The next economic crash
Yeah, so that massive $2 billion deficit that Bill English intends to make up by making massive cuts into welfare don't really suggest much of a solution when noting what is happening in the US...
The magical 2.2 housing ratio between median nationwide home prices and household income – Nationwide home prices still inflated by 30 percent based on 50 years of household data.
The typical American family is facing the biggest economic uncertainty since the Great Depression and must feel like their lives are in a washer spin cycle. Many unemployed Americans are now entering a stage where unemployment insurance is being cut off which will send tens of thousands of people into the street. The mainstream media won’t cover this because they rather gossip about the next tan face to drink themselves into a gutter at a nightclub. 43 million Americans are receiving some kind of food assistance yet this is some kind of recovery? Many are wondering how banks can produce such large profits without actually producing anything real or of substance in the economy. Yet banks are largely casinos that now operate to siphon off real wealth from the economy through bailouts, frauds, and other activities that harm the overall economy.
...or indeed advice out of Japan...
Years of global slump ahead - Mr Yen
In an era where forecasts by permabears have got ample attention and vindication, few are as disturbing as this: a world recession until 2018.
It comes from Eisuke Sakakibara, Japan's former top currency official, known as "Mr Yen" for his ability to move markets.
Because Tokyo's revolving-door politics often sends a new face to each Group of 20 meeting, he is one of the few Japanese constants in market circles. Sakakibara was a key player when Japan faced everything from the Asian crisis to Russia's default to the onset of deflation to a banking collapse that saw the demise of Yamaichi Securities.
So, when an economist as well known as Sakakibara says "the world is set for a long-term structural slump reminiscent of the 1870s", when average global annual growth was about 1 per cent, I can't help but listen.
The reason for the slowdown? Governments put fiscal austerity ahead of restoring stable growth.
...the austerity measures being promoted by the right wing to justify deep cuts to social welfare and public services will only serve to drive the global economy into deeper recession.
As the economy continues to collapse, the political spectrum will splinter and the protests will get angrier as the most vulnerable are told they will be cutting back so that the wealthy elite of NZ (John Key included) can take more.
In the screams of anguish on talkback radio at how much we are borrowing, no mention of the tax cuts that National are borrowing for or the fact that this GST tax rise to fund a tax cut for the wealthy was supposed to 'turbo charge' the economy but didn't.
One gets the feeling that the situation goes beyond the vulgar economic Darwinism National are offering...
US jobs market woe dampens optimism
America's unemployment rate unexpectedly rose last month, delivering a blow to recent optimism that a recovery in the world's biggest economy was finding some momentum. The increase in the rate to 9.8pc from 9.6pc in October, will do little to comfort the US consumer, whose spending helped power the global economy until the financial crisis.
...American real estate could be near another meltdown...
Dr. Doom Predicts Another $1 Trillion in Housing Losses
As Nouriel Roubini heads to Athens to meet with investors and policymakers potentially about the debt crisis in Europe, the economist says he’s increasingly worried about a problem closer to home: America’s real estate mess.
The country’s real estate problems are “underappreciated,” and banks could face another $1 trillion in housing-related losses, Mr. Roubini said in a phone interview with DealBook on Monday. At the same time, he played down the issues in Ireland, Greece, Portugal and Spain, calling the matter “contained” for now.
The United States “real estate market, for sure, is double dipping,” Mr. Roubini said. “The apparent increase in prices has been fully reversed, demand is falling, and supply is going to increase.”
...and what chances do the Government have in balancing the books by the time Bill English has promised? Not very good at all it seems...
Deficit turnaround 'optimistic'
BNZ head of research Stephen Toplis said the rates used by the Government were unlikely given expectations that the world economy would recover.
"We think that these forecasts introduce a financing risk for Government as we think the cost of debt is likely to be higher than Treasury currently assumes," Mr Toplis said, despite praising the Government for its cost controls.
If you were one of the 650 millionaires in NZ who have received a $1000 tax cut since October, you'd be as optimistic as a $40 million dollar man in a Hawaiian mansion, however if you are one of the majority earning under $50 000, this Government's economic policy has done sweet bugger all. As this reality sinks in, right when the retail industry is the next one to start shedding jobs and as welfare and public service cuts start biting, let's see the scrutiny turn on what exactly our political leaders can really offer NZers.
2011 will be the first election in 25 years where there will be a clear fight for the ideological heart, mind and soul of NZ.