web analytics

So what is happening with the price of oil?

Written By: - Date published: 10:00 am, December 18th, 2014 - 137 comments
Categories: climate change, Economy, energy, Environment, Europe, global warming, International, iraq, us politics - Tags:

oil drums large thumb

At the end of a long year including a somewhat traumatic election result and a leadership campaign and with the current circuit of christmas celebrations and the impending end of the work year I have had less time than I would like to keep up with international political events.  But there is one significant development that deserves some analysis and discussion.

The price of oil has gone haywire.  From a gradual and consistent increase to over $100 US per barrel until six months ago it has since crashed recently to $63 dollars per barrel.  This has thrown the economies of Russia and Venezuela into turmoil as their significant petroleum production is no longer profitable.  Iran is also suffering.  Any hope that it had of trading its way out of trouble is disappearing.

The decrease is due to a number of events.  Shale oil production in the US is now producing about 4 million barrels of petroleum a day.  Libya’s oil industry has managed to get back on its feet after a long period of disruption caused by the civil war.  Demand has declined in Europe and the East.  OPEC recently could not agree on restraining production to maintain prices.  And Saudi Arabia is happy to let the price drop at least in the meantime.

The targets are not clear.  The Guardian thinks that Saudi Arabia and the United States are wrecking havoc on Russia for recent misdeeds including its foray into the Crimera.  From a recent article:

When the introduction of sanctions over Russia’s support for the separatists in Ukraine failed to bring Vladimir Putin to heel, the US and Saudi Arabia decided to hurt Russia by driving down oil prices. Both countries will face some collateral damage as a result – and this could be considerable in the case of the US shale sector – but both were prepared to take the risk on the grounds that Russia would suffer much more pain. This has proved to be true.

Now for the good (or perhaps less bad) news. Eventually, lower oil prices mean stronger global growth, because consumers will have more money to spend and businesses will have more spare cash to invest. At that point, the price of oil will rise and the rouble with it.

Even so, Russia looks vulnerable. It has reached the end of the road with interest rate increases and has only two options: to allow the rouble to find its own level, in the hope that declining oil prices will prove temporary or to introduce capital controls. These are seen very much as a last resort by Moscow, but may prove necessary if the rouble rout continues.

The phrase “perfect storm” is over-used, but the combination of a collapsing currency, a collapsing economy and punitive interest rates make it apposite. The question now is how Putin responds. If he softens his line over Ukraine, the west’s gamble will have paid off and it will be mission accomplished. But there are hardliners in Moscow who will argue that the response to the crisis should be a siege economy and the ratcheting up of military pressure on Ukraine. If economic agony makes a wounded Russian bear more belligerent, it will prove a hollow victory.

Others think that Saudi Arabia is attempting to destabilise the United States shale oil programme and is trying to destroy it by making it unprofitable.  As soon as the competition disappears Saudi Arabia Kuwait and other Middle Eastern oil producers can then increase prices.

This must causes considerable doubt as to the appropriateness of long term prices for petroleum.  It seems that the world has been overcharged for a considerable period of time.  At one level this is not a bad thing.  A high price at least slows down the burning of petroleum and the increase of the effects of climate change.  A high price is not bad as long as the profits were being used for the good of humanity.  But all that has occurred is that some very wealthy individuals have become even richer.  And you have to wonder why the oil industry is so heavily subsidised.

Whatever the motivation the geopolitical implications are huge and underscore how fragile and interdependent the world’s financial system is.  Not to mention its environment …

137 comments on “So what is happening with the price of oil?”

  1. coaster 1

    The high price of oil has increased the demand for hybrid and electric cars, but ultimately the only people who realy suffer are those at the bottom.

    one thing that never gets mentioned about reducing petrol usage are air conditioners.
    if we removed air con from cars, and houses it would reduce our petrol and power consumption dramatically.

    • ianmac 1.1

      “If we removed air-con from cars, …it would reduce our petrol and power consumption dramatically.”
      This has been a belief for years coaster. They say maybe 10% increase in fuel usage.
      But some car experts tested that by driving a particular precise circuit with precise fuel measured with air-con then without air-con. They could not detect any measurable difference.

      The drop in oil price seems a bit ominous to me. Big oil companies have very very selfish motives. Give today. Take back tomorrow. My bike even more important!

      • Thinker 1.1.1

        I heard that, at rasonable cruising speed, the cost of incar aircon is about the same as travelling with the windows down (which kills the drag coefficient).

      • Murray Rawshark 1.1.2

        I was sceptical, so I looked for a study. The first one I found has this abstract:

        Vehicle air-conditioning can significantly impact fuel economy and tailpipe emissions of conventional and hybrid electric
        vehicles (HEV) and reduce electric vehicle (EV) range. In addition, a new U. S. emissions procedure, called the
        Supplemental Federal Test Procedure (SFTP), has provided the motivation for reducing the size of vehicle air-conditioning
        systems in the United States. The SFTP will measure tailpipe emissions with the air-conditioning system operating.
        Current air-conditioning systems can reduce the fuel economy of high fuel-economy vehicles by about 50% and reduce the
        fuel economy of todayís mid-sized vehicles by more than 20% while increasing NOx by nearly 80% and CO by 70%.

        Click to access 28960.pdf

  2. Ad 2

    Changeover to fully electric fleet, in my experience with fleet operators and dealerships, is less dependent on price than might be expected.

    Fleet operators are perturbed by oil price stability up and down, excise and ruc changes, and regulatory changes such as EU particulate changes, EU diesel bans etc.

    New vehicle conversions are by rich people with green consciences. And they are the majority of new electric conversions.

    It will happen throughout the taxi, freight, bus, train, courier, council, utility fleet, and others pretty quickly.

  3. Richard Christie 3

    Doesn’t Russia supply much of the gas that keeps Europe from freezing over each winter?.

    There has to be limit to how much the US and W Europe can piss off those who control such a supply.

    • KJS0ne 3.1

      They’ve been on a desperate hunt for alternatives for months now. Even going to such unsavory locations as Iran, with hands outstretched. They actually can source enough alternatives to not require the Russian gas, but it’s going to cost an arm and a leg. So far it seems, they’re prepared to suffer it to put the squeeze on the Russian dictator. But should a second winter roll around and there be no change in the geopolitical situation, I imagine the pyrrhic nature of this game may indeed become too big a frog to swallow.

    • Ovid 3.2

      Europe is already taking steps because it views the Russian supply of gas as unreliable – something prompted by the 2009 gas dispute and accelerated by the Ukrainian crisis this year. LNG terminals are opening in Poland and Lithuania next year, with more being built around Europe through to 2020.

      Further, the Trans-Adriatic Pipeline from Azerbaijan into southern Europe should start exporting natural gas in 2017-2018. This pipeline avoids Russia entirely. Europe has also had the good fortune to have a mild winter this year.

      • Colonial Rawshark 3.2.1

        LNG terminals are opening in Poland and Lithuania next year, with more being built around Europe through to 2020.

        Opening LNG receiving and storage terminals is fine. Where is all this new LNG coming from, though?

        Russia will play the long game against the west’s imperial ructions, and you can bet that China will be providing it with support.

    • Andrew 3.3

      You bring up an interesting point.

      Putin has been threatening the Europeans with cutting off the Russian gas supply for years so they have responded by quietly expanding their LNG ship offloading capability. They are now effectively independent of Russian gas. In parallel to this the international price of LNG has plummeted.

  4. KJS0ne 4

    It most certainly IS the USA putting pressure on the Sauds to turn the pump on full blat, in order to crash the Russian economy. Every action has a reaction though and it risks bankrupting the Shale and Gas industry in the USA, the very same one that made them a net exporter for the first time since the mid 70s. At such comparatively low prices, there just isn’t the profit margin there for extraction of these unconventionals.

    Sort of cutting of the nose to spite the face. These things will be among the taints upon Obama’s legacy. He is in many ways akin to President LBJ, domestically full of good ideas and reform, but a real prick when it comes to foreign policy.

  5. Manipulation by America is the only word to describe the current oil price.
    And there is little doubt it is aimed at Russia.

    While it is great for the consumer now, once it has it’s desired impact we will soon return to business as usual with an upward spiral of the oil.
    We are just the pawns of the greedy .

    • lprent 5.1

      Manipulation by America is the only word to describe the current oil price.

      How odd. It appears then (from what you say) that the US is deliberately lowering the price to try and drive their own shale oil producers out of business? Perhaps you should do some basic reading on the subject of OPEC and in particular about possible Saudi reasons for trying to drive the shale oil producers out of the market.

      Personally I don’t think that the idea that the Saudis could be bothered about Russia are particularly likely. And destabilising a weak economy country like Russia that has quite so many nukes just isn’t a credible foreign policy objective for the US. You’d have to be a paranoid to think so…..

      Ummm

      • b waghorn 5.1.1

        Your assuming that the us foreign policy is run by sensible people.

        • lprent 5.1.1.1

          They usually are. It is just that their policies are as constrained by their own parochial interests, and those are often based on a lack of understanding by their public and elected people.

          The George Bush Jr attack into Iraq in 2002 was a clear case of exploiting that. Junior just wanted to finish off what his daddy was stopped from doing by the UN so he built a WMD fantasy.

          • Gosman 5.1.1.1.1

            I’d largly agree with that analysis.

          • KJS0ne 5.1.1.1.2

            I think it had more to do with Halliburton and KBR making an absolute killing with billion dollar no bid contracts than settling a score that Daddy failed to do.

          • b waghorn 5.1.1.1.3

            I don’t believe the yanks would stop at anything to remain the dominant super power so destabilizing Europe works for them and if Iran and Venezuela suffer for that they would see it as a bonus.

          • Colonial Rawshark 5.1.1.1.4

            The Saudis don’t have to do much to kill the Shale Oil bubble, to be realistic. Also, the Saudis are very unlikely to be manipulating world oil markets in this egregious way without some kind of tacit go ahead from the US.

            The best month of production from any shale oil well is literally the first month. Declines are rapid after that. You need to keep sinking new wells rapidly in order to maintain the illusion of steady production from a field.

            Greer has just written a nice little piece harking back to the Penn Square Oklahoma oil bubble banking collapse.

            http://thearchdruidreport.blogspot.co.nz/2014/12/deja-vu-all-over-again.html

            • mickysavage 5.1.1.1.4.1

              I put both theories up (Saudi + US v Russia, Saudi v US) because at a self interest level neither of them made sense to the US. But the Saudis are the common denominator.

              • RedLogix

                Frankly I just see it as a combination of demand destruction (the long predicted instability of prices around peak oil) and the Wahabi’s playing a little game to hurry things along a bit.

                And the Americans sitting back and seeing how long a piece of rope they can pay out to Putin.

                Probably impossible to pin down the root cause; it’ll be the usual combination of cunning, scheming and cupidity by a cast of actors, some in plain light and others not, who are behind this.

                It will be the unintended consequences that bite in arse.

                • Skinny

                  It’s open slather, with the America losing face with OPEC over their failed meddling in the Middle East, now they are opening up the pipes. With Russia having shored up their supply chain it’s little wonder oil prices are so volatile. The situation is grim and could mean a stouch that drags us in to a bloody conflict that resembles world war 1.

