Financial Armageddon!!

[Realist]

Austerity fails Exactly when in the last 800 years has that happened?

The Great Depression, it exacerbated the crisis.

By fail, I mean people will look back and the consensus will be that they worsened the recession and that it would have been better to add more fiscal stimulus. The mere fact they had a stimulus package and now are playing opposites seems quite stupid to me, a bit like the "double dutchess" as I now call her third person escapade.

Currently the US seems to repeating the mistakes of the French, English, Ottomans and the Spanish and Austrian Hapsburgs

http://www.economics.harvard.edu/fil..._Different.pdf

Thanks for the link, I've heard all that 'empires fail' stuff before though. In 2007 when people were saying the USD was dead, I was telling people it had reached bottom. When people were expecting global growth in 2006 I forecasted the biggest global crunch in history (just a bit too early). When people were saying $600 gold was a bubble I expected $1000/oz. Money is funny, nothing is as simple as it seems.

[eri]

Thanks for the link, I've heard all that stuff before though. In 2007 when people were saying the USD was dead, I was telling people it had reached bottom. When people were expecting global growth in 2006 I forecasted a global crunch. When people were saying $600 gold was a bubble I expected $1000/oz. Money is funny, nothing is as simple as it seems.

how have your property investments panned out?

[Realist]

They haven't, I won't be investing in property any time this decade.

[Austrokiwi]

Thanks for the link, I've heard all that 'empires fail' stuff before though. In 2007 when people were saying the USD was dead, I was telling people it had reached bottom. When people were expecting global growth in 2006 I forecasted the biggest global crunch in history (just a bit too early). When people were saying $600 gold was a bubble I expected $1000/oz. Money is funny, nothing is as simple as it seems.

I didn't think the link referred to empires failing but rather the cyclical nature of defaults. I am not a God Guns and Gold fanatic, ( I personally think it would be economic suicide to return to a Specie based monetary system} rather I see the world economy as having hit a turbulent time in which "economic evolution" jumps. In the history of money the US$ is a very short lived phenomenon. China may prefer to stay with the US$ for now as to do otherwise would see it taking a massive financial loss, however that also suggest to me when the Chinese can move away from the US$ (safetly) they will. The Euro IMHO has been slammed by Brit an American commentators who have been astounded at the Euros strength over the last few years.


NOw Austerity never gets Governments into trouble. Stimulating the economy has got Gvts out of problems. The second great depression shows what happens if you don't. However I think this time round the pendulum has swung too far in favour of stimulation ( particularly in the US). I believe that in Europe there is a little more balance ; interest rates are not going to go up any time soon ( our mortgage interest rate is below 3%). But cuts in pensions, retirement age ( Women can retire at 55 and receive the Pension in Austria) and government spending are now happening. These changes are possible now when a year ago they were unthinkable. This is why I think in 3-5 years the Euro Economy will be stronger and growing there will be necessary structural changes that the US can't follow ( they don't have the social support spending that has been "breaking Europes back"

The USA has a different problem they can't cut spending for fear of stalling the economy.

[Realist]

Property speculation got out of hand, that created a bubble and now the only way to replace that bubble is with government debt. If the bubble is not replaced there is deflation. I believe the best solution is to allow wage inflation to make property more affordable, then property can rise again. The alternative is to let things deflate, have massive unemployment and wait a long time until the economy picks up but property will probably fall if that happens. Better to allow wages to rise, than allow property to fall.

[Austrokiwi]

I have a great deal of difficulty seeing how that is going to happen in New Zealand: NZ is around 18th on the OECD list and I fear it could slip further. The fact is a city ( which effectively thats all NZ should be regarded as) of $4.5 Million people just does not have the economic mass/inertia to inflate wages. NZ is going to compete with other SE Asian countries who can provide labour far cheaper than NZ can. The tyranny of distance limits what NZ can effectively export. The old idea of value added is great except when NZ adds value to its agricultural products it just shows the competitors in Africa and South America what they need to do to remain competitive. Its Ideal for them let NZ spend the R&D and then copy it!


