House prices
I watch this video when I need a reminder of how good it is...
flollo wrote:I watch this video when I need a reminder of how good it is...
fck that guy has it nailed.
I am sure it is way harder than that guy makes it look. Had a first go at windsurfing recently, on the big SUP model, can see the attraction flollo
flollo wrote:I also have a confession to make: over the years I added SUP and Wingsurfing to my watersports portfolio. This means I can find somewhat acceptable conditions on most days and far from popular locations. I had an epic wing session the other day, completely by myself, with not a living soul in sight. There is no need to squeeze with everyone else, even lakes are an option now.
I always liked surfing alone too, just a girlfriend standing on the shore and sometimes taking pictures with a drone.
Keahi is a legend. Great on kite, wing, SUP, and surf. He makes everything look very stylish and easy. I met him a couple of times. One time we had a SUP session at Makaha, on the tip of long reef at Sydney's northern beaches. It's a very exposed break, a long paddle to get there and it picks up any available swell. A big lineup with a few different take-off zones. So, it's a favorite for the SUP crew (I also windsurfed here, it's a great windsurfing wave spot).
There was a solid swell in the water but it's always tricky to know how big it truly is out there. Once we got out I realised it was way bigger than I thought. I got into a position and a great set was coming my way. I was in a perfect spot and felt really confident taking off. It was going to be 'a wave of the lifetime' but I was celebrating too early. I took off with confidence but this thing was growing on me and I just couldn't get to the bottom of the wave. I pressed hard under my feet but it's just unbelievable how it felt like forever to get there. And unfortunately, as I got to the bottom my nose hit the water and I wiped out. I got absolutely smashed and my leggie broke. Completely disoriented and started losing breath underwater. Eventually, I somehow surfaced but sadly, the next wave was an absolute bomb. I tried to go under as hard as I could but this wave still rolled me around like I was a toothpick and I started losing breath again. It felt like I was under for ages and I barely got out of it. There were another couple of waves that I managed to get through before the situation calmed down. I looked for my board and it was at least 200-300m away. I managed to retrieve it and I paddled back to shore to pick up a new leggie. On my way back I watched Keahi absolutely rip these waves, He was unbelievable. Just a few levels above anyone else. I managed to get a couple of good waves which was a great achievement considering all the challenges. This was 7-8 years ago and I don't even remember how big the actual swell was or which time of the year it was. That set that cleaned me up must have been in the 10ft range as I still remember it as one of the worst wipeouts in my life and I was out in some solid waves since then.
For reference, this is the wave I am talking about. You can see there's a section in the middle that throws quite hard, I think this is where I got smashed. It fattens out after that but the drop is exhilarating.
And also, Keahi broke the news with that bomb at Backdoor a few years back
flollo wrote:Keahi is a legend. Great on kite, wing, SUP, and surf.
Yep. Humble guy too.
Few years back I snapped a board at Himalayas and didn't have a back up, so I had to sit on the beach waiting for my mates to come in. The downtime gave me an opportunity to really watch the session, which included Keahi on a SUP tearing the place apart. Rather than paddle up the line and be a pest, he'd wait for the wide ones that no-one else could get then drop in as the pack was scrambling.
He was doing this thing where he'd lay the paddle into the wave face on a backside cutty, then quickly change it so the paddle was sort of behind him on the foam bounce.
Impressive move on a 10ft wave, and he did it over and over again.
He also got one of the best waves - if not THE best wave - of the Oma swell at Noosa, while riding a shortboard.
I’m just off foils cause there’s some utter flog who’s doing his best to spread the word about a spot near me so he can sell more foil equipment. Pretty sure he lives hours away but that doesn’t stop him from telling anyone who’ll listen to get here. Encouraging crowds of dangerous foil mongs who catch every wave that breaks….so good.
That is shitty behaviour.
Very fortunate with the foil crew I encounter here; courteous, considerate, gives you a ride to save a massive paddle. Also lets out of town guys know when they're not behaving.
Edit: hey flollo. Just watched that Little Makaha video. Why aren't surfers all over that? Big and clean, although not exactly connecting perfectly.
Island Bay wrote:Edit: hey flollo. Just watched that Little Makaha video. Why aren't surfers all over that? Big and clean, although not exactly connecting perfectly.
Flollo may have his own take, but my experience, based on chasing it fairly hard during the three years I lived in the area, is that even on clean, consistent swells it remains an extremely unpredictable wave.
Standing on the top of Long Reef during a clean south swell gives you an idea why. As long lines of uniform swell approach the outside of Butterbox, Dontals, and Little Makaha they're broken up and scattered by the underlying bathymetry that forms the distant bommie of the German Bank (and if not the bank itself then the chain of bommies it rests upon).