      • KJS0ne 5.1.2

        In matters of foreign policy the Saudis are doing what the US tells them to do. The House of Saud is reliant upon US support, their grasp on power in their nation is a lot more tenuous than is commonly supposed. Destabilizing the Russian economy and the Putin Government is priority number one for US foreign policy, they want to force Putin to back off, or to create insurrection against his regime. I don’t understand how you can’t see that, especially given that the US and EU have put sanctions in place to do that exact thing. Its not exactly a state secret.

        As for the Nuclear thing, MAD is still a viable doctrine here, Russia aren’t going to threaten anyone with nuclear weapons, and even if Putin is toppled (which I can’t see happening) the Russian military aren’t going anywhere.

        As Waghorn says, you are assuming the US foreign policy is run by sensible rational people, it is not.

        • KJS0ne 5.1.2.1

          I should add that Putin’s talk of moving Nukes into the Crimea is just sabre rattling, they will move their Nukes from point A, to point B and the rhetoric will get nasty but in the end of the day that’s all it is. Russia would never risk their own annihilation because they don’t like the way the USA is putting the squeeze on them. The US knows this.

          It’s an economic war. Economists have been pretty clear that the Ruble’s tumble has been due to two things: Sanctions and oil prices. Now the former is most certainly the direct result of US foreign policy, and all the evidence suggests that the latter is too. The Saudis are flooding the market, that is a fact. All that remains to be seen is why and it is by no means paranoia to join the dots that it is because the US wants them to.

      • Simple Simon 5.1.3

        Washington is responsible for the price drops in one way or another. Whether intentional or not, what should not be forgotten is that the last time prices fell dramatically was a few months before the global economic meltdown in 2007. Inadvertently or not, Washington’s push for sanctions could be leading to another international economic crisis

        • KJS0ne 5.1.3.1

          It may also be worth mentioning that Saudi Arabia get’s something out of it too, they get to apply financial pressure on Iran, their sworn enemy (Sunni v. Shia divide) – Ostensibly this is the line that the US is playing with, that they’re not involved in Saudi Arabia’s machinations, but that’s a load of codswallop… Where there’s smoke there’s fire. It’s a dangerous game of chicken that the US and Russia are playing, but play it they will.

          • Colonial Rawshark 5.1.3.1.1

            Saudi Arabia get’s something out of it too, they get to apply financial pressure on Iran, their sworn enemy (Sunni v. Shia divide)

            Don’t forget the Arab/Persian divide too. Complex place this Middle East.

    • Ennui 5.2

      This whole scenario was predicted very accurately a few years ago by Nicole Foss at theautomaticearth.com

      She links supply fluctuation with capital investment in harder to get oil and in arbitrages like the shale oil cycled in with capital destruction when over supply causes the price to fall. Lower prices in turn destroy capital investment required to pump the harder to get oil…..which in turn destroys production and supply….price goes up and down wildly.

      It all seems very complex, and the geo politics of finance / oil (inseparable) make for madness. Things we do know:

      *Russia has long term supply deals with China for easy to pump oil which the two countries do not clear in $US. They have also invited Iran into the act pumping via Baku which means the US cannot control the trade via military presence in the Gulf.
      *Both Russia and China have huge gold reserves should trade decide to be settled in gold.
      *Both Russia and China have vast amounts of $US, their problem is how to get rid of it. The biggest worries they have is that the both the US economy and the EU economy are basket cases. Their consumption of Chinese production and Russian oil and gas is based upon financialisation (huge debt creation that cannot support interest (aka Quantative Easing)….Chinas biggest markets are very sick.
      *The US fracking industry has proven to be a huge financial bubble. Capital invested was supposed to give returns for multiple years. Most fracking wells have had a very limited lifespan, usually 2 years or less…the frackers knew this. The investors got fleeced. Insolvency follows.
      *The supply of gas and cheap energy to allow the US and Canada to take advantage of tar sands etc is drying up, supply will crash. The US “energy independence” becomes a costly illusion.
      *Oil supply of standard crude (as opposed to shale oil, tar sands etc) has declined since 2007. We have not noticed greatly because it has been gradual and we have been in recession.

      What we are seeing through various prisms and perspectives is the escalation of resource wars between the old (US / Euro) and new (China BRICS) powers. Empires don’t die or emerge silently. Interesting times await us.

      • greywarshark 5.2.1

        @ KJS One
        It seems that the USA running interference on Russia is a big cause of the drop in oil prices. Yet am ‘oil market analyst’ Richard Hale? on Radionz Morning Report said it was due to drop in demand, not a mention of the political aspects.
        He is definitely paid to tickle the market, and an honest deliverer to his money sources.

  6. Colonial Rawshark 6

    Manipulating the price of a key commodity like oil is playing with fire. Huge oil exporting countries like Nigeria will also be stung. Using the markets as some kind of geopolitical ‘financial weapon of mass destruction’ affecting the livelihoods and standard of living of hundreds of millions is sociopathic, to say the least.

    But also remember, the daily quoted price for Brent or WTI is not going to reflect what the reality of long term supply contract pricing is, for quite some time. Spot prices have limited relevancy because of this.

    You can guarantee that no deep see oil is going to be extracted around NZ at $60bb.

    • miravox 6.1

      “Manipulating the price of a key commodity like oil is playing with fire.”

      Yes – look at the effect on NZ of the crash in dairy prices – partially due to the sanctions on Russia. Multiply that by umpteen hundred times and see what it does to the economies that trade in oil.

      “Spot prices have limited relevancy because of this.”
      But they do have a substantial impact on share prices (even non-Russian ones) and that is pretty disruptive. Nose, meet face….

      “You can guarantee that no deep see oil is going to be extracted around NZ at $60bb.”

      Yes – development will be a challenge.

    • KJS0ne 6.2

      Using the markets as some kind of geopolitical ‘financial weapon of mass destruction’ affecting the livelihoods and standard of living of hundreds of millions is sociopathic, to say the least.

      Indeed. It will hurt the US so bloody much if these Shale companies go under as a result. Zero hedge had a great graph earlier this year detailing just how much employment is tied to the S&G industry in certain states.

      http://www.zerohedge.com/news/2014-12-03/jobs-shale-states-vs-non-shale-states

      And as we well know, job loses in a primary sector have massive ripple effects all the way through the economy, your service industry workers, schools, transport, shit, just about bloody everything.

  7. Wow, Where to begin?

    Here are a few pointers as to why you should really spend more time researching an article before you begin writing:

    First of all, Saudi Arabia’s Royal family is a US tool. They are clinging to power with the help of US weaponry and they wouldn’t produce a barrel of oil with US/NATO consent. They have been heavily implicated in the events of 9/11 and the funding of ISIS together with Israel and the US.

    So is are the royal families of Qatar and Bahrain.

    Secondly, shale oil and fracking has been an utter scam from day one. Organized to get subsidies and left alone for the local population to clean up when the Ponzi scheme ran to ground. 4 million barrels is really not a lot.

    Thirdly, the financial system is collapsing due to banking fraud and the unsustainability of a fiat currency system. The Globe is an estimated $ 40 trillion in debt and you have to wonder to who.

    That $ 40 trillion is leveraged by the big banks in fraudulent and criminal financial products to the tune of anywhere between 60% to infinity as we don’t know how many times the City of London has rehypothicated that debt. There being no limit on the times they are allowed to do that means that if the whole house of cards comes down it will be absolutely apocalyptic in size.

    Fourtly, Russia while at the moment under pressure has been stocking up on massive amounts of real world gold in preparation of exactly this moment and can turn inwards to sustain itself for a longer period than say the Anglo Saxon empire which probably has no gold reserves anymore other than what they have in the NY vaults from other countries who are clamoring to get it back. So far only two countries have been able to return some of their gold that I know off: Venezuela and (in secret) the Netherlands.

    Germany most notably has been told they have to wait about seven years for their gold to be returned indicating a severe shortage of gold in the US.

    In fact the Anglo Saxon banking system is so overleveraged that a few minor increases of points if the interest rates will blow the whole system to kingdom come.

    They have been financing (with money printed out of thin air and yes, even China does that) housing and real estate bubbles around the globe to keep the ball rolling and that is coming to and end as the scam is becoming to obvious and so the next they do and have always done is

    Fifthly, get the world to go to war.

    So what you are seeing is a bunch of psychopaths pulling out all the stops to prevent being caught at looting the entire globe as they have been for a very, very long time.

    • Colonial Rawshark 7.1

      It’s a damn unfortunate business.

      They’ve also set up hundreds of trillions of dollars worth of derivatives – many times the value of global GDP – which in another counterparty risk meltdown would destroy the financial system and freeze the real economy.

      We’ve not really learnt anything, have we.

    • nadis 7.2

      Yes, Mike. I can see how Turkey is so anti-west being a member of NATO, a strong ally of the US, Israel and Europe, and desperate to gain EU membership. I really can see how Turkey being one of those pesky muslim countries might pose real problems for the West.

    • nadis 7.3

      The real story about the German gold is far less exciting – they are not repatriating it at all.

      http://www.bloomberg.com/news/2014-06-23/german-gold-stays-in-new-york-in-rebuff-to-euro-doubters.html

      Given Venezuela and the Netherlands got their gold back as required I think the conspiracy around german gold is a beat up.

      And the Russian gold reserves are about 40ish billion dollars worth. Just to put that in context, that is only two months of import cover for Russia. So its not a lot, bear in mind that in October the russian central bank spent USD30 billion intervening in the currency markets. The ruble depreciated 10% in October. In November it is thought the bank spent at least twice that, the ruble went from 43 to 49. Now it is in the low-mid 60s. Last night the ministry of finance announced it was spending 7 billion dollars right now. Given require det repayments and increased interest costs, the fact that Russian banks are asking for 100’s of billions of dollars of support, Russia could burn through their reserves in months.

      The breakeven price for shale – including a 9% return on investment is about $60 per barrel.

      http://www.vox.com/2014/12/3/7327147/oil-prices-breakeven-shale

      I am though a bit concerned too with how much leverage is out there, though its important to think about the net amount of derivative exposure, not the gross amount. A counterparty is not exposed to the total value, only the difference between the entry level and the unwind level. But as always the regulators are now fixing the last crisis, not thinking about the next one. Russia will be a good test, we’ll, see a lot of corporate and bank defaults, prob not a sovereign default, but how well the defaults are contained will be a good test.

      • travellerev 7.3.1

        Nadis, Didn’t read my link to the German gold situation did you? Neh, didn’ t think so.

        • nadis 7.3.1.1

          Yeah right – because zero hedge is so credible. So you believe the German auditors that went to the fed are lying. And Buba board members are lying?

          http://www.bundesbank.de/Redaktion/EN/Interviews/2014_02_19_thiele_handelsblatt.html

          Gold conspiracy theorists are almost universally complete idiots and believe in things which by definition are inconsistent with observable facts. The whole “investment banks are manipulating the gold price lower to cover positions where they have lent out the gold.” Well how much lower do you want it? We’ve just gone from nearly $2000 to under $1200…… Gold ETF’s have halved in physical gold holdings over the last 3 years. Lots of central banks have been sellers on demand…… There is no shortage of physical gold……… I’m not in the business of forecasting prices but I’m prepared to have a bet with you – within 1 year, gold will have traded below $900. Name your price and charity.