I suggest you read the Havard research paper you thought was another empire falling theory theory (Please stop making inane and incorrect assumptions about what I am actually thinking and the position I am taking). The Article IMHO suggest there maybe shocking potential problems for NZ. For example the paper makes it clear in the long run private debt is no different to Public debt when it comes to causing problems. There is a book of the same title as the article , but the book ( as I found out) adds little value. It is academic well researched and like all well researched Journal article open to analysis.

Like you I picked gold going up greatly to my profit, and I correctly anticipated the US$ dropping greatly to my profit. We converted US$150,000 to Euro When the Euro was valued at US$0.80 (and before you comment that we have yet to realise a profit) we took our profit in US dollars when the Euro was around US$1.50 So like you I have made accurate predictions.

[eri]

They haven't, I won't be investing in property any time this decade.

then why have you sought out and joined a forum called property talk?

to guide us poor deluded fools, (who's property investments have done well enough thank you very much) with your proven flawed advice?

[Realist]

I have a great deal of difficulty seeing how that is going to happen in New Zealand...

That's related to what I was saying about NZD buying 25c US, it will be great for export, tourism, immigration, that's where the money will come from. We're like Australia in a way, we sell dirt and get rich, albeit our dirt stays in the ground for people to come and live on. This pushes property prices up, which generates the wealth effect, presto. I don't care about what economists predict, they're often wrong and can never agree. I subscribe to an alternative paradigm, my advice to you is just wait, see if what I say turns out to be true.

[Realist]

then why have you sought out and joined a forum called property talk?

I already explained that to you on another thread.

to guide us poor deluded fools, (who's property investments have well enough thank you very much) with your proven flawed advice?

Proven flawed advice? I haven't given any advice.

I'm sure your investments are doing fine, I'm not really that interested in your personal achievements.

[Austrokiwi]

That's related to what I was saying about NZD buying 25c US, it will be great for export, tourism, immigration, that's where the money will come from. We're like Australia in a way, we sell dirt and get rich, albeit our dirt stays in the ground for people to come and live on. This pushes property prices up, which generates the wealth effect, presto. I don't care about what economists predict, they're often wrong and can never agree. I subscribe to an alternative paradigm, my advice to you is just wait, see if what I say turns out to be true.

The immigration effect is a double edge sword: I have commented in the past that those who immigrate to NZ are economic migrants, those who emigrate from New Zealand are economic migrants,

The result is NZ looses those who might elevate its economic performance and gains those who maintian the status quo. {Until the recent revelations of the Labour party credit card party I believed NZ was doomed to suffer a majority of centre left governemtns for the simple reason the Centre right voters keep leaving the country}

As a further aside: I also tend to think that if you are very rich ( anywhere ) you should vote centre left for the simple reason left wing governments keep the poor poor, protect the very rich and rort the middle classes. I think Sue Bradfords objection to unemployment insurance is a very good example of this!

[Realist]

The immigration effect is a double edge sword: I have commented in the past that those who immigrate to NZ are economic migrants, those who emigrate from New Zealand are economic migrants,

There's a big difference between someone arriving in Australia with a couple of hundred dollars and someone arriving in NZ with funds to buy a property. Tourists, students and retirees don't push locals out of the job market either.

The result is NZ looses those who might elevate its economic performance and gains those who maintian the status quo. {Until the recent revelations of the Labour party credit card party I believed NZ was doomed to suffer a majority of centre left governemtns for the simple reason the Centre right voters keep leaving the country}

But National has been in for two years anyway, so we were never on a fixed path. For most humans, the brain is 'plastic' it can adapt to a surprising number of tasks, with training and motivation people can fill just about any job description. People change voting preference according to their financial position anyway, which changes as they increase skill.

As a further aside: I also tend to think that if you are very rich ( anywhere ) you should vote centre left for the simple reason left wing governments keep the poor poor, protect the very rich and rort the middle classes. I think Sue Bradfords objection to unemployment insurance is a very good example of this!

Nope, very rich people just lobby

[Austrokiwi]

There's a big difference between someone arriving in Australia with a couple of hundred dollars and someone arriving in NZ with funds to buy a property. Tourists, students and retirees don't push locals out of the job market either.

