sharetrader
Page 34 of 55 FirstFirst ... 2430313233343536373844 ... LastLast
Results 331 to 340 of 543
  1. #331
    Member
    Join Date
    Mar 2006
    Location
    Auckland, New Zealand
    Posts
    482

    Default

    Quote Originally Posted by Aaron View Post
    Liam Dann at it again in the herald today on why the reserve bank must cut interest rates (He could get a job as a bank economist if journalism doesn't work out for him).

    According to the statistics inflation is at .4% and this is terrible. I would have thought price stability would be good for people.

    Unfortunately we know inflation isn't at .4% especially if you are wanting to buy a house. The only valid reason I can think for cutting interest rates is because everyone else is and we don't want our currency to rise and screw our export industries. Possibly savers getting 3% nominal returns is upsetting for the over indebted baby boomers running the country. At 3% less .4% equals a 2.6% real return when it should really be closer to zero or less than zero according to the great minds running the worlds financial system.

    It must be galling for rental investors not having 2% taken off their mortgages each year. Even more galling that anyone should suggest their capital gains be taxed. Keep in mind the over 10% house price appreciation is tax free while your 2.6% real return is a lot less once tax is taken off your 3% return.
    I suspect baby boomers have worked out how to fund their retirements as they haven't put anything aside. Create a society of haves and have nots and they can rent NZs housing to young NZers and the poor wage earners whose wages are rising at less than half the rate of house price inflation.

    Good one Liam and Graeme Wheeler. It makes sense but only if you want to penalise savers and reward borrowers. How long can you discourage saving before even the most conservative and timid investor wakes up to the fact that cash and debt are becoming the most risky investment option. I wonder if they really believe that low inflation is a problem or if they are being deceitful and actually know which side of their bread is buttered.

    All the talk of a housing crisis and the fixing the supply side of the equation. The Demand side could be looked at as well I suppose, raise interest rates and lower immigration for a start.
    Interesting reading what was said back in Feb 2015.
    https://www.tvnz.co.nz/one-news/new-...es-key-6228040

    Even Bill Gross the "Bond King" has been recently quoted as saying real assets such as real estate and gold are the best investment options currently.

    That's my morning rant over. Still sitting on cash like a big dummy, I shouldn't be worried about what seems right or fair but should go with whatever the economists and finance people want. Just angry at myself because I haven't and having missed the boat continue to be frustrated by the bulls**t coming out of the media and world central banks.
    Time for change at the top.

    We all know why Chinese devaule their currency - to gain trade advantage so seems like rest of world doing similiar tactics however there is more to this - there is actually no or little GROWTH - fact
    This is the NEW world we live in - 0% growth - historically low interest rates - 200 trillion of global debt , paper money worthless , central banks expanding the monetary base ( QE 1 , 2 ,3 ,4 ...ETC ) Iits all got to come to a head as printing money and kicking the can along the road for next 20 years is all they can do to stop a global collapse - the world is based on one thing - Exppnential growth year upon year upon year and it cant sustain - this is why countries love immigration as its boosts their economies - without it we shrink

    Countries Debt ratio to GDP is scary - too much debt = defaults , lowering of credit ratings however the rating agencies are built on BS as we saw with the aa mortgage bonds that were worthless and toxic and guess what American banks doing it again - hiding toxic debt and selling it as a derivitave SAD deceitful world

    In 2015 Several large banks started selleing billions in something called a "bespoke tranch opportunity"

    which according to Bloomberg news is just another name for CDO's LOL

    cheers Schu
    Last edited by SCHUMACHER; 05-08-2016 at 09:01 AM.
    \"if women didn,t exist , all the money in the world would mean nothing\" Aristotle Anasis.

    \"The trend is your friend\"

    \"A mans reach should always extend beyond his grasp" J.F Kennedy

  2. #332
    Member
    Join Date
    Mar 2006
    Location
    Auckland, New Zealand
    Posts
    482

    Default

    BTW - Bill gross is correct - physical wealth is KEY to survival - paper money is death !!
    money in savings acount is devaluing all the time and worthless - buy gold, silver and prpperty is where its at

    george soros bought into silver in a big way recently mmm
    \"if women didn,t exist , all the money in the world would mean nothing\" Aristotle Anasis.

