|IndyWatch Australian Economic News Feed Archiver|
IndyWatch Australian Economic News Feed was generated at Australian News IndyWatch.
Queensland Premier Anna Palaszczuk has followed Bill Shorten in blaming privatisation for the woes of the electricity network. Shes basically right, although theres much more wrong with the National Electricity Market than that.
Equally importantly, in terms of getting a good outcome, shes on a political winner in the fight with the Turnbull government and particularly the Abbott faction pulling Turnbulls strings.
No one fully understands whats going wrong with energy policy, but Australians love renewable energy and hate privatisation. Both of these judgements are validated by experience. Renewable energy has overdelivered on its promises while privatisation has (at best) undelivered and more commonly made matters worse. So, the idea that the LNP can win the debate on energy policy by bashing renewables and attacking public ownership as socialism seems pretty implausible.
Edward Hopper Automat 1927 Australia: A Delusional, Stuffed, Basket Case, Bubble, Third World Economy (MB) With QT On The Way, This Market Is Headed For A Brick Wall (Boockvar) Where Deutsche Bank Thinks The Next Financial Crises Could Happen (CNBC) Just 4% Own Over 95% Of Bitcoin (HowMuch) MPs
Yesterday, we told you about a special report Nick Hubble has prepared on why gold is the perfect investment for any Australian right now.
Its called The AUSSIE Case for Gold. And you can get a sneak peek here.
Nick is the Editor of Jim Rickards Strategic Intelligence advisory here in Australia.
And while it seems people all over the planet have their heads firmly stuck in the bitcoin frenzyJim and Nick have been quietly investigating the REAL threat to the world economy.
Australia is a key part of it.
You can think of this report as the missing chapter of Jims bestseller, The New Case for Gold.
So, were releasing a special, 2017 limited print run package. Why? To help navigate your wealth through what Jim calls the next monetary reset.
This is something that could finally bring down the global eight-year-old bull market.
What could be the trigger?
As Jim explains below, one factor people still seem to ignore is ever-rising US national debt, which, as of today, is over US$20.1 trillion
The blame for this comes from the cost of major wars, the 2008 financial crisis, and a bevy of irresponsible government spending.
But, as much as we like to criticise government for being completely irresponsible with our money, the past is in the past.
What matters now is how we get out of this mess.
Thats why I want to share with you Jim Rickards latest take on the situation.
Read on below for the current state of the debt crisis, but, more importantly, a clever first step on how we can get out of it
Right now, the United States is officially $20 trillion in debt. Over half of that $20 trillion was added over the past decade.
And it looks like annual deficits will be at the trillion-dollar level sooner rather than later when projected spending is factored in.
Basically, the United States is going broke.
I dont say that to be hyperbolic. Im not looking to scare people or attract attention to myself. Its just an honest assessment, based on the numbers.
Now, a $20 trillion debt would be fine if we had a $50 trillion economy.
The debt-to-GDP ratio in that example would be 40%. But we dont have a $50 trillion economy. We have about a $19 trillion economy, which means our debt is bigger than our economy.
When is the debt-to-GDP ratio too high? When does a country reach the point that it either turns things around or ends up like Greece?
Economists Ken Rogoff and Carmen Reinhart carried out a long historical survey g...
September 20, 2017: A new economic study has completely undermined previous claims that the Trans-Pacific partnership agreement without access to the giant US market would still result in significant economic gains for the remaining 11 countries.
The study has emerged as the TPP-11 countries meet again in Japan on September 21 22 to negotiate possible changes to the TPP text without the US. Some governments only agreed to US proposals like increased monopolies on medicines and copyright, and foreign investor rights to sue governments, in order to gain access to the US market. They want to drop or renegotiate these clauses.
The new study by Rashmi Bunga, a senior economist working for the United Nations Committee on Trade and Development, has been published by the University of Munich.
The study is a detailed critique of the attached paper by Kenichi Kawasaki from the Japanese National Graduate Institute for Policy Studies. The Japanese and other TPP governments have been using this paper to argue that there would still be economic gains from an agreement between the 11 remaining TPP governments without access to the giant US market.
The UN economists paper shows that the economic modelling used in the Japanese paper rests on a series of completely unrealistic assumptions that ignore negative outcomes from trade agreements and always come up with a positive result (p. 3).
These assumptions include that there are no unemployment effects and no trade deficit effects, which are in fact two of the main real-world negative impacts resulting from trade agreements.
The UN study also shows that Japanese paper vastly exaggerates positive economic outcomes resulting from removal of non-tariff measures in the TPP, by assuming that all such measures will increase overall economic welfare and ignoring any negative effects (pp. 4-5). But some of these are the most controversial clauses on medicines and copyright monopolies that other governments are rejecting because of their negative effects.