I am not sure what you mean by this it doesn't reflect what I was saying. Yes an immigrant from the Uk may buy a house in NZ but other than that how do they build up the economy? The situation seems to be the people who NZ really needs to build up the economy are more likely to emigrate to the US or Europe and other more economically encouraging areas, than either remain in NZ or emigrate to NZ.

NZ is attracting an in the main the "B" team. In other words NZ is a life style location it is not a big business location. So comming back to an early point of yours I have difficulty seeing how salary wage growth can occur in NZ to the level to restore housing affordability. I can only see it happening with 10-15 years of stagnating house prices.

But National has been in for two years anyway, so we were never on a fixed path. For most humans, the brain is 'plastic' it can adapt to a surprising number of tasks, with training and motivation people can fill just about any job description. People change voting preference according to their financial position anyway, which changes as they increase skill.

HUH?


For NZ to really develop its economy something radical has to be done...... For instance abolish compnay tax completely. Sucessful business would still create tax income through their employees and GST. Alternately get rid of Personal Income tax. NZ is on the fringe of the global economy it can't use the methods that Aussi or other large countries do.... it has to develop unique solutions.

[Realist]

I am not sure what you mean by this it doesn't reflect what I was saying.

That's because you weren't saying much

Yes an immigrant from the Uk may buy a house in NZ but other than that how do they build up the economy? The situation seems to be the people who NZ really needs to build up the economy are more likely to emigrate to the US or Europe and other more economically encouraging areas, than either remain in NZ or emigrate to NZ.

Yes, Poms love Christchurch and Hamilton btw, buy a house and they do don't they. Guess what that does, it increases the price of property, guess what that does, it generates wealth, guess where the wealth goes, back into the economy, guess what happens to unemployment (NZ just 6% ), it goes down, guess what happens to wages? They go up because unemployment is low so employers need to bid higher wages...I already explained this though, that's what the wealth effect is.

Build up the economy? What with their entrepreneurial skill? What skill, most the moaning people who emigrate are just salary workers looking for a higher salary, then they get stuck hoping to recoup their pension fund some day. The immigrants coming here from Asia on the other hand are on average much more interested in business, that's because they tend to come from successful families, they love business!

NZ is attracting an in the main the "B" team. In other words NZ is a life style location it is not a big business location. So comming back to an early point of yours I have difficulty seeing how salary wage growth can occur in NZ to the level to restore housing affordability. I can only see it happening with 10-15 years of stagnating house prices.

A-team actuallly, because Asia is a doggy dog place so you gotta have a lot of money to come here. Exactly, we are a lifestyle location, which includes the dream of easy access to small business. As for big business, if you are that hung up on it, just buy shares...anywhere in the world with a click of the button, in a home that isn't powered by the next Chernobyl.

The great thing about our size, we only need the cream of the global economy, they don't work incidentally, they retire in somewhere like Tauranga or Queenstown.

HUH?

Google: brain plastic

For NZ to really develop its economy something radical has to be done...... For instance abolish compnay tax completely. Sucessful business would still create tax income through their employees and GST. Alternately get rid of Personal Income tax. NZ is on the fringe of the global economy it can't use the methods that Aussi or other large countries do.... it has to develop unique solutions.

Been said for years! A million times before, yet we're still doing mighty fine thanks. Auckland 4th best city in the world you know, not my favorite one here even, wow the rest of the world must suck completely

Just cut your losses on real estate and come to NZ

[Austrokiwi]

Been said for years! A million times before, yet we're still doing mighty fine thanks. Auckland 4th best city in the world you know, not my favorite one here even, wow the rest of the world must suck completely

Just cut your losses on real estate and come to NZ

Why would I want stop stop living in the city rated top in the world for the last two years running?

What loss's in real estate?.............you an expert on the Austrian market now are you?

[Realist]

"All males who have reached the age of eighteen and are found fit have to serve a six months military service, followed by an eight year reserve obligation." wow, Vienna's great not only is it a sexist obligation but it also infringes upon human rights. At least you don't have nuclear power though, in your country. In NZ we couldn't be further away from nuclear power on the other hand - it's great. Well whatever the reason is for you to keep visiting NZ in cyberspace I hope you're not too homesick bro, just don't forget whose picture is on our $10 note, she was a real sweetheart.