    \"The trend is your friend\"

    \"A mans reach should always extend beyond his grasp" J.F Kennedy

  3. #333
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    2,497

    Default

    Don't know why I am picking on Liam Dann. Possibly because he is discussing an issue that I consider to be important but I have different conclusions to him.
    http://www.nzherald.co.nz/business/n...ectid=11694771

    Here is at it again. He suggests "This economic cycle of low inflation and low wage growth is creating asset bubbles, exacerbating inequality and driving political instability."
    I would disagree with him on this, I would suggest central banks efforts to boost inflation have created the asset bubbles and increased inequality. Low interest rates and easy money create bubbles not low inflation. (Think about it Liam an asset bubble is inflation but only in asset prices) Central banks keeping asset prices inflated isn't really about helping people but to ensure the financial system doesn't fall over.

    The political instability comes from the average man on the street knowing something is wrong with the system but only having "extremists" offering to try and change things.

    The average kiwi isn't moronic enough to borrow and spend on consumables but will spend on an asset that keeps going up in price(houses). Not sure about going up in value as rents can't increase if wages aren't increasing.

    Low inflation could be due in part to the ramp up of investment due to earlier debt. (e.g. dairy farming in NZ, Iron Ore Mining in Australia, Fracking in the USA and the manufacture of everything in China), also it has been pointed out that baby boomers are starting to retire and that retirees tend to spend less which would mean less spending in the economy, less demand equals lower prices. maybe the financial system appears broken because central banks won't allow a recession and possibly recessions are part of the economic cycle. Maybe recessions are a time for new people to have a go instead of maintaining the status quo and increasing inequality. maybe stealing off savers and people on fixed income (wage earners) through inflation isn't the best way.

    On another issue I see Labour is saying National has dropped the ball on immigration. On the contrary if the current national superannuation system is to remain affordable you need more people end of story.
    Last edited by Aaron; 17-08-2016 at 07:26 AM. Reason: me suggesting someone is stupid is hypocritical

  4. #334
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    2,497

    Default

    Maybe this guy has identified the real reason for the housing crisis.
    http://www.stuff.co.nz/business/opin...roperty-bubble

    Lets give stable prices a go and see if we can't come up with a way to have a sustainable economy rather than something that relies on constant growth. Unless it is actual productivity growth rather than inflation of prices.

  5. #335
    Veteran novice
    Join Date
    Jun 2007
    Location
    , , .
    Posts
    7,289

    Default

    Some strange ideas there from a former investor in, and victim of, the Ross Asset Management fiasco.

  6. #336
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    2,497

    Default

    Not many ideas in the article but you could imagine that he now has a better ability to spot a Ponzi scheme when he sees one.

    Not joining the greater fool investment trend has made me look foolish. I blame inflation rather than my own bad decisions.

    As a friend recently told me, at the time they bought, their houses seemed overpriced but after a couple of years they were proven right. He is now retired and I am working hard wondering if I can ever finish work and retire.
    Last edited by Aaron; 18-08-2016 at 10:41 AM.

  7. #337
    Guru
    Join Date
    Apr 2007
    Location
    Hamilton New Zealand.
    Posts
    4,251

    Default

    Great post #333 Aaron (bias as that is my thinking and I couldn't have written it better....I've been harping on about systems lately and the more I read the more credible the Austrian economic theory seems in today's world (debunked by main stream Economists and Central Bankers alike).

    Anyway your immigration increase comment is interesting..I also agree the Western Countries need immigrates and will increasingly have to rely on them in the near future because of the invisible problem
    The invisible problem many Western Countries face is the ticking demographic time bomb...I think the "backroom boffins" that have the power are very aware of the future and would welcome immigration..The public of course are not that welcoming and seeing the short term shortages in some economy infrastructures including large city housing shortages could unknowingly help derail their own near future. The Politicians are "sycophant animals" and act on majority public wants.
    **Baby boomer Generation 1946 - 1964 and comprises 20% of the USA population and gone in 25 years

    Left unchecked (highly restrictive immigration policies) the near future would see a slow exit of baby boomers not being replaced via natural growth rates.... population decline, consumer decline, property surplus, economy shrinkage (for a generation)..
    There must be some very worried "boffins" when seeing the increasing public pressure wanting to limit or stop immigration and want more residential dwellings built within the large cities on a massive scale..
    Last edited by Hoop; 18-08-2016 at 11:11 AM.