The nontariff measures in the TPP include increased medicine monopolies which will delay the availability of cheaper medicines and increased copyright monopolies which will increase payments to copyright holders at the expense of consumers. Both the UN paper and studies by Australias Productivity Commission show that these will increase costs to governments and consumers, and have a negative effect on the ec...
I am travelling all of today to the US for the MMT Conference in Kansas City
which begins on Thursday. I hope to see some of you at the
conference which will be a major development in our program of work
and advocacy. From there I am onto London for the British Labour
Party Conference presentation (Monday) and the book launch of my
latest book (with Thomas Fazi) Reclaiming the State: A
Progressive Vision of Sovereignty for a Post-Neoliberal World
(Tuesday see below for free ticket access). For details of all the
events associated with my speaking tour in the next fortnight see
While I am away, the blog might be rather sketchy. The itinerary is very tight with lots of travel which is disruptive for considered research and writing.
I also wont be able to attend to comments in the next 24 hours or so.
At the very least, while I am away, I will keep a daily diary and post audio, interviews, photos, videos etc where possible.
But for now some music .
On Thursday night I am playing guitar in Kansas City with a jazz trio (piano, bass, drums). This is the sort of stuff we will be exploring although it might go from this to some things a little more raucous as we go!
It is one of my favourite records of all time. A Blue Note label jazz classic.
Thursday, September 21: Kansas City International Conference of Modern Monetary Theory see program for details.
Friday, September 22: Kansas City MMT conference, as above.
Monday, September 25: Brighton (UK) I will be speaking at a fringe event Economics for a Progressive Agenda associated with the British Labour Party Annual Conference.
Location: The Brighthelm Centre, North Road, Brighton, BN1
Time: The event will run from 14:00 to 17:00.
Entry: Free. All are welcome.
See RSVP page.
Also The fringe event that promises to empower Labours Progressives against neoliberalism for more details and backgrou...
You cant stop things like the blockchain. It will be everywhere, and the world will have to readjust. World governments will have to readjust John McAfee, Founder of McAfee As youre aware by now, the worlds largest corporations and most governments are already testing the incredible potential of it. Australia, Japan, and Germany are 
The post Blockchain & Cryptocurrencies Dont Say You Didnt Know appeared first on The Last American Vagabond.
By Fiona MacDonald
For the first time ever, scientists have stored light-based information as sound waves on a computer chip something the researchers compare to capturing lightning as thunder.
Light-based or photonic computers have the potential to run at least 20 times faster than your laptop, not to mention the fact that they wont produce heat or suck up energy like existing devices.
This is because they, in theory, would process data in the form of photons instead of electrons.
We say in theory, because, despite companies such as IBM and Intel pursuing light-based computing, the transition is easier said than done.
Coding information into photons is easy enough we already do that when we send information via optical fibre.
But finding a way for a computer chip to be able to retrieve and process information stored in photons is tough for the one thing that makes light so appealing: its too damn fast for existing microchips to read.
This is why light-based information that flies across internet cables is currently converted into slow electrons. But a better alternative would be to slow down the light and convert it into sound.
And thats exactly what researchers from the University of Sydney in Australia have now done.
The information in our chip in acoustic form travels at a velocity five orders of magnitude slower than in the optical domain, said project supervisor Birgit Stiller.
It is like the difference between thunder and lightning.
It is only a matter of time now before cryptocurrencies become completely mainstream. Bitcoin is far more advanced when compared to other cryptocurrencies. Bitmoney.eu, an online bitcoin-purchasing platform, is looking to be at the very front of this shift towards a crypto-economy. Bitcoin is a secure and private way to hold money while also guaranteeing Continue reading Bitmoney.eu expanding outside of EU by adding POLi payment method for New Zealand and Australian customers
The post Bitmoney.eu expanding outside of EU by adding POLi payment method for New Zealand and Australian customers appeared first on NEWSBTC.
Im doing some work on privatisation and wanted to look at recent UK experience with the Private Finance Initiative. So, I Googled for PFI in the last year (as Google personalizes searches, your mileage may vary). The result is a surprising degree of unanimity. Across the political spectrum, there is agreement that
* PFI is a disaster, enriching private firms at the expense of
* The other side is (mostly) to blame
Excluding some references to an Indian political group and some data sources, the top hits are, in order:
I have all that much time today to write this up and it is going
to be one of those multi-part blogs given the depth of the
historical literature I am digging into. So this is Part 1. The
topic centres on an agreement between the US Federal Reserve System
(the central bank federation in the US) and the US Treasury to peg
the interest rate on government bonds in 1942. What the agreement
demonstrated is that a central bank can always control yields on
government bonds, which includes keeping them at zero (or even
negative in the current case of Japan). What it demonstrates is
that private bonds markets, no matter how much they might huff and
puff about their own importance or at least the conservatives who
are fan boys of the bond markets), the government always rules
because of its currency monopoly
There is a rich set of documents now available, which help us understand what the 1942 agreement was all about.
