the State has been as low as 17% of GDP in recent years. That is what the bloated socialist welfarist nations with their States at 35%-50% of the economy are going to end up in hock to.

I also look on it as China reverting to its ancient, Confucian roots, along with a rapid taking on of Christianity; that is what post-christian, liberal secular multiculti moral relativist nations are going to end up in hock to.

Or look on China as having strong ethics of work, thrift, and personal responsibility. That is what the “everyone’s a victim now” West is going to end up in hock to.

If China hadn’t had its disastrous Communist interlude; imagine it being Japan times ten. They’d already own the world; Japan probably owns 10% of it as it is.

Feb. 20 (Bloomberg) — A glitch in satellite sensors caused scientists to underestimate the extent of Arctic sea ice by 500,000 square kilometers (193,000 square miles), a California- size area, the U.S. National Snow and Ice Data Center said. http://www.bloomberg.com/apps/news?pid=20601110&sid=aIe9swvOqwIY

1. That is a dangerous mistake for shipping
2. The Polar bears are now safe.

China is going to continue buying US bonds and with reserves and foreign assets of perhaps $2 trillion or more isn’t it a little ironic that the capitalist west is going to end up in hock to the communist east.

Too late – we were hooked into the hock ages ago.

And is it a sure thing that China will continue buying US bonds?

The primary reason why China continues to prop up the US$ is so that the US and other countries who rely on the US$ for trading purposes, continue to consume China’s exports.

A leader in last week’s Economist considered the prospect of the newly emergent middle classes in China, India, Brazil etc being faced with a return to poverty. History suggests that major social instability could ensue. China, in particular, will do everything within its power to avert social unrest.

I’m not an expert, and I’m only pondering here. But I wonder how soon before China realises that it does not have to depend on Western nations to buy its commodities, because it has an enormous untapped market at home? It doesn’t have to reduce production at all, if it simply allows its middle class to grow and whets its appetite for consumption.

Same goes for India and Brazil.

Of course, were this to happen, it may end the cosy co-dependency between developed and developing countries. Why would China continue to lend money to the US if it no longer needs its business? And once the credit really dries up, today’s so-called “developed” nations may be in for a very rude awakening.

On the plus side, if my scenario were to play out the developing nations would become rapidly more democratic.

..here is how it went..

http://whoar.co.nz/2009/oliver-driver-interviews-john-keyhe-gets-one-tickone-crossand-a-jurys-out/

phil(whoar.co.nz)

China is going to continue buying US bonds and with reserves and foreign assets of perhaps $2 trillion or more isn’t it a little ironic that the capitalist west is going to end up in hock to the communist east.

funny!

I still gave you a positive karma point for your comment, though. I presume you were sincere, you do want a free market in electricity?

I am continually disappointed by the non-intellectual debates on the subject of “free market” reforms versus statism; virtually all the criticisms of any so called “free market” reforms, relate to the aspects that result from the free market being left out or disallowed from working. So your comment was perceptive; we do not have a free market in electricity, and the failings we experience are no reason to go back to a State monopoly rather than forward to a real free market.

By the late Dr. Adrian Rogers, 1931- 2005, former Pastor Bellview Baptist Church, Memphis, Tennessee.