          When there are so many other credible conspiracies going on in finance (high frequency trading, job swaps between wall street and regulators, insider trading etc), its remarkable people waste so much time on gold. I guess people who actually do have something to hide love the gold stuff because it detracts attention away from them.

          • Colonial Rawshark 7.3.1.1.1

            Oh FFS Nadis, manipulation of the daily gold fix by the big banks was revealed months ago, stop acting like manipulation of the gold markets and of physical gold doesn’t happen.

            Zero Hedge is an order of magnitude more believable than CNBC.

            BTW when was the last audit of the gold held in Fort Knox done?

            • nadis 7.3.1.1.1.1

              Yet again you are showing your ignorance. Fort Knox is the US Federal gold depositary, they also store things there like the Ark of the Covenant, ALien artefacts etc. Foreign countries store their gold at the New York Federal Reserve building. Cmon on, you must have seen Die Hard? Re audits, the Bundesbank audited their gold holdings at the NYFRB in 2013.

              The gold manipulation you are talking was the spot fixings. The conspiracy I’m referring to is the massive price suppression to cover up the infinite hypothecation of gold.

              You seriously are quite out of your depth on global financial stuff.

          • RedLogix 7.3.1.1.2

            There is no shortage of physical gold……… I’m not in the business of forecasting prices but I’m prepared to have a bet with you – within 1 year, gold will have traded below $900.

            Before taking that bet on you may want to take into account that right now fully 50% of all gold producers in the world make a loss when the price is below $1100 per ounce.

            And with average grades continually dropping that number will only climb.

            As an industry insider I can tell you that a very large portion of the industry is figuring that their gold is worth more to them left in the ground right now. Eventually that shortage you are talking about is only a relative thing.

            Think of gold as a competitive currency to the fiat ones. Because most central banks are engaged in a massive round of competitive devaluation – they do not want gold to look like a viable alternative. Hence all the manipulation.

            But none of this fiddling will negate the fundamental reason why gold will remain the currency of last resort – because all the other alternatives ALWAYS fail.

            • nadis 7.3.1.1.2.1

              RL – I’ve worked in finance for over 20 years, I’ve traded commodities for 6 years, I’ve overseen a business that as one of its activities structured index trades on commodities and I’ve seen no evidence of this manipulation you refer to. I’ve seen lots of attempted skulduggery, some successful some not, but no evidence of any mass manipulation. I’d love someone to educate me, but please, no references to GATA – they are certifiable fruitcakes who have been proven wrong on every claim they have made, plus have a history of embracing convicted scamsters.

              I do agree with you on the marginal production cost of new gold – 80% of production probably lies between $1000 and 1300 pr oz. But you’re ignoring recycled gold either from central bank holdings or the scrap market – the marginal cost of that gold is zero. There is no gold shortage – if there was we wouldn’t have seen the price drop from 1900.

              My bet was very precise – I didntt claim gold will be below 900 at year end, I bet that sometime in 2015 it will trade below 900. If dollar yen goes to 130 and euro dollar to 105 that mightl be enough to get gold to $1000, add in fed tightening and that’ll be the icing on the cake. But I’m also not claiming I have any predictive powers greter than anyone else.

              Gold has actually been an incredibly poor investment int the 20th century versus the alternatives.

              An investment in Gold in 12/1971 would have returned 8.0% per annum whereas an investment in the S&P500 over the same period would have returned 13.6% per annum.

              http://en.wikipedia.org/wiki/Gold_as_an_investment#mediaviewer/File:Gold_price_in_USD.png

              • Paul

                A financier.
                Mmmmm. Explains a lot.

              • RedLogix

                Of course scrap gold does not add to the total – it merely represents a recycling of existing gold in the market. Whereas demonstrably the total demand, especially from India and China, is growing. That can only be met by new gold at prices well over $1200 pr oz. And at the current price no-one is investing in major new production.

                I’m not at all enamoured with gold as an investment either – the main reason why people value it is as a currency of last resort. And that is because history demonstrates that sooner or later ALL fiat currencies fail.

                From the numbers I’ve seen all the gold ever mined is worth about $3-4 trillion at current prices. Given that global GDP is in the order of $60-70 trillion – it suggests that in the event of people needed to resort to it as an alternative en mass – the price could potentially change very dramatically indeed.

                • nadis

                  Personally i think canned food and shotguns are more useful than gold in the sort of scenarios gold nuts talk about.

                  So no explanation of the mass gold manipulation conspiracy you mentioned? Not looking for real evidence, just a coherent explanation of what it is and how it works.

                  • RedLogix

                    The only real currency of value will be your ability to organise a safe community around you and the skills to help maintain it. But even so, while gold is far from perfect, in such circumstances it’s still a way better bet than paper, or phantom blips in a bank account you can no longer access.

                    As for a coherent explanation for how it’s done:

                    http://www.paulcraigroberts.org/2014/01/17/hows-whys-gold-price-manipulation/

                    In an efficient market none of that would be possible, but in a market dominated by a handful of very powerful actors, then the usual assumptions probably no longer hold.

                    • nadis

                      I kind of lost interest in Paul Craig Roberts when I read this lunatic rambling:

                      “Vladimir Putin Is The Leader Of the Moral World

                      Vladimir Putin’s remarks at the 11th meeting of the Valdai International Discussion Club are worth more than a link in my latest column. These are the remarks of a humanitarian political leader, the like of which the world has not seen in my lifetime. Compare Putin to the corrupt war criminal in the White House or to his puppets in office in Germany, UK, France, Japan, Canada, Australia, and you will see the difference between a criminal clique and a leader striving for a humane and livable world in which the interests of all peoples are respected.”

                      Anyway after a 90 second scan of his gold column, IMO there are several profound flaws in his argument, but you only need to understand how futures or “paper gold” works to see the whole manipulation argument doesn’t hold.

                      Lets say I am China or India and I want to buy 25 tons of gold – thats roughly a billion dollars of gold at the price I want to pay, $1200. So all I need to do is buy 8,300 futures contracts. That is no problem – daily volume in the first contract runs at around 200,000 to 300,000 contracts per day.

                      So now I am done. Ha you say – thats only paper gold you own. True but if I hold my contract to the notice period which for the December contract is anytime between Nov 28 and Dec 29, I can submit a notice to deliver and post my 1 billion dollars. Whoever is short my 8300 futures contracts now has two days to deliver 100 tons of gold to my account at an authorised gold depository. The gold bars delivered have to have come from another (or the same ) authorised depository and have to have an assay certificate and a unique ID number. Once delivered, and my billion dollars is paid, I now own 25 tons of numbered gold bars. I now have a choice. I can leave those numbered bars in the warehouse under my ownership or I can send a lorry around and pick them up and take them to my own warehouse ( or if I am the Central bank of Russia, I can deliver say 20% of them to Putins personal vault in Switzerland and keep the rest at the NY Fed)

                      Click to access 113.pdf

                      So I bought paper gold, but very quickly – within a few days i turned it into real gold, and within a few weeks it is sitting in my own warehouse.

                      The gold conspiratists always overlook this point. What they disparagingly call “paper gold” is completely fungible with real gold. There is no conspiracy because anyone can avoid all the conspiracy steps just by buying a futures contract and going to delivery. I’ll say it again, gold manipulation conspiracy theorists are morons, and usually self interested because many of them run a nice side business in selling heavily marked up gold to retail suckers.

                      If there really was a mass shortage of physical gold, I can assure that fact would be very quickly exploited by the hedge fund community who would buy futures with reckless abandon. When there wasn’t sufficient physical gold to deliver to the hedge funds you would see the mother of all price spikes as the short future holders scramble to find gold to deliver. The short side of the transaction does not have the right to not deliver. In fact if they dont deliver the long future owner has the right to “buy in”, that means they vcan go to market and buy the gold at any market price and send th e bill to the short side. That is called a delivery squeeze and does happen from time to time especially in bond futures when there arent enough of the dleiverable bonds around to deliver, usually cos some unsophisticated player owns a big chunk of them and doesn’t understand the economics of delivery.

                      So just to be really really clear — if you understand how futures markets work, by definition there can be no gross manipulation as described by Paul Craig Moon Unit Roberts because the whole manipulation process can easily be avoided by buyers of physical gold just by taking a futures position to delivery.

                      Please point out any flaws in my logic – good luck with that. If gold futures were cash settled instead of physical settlement the conspiracy theory might work, but physical settlement kills it.

                      (I wont even address how unlikely a vast conspiracy by the fed and investment banks run in an off books process, requiring the complicity of hundreds of individuals, secret accounting, off books transactions, running massive price risk outside bank risk management oversight plus the complicity of the SEC and thee CFTC could ever remain secret. Investment bankers are notorious gossip whores).

                      Sorry to disprove your conspiracy. The real truth is much more simple. Supply and demand, and in a non zero interest rate world the opportunity cost of holding gold starts to hurt.

                    • RedLogix

                      Interesting.

                      The link I made was not written by Craig Paul Roberts but by this person:

                      Dave Kranzler traded high yield bonds for Bankers Trust for a decade. As a co-founder and principal of Golden Returns Capital LLC, he manages the Precious Metals Opportunity Fund.

                      Putin had nothing to do with it. But seeing as how you mention him, I briefly address your remarks. Putin is of course no angel, yet for all his greed and authoritarian heavy-handedness, when you consider the dismal record of all his predecessors – Putin is probably the best leader the Russian people have had since Catherine the Great. It goes a long way to explaining why after so long in power he still enjoys stratospheric levels of democratic popularity.

                      And while I wasn’t asking for your opinion of Paul Craig Roberts, the article you reference:

                      http://www.paulcraigroberts.org/2014/10/25/vladimir-putin-leader-moral-world-paul-craig-roberts/

                      is worth reading for Putin’s speech alone.

                      And for the gold thing. Yes you gave us a lecture on how the gold market should work. You rather carefully avoided addressing what Dave Kranzler wrote. After all you are the expert here and I was hoping you could point out exactly where Kranzler went wrong.

                    • nadis

                      Red – you seem to be wilfully ignoring what i wrote. I specifically said several times where he was wrong. Once again – he pretends the fungibility of futures and physical gold doesn’t exist. He ignores the right of futures holders to take physical delivery of real gold. His description of market manipulation simply cannot work because if the Fed attempted to do it (massive short selling of futures) it would simply make life easier for entities that want to own physical gold. If you can’t get your head around that I can’t help you anymore.

                      Let alone the massive, complex, secret and illegal conspiracy required by the Fed to make it work.

                      I cant say it any simpler. He is wrong.

                      You’re probably right about Putin. Unfortunately. I do recommend you read the recent Karen Dawisha book about him.

                    • RedLogix

                      He ignores the right of futures holders to take physical delivery of real gold.

                      But as you yourself have stated the extremely high levels of hypothecation and fractionalisation in the gold market simply means that not all futures holders can. In this circumstance such a ‘right’ becomes effectively meaningless. And everybody knows this.

                    • nadis

                      Now you-re sounding like a birther or a truther or a denier.