My favourite LM memory was getting a real long one and on the paddle back out, thinking I was in deep water, no breaking waves within cooee, having a ten footer rear up out of the east on a south swell day.
Yeah, I agree with that. It's really exposed and picks up all the directions which then break in a different way. A difficult lineup to navigate on a surfboard. Also, there is only small parking on the headland and a long walk down. With a SUP you can paddle from the beach and even surf a couple of options along the way. It's also a lot easier to navigate the lineup. Going from the beach with a surfboard is not really an option. Not to mention the whole shark element, it can feel quite spooky out there. I never think about sharks when I'm on a SUP or a wing as I'm moving all the time. But sitting on a surfboard between sets is a different experience. And I guess you have numerous surfing options on both sides of the headland. It would probably be a different story if this was the only wave in the area.
Sorry which thread is this?
Check out NZ at the end. Fcking stupid.
Real house price changes in the last 40 years… pic.twitter.com/UYzcmslAOy
— Wall Street Mav (@WallStreetMav) October 19, 2022
donweather wrote:Sorry which thread is this?
Oh c'mon we went a bit off-topic, I'm sure it's nothing dangerous...
donweather wrote:Check out NZ at the end. Fcking stupid.
https://twitter.com/wallstreetsilv/status/1582556167682723840
This is super cool.
Anyone know the reason for NZ crazy price growth?
Not enough housing, crazy demand because everyone wants to live there?
NZ house prices have nearly identically tracked the money supply:
You mean not enough land released.
It would be interesting to see comparisons between the two countries on immigration intake compared to new land released. (
One thing for certain its not pushed by their refugee intake which has never gone higher than just over 1k a year and going back ten years was less than 500 people a year.
It's also interesting because NZ has a fairly even spread of decent sized cities (considering NZ overall pop size) unlike Australia where Melb & Sydney are the big focus, so its surprising in that way too, as you would think that would take pressure off crazy prices, where's average prices in Melb & Sydney would push up the average price for the whole of Australia.
Looks like all the usual suspects - low interest rates, policies creating a new investor class, levels of population growth amongst the highest in the OECD...
gsco wrote:NZ house prices have nearly identically tracked the money supply:
Okay cool, well that makes complete sense.
So this is controlled by central bank to control economical growth and affects things like interest rates yeah?
So why would they allow things to take off so much compared to other countries, obviously the plus is healthy growing economy, but seems kind of risky and safer to have just eased things back a bit and keep more inline with other countries.
Does this put NZ at more of a risk now for inflation and not being able to control inflation, compared to other countries?
Yes the money supply is controlled by central banks.
The bigger picture is that the same scenario - low interest rates, large increases in the money supply, and subsequent asset price bubbles and inflation - has happened in pretty well all developed nations post GFC. I'm not sure about the exact, unique reasons for NZ's property bubble leading the charge but the general trend is the same across the planet.
It's basically all due to the general political-economic policy framework that has generally been followed by most developed nations - particularly UK, Aus, Can, NZ, US - for decades now, which is based on a synthesis of:
- more neoliberal style political ideology: relatively small governments and low taxes, austerity and attempts at cyclicly balanced budgets, allowing the market to drive economic growth, and using monetary policy as the main tool to manage the economy and business cycle via inflation targeting.
- the modern macroeconomic policy orthodoxy called the new neoclassical synthesis, which resulted in, among other things, the inflation targeting role of central banks whereby monetary policy is aimed basically exclusively at controlling inflation.
indo-dreaming wrote:So why would they allow things to take off so much
I think the answer is they just didn't really know what do and how to prevent it within this political-economic policy framework, and it just got out of control. This wiki page on the NZ property bubble contains a lot of discussion about attempts to prevent the bubble, all to no avail.
A new political-economic ideology seems needed.
Don’t worry vj, China’s onto it.
https://johnmenadue.com/the-changing-world-order-with-declining-western-...
On a side note, seeing the graph showing the reducing amount of US bonds held by China (that gsco put up awhile back) made me wonder, at what level will it be ‘game on’
"I'm not sure about the exact, unique reasons for NZ's property bubble leading the charge but the general trend is the same across the planet."
bunkers for billionaires perhaps?
and what you said...
& yes there it is, fall of a government. Members are not impressed. All started by looney tunes stimulus proposals into 10% inflation.
