The debt trip
The NY Times has some steep figures on the debt avalanche. Because of the skewing of the US federal debt portfolio to short-term issuance to overcome the credit crisis $1.6 trillion of the $12 trillion US government debt falls due before 31 March. On top of this everyone is forecasting that the interest rates will have to go up (esp. as Germany, Japan and the UK all compete to finance their blow-outs) which leaves the US in a costly predicament when they are forced to lift their near-zero rates.
The assumption underlying this debt is that the US will not default — that is why the risk is considered to be so low that lenders accept interest rates that are minimal; but one of the risks - after the recessionary bite has abated - is inflation. It will be very tempting for the US to inflate its way out of the debt mountain. The consumers won't be happy with the rising prices, foreign creditors will be aggrieved as the relative value of their holdings slips away, and the exchange rate will deteriorate making gold at $1050 an oz. and oil at $70 a bbl. look like a time of modest and affordable living.
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posted by Tim Selwyn @ 9:27 am
4 comments
4 Comments:
Factor in peak oil and ongoing costs from climate change and we have an economic crises meeting an environmental crises meeting an energy crises meeting a population crises meeting an poverty crises meeting a resource crises.
That's a lotta meatball.
NOT OUT FRONT, LEADING THE WAY; BUT DOING 'OUR FAIR SHARE' RIGHT MATE/YEAH RIGHT!
Auckland's rail system is to receive $500 million to buy electric trains.
Transport Minister Steven Joyce said the loan to KiwiRail would kick forward the process early next year, with the first electric trains operational from 2013.
"After double tracking, electrification is the important next stage in the development of Auckland's rail network. Rail is an increasingly important way for Aucklanders to get to work each day.
"Today's announcement means Auckland can look forward to a fleet of modern electric trains running on a modern and more reliable network."
Auckland Regional Council chairman Mike Lee said "public transport in Auckland is set to take a huge leap forward" thanks to the Government's funding.
"This is a historical moment for Auckland ," he said.
"The decision will not only significantly improve the quality of Auckland public transport, but also change the way Aucklanders view public transport and their city." Mr Joyce said the upgrade in the Auckland rail network would give commuters more frequent trains at peak times and help future passenger demand.
"New Zealand's future success is tied to that of Auckland as our largest city and largest local economy.
"Getting the rail network operating as efficiently as possible is vital to increased economic growth that will deliver flow-on effects for the rest of the country."
Further work needs to be sorted with the Auckland Regional Transport Authority and the NZ Transport Agency to ensure train fees remain affordable with expansion, Mr Joyce said.
The $500m brings the Government's investment in Auckland's metro rail system to $1.6 billion.
Funding for the trains was originally planned to come out of Auckland's regional fuel tax. But the Government did not proceed with it earlier this year, calling it an "expensive and inefficient" way to collect revenue.
KiwiRail chief executive Jim Quinn said a team was being assembled to manage the procurement process.
"Our first task will be to review the information that has already been gathered and then get a Request for Tender document into the market place," he said.
"We expect to be in a position to do this early next year and to award a tender before the end of the year."
$300 million and $235 million for 48 times 2 electric train units in wellington already paid for.Front page Dominion yesterday.
THAT'S HALF A BILLION FOR WELLINGTON NOT AUCKLAND TRAINS RIGHT JOYCE!
Wankington get them next year.
75 electric cars 'which although measuring 24 m instead of 20 m would have reduced capacity'...a multi-agency working party of officials sack em...
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