                      Do you really think “everbody” in the markets is declining to take futures to delivery because they know the right is “meaningless”.

                      Cmon – you’re in fantasy land right now. You think Russia or China or a bunch of greedy selfish hedge fund players would not exercise their legal rights because “everyone knows”. I realise you’ll probably now say “ahhh but they have a vested interest in not seeing the financial system fall over so are exercising restraint.” Save yourself the mental gymnastics.

                      Take a step back, a deep breath and think through what you’re saying. It’s beyond stupid.

                      If you can’t see it, I’m done and you need to change your handle to get rid of the logix bit..

                      BTW, I’m not sure I ever claimed massive hypothecation of gold? Did I? Massive gold lending occurs but thats normal for any asset.

                    • RedLogix

                      Well not everyone thinks that the gold market is as simple and pure as you:

                      http://goldchat.blogspot.com.au/2014/02/fractional-reserve-bullion-banking-and.html

                      (In his day job this guy works for the Perth Mint.)

                      No-one seems to want to come out and say exactly how fractionated gold bullion is – but it almost a certainty that if everyone attempted to take physical delivery of all their futures notes as they matured, not everyone would finish up with the right number of uniquely minted bars stacked up in their living rooms.

                    • nadis

                      Perth Mint = vested interest in scaring retail buyer s into buying physical gold at a 20% mark up.

                      On the one hand you cant claim market participants are greedy and out of control and will do anything for personal gain and in the next say there is a secret gentlemens agreement not to take physical delivery.

                      Complete and utter logic fail. I’m done on this. You asked me to point out the flaws in the conspracy argument. I did. Convincingly. You’re now xnot just changing the goalposts but changing the country in which the game was played. If this was a climate change discussion you’d be the Cameron Slater role.

                      I was a managing director at one of those “gold cartel” banks in London. I traded commodities for six years and ran a structuring business for 10. Believe me if there was manipulation, I and everyone in the business would be off to the US DOJ looking for a 20% whistleblower payment on what would be billions of fines. I’m still here working a day job.

                    • RedLogix

                      Managing Director of Big Bank = mmm what possible vested interest could this guy have?

                      Look you are a busy man and thanks for dropping by to chat to the peasants. I’m sure we all appreciate it.

                    • nadis

                      I get it Red. You’ve gone ad hom now because you cant argue on the facts. I think we l’ll call you a “golder” now.

                      For the record I havent worked in that world for 5 years and have no desire to do so again. I’m a happy small business owner who can now pick up the kids form school every day. I have no vested interest. Wish I had 20% of a multi billion whistle blower settlement though.

                    • RedLogix

                      And if you don’t think making a stupid comparison with Slater isn’t an ad hom – then you too have made a complete and utter logic fail. I can play that game all day if you really want.

                      But here is the point – more than a few people who do appear to have the similar kinds of background and qualifications as you – are pointing to what they believe are peculiar things happening in the gold futures markets. Some of them make quite a detailed case.

                      What we do know absolutely for certain is that the major currencies are in a massive game of competitive devaluation at the moment. Why is it so very hard to believe that the same players might not also want to ensure that the one currency that might show up their machinations – is also kept undervalued?

                      And the track record of whistle-blowers is not a pretty one. Especially so I should imagine if you are taking on the US Fed. But I suspect you know this.

                • nadis

                  I believe you except for the near 50% drop in chinese gold demand this year versus 2013………

            • nadis 7.3.1.1.2.2

              Ok – I get it.

              You asked me to prove something. I did. Now because it doesn’t fit your faith mechanism you just want to ignore it. Lets just move on as logic will never overwhelm faith.

              On a conciliatory note if you want to see interesting examples of real time market failure and market manipulation spend some time on this website. Unfortunately nothing to do with large scale manipulation, more the impact of short term failures in exchange structure due to algorithmic trading. Very interesting though.

              http://www.nanex.net/NxResearch/

              This company provides a real public service.

          • travellerev 7.3.1.1.3

            Worse, I think the Fed are lying. period. And the Bundes bank. 😆 . Oh and by the way gold price manipulation with paper gold is all but admitted! Just like the LIBOR by the way!

      • Colonial Rawshark 7.3.2

        Russia will do fine. Their people have put up with more hardship than this and driving them into the arms of President Putin is hardly a sound strategy.

        • Tracey 7.3.2.1

          Just because people can survive hardship isnt quite the same as saying the people will be fine.
          Some wont survive the hardship.

          I agree that putting the people between a rock and Putin, they will choose Putin.

          • nadis 7.3.2.1.1

            Putin and his cronies will survive just fine. They’ll continue to thieve the natural resources at the expense of the ordinary Russian and stuff the proceeds into banks in Switzerland, Singapore, Hong Kong etc. I recommend anyone interested in “modern” Russian (it’s not really modern Russia, its actually medieval Russia in the 21st century) should read “Putin’s Kleptocracy” by Karen Dawisha. Absolutely mindboggling. It’s a great memorial to the many journalists and activists who have had “accidents” over the last decade and a half.

            Here’s background to the book here

            http://www.economist.com/blogs/easternapproaches/2014/04/russia

            Good news is it has been published and available in ebook form here:

            http://books.simonandschuster.com/Putins-Kleptocracy/Karen-Dawisha/9781476795218

            Well worth the 15 bucks.

            I bet Putin is wishing right now he hadn’t waste $60 bln on the Soichi olympics.

            • Colonial Rawshark 7.3.2.1.1.1

              So you prefer the US kleptocracy? They are “our kind” of kleptocrats, I suppose. Of course, the US kleptocracy will survive fine, even as 49M Americans including 1/3 of US children, live on food stamps.

              • nadis

                Like almost all of the world, I’d rather be in the US than pretty much any other english speaking country – NZ and Australia excepted. Unlike most people who demonstrate such a rabid anti-US bias on this site, I have actually lived in the US for many years as well as numerous other countries.
                Equating a society like the US to Russia merely demonstrates how out of touch you are with reality. Show me a single social, economic, human rights or any other measure of human development where Russia has the moral high ground over the US and I’ll fall off my chair. There are two countries in the world that immigrants from the less developed world want to go to above all others. Unfortunately for your world view those countries are the USA and the UK.

                Better yet, educate yourself and read the book. You should have heard of Karen Dawisha – as an academic studying Russia she is at the top of the heap.

                • Colonial Rawshark

                  USA the richest country in the world, 49M on food stamps (1/3 of all US children), up to 5M homeless at some time during a given year, and a prison industrial complex using blacks for slave labour, being paid 50c or less an hour. But which will happily pay corporates $200M per white elephant fighter jet as well as spy on all its allies, render and torture innocent people, drone an entire village, etc.

                  I don’t think that Russia has massacred a wedding party full of innocent people in recent years. The US has.

                  Some moral high ground.

                  Yes, of course, USA is a great place to live if you are white, and in the top 5% of society.

                  • Macro

                    But the roads are crap! so need the helicopter…
                    The food is even more crap
                    and the water is so bad if you live in Toledo at times you can’t even drink it!
                    You need to live in a gated community and have multiple locks on the doors.
                    Kids are likely to be gunned down at school.
                    Yep! great place to live.

                    • nadis

                      MAte – you obviously havent lived there. 99% of the population doesnt experience those things, though I do grant you the state of some roads is pretty shite

                    • Macro

                      I’ve visited – and that was enough. No wish to return – even with the outstanding colours of fall. A more dirty, downtrodden, unpleasant, unwelcoming place, I have yet to visit. Canada on the other hand – despite it’s crappy roads was far more pleasant.

                  • nadis

                    You have no idea what the russians have been doing in and around Grozny. Killing a wedding party unintentionally would be the the most benign thing the Russians have done in Chechnya. Scorched earth policy anyone?

                    Re prisons – we do the same thing here. America has its faults but it also tends to recognise them – what chance any other countrry in the world would have published the Senate report on torture. Russia just murders the journalist who wrote the story.

                    Please give me at least one thing Russia does better, just one.

                    • Tracey

                      They tend to recognise bad stuff, like most nations, once they have been exposed. I dont consider theusa evil but they peddle a fake dream.

                  • Tracey

                    But but thats not the advertising the US sells…

                    • nadis

                      I agree. The US is probably the most optimistic country I have ever seen (sweeping generalisation I know) and even though most won’t get rich almost everyone believes they will, and woe betide anyone who takes that chance away.

                      In foreign policy I think they often inhabit an odd junction between self interest and altrusim, and often confuse the two. When no one else in the world comes close to the military and economic power the US has I think it becomes easy to over reach. But their foreign policy expertise shouldn’t be denied – we often don’t get it because we don’t understand the US motiviation, but from their perspective (preserve US Hegemony) it usually is very logical. 10 soon to be 11 carrier groups, the worlds largest and second largest airforces (USAF and USN) and an unshakeable belief in the superiority of the American way explains in part why the US does what it does.

                    • RedLogix

                      This Russia vs USA thing is interesting. There is no question that the USA is on the whole a far more materially wealthy place and is fortunate to have had a legacy of relatively benign governance. It is a nation of extraordinary diversity and values, with both successes and failures on a grand scale.

                      Russia by contrast is a tough place to live. I was there a while some years back and it’s wrong to glamourise the place. Life is hard, and even the Russians hate their winter. And generations of mis-rule has left most ordinary people very wary and suspicious of anything in the public domain.

                      Yet here is the odd thing. I’ve visited both countries. If I had to pick one I’d be tempted to choose Russia. Well if I was feeling brave. Why?

                      Because I found the Russians by far the more interesting as people. In public you see the grim, drunk or beaten down stereotype. In private you see something altogether different and a lot deeper. Whereas I find most Americans funny, clever and smart – but shallow and brittle.

                  • tinfoilhat

                    🙄

                    CV I think everyone on this site knows the love affair you have going with anything and everything anti US – but the absurd boosting of Putin and Russia does tend to get a bit boring after a while.

                    • Paul

                      There are reasons to question a lot America does in the world.
                      It’s actions in Iraq alone should make us wary of its role.
                      We should not be it’s unthinking puppet, as Key would have us be.

  8. mikesh 8

    Russia is at present building a gas pipeline into Turkey. Some have suggested that this portends an alliance between those two countries. Given that Turkey controls access to the Black Sea via the Bosphorus, such an outcome might not be good for the West.

    • miravox 8.1

      Is that the South Stream pipeline you’re talking about? If so it was cancelled a couple of weeks ago.

      On December 1, during his state visit to Turkey, Vladimir Putin announced that Russia would cancel the construction of the ambitious South Stream pipeline. According to Donald Jensen, resident fellow at the Center for Transatlantic Relations, this decision does not mean an end to Moscow’s search for ways to transport natural gas to Europe while bypassing Ukraine.

      Set up by the Russian energy giant Gazprom in 2007, the South Stream pipeline project brought together a consortium that included major energy companies in Austria, Italy, Hungary, and Bulgaria. With a design capacity of 63 billion cubic meters per year, the project would have carried about 12 percent of Europe’s annual gas consumption and was estimated to cost $40 billion. The pipeline was designed to send Russian gas through the Black Sea to Bulgaria, Serbia, Hungary, Slovenia, and Austria.