  8. #338
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    2,497

    Default

    Thanks for the compliment Hoop.
    Banging on further about the issue I see this article in the herald this morning.

    http://www.nzherald.co.nz/business/n...ectid=11702299

    This article looks at a study by McKinsey, although NZ is not included I was about to rage on that it highlights the magic of inflation. A large majority of people becoming worse off without noticing but when I saw the executive summary was 30 pages long I lost interest in really understanding what the results might be saying.

    So without fully understanding what the data might be saying and the fact that it also covers a period called the GFC I would suggest that the results back my belief that inflation is bad and that price stability and sustainability might be a better goal for society rather than the constant growth in people consuming more stuff model that we have.

    I think this study only looks at income so if you said that real wealth is real estate and businesses that generate a profit for shareholders by providing goods and services society needs/wants I would note that at a time of real falling income for most people in the western world assets that provide wealth have been inflated even further beyond their reach. Central Banks are exacerbating this situation with their experimental monetary policies all based on the theories they learned at University. I would suggest the wealth effect they are trying to create does not work when everyone in real terms is already getting poorer. Inflating the value of real assets such as real estate beyond their reach won’t make for a better more vibrant society. Although I suppose for the young people there might be a lot more jobs on super yachts and in other service industries around the 10%-20% who are doing much better.

    Brian Fallow even goes so far to suggest a capital gains tax to offset a reduction in GST. Now that sounds like real change. Although bringing in a capital gains tax at the height of an asset bubble sounds like a bad idea. Let’s have a market crash first.

    The ASX thread is probably not the place for my rantings so hopefully if you have reached this last line you are not too upset wasting your time reading a pointless opinion. I use it as it has Inflation and Deflation in the title..
    Last edited by Aaron; 02-09-2016 at 09:16 AM.

  9. #339
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    2,497

    Default

    Liam Dann at it again regurgitating what he learnt in his economics class and a mantra that has been drilled into everyone’s head (except maybe a few people who can remember as far back as the 70s). Deflation is evil and dangerous and will destroy society.

    What a headline “Inflation at dangerously low levels”.

    Dangerous to who exactly? Well everyone in society apparently as people will stop buying if there is deflation. This is true of my investing as I wait for an expected deflation of asset prices I am not investing at all. In the event of deflation I will invest a lot more. But I guess consumption and investing isn’t the same thing. Don’t panic Liam I will still eat regularly even with inflation near zero. In fact I will only really cut back on food when it is inflating at over 3% and becomes too expensive for me.

    One of the things he does in the article is point out(contradicting the headline altogether) that housing isn’t part of the inflation figure and to be honest I would have thought food, shelter(housing), clothing and energy would be essential to most people.
    Assuming on average housing makes up 25% of a families budget based on figures from the link below and I would suggest mortgage free baby boomers would drag this average down a lot. https://www.newzealandnow.govt.nz/li...e-living-costs
    (What is that website by the way, advertising NZ to immigrants by the looks of it? My tax dollars going toward encouraging immigration… fantastic.)

    25% of your costs are increasing at 10% a year and Liam is worried about low inflation. Is he suggesting life would be much better if food and energy were increasing at 2.5% per annum as well. What a moron. Mind you he is in good company along with the world central bankers and bank economists.

    It would be good if some genuinely intelligent thinkers started going to University and took time to consider whether current economic and monetary policies/theories are the best idea for a society that has reached maturity and its population is starting to flatten out. (sadly I’m way too stupid but I don’t let my lack of intelligence stop me from having an opinion)

    We can keep the immigration spigot open and grow the population like a third world country and boost inequality in the form of asset price inflation in the hopes of getting across the board inflation to keep the growth model working or possibly there are people smart enough to come up with some new economic theories. Remember economics is not a science it is an art. It is like anthropology a study of human nature. Maybe the western world is changing and economic theory needs to change with it rather than the other way round.

  10. #340
    Speedy Az winner69's Avatar
    Join Date
    Jun 2001
    Location
    , , .
    Posts
    37,739

    Default

    Aaron - excerpt -

    It would be good if some genuinely intelligent thinkers started going to University and took time to consider whether current economic and monetary policies/theories are the best idea for a society that has reached maturity and its population is starting to flatten out. (sadly I’m way too stupid but I don’t let my lack of intelligence stop me from having an opinion)
    Thats the problem mate - the university curricula is set brainwash the young academics from an early age

    Anybody doing what you suggest wouldn't get very far with his studies

    Generally agree with your most
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •