If they are failing it’s because they’re not doing their job and its certainly not the governments job to prop them up.

Air NZ ?

It is a very pro-international banking system article while suggesting that it is just the NZ system. All the international banks are so interconnected and that system including the Aussie banks we have over here is collapsing as we speak. Not just here but the US the British and Aussie banks. Why should we borrow to keep their corrupt system cranking along. Let it collapse I say.

I’ve decided to bank with Kiwibank and will open an account there next week, sod the big international banks.LOL.

That’s part of why oil has gone up in price. That and speculation.
All borrowing to prop up failed financial institutions does is perpetuate the living outside our means consumerism and will end in a worse depression. Best to face the music now, get rid of the fraudulent fractional banking system and start a new.

Scary stuff but if we don’t the depression will be worse.

Lucky for us our economy is in far better stead than say the American, English or Australian economies and we still have a lot of food sustainability compared with the 3 above mentioned countries.

what’s your estimate on this Tim, how much capital?

…and how did we get such large amounts of passive capital?

We can argue about the semantics of “masss unemployment”, but all the indicators suggest that spare capacity is exactly what we are going to have for the next little while.

“If you borrow try to increase infrastructure capacity when there is… …no spare capacity in the economy, as now in New Zealand, all you get is inflation.”

Lets take electricity as an example. If we have no spare capacity in the current network, wouldn’t that be EXACTLY the time you would want to borrow to produce more? Yes, of course it is. Why? because ongoing shortage of capacity is waaaaay more inflationary than the scenario you outline.

I don’t see the inconsistecy – Cullen has said what he’s going to spend (or return, via tax cuts), and that that is all that is possible to spend without borrowing to fund tax cuts/infrastructure. National are going to spend more, and therefore have to borrow as what they are going to spend will be more than is available.

I’m not sure what you mean by ‘it’s about $2b’, where did that figure come from and what’s it in relation to?

A mature economy needs a broad mix of low risk/low return, medium risk/medium return, and high risk/high return investment vehicles. To date money has been skewed at both ends: it is either sitting in a bank on term deposit (low risk), or flooding into dodgy finance companies. The sharemarket is generally a medium risk investment. As savings levels rise with kiwisaver and the Cullen Fund, more money will flow into this middle level. As reality hits that high risk finance companies are a bad place to put all your money, money will flow in the short term into safer places–the bank or under your pillow.

I don’t know what kind of instruments might be offered, or what they will be used for, but infrastructure bonds backed by government guarantee at 6% are just as safe as putting your money on term deposit. And unlike putting your money in the bank, the profits of which just go offshore, building roads and broadband–just two of the likely possibilities–grow productive capacity. So too will enhancing energy supply. Several billion has been lost to the economy this year because of poor energy production. Building excess capacity over the long term isn’t productive either, but we’re not at the balance we need.

The finance company collapses really hurt the investors in the short term, but in the long run if it’s a wake up call to people not to put all your money into high risk plans if you can’t afford to lose it, then that’s not a bad thing. It would be nice to think that with much more capital staying in New Zealand, we don’t have to have the debate in the future about selling Auckland Airport offshore because the only money available to buy it is from offshore. A wider range of local instruments designed to boost productivity will increase the attractiveness of local investment.

I’ve booked marked your comment saying employment is still going up. We can come back to this for a revierw in 6 months. Best of luck.

Are they the surpluses that Dr. Cullen told us were not real enough to cut taxes or are there some other surpluses that I don’t know about? $8b surplus and no tax cuts – wot’s the cunnection. It’s not $8b, it’s about $2b…. It was good to talk them down when people were calling for tax cuts – now that the economy is in recession the historic surpluses are being talked up again. Please explain.

Trying too hard – No, just listening to all the contradictory things that Labour say before/after each bad poll and wondering how it’s all going to work.

…a falling employment market… No. falling employment rate. Numbers in jobs is still going up; thus, more PAYE.

National plan to lob in more than Labour. The whole point is there isn’t any more.

How can more spending be done with a recession and a falling tax base as a result of a falling employment market without significant borrowing – How ?

The Labour party in an effort to push up their opinion poll results have painted themselves into a corner. All the “good” stuff will be done without any of the “bad” stuff – How?

It’s not enough to just say “National bad” without explaining how Labour will deliver – How will Labour do it?

The point I’d like to make is that in a slight downturn that bad faith will be hard to shake – what kind of vehicle do you see being used to increase large-scale local investment? Anything regulatory, or do you think it could be market-driven?

Finally, what do you think these investments should be in? What would really drive our economy? I don’t think it’s traditional infrastructure, not by a long shot. I’m vaguely interested in seeing what National want to invest in, but suspect it’s roads and fibre. Rather lacklustre really. All sparkle and no bang.