      It seems strange that this one has been cancelled. Something about how expectations of future energy needs will develop, maybe? or short of funds?

      • mikesh 8.1.1

        No. This is not the South Stream project. That one I think was intended to go under the Back Sea and through Bulgaria, bypassing the Ukraine.

      • mikesh 8.1.2

        As I understand matters, the South Stream project was cancelled because the EU wanted to own the pipeline, believing that the supply of the gas and its transportation should be separately owned. However this would have allowed the transport company/consortium to grab the lion’s share of the income by charging monopolistic transport prices. Putin wasn’t having a bar of this apparently and cancelled the project.

      • nadis 8.1.3

        I’m picking short of funds. Rosneft is already asking Putin for a $49 billion bailout, as have VEB Bank, Russian Agricultural Bank, Gazprombank etc. Cronies first, women and children last.

        • miravox 8.1.3.1

          Putin is giving his annual Q&A right now – CNN is broadcasting bits. He reckons the Russian financial crisis will be over in 2 years – worst case scenario.

          Seems to think low oil and gas prices are unavoidable. Says he’ll diversify the economy and the central bank was a bit late but is doing the right thing. He says he’ll use the government reserve funds (?) to ease effects of the crisis.

          The problems, he says are a result of ‘outside forces’. I agree to an extent with that – given the aim of EU/US was to force Russia to change through economic sanctions. Not a lot of sabre-rattling though.

          Why don’t we have these Q&A things, I wonder?

          Also commentary on the Guardian…

          http://www.theguardian.com/world/live/2014/dec/18/vladimir-putin-press-conference-rouble-oil-live

          • Colonial Rawshark 8.1.3.1.1

            They timed the attack on the Russian economy to try and shake Putin and make him look weak and rattled at his annual pressor. Interesting enemies, eh.

        • Colonial Rawshark 8.1.3.2

          Cronies first, women and children last.

          Putin is merely following the example of the Federal Reserve and the Bank of England in that case.

          For instance the Fed kept ZIRP for the investment banks while Congress horrifically raised interest rates on student loans.

          The US has given the banks over a trillion dollars in bailout money, but for families evicted from their homes, nothing.

          US cronies first, US kids last, as you say.

  9. Tom Gould 9

    According to the AA Petrol Watch schedule, the pump price of a litre of 91 octane in Auckland has fallen from 220.9 cents on 19 June 2014 to 193.9 on 16 December 2014, a drop of 27 cents a litre or around 14 per cent. On the other hand, the price of a barrel of crude has roughly halved. I guess big oil knows best of all how to win on both the up side and the down side?

    • nadis 9.1

      You also need to factor in the NZD. In June NZDUSD was 0.8750, now it is 0.7700 – thats a drop of 11% which added to the drop in NZ petrol is ~25%, whereas crude is down about 45%. So there is a 20% gap there.

      However only about 40% of our pump price is the actual cost of the oil – the rest is tax (paid on a per litre basis, not a percentage of petrol cost basis) and refining costs, so the drop we have seen (25%) is about right (i.e., 40% of 45%), in fact we almost look like we are ahead of the game.

      • Tom Gould 9.1.1

        Interesting. It is worth noting that the last time oil was $60 a barrel was in mid 2009 our dollar was buying US 64 cents and the pump price here for a litre of 91 octane was around $1.70. So even with the GST rise cancelling out the better exchange rate we should be paying around $1.80 a litre at most.

  10. Richard@Down South 11

    I wonder if the people with the Oil, are trying to get what they can for it now, while its worth something… rather than slow down supply, and raising the price…

  11. Achtung_baby 12

    But shouldn’t oil price going up very rapidly as forecasted by the Greens, and Rusell Norman in particular? Where is peak-oil?

    • mickysavage 12.1

      You presume that there is a free market and no manipulation of the price of petroleum. The price will go up, this is inevitable, it just seems that the the theory anticipated a better functioning market.

    • Richard@Down South 12.2

      Peak Oil definitely happened… the real bottleneck as I understand it is refinery capacity (it’d take about 5-7 years minimum to make a decent sized refinery)

      They could find an oil well which is twice as big as current world reserves (good luck with that), and it’d still need to be refined.

      When a business such as an Oil giant like Shell, sells part of its business (what is now Z stations) you have to ask why…

      • nadis 12.2.1

        Do you have any idea what the Z stations are worth as percentage of Shell Oil’s global business?

    • Colonial Rawshark 12.3

      That’s a fundamental mistake that you have just voiced there.

      It has been understood for a long time that peak oil and low oil prices might simply occur hand in hand. Why? Because lower oil prices doesn’t mean that damaged western economies are going to find those lowered prices any more affordable.

      And oil prices are lower, in part, because energy demand has been destroyed by an economic slow down.

      In theory, greatly lowered oil prices should spark a volume consumption boom in oil. Yet none can be seen – because economies around the world are so weak that they cannot afford to burn more oil even at its current reduced rate.

  12. Sable 13

    Sad you felt the need to quote the Guardian, a paper which in my experience seems to rely too heavily on opinion. The reality is there is more oil than needed and its becoming an unattractive resource too given its causing global warming. There are other alternatives that are cleaner and sometimes as affordable.

    As far as Russia is concerned its been under economic pressure from US engineered sanctions for amoungst other things having the temerity not to let the US’s puppet regime in Kiev grab the Crimea, where Russia has its only warm water military base. This in other words has less to do with oil than you may think. Russia also has gas resources which the US is trying to block and in some cases has blocked in the hopes it can flog off its own overpriced gas to the EU at a much higher price.

    Russia is also going through a period of economic readjustment as it moves away from the US dollar and aligns itself with other BRICS nations, such as China and India, who its has just signed substantial trade deals with much to the US’s chagrin.

    Oil no longer makes the world go around but it will continue to go around anyway. Whats uncertain is whether the US will be able to sustain its 3% growth and what this means for any nation foolish enough to tie its fortunes (TPPA) to the US’s increasingly defunct economy. Take note John Keys….

    • KJS0ne 13.1

      The Crimean situation is not as black and white as you would have people think, just as Kiev is not a puppet regime, it was a popular revolution that brought the interim government to power and forced Yanukovych flee, a popular revolution built upon people being tired of corruption, tired of not seeing any improvements in their standard of living, tired of the stagnation of their homeland, tired of being only a nominally independent state. The interim government knew Russia would never support them, and knew they were fucked without the support of the West, so to the West they turned.

      Back to the Crimea, it’s really worth noting that Russia only conquered the Crimea in 1783 during Catherine the Great’s reign and the people of the Crimea were long standing enemies of the Russians, the Crimean Tartars used to go out on yearly raids into the Russian countryside slaughtering villagers and stealing thousands of Russians to be sold into the slave trade in the Ottoman empire, to which the Crimean Khanate was a vassal state. the Crimea was (is) a source of pride for Russia, the hard won jewel in the crown. During the Soviet times it was a holiday destination for a number of dignitaries and Soviet elite. I think Russia likes to see the Ukraine as nominally part of Russia, and many Russians are in favour of parts of the Ukraine becoming a part of Russia, a harkening back to the days of Russian hegemony, of Russian greatness. In areas of Russian majority one can understand (even if one doesn’t agree) the sentiments they express, having been left behind by 20 years of policies that do little for the advancement of the areas of Russian ethnic majority or high minority, they wish to return to the glory days. Still, this is a remarkably similar complaint to the argument from Kiev that spurred on the revolution in the first place – That the government was ineffective at raising the living standards of it’s citizens and corruption was ruling the day. Still Kiev argues, the Crimea and Eastern Ukraine are part of the sovereign Ukraine, it was an invasion by Russia without a reasonable casus belli, and they’re not wrong.

      Just like the Israeli-Palestinian conflict, there is no clear right or wrong in the Ukraine. Just two groups of people with their own best interests at heart who have come to blows and slaughter as a result.

      • Colonial Rawshark 13.1.1

        , it was a popular revolution that brought the interim government to power and forced Yanukovych flee, a popular revolution built upon people being tired of corruption, tired of not seeing any improvements in their standard of living, tired of the stagnation of their homeland, tired of being only a nominally independent state.

        All the people of Ukraine did is swap one lot of criminal oligarchs for another lot.

        This is not progress.

  13. Colonial Rawshark 14

    Those implying that $60bb oil is “cheap” need to get their heads read. Remember it was less than 20 years ago that oil was hovering around the $15bb mark. How perceptions change.

    • nadis 14.1

      Man – you really have a problem with inflation don’t you – I’m forever having to remind you how it works.

      Inflation adjusted, the price of oil from 1976 to 1986 is higher than it is now. In 1979 the price of oil was the equivalent of $117 now. From 1986 through to 2002 the average inflation adjusted price was around $35, with one very brief dip down to $13 in Dec 1998.

      • Colonial Rawshark 14.1.1

        Of course I was correct: oil is 4x more expensive today than 20 years ago. No wonder the global economy is crippled.

        Affordable oil is running out. Price is only one factor. Income is another. Affordability is a function of the two. Then there is the cost (financial and energy-wise) of the extraction of each new barrel of oil.

        Oil at the 1976 price caused an economic shock which brought western economies to a literal stand still.

        We are not at those levels again, but western incomes have deteriorated since then: meaning oil is cheaper but also less affordable, and we use even more of it per day per capita than back in 1976, just to maintain our lifestyle.

        So relatively speaking we are far more dependent on even more oil than we were back then.

        There is a simple truth: affordable oil is just about gone, and a barrel of oil today takes far more money and energy to extract than in 1976. All the low hanging fruit is gone and shale oil, deep sea oil and tar sands are all that is left.

        And very little of that can be extracted at $60bb.

  14. tricle up 15

    http://www.theguardian.com/environment/earth-insight/2013/aug/30/syria-chemical-attack-war-intervention-oil-gas-energy-pipelines Europe is a attractive market and at the top is the balance of power the collecting of friends and resources

  15. Paul 16

    The fact that our media are not reporting the reasons and geopolitics behind the collapse in oil prices shows that how much our media is compromised. They are not telling us what’s really going going on. We now live in an Orwellian/Huxleyesque dystopian world.

    The level of knowledge the western corporate media puppets wants us to have is very superficial.

    The cost of petrol in New Zealand

    What Russians are buying at shops because of the crisis
    http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11376101

    How individual westerners can exploit the situation.

  16. kushal kumar 17

    Here is the answer to the question : ” So what is happening with the oil price?”. This writer’s predictions were published as early as on 2 June 2014 in article – ” Stressful times ahead for world economy in 2015 and 2016″ – at http://www.astrologyweekly.com. Among other commodities, energy resources including oil and gas, minerlas and metals were also identified as indicative of concern. The concern was identified to begin from November 2014 and on. Broad picture of regions or countries likely to be covered were also identified. Readers may find that these monumental predictions are matching somewhere with ongoing economic picture around the globe. Not very far from now, a month and a half period covering January to mid- February 2015 could perhaps cause specific concern regarding global economy . It may however be observed that these likely trends are indicative only and may not be construed to be conclusive or deterministic. There is always a room for reform, correction, salvaging, or improvement through a well hammered out renewed strategy.