🔥🔥 This is an extraordinary outburst from Charles Walker(Tory MP) 🔥🔥 pic.twitter.com/Hw1MSHcTFa
— Haggis_UK 🇬🇧 🇪🇺 (@Haggis_UK) October 19, 2022
ol' boris ain't looking so bad after all
clever line
"A book is being written about the Prime Minister's time in office. Apparently it's going to be out by Christmas. Is that the release date or the title?" 💥😅 @Keir_Starmer #PMQs pic.twitter.com/IYvzzFqNUT
— Best for Britain (@BestForBritain) October 19, 2022
Truss...what can you say...apart from The Economist magazine will have to quickly change its most recent cover:
Re property prices, UBS recently published their global real estate bubble index, which has the following interesting ranking:
Also, I find it very interesting that the monetary policy objectives of the US Fed are written in law - in the Federal Reserve Act - as being to increase the money supply in line with the productive capacity of the economy:
Yet this is what they did post GFC:
(as did most other developed countries) basically leading to the above property bubbles identified in the UBS report. Warsaw property prices look reasonable...
Australia only lost the money supply plot during covid:
which is ironic given that covid has now been conclusively proven as a complete hoax...
gsco wrote:which is ironic given that covid has now been conclusively proven as a complete hoax...
In what context was it a hoax?
Truss tried to go the full Thatcher and found that shit doesn't wash any more. Surrounded herself with ideologues with no dissenting voices, yet the Tory faithful are disappointed with the backflip, despite the markets and most of the general public flipping the bird at her first budget. Bring back Boris and they will be gone forever.
blackers wrote:Truss tried to go the full Thatcher and found that shit doesn't wash any more. Surrounded herself with ideologues with no dissenting voices, yet the Tory faithful are disappointed with the backflip, despite the markets and most of the general public flipping the bird at her first budget. Bring back Boris and they will be gone forever.
Flollo mentioned it yesterday and I'd said it before too: Western democracies are all out of ideas. This era is similar in so many ways to the early-70s when central banks could no longer control the boom/bust cycle and stagflation had become entrenched.
Back then, the financial institutions that mattered were staffed by economists who only knew the economics of the post-war Long Boom, and stagflation was a language they couldn't speak: they didn't understand it, couldn't respond to it.
It took an out of the box idea formulated in the 1930s at the Chicago School of Economics to release the jam. No working economists had seen free market liberalism or its running mate globalisation in practice, so it took a bold vision and a hell of a lot of faith to dismantle economies that had provided the greatest prosperity in human existence (the Long Boom), even if they'd become unwieldly and uncontrollable.
To varying degrees, Western democracies dismantled their economies - the US and UK went all in, Australia took a more cautious approach, northern Europe were even more circumspect - and the results were felt within a few years with a slowing of the boom/bust cycle and greater general prosperity.
Four decades later it feels, not like the release from a cycle, but a part of a larger one. Neoliberalism is strangling every country that adopted it, however just as we were in the early-70s, no-one in power has a response to it.
Tellingly, the only answer is to 'go with what they know'. Cut taxes, smaller government, more privatisation. There should've been red flags waving when Frydenberg was made Treasurer and he answered a question about his heroes: Margaret Thatcher and Ronald Reagan. Same goes with Liz Truss modelling herself on the Iron Lady.
Cutting taxes, smaller governments, more privatisation, are the only responses our working economists (and most politicians) know, and masochistically they're only making our problems worse.
Slowly, however, we're all beginning to suspect that either those in power are ideologues who will do nothing else, or they're naive and they know nothing else.
It's gonna take someone with a bold vision to sell a new political idea that rescues Western democracies.
True Stu. Sadly there are a lot, in politics, business and the general population who are wedded to these concepts, and the usual crew keep getting voted back in. I don’t know the answer either, other than it is clearly not Liz Truss. Innate greed and perceived self interest are strong drivers, just look at the torrent of “what’s in it for me?” that comes with any budget/election. They have been sold the same story for decades.
"It's gonna take someone with a bold vision to sell a new political idea that rescues Western democracies."
let's hope it doesn't involve war.
Great comment Stu.
To it I'd add that there's also too many vested interests in the neoliberal political / neoclassical synthesis economic paradigm, namely the already wealthy, landed asset owners.
Not only has their wealth streaked away from the everyday serf masses via asset price bubbles, but a quick look at corporate executive pay/salaries relative to things like worker pay, GDP, etc, shows that a lot of the increase in the money supply has filtered directly through into the salaries of corporate executive elites, in all countries.
Regarding new political and economic visions, has anyone been following some of the output from the Roosevelt Institute, such as this report titled The Emerging Worldview: How New Progressivism Is Moving Beyond Neoliberalism?