There was also a special edition of the Economic Quarterly, a quarterly publication put out by the US Federal Reserve Bank Richmond branch in the Winter of 2001, which commemorated the 50th anniversary of the Accord.
It is very interesting to read through the historical documents and the more recent (2001) interpretation of them.
On December 7th, 1941, the Japanese bombed Pearl Harbour, which provoked the US to formally enter the World War 2 conflict in an allied alliance with the United Kingdom and the Soviet Union.
On December 11, 1941, war was declared between Germany and Italy and the US.
In April 1942, as the US ramped up the prosecution of its War effort, the Treasury Department requested that the US Federal Reserve Bank use its monetary policy operations to maintain:
a low interest-rate peg of 3/8 percent on short-term Treasury bills. The Fed also implicitly capped the rate on long-term Treasury bonds at 2.5 percent.
That is, control yields on government debt across a broad maturity range. By controlling the short-end of the yield curve (the structure of interest rates by maturity of the debt), the central bank would condition the longer term rates.
And they could directly control the longer rates, which would then influence the cost of investment type borrowing by the private sector.
All in a days work for a central bank that works in harmony with the fiscal authority.
The aim of the US Treasury was:
to stabilize the securities market and allow the federal government to engage in cheaper debt financing of World War II
The President, Harry Truman and the Secretary of the Treasury John Snyder were both, not only motivated by a desire to keep the cost...
We got our equal marriage survey forms in the mail yesterday, and posted them back today. From what Ive seen, about half the forms were delivered last week and nearly all will be done by Friday. And I imagine, most people will either respond straight away or not at all. So, it was kind of strange to see the official campaigns being launched at the weekend, rather as if an ordinary election campaign started at lunchtime on election day*.
On the other hand, the results wont be announced until November, and the ABS is working hard to prevent any release of partial information. Thats if the votes were kept under lock and key on election night and not counted until the last postals and absentees had come in.
* For byzantine funding reasons, the major parties now leave their election launch until the week before election day, when quite a few people have already voted. But this is taking it a step further.
Debates are supposed to be argued on the facts. When we discuss things like Australias housing bubble, Brexit, the financial crisis, and retirement ages, we argue using facts. To some extent, anyway.
Youve probably quoted many of the facts in discussions with your friends and family.
Like facts about Australias housing shortage. Or net migration to the UK, which sits at around 250,000 a year, making many people vote in favour of Brexit.
According to a long-standing media furore, huge amounts of foreign students vanish into the British workforce each year, instead of going home at the end of their degree.
Or you mightve mentioned the worlds whopping US$225 trillion of debt when discussing the impossibility of high interest rates. And how the Greek governments debt to GDP ratio of 180% still isnt solved.
There are vast underfunded pensions that we must find a way to honour too. The World Economic Forum says the funding gap will be US$224 trillion by 2050 for the six biggest pension systems, of which Australia is one.
But what if all the figures are wrong? What if your facts are dodgy? What if people cant count?
Where would that leave our discussions, votes and policies? What sense would analysis, debate and data-driven decisions make then?
None at all.
Unfortunately, it looks like we cant count. All too often, our facts are baloney.
Recently, all sorts of dodgy data have been exposed. To the point where you have to admit it
The UKs immigration figures which pushed Brexit over the line were based on small-scale surveys done at airports. Seriously. And those are the governments official figures.
The surveys missed tens of thousands of people leaving the UK, especially the much-maligned foreign students who were accused of vanishing into the workforce to steal British jobs. It turns out barely any stay. The new immigration system, which exposed the pathetic old one, still doesnt match up with airline data. The private sector actually counts people properly
But it also hides numbers
The Bank of International Settlements (BIS) recently discovered $14 trillion in debt it didnt know about. Using derivatives, firms can borrow vast amounts of money in a hidden way that looks like wheeling and dealing, but is in reality funding their operations.
This shows how pathetic and pointless attempts at regulation and deleveraging are. Corporate finance responds to incentives, not slack laws with more holes than Swiss cheese, and without personal consequences for breaking them.
Of course, governments use the same tricks.
Do you remember when Goldman Sachs was caught manipulating Greek finances to get the country the report card it needed to join the EU?
Well, the BISs newly discovered debts used sim...
Australia has introduced a new bill that, if passed, would end the country's bitcoin "double taxation" issue.
|IndyWatch Australian Economic News Feed Archiver|
IndyWatch Australian Economic News Feed was generated at Australian News IndyWatch.
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