    • nadis 17.1

      Astrology? Seriously? What are you, 8 years old? Why so anti-science?

      • AmaKiwi 17.1.1

        Notice all the qualifiers.

      • Colonial Rawshark 17.1.2

        Astrology is not anti-science. Astrology was a driver for the ancients to hone and refine astronomical instruments and knowledge. You really need to expand your concepts of human knowledge.

        • AmaKiwi 17.1.2.1

          @ CV

          The “predictions” kushal kumar lists are not predictions at all. Everyone is a continuation of an already existing trend. I’m not impressed. When he adds a whole list of qualifiers it becomes laughable.

          For example, “Among other commodities, energy resources including oil and gas, minerals and metals were also identified as indicative of concern.” The Commodities Price Index has been in steady decline for several years. Astrology or no astrology, it’s useless information.

          Same for the vacuous comment about the global economy.

          • Colonial Rawshark 17.1.2.1.1

            So how is the quality of Kumar’s comments any different to the distinguished economists, market forecasters and bankers we see reported in the headlines every day?

            • AmaKiwi 17.1.2.1.1.1

              Precisely my point. Who says they are “distinguished”?

              The ones who know something worthwhile, don’t reveal it. They spin a story but keep the worthwhile information to themselves. Or they hype an investment they are trying to get the public to buy from them.

              I remember one of these “experts” boasting about all the great stocks his company had discovered. One of them was a bank that had a fantastic P/E ratio, no debt, no bad loans, etc. It was the bank in my town. What he didn’t tell a hundred thousand people in TV land was the bank was owned by a few families and you could wait ’til hell freezes over before any of them would sell a single share.

              He wanted people to think he was a brilliant investment manager and they could make money giving him their money to invest (for a hefty fee). “Distinguished” may arse. A con artist.

        • miravox 17.1.2.2

          Yeah, I’d say astrology was a proto-science.

          The social science bit of that proto-science has moved on an awful lot since the ancients identified stars and tried to find some inter-galactic logic to human behaviour – economic or otherwise.

        • nadis 17.1.2.3

          Last time I checked we were in the 21st century, and the pagan beliefs of primitive societies have been somewhat superseded.

          • Colonial Rawshark 17.1.2.3.1

            Hardly. Irrational belief in the influence and wisdom of central bankers is still going strong in many quarters of the power elite and the mainstream media.

  17. AmaKiwi 18

    I don’t hear any conspiracy theories about why since mid-2011 gold has lost 41% of its value and silver has lost 82%. Maybe that wasn’t a conspiracy but oil is.

    The truth is markets fluctuate.

    The talking heads always need to entertain you with explanations that fit your prejudices. In reality, they don’t have a clue.

    The people who do have a clue don’t need their egos stroked by being in the media. They use their knowledge to make money which they do by scrutinizing market movements in the finest details, not by playing geopolitical Sherlock Holmes. But heck, that is Nerd’s work: measuring, comparing, patiently waiting for opportunities, things reporters on deadlines don’t have time for. The Nerds know. The reporters entertain.

    • Colonial Rawshark 18.1

      Gold fix process questioned: fraud likely.

      http://www.bloomberg.com/news/2013-11-26/gold-fix-drawing-scrutiny-amid-knowledge-tied-to-eruption.html

      http://www.zerohedge.com/news/2014-04-29/gold-fix-manipulation-crackdown-deutsche-officially-resigns-london-fix-seat

      The truth is markets fluctuate.

      They use their knowledge to make money which they do by scrutinizing market movements in the finest details

      Your concept of the financial markets is slightly dated, unfortunately.

      You should catch up with how all electronic markets, including gold, are utterly manipulated and goal seeked via automated High Frequency Trading algorithms. Even the market exchanges are utterly compromised.

      eg.

      http://www.zerohedge.com/news/2014-06-01/memorial-day-gold-massacre-when-hfts-forget-worlds-vacation

      http://www.zerohedge.com/news/2013-09-06/heres-your-efficient-market

      • AmaKiwi 18.1.1

        CV

        Minute by minute you can use computers to skin a few dollars here and there.

        A relentless 82% drop over a three years is NOT computer generated. It’s a major trend.

        Kindly refrain from insulting my knowledge of financial markets. I know whereof I speak.

        • nadis 18.1.1.1

          Agreed amakiwi. Thee fixing scandals are about setting the price on the day at an advantageous level, not about the overall price level. In libor fixing for instance, even here in little old NZ banks can quite easily have an interest rate swap position where every basis point (thats 0.01%) on the 3 month bank bill rate can make 10s of millions of dollars of difference or more to the value of the swap position. Banks are doing this trade to hedge the risk on their vast mortgage book and that’s the incentive for traders to collude to just make that rate officially settle today 1 or 2bps away from where it other wise would. But manipulating the market to move the price 105 or 20% or 50%, no chance. Same with FX and gold fixes etc, a couple of pips here and there on the fix can make a traders day.

          HFT in the equity markets can be easily avoided. Don’t use trading algorithms to execute, don’t leave “at market” orders, or alternatively just route all your orders through IEX. Avoid brokers like the plague. The real scandal in HFT is the complicity of the exchanges to allow it to occur in the first place, for a fee. Flash Boys by Michael Lewis is a great read.

          Colonial – you really are trying to have conversations outside your pay grade on this market and economics stuff, and every time you reference zero hedge you look desperate. I told you before – convicted bulgarian inside trader with grudges and a long track record of bad calls.

        • Colonial Rawshark 18.1.1.2

          A relentless 82% drop over a three years is NOT computer generated. It’s a major trend.

          Kindly refrain from insulting my knowledge of financial markets. I know whereof I speak.

          You still have faith that fundamentals rule the markets while manipulation via various means can have only short term and limited effects on asset prices.

          I believe that US equity indices climbing higher and higher for years now pumped up on promises of QE and various other manipulations, even as real GDP and real profit outlooks deteriorate, demonstrates that is not so. Market price manipulation can have prolonged effects over a time period of years.

          The US housing market is another example of a major market where prices were manipulated upwards over many years by the major banks using fraudulent means, to form a massive asset price bubble which ultimately collapsed. I am not talking about something which is limited to a second by second phenomena here.

          Pump and dump and short selling into a market to depress prices are classic manipulations and in their variations can occur over weeks, months or years.

          Apologies, no offence was intended.

          • AmaKiwi 18.1.1.2.1

            I NEVER said I “have faith that fundamentals rule the markets.” I definitely do NOT.

            But it appears to me you do because what you are describing IS fundamental analysis: QE, asset bubbles, GDP, profits, market prices, etc. These are what analysts call “market fundamentals.”

            I am not sure what your point is. If you are saying there is a lot of dishonesty, corruption, and stupidity at many levels and across a wide range of financial markets, I absolutely agree. But I also think this does not make markets unpredictable because I think human behavior is predictable. With or without the dishonesty and corruption, it was predictable that these markets (shares, real estate, and others) would explode skyward. By studying surveys of investor and popular sentiment, it is equally predictable when these markets are likely to collapse. That is technical analysis as opposed to fundamental analysis.

            It’s 2:50 a.m. and time to call it a night. My investment suggestion . . . No, I won’t tell you because only one in a hundred would agree with me. That’s the nature of markets, do the opposite of what everyone else is doing. And the more they are convinced they are onto a sure thing, the closer we are to the market reversing direction.

  18. kushal kumar 19

    This writer is happy to note that some meaningful discussion has been contributed by learned commentators here in relation to my predictions. Contrary views or comments are always welcome in a discussion so long as these are not abusive. While it is correct that some weak and faint guess about shape of things can be attempted based on thorough overhauling of related goings on or happenings in a scenario, it is not practicable to paint a precise and accurate picture unless one has a precise tools of a science or art. Further, this writer mentioned the words ” among other things” here because there was no relevance to specify other commodities which I have predicted in my article of 2 June 2014. In the instant case, readers may like to find :-
    (1). That there was no trend available in May 2014 that could suggest that a specific scenario could develop commencing from November 2014.
    (2). This writer has enumerated about seven items or commodities which could come into focus in relation to turmoil in economy. That means the commodities or factors are not vague or unspecified or numerous.
    (3). Though regions or nations likely to be in focus have not been specified for obvious reasons to be fair to them, some hints could show that these are somewhere touching the point.

  19. Phil 20

    There’s a great article over at 538 trying to make sense of oil prices today:
    http://fivethirtyeight.com/features/the-conventional-wisdom-on-oil-is-always-wrong/

    In short – drilling is a complicated business that cannot be controlled by one organisation or entity, regardless of how much huffing and puffing OPEC do or how many fantasists think the US government can control the global price.

Recent Comments

Recent Posts

  • New Zealand First calls for tahr cull halt
    Mark Patterson MP, Spokesperson for Primary Industry New Zealand First is supporting calls by hunters and the New Zealand Tahr Foundation (NZTF) to halt a large scale cull of Himalayan Tahr by the Department of Conservation in National Parks. The calls are supported by a 40,000 strong petition and the ...
    3 days ago
  • Response to Spin-off allegations
    Rt Hon Winston Peters, Leader of New Zealand First New Zealand First leader Winston Peters today scoffed at suggestions that a team of six political operatives have been dispatched to New Zealand to assist his campaign. ‘As President Ronald Reagan once said, ‘there they go again.’ ‘The clickbait journos can’t ...
    3 days ago
  • Jenny Marcroft MP to represent New Zealand First in Auckland Central
    New Zealand First is pleased to announce Jenny Marcroft as the party’s election 2020 candidate for the Auckland Central electorate. Jenny spent years working in Auckland Central, having spent a vast proportion of her broadcasting career there. She says she, "knows the place and knows the people." Ms Marcroft says ...
    4 days ago
  • Creating jobs and cleaning up our rivers
    New Zealanders deserve healthy rivers and lakes that are safe to swim in - but they have been getting worse for decades. That's why, with our latest announcement, we're investing in projects that will help clean up our rivers and lakes and restore them to health, within a generation. ...
    5 days ago
  • Jacinda Ardern: 2020 Labour Congress Speech
    Jacinda Ardern's speech to the 2020 Labour Party Congress. ...
    5 days ago
  • Kelvin Davis: 2020 Labour Congress Speech
    Kelvin Davis' speech to the 2020 Labour Party Congress. ...
    5 days ago
  • Week That Was: Another week of major progress
    This week we moved into the second half of 2020 - and our Government delivered another week of big changes and major progress for New Zealanders. Read below for a wrap of the key things moments from the week - from extending paid parental leave, to making major investments in ...
    1 week ago
  • Green Party opposes RMA fast-track bill that cut corners on environmental safeguards and public cons...
    The Green Party has opposed the COVID-19 Recovery Fast-track Consenting Bill which shortcuts normal consenting processes under the Resource Management Act (RMA), reduces public participation and narrows environmental considerations. ...
    1 week ago
  • Site of new freight hub revealed
    Hon Shane Jones, Minister of Regional Economic Development A regional freight hub for the lower North Island will be built just northeast of Palmerston North, Regional Development Minister Shane Jones has announced. The Government is investing $40 million through the Provincial Growth Fund to designate and buy land and design ...
    1 week ago
  • Greens call for Guaranteed Minimum Income to alleviate skyrocketing debt with MSD
    Green Party Co-leader Marama Davidson is calling for the introduction of a Guaranteed Minimum Income to lift hundreds of thousands of people out of poverty and prevent more families entering into further debt with the Ministry of Social Development.  ...
    1 week ago
  • Winston Peters: Facts matter when taxpayer money is on the line
    There has been renewed focus on New Zealand First acting as a handbrake on the Government after our decision to not support Auckland light rail. We are a handbrake for bad ideas, that is true, but our track record since 2017 has seen New Zealand First constructively also serve as an ...
    1 week ago
  • Bill raising minimum residency requirement for NZ Super passes first reading
    Mark Patterson MP, New Zealand First List MP New Zealand First’s Fair Residency for Superannuation Bill passed its First Reading in Parliament today. The Bill makes a significant change to NZ Super by raising the minimum residency requirement from 10 to 20 years, after age 20. “Currently, a migrant of ...
    1 week ago
  • Harsher penalties for assaults on first responders one step closer
    Darroch Ball MP, Spokesperson for Law and Order A New Zealand First member’s bill in the name of Darroch Ball introducing a six-month minimum prison sentence for assaults on first responders has passed its second reading in Parliament. The new offence of "injuring a first responder or corrections officer with ...
    1 week ago
  • Criminal Cases Review Commission delivers Coalition promise
    Fletcher Tabuteau MP, Deputy Leader of New Zealand First New Zealand First welcomes the launch of the new Criminal Cases Review Commission, gifted with the name from Waikato-Tainui - Te Kāhui Tātari Ture, announced in Hamilton today by Justice Minister Andrew Little. “New Zealand First has long believed in and ...
    1 week ago
  • Greens welcome huge new investment in sustainable projects
    The Green Party is celebrating over $800m in new funding for green projects, which will get people into jobs while solving New Zealand’s long-term challenges. ...
    1 week ago
  • New Zealand First demands answers from Meridian Energy
    Mark Patterson MP, Spokesperson for Primary Industries New Zealand First is appalled that Meridian seems to have been unnecessarily spilling water from its dams to drive up its profits."While New Zealanders have been coming together in some of our darkest hours, we don’t expect power gentailers to waste water and ...
    1 week ago
  • Getting New Zealand moving again: June 2020
    We wrapped up the first half of 2020 with a busy month, taking additional steps to support New Zealanders as we continue with our economic recovery. We rolled out targeted packages to support key industries like tourism and construction, helped create jobs in the environmental and agriculture sectors, and set ...
    1 week ago
  • Māori union leader appointed to Infrastructure Commission board
    Hon Shane Jones, Minister for Infrastructure Infrastructure Minister Shane Jones has welcomed the appointment of Maurice Davis and his deep infrastructure and construction experience to the board of the Infrastructure Commission. Mr Davis (Ngāti Maniapoto), is the seventh and final appointment to the board led by former Reserve Bank Governor ...
    2 weeks ago
  • Click-bait journalism at its worst
    Rt Hon Winston Peters, Leader of New Zealand First New Zealand’s click bait journalism is taking a turn for the worse, with yet another example of sensationalist, wilful-misrepresentation of the facts. “New Zealand First has worked constructively with its Coalition partner on hundreds of pieces of legislation and policy, and ...
    2 weeks ago
  • Green Party proposes transformational Poverty Action Plan
    The Green Party is today unveiling its Poverty Action Plan, which includes a Guaranteed Minimum Income to ensure people have enough to live with dignity.     ...
    2 weeks ago
  • PGF accelerates Rotorua projects
    Rt Hon Winston Peters, Deputy Prime Minister Fletcher Tabuteau MP, Under-Secretary for Regional Economic Development The Rotorua Museum redevelopment and Whakarewarewa and Tokorangi Forest projects will be accelerated thanks to a $2.09 million Provincial Growth Fund (PGF) boost, Deputy Prime Minister Winston Peters and Under-Secretary for Regional Economic Development Fletcher ...
    2 weeks ago
  • Week That Was: Getting people into jobs
    This week, we rolled out the next steps of our recovery plan, with new infrastructure investment, extra support for tourism operators, and a new programme to get Kiwis into agriculture careers. The global economic consequences of COVID-19 will continue to be a challenge, but we have a detailed plan to ...
    2 weeks ago
  • Coalition commitment establishing Mental Health Commission delivered
    Jenny Marcroft MP, Spokesperson for Health New Zealand First welcomes the passage of the Mental Health and Wellbeing Commission Bill through its final reading in Parliament today fulfilling a coalition agreement commitment. “This is an important step in saving the lives of New Zealanders and delivers a key coalition commitment ...
    2 weeks ago
  • Whakatāne gets a $2.5m ‘turbo boost’
    Whakatāne has been given a $2.5 million boost to speed up previously funded projects and create more than 450 jobs in the next decade. Of those, the equivalent of 160 full-time jobs could be delivered in the next six weeks. Deputy Prime Minister Winston Peters is in town to make ...
    2 weeks ago
  • $2.5m PGF funding to speed up economic recovery in Whakatāne
    Rt Hon Winston Peters, Deputy Prime Minister Fletcher Tabuteau MP, Under-Secretary for Regional Economic Development The Provincial Growth Fund (PGF) is investing $2.5 million to accelerate three infrastructure projects in Whakatāne, Deputy Prime Minister Winston Peters and Under-Secretary for Regional Economic Development Fletcher Tabuteau announced today. “This package is about ...
    2 weeks ago
  • Shane Jones calls out those holding drought-stricken Auckland ‘to ransom’ over water
    Infrastructure Minister Shane Jones is throwing his weight behind a bid by the Auckland Council to fast-track the more than doubling of the city's water allowance from the Waikato River. And he's coming out strongly against anyone who plans on getting in the way of this campaign. "It is my ...
    2 weeks ago
  • Another Green win as climate change considerations inserted into the RMA
    The Green Party is thrilled to see changes to the Resource Management Act (RMA) that mean consents for large projects can be declined if they will have significant climate change implications that are inconsistent with the Zero Carbon Act and Aotearoa New Zealand’s Paris Agreement obligations.  ...
    2 weeks ago
  • New Navy vessel Aotearoa to arrive in New Zealand
    Hon Ron Mark, Minister of Defence The Royal New Zealand Navy’s new ship, Aotearoa, set sail for New Zealand on 10 June from the Republic of Korea, and is due to arrive in Auckland tomorrow, announced Minister of Defence Ron Mark. “Aotearoa is the Royal New Zealand Navy’s new fleet ...
    2 weeks ago
  • Racing Industry Bill passes third reading
    Rt Hon Winston Peters, Deputy Prime Minister, Minister for Racing Racing Minister Winston Peters has today welcomed the Racing Industry Bill passing its third reading, creating the legislative framework for revitalising the racing industry while limiting the need for future government intervention. “For too long our domestic racing industry has ...
    2 weeks ago
  • Green Party seek amendment to ensure all prisoners can vote
    The Green Party has today put forward an amendment to the Electoral (Registration of Sentenced Prisoners) Amendment Bill to ensure all people in prisons can vote in general elections. ...
    2 weeks ago
  • Green Party welcomes new approach to delivering light rail
    The Green Party welcomes the decision to not proceed with Public Public Investment (PPI) delivery of Auckland’s light rail project and to instead run the process through the public service. ...
    2 weeks ago
  • New Zealand First welcomes PGF investment in Wairarapa Water
    Hon Ron Mark, New Zealand First List MP based in the Wairarapa New Zealand First List MP Hon Ron Mark welcomes the announcement of Provincial Growth Funding investment of $1.4 million to help secure the Wairarapa’s water supply. The funding boost will allow the Greater Wellington Regional Council (GWRC), and ...
    2 weeks ago
  • New Zealand First MP Mark Patterson selected as candidate for Taieri
    New Zealand First list MP Mark Patterson has been selected to represent the party in the newly formed Taieri electorate at the upcoming election. Mr Patterson, his wife Jude and two daughters farm sheep and beef at Lawrence and Waitahuna. He previously stood in the Clutha-Southland electorate however boundary changes ...
    2 weeks ago
  • Ground-breaking on NZ Post depot
    Hon Shane Jones, Associate Minister for State Owned Enterprises A new ‘super depot’ to be built for NZ Post in Wellington will create around 350 jobs during construction, Associate Minister for State Owned Enterprises Shane Jones says. Shane Jones today attended a ground-breaking and blessing ceremony for the parcel-processing depot ...
    3 weeks ago
  • Week That Was: Putting our economic plan into action
    Our strong economic management prior to COVID-19 - with surpluses, low debt and near-record-low unemployment - put us in a good position to weather the impact of the virus and start to rebuild our economy much earlier than many other countries. Now we're putting our plan to recover and rebuild ...
    3 weeks ago
  • Fleeing drivers hit new record-high yet again
    Darroch Ball MP, New Zealand First Spokesperson for Law and Order Recently released Police fleeing driver statistics have shown yet another increase in incidents with another record-high in the latest quarter. “This new quarterly record-high is the latest in a string of record-high numbers since 2014.  The data shows incidents ...
    3 weeks ago

  • Gang crime, meth harm targeted in Waikato
    The Minister of Police says a major operation against the Mongrel Mob in Waikato will make a big dent in drug harm and violent offending linked to organised crime networks. “Senior leadership of the Waikato Mongrel Mob has been taken out as a result of Operation Kingsville, which resulted in ...
    BeehiveBy beehive.govt.nz
    11 hours ago
  • Supporting victims and families to attend mosque attack sentencing
    The Government is extending the border exception criteria to enable some offshore victims and support people of the Christchurch mosque attacks to attend the sentencing of the accused beginning on 24 August2020, says Immigration Minister Iain Lees-Galloway. “We want to support our valued Muslim brothers and sisters who were directly ...
    BeehiveBy beehive.govt.nz
    11 hours ago
  • Boost for community freshwater restoration projects
    A project to support volunteer efforts to look after streams and rivers is getting a boost thanks to support from DOC’s Community Conservation Fund announced Minister of Conservation Eugenie Sage today.  “The government is backing efforts to look after waterways with $199,400 for the Mountains to Sea Conservation Trust from ...
    BeehiveBy beehive.govt.nz
    12 hours ago
  • More support for women and girls
    Minister for Women Julie Anne Genter today announced that funding for the COVID-19 Community Fund for women and girls will be doubled, as the first successful funding applications for the initial $1million were revealed. “Women and girls across the country have suffered because of the effects of COVID-19, and I ...
    BeehiveBy beehive.govt.nz
    13 hours ago
  • Crown accounts stronger than forecast with higher consumer spending
    The Government’s books were better than forecast with a higher GST take as the economy got moving again after lockdown, Finance Minister Grant Robertson says. The Crown Accounts for the 11 months to the end of May indicate the year end results for tax revenue will be stronger than forecast. ...
    BeehiveBy beehive.govt.nz
    15 hours ago
  • Govt releases plan to revitalise wool sector
    A plan to revitalise New Zealand’s strong wool sector and set it on a new, more sustainable and profitable path was unveiled today by Agriculture Minister Damien O’Connor. The newly-released report - Vision and Action for New Zealand’s Wool Sector - was developed by the Wool Industry Project Action Group ...
    BeehiveBy beehive.govt.nz
    15 hours ago
  • Funding for Predator Free Whangārei
    Community efforts to create a Predator Free Whangārei will receive a $6 million boost, Regional Economic Development Minister Shane Jones and Conservation Minister Eugenie Sage announced today. The new funding, through Government company Predator Free 2050 Ltd, will create around 12 jobs while enabling the complete removal of possums over ...
    BeehiveBy beehive.govt.nz
    16 hours ago
  • New Zealand to review relationship settings with Hong Kong
    Foreign Affairs Minister Winston Peters has announced that the New Zealand Government is reviewing the settings of its relationship with Hong Kong. “China’s decision to pass a new national security law for Hong Kong has fundamentally changed the environment for international engagement there,” Mr Peters said. “New Zealand remains deeply ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Funding for Whangārei’s infrastructure projects revealed
    Regional Economic Development Minister Shane Jones has announced details of a multimillion-dollar investment in Whangārei for infrastructure projects that will help it recover from the economic fallout from the COVID-19 pandemic. More than 200 jobs are expected to be created through the $26 million investment from the Government’s rejuvenation package ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Managed isolation and quarantine update
    Following a second incident in which a person escaped from a managed isolation facility, security is being enhanced, including more police presence onsite, Minister Megan Woods said. “The actions of some individuals who choose to break the very clear rules to stay within the facilities means that more resourcing is ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Funding for Kaipara district community waste programmes
    Waste reduction and recycling programmes in Kaipara are set to get a boost with Associate Environment Minister Eugenie Sage today announcing a $361,447 grant from the Ministry for the Environment’s Waste Minimisation Fund (WMF) Sustainable Kaipara. “The new funding will allow Sustainable Kaipara to partner with local schools, kura, community ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government will support the people and economy of Southland
    The Government will support the Southland economy in the wake of multinational mining company Rio Tinto’s decision to follow through with its long signalled closure of the Tiwai Point aluminium smelter. “This day has unfortunately been on the cards for some time now, but nevertheless the final decision is a ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New transformational tools for the Predator Free 2050 effort
    New tools being developed to help boost Aotearoa’s Predator Free 2050 effort were unveiled today by Minister of Conservation Eugenie Sage and Under Secretary for Regional Economic Development Fletcher Tabuteau. A new rat poison, a camera with predator recognition software to detect and report predators, a new predator lure and a ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Armoured vehicles for New Zealand Army
    The Coalition Government has approved the purchase of a fleet of Bushmaster vehicles to replace the New Zealand Army’s armoured Pinzgauers, Defence Minister Ron Mark has announced today. The new fleet of 43 Australian-designed and built Bushmaster NZ5.5 will provide better protection for personnel and improved carrying capacity. “The age ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Community-led solutions to prevent family violence
    The Government’s three prevention frameworks to reduce family violence in Aotearoa were launched this week by Associate Minister for Social Development Poto Williams.   The frameworks were developed in partnership with communities around New Zealand, and build on the work the Government has already begun with its new family violence prevention ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Govt confirms investment in better radiology and surgical services for Hawke’s Bay
    The Government is pleased to confirm funding for improvements to radiology and surgical services at Hawke's Bay DHB, Health Minister Chris Hipkins says.     "The Minister of Finance the Hon Grant Robertson and former Health Minister Dr David Clark approved funding for Hawke's Bay DHB’s redevelopment of their radiology facilities ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Specialist alcohol and drug addiction services strengthened across New Zealand
    •    New funding for four beds at Napier’s Springhill Residential Addiction Centre •    A new managed withdrawal home and community service, and peer support before and after residential care at Tairāwhiti DHB  •    A co-ordinated network of withdrawal management services throughout the South Island •    Peer support in Rotorua and ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Coastal Shipping Webinar
    Introduction, seafarers and POAL Good morning everyone, I am delighted to be online with you all today. Before I begin, I have to acknowledge that COVID-19 has disrupted the maritime sector on an unprecedented scale. The work of seafarers and the maritime industry is keeping many economies around the world ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Support for resilient rail connection to the West Coast
    A $13 million investment from Government will create jobs and improve the resilience of the rail connection between Christchurch and the West Coast, Infrastructure Minister Shane Jones and Regional Economic Development Under-Secretary Fletcher Tabuteau say. The funding comes from the tagged contingency set aside in Budget 2020 for infrastructure projects ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Major investment in safe drinking water
    The Government is investing $761 million to assist local government upgrade under-pressure water services across the country, Prime Minister Jacinda Ardern and Local Government Minister Nanaia Mahuta announced today.  The announcement was made at the site of the water bore that was found to be the source of the fatal ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Supporting stranded seasonal workers to keep working with more flexible options
    Recognised Seasonal Employers and migrant seasonal workers stranded in New Zealand will be able to continue working and supporting themselves with more flexible hours and roles, says Immigration Minister Iain Lees-Galloway. The time-limited visa changes are: Stranded RSE workers will be able to work part-time (a minimum of 15 hours ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Relief for temporary migrants, employers and New Zealanders who need work
    The Government is making immediate short-term changes to visa settings to support temporary migrants already onshore in New Zealand and their employers, while also ensuring New Zealanders needing work are prioritised, Immigration Minister Iain Lees-Galloway says. We are: Extending temporary work visas due to expire by the end of 2020 ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Freshwater commissioners and fast-track consenting convenor appointed
    Professor Peter Skelton CNZM has been appointed as Chief Freshwater Commissioner and Alternate Environment Court Judge Craig James Thompson as Deputy Chief Freshwater Commissioner for the newly established Freshwater Planning Process (FPP). Environment Minister David Parker today also announced the appointment of Chief Environment Court Judge Laurie Newhook as the ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Appointment of Judge of the High Court
    Auckland Queen’s Counsel Neil Campbell has been appointed a Judge of the High Court, Attorney‑General David Parker announced today. Justice Campbell graduated with a BCom and LLB (Hons) from the University of Auckland in 1992. He spent two years with Bell Gully Buddle Weir in Auckland before travelling to the United ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Feedback sought – Commercial Film and Video Production Facilities
    The Associate Minister for Greater Christchurch Regeneration, Poto Williams, is seeking feedback on a proposal to better enable the development and operation of commercial film and video facilities in Christchurch. The Proposal, developed by Regenerate Christchurch in response to a request from Christchurch City Council, asks that powers under section ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Govt launches bold primary sector plan to boost economic recovery
    The Government has launched a bold plan to boost primary sector export earnings by $44 billion over the next decade, while protecting the environment and growing jobs. Prime Minister Jacinda Ardern today released Fit for a Better World – Accelerating our Economic Potential, a 10-year roadmap to unlock greater value ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Wellbeing of whanau at heart of new hub
    A new approach to prevent family harm that encourages greater collaboration across government and community groups is being celebrated at the opening of a new facility in Auckland. Prime Minister Jacinda Ardern today opened the Multi-Disciplinary Family Harm Prevention Hub Te Taanga Manawa in Lambie Road in Manukau. The facility ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New Report on Auckland Port Relocation
    The Government has released a major new report on the options for relocating the Port of Auckland’s freight operations while deferring any decision on the issue. “That decision needs to be informed by policy analysis that is still to be completed. As a result it will be up to a ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Dual place names for Te Pātaka-o-Rākaihautū / Banks Peninsula features
    The history of Rāpaki is being restored through the inclusion of te reo in thirteen official place names on Te Pātaka-o-Rākaihautū / Banks Peninsula and around Lyttelton Harbour/Whakaraupō, the Minister for Land Information, Eugenie Sage, announced today.   “I am pleased to approve the proposals from Te Hapū o Ngāti ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government and Air New Zealand agree to manage incoming bookings
    Bookings for seats on Air New Zealand flights into New Zealand will be managed in the short term to ensure the Government is able to safely place New Zealanders arriving home into a managed isolation or quarantine facility, says Housing Minister Megan Woods.  “Last week Air Commodore Darryn Webb and I ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • $80 million for sport recovery at all levels
    Grant Robertson has today announced the first major release of funding from the $265 million Sport Recovery Package announced at Budget 2020.  “Today we’re setting out how $80 million will be invested, with $54 million of that over the 2020/2021 financial year for organisations from community level through to elite ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Keeping ACC levies steady until 2022
    The Government is maintaining current levy rates for the next 2 years, as part of a set of changes to help ease the financial pressures of COVID-19 providing certainty for businesses and New Zealanders, ACC Minister Iain Lees-Galloway says. “New Zealanders and businesses are facing unprecedented financial pressures as a ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Extended loan scheme keeps business afloat
    Small businesses are getting greater certainty about access to finance with an extension to the interest-free cashflow loan scheme to the end of the year. The Small Business Cashflow Loan Scheme has already been extended once, to 24 July. Revenue and Small Business Minister Stuart Nash says it will be ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New investment creates over 2000 jobs to clean up waterways
    A package of 23 projects across the country will clean up waterways and deliver over 2000 jobs Prime Minister Jacinda Ardern and Environment Minister David Parker announced today. The $162 million dollar package will see 22 water clean-up projects put forward by local councils receiving $62 million and the Kaipara ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Speech to Labour Party Congress 2020
    Tena koutou katoa  Nga tangata whenua o tenei rohe o Pōneke, tena koutou Nau mai, haere mai ki te hui a tau mo te roopu reipa Ko tatou!  Ko to tatou mana!  Ko to tatou kaupapa kei te kokiri whakamua  Tena koutou, tena koutou, tena tatou katoa   Welcome. I ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • PGF top-up for QE Health in Rotorua
    The Provincial Growth Fund (PGF) is investing $1.5 million to ensure QE Health in Rotorua can proceed with its world class health service and save 75 existing jobs, Under Secretary for Regional Economic Development, Fletcher Tabuteau announced today. The PGF funding announced today is in addition to the $8 million ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Building a more sustainable construction sector
    A new programme, which sets a firm course for the Building and Construction sector to help reduce greenhouse gas emissions, has been announced by the Minister for Building and Construction Jenny Salesa. “A significant amount of New Zealand’s carbon emissions come from the building and construction sector.  If we’re serious ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • PGF funds tourism boost in Northland
    The Provincial Growth Fund is investing more than $7.5 million in Northland ventures to combat the economic impact of the COVID-19 virus, Deputy Prime Minister Winston Peters and Regional Economic Development Minister Shane Jones have announced. The Provincial Growth Fund (PGF) investment is going to the Northern Adventure Experience and ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Four new projects announced as part of the biggest ever national school rebuild programme
    Prime Minister Jacinda Ardern and Education Minister Chris Hipkins today announced significant funding for Auckland’s Northcote College as part of the first wave of a new nationwide school redevelopment programme to upgrade schools over the next 10 years. The $48.5 million project brings the total investment in Northcote College to ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • COVID-19: Support to improve student attendance and wellbeing
    The Government has opened an urgent response fund to support schools and early learning services to get children and young people back on track after the Covid-19 lockdown. “While we are seeing improvements in attendance under Alert Level 1 Ministry of Education data shows that attendance rates in our schools ...
    BeehiveBy beehive.govt.nz
    1 week ago