They call it "new progressivism" but it's not (entirely) the cringeworthy culture/gender/identity/race etc wars stuff that we see all around us. The Roosevelt Institute seems to actually be talking about some good ideas of economic and political substance.
I remember Australian politics used to be like that, a couple decades ago...but now it seems to be mostly about questions like if there's 72 or 73 genders...
...and here we go again....
https://www.theage.com.au/business/markets/markets-are-clearly-in-charge...
gsco wrote:I remember Australian politics used to be like that, a couple decades ago...but now it seems to be mostly about questions like if there's 72 or 73 genders...
Those times of Aussie politics you refer too wouldn't happen to be the Keating/Howard era would they?
Interesting emerging worldview report. I can see group 3 "The Economic Transformers" already at work - eg the car or carbon markets; adoption of technology is forced from above via policy, rather than driven by the market (ie everyday people's) wishes. We will go electric, and CO2 free, but there is going to be a lot of mining and diesel going on in the background. The way local councils change the bins of residents - already coming from top-down.
& yes, they include the racial/diversity stuff - if they continue to do so, they will be surprised continually that the working class of non-diverse origins votes against them for someone like Trump. Even though their overall ideas would benefit these people, apart from putting them at the back of the opportunity queue. Imagine having kids now that were 1)of European descent and 2) Male and 3) working class in the new world they want to bring... Point is, they are merely re-branding the insanity of the last decade, it's still there.
Haven't come across anything on mad house/asset prices and how to overcome this, apart from government providing directly mentioned in one of the subgroups.
All this discussion proves the fact that no one is fully in control. It's quite contrary to that other thread where people believe that there is a coordinated, master-planned power with the goal of controlling humanity. There is nothing I learned in life that would convince me that this is the case. I worked on some large projects in life and all I'm going to say is that it's painfully hard. It's super hard even when you have enough resources. I can't even imagine someone making decisions on a global scale. If someone is truly out there controlling the world all I'm going to say to them is - good luck!
I believe the path forward needs to involve less ideology. The focus needs to be on speed and implementation. Governments need to be open-minded to respond to the information as it comes in. Here's a small, quick example regarding housing. When we started lockdowns due to covid and banned people from leaving one could safely assume that people will holiday locally. This, of course, led to the explosion of demand for Airbnb-style properties. Imagine if at that moment we did some straightforward taxation changes like removing negative gearing from holiday rental properties. And charing higher council rates for holiday rentals which is what Brisbane is doing now I believe. Our public budgets would be better off. Would this have a negative impact on the demand? Absolutely no, nothing would change. But what did we do? Nothing. Too slow.
Conversely, I also believe there is a time when lowering taxes makes sense. I don't see these things as black and white, I see them as quality responses to particular situations. However, they seem to be ideologically driven and they rotate between electoral cycles regardless of what the conditions are at any given time. And one needs to be agile to deliver within tight timeframes. And this is not an attribute that governments can be proud of.
as the econ stuff ends up in this thread
https://www.zerohedge.com/markets/theyve-totally-lost-control-yen-puke-s...
"As one veteran trader MSG'd us: "they've totally lost control, The BoJ is f**ked either way here."
He is referring to the fact that while no one is talking about it, The BoJ's YCC scheme has failed with 10Y JGBs now trading above 25bps for over a month."
My late night reading of this is, they can (print and) buy lots of JGB's, raising the price and suppressing the interest rate - but - in a world of exploding yields, their currency then takes a battering. If that happens, as Japan imports pretty much all energy and much materials, everyone from Mitsubishi to Mrs Watanabe cops inflation pretty hard. Does this make sense? Another volatile night overseas, as the rain sets in here.
This should really go in the Daily Good news thread
Holy shit…a win!
https://www.abc.net.au/news/2022-10-21/scotts-head-development-withdrawn...
Excellent news
Aahhh Japan, the grandaddy of them all in terms of the quantitative easing/yield curve control experiment and massive government debt.
Japan is the under-the-radar ticking time-bomb, the elephant in the room that everyone is absolutely petrified to talk about..!
A little rule of thumb is having government debt larger than 100% of GDP is unwieldy, a no-no. Japan's is >250% of GDP (and the other basket case G20 economies are the US and Italy):
Japan is the country that most experimented with 0% (well negative actually) interest rates and massive quantitative easing (yield curve control to keep all interest rates near 0%) over the decades to try to get its stagnant economy moving again.
It's Japan's central bank that buys most of these Japanese government bonds, and it holds a LOT of them:
The Japanese economy and government are basically already completely bankrupt.
They are literally finished and will no longer exist as a going concern if they start to experience inflation and have to increase interest rates. There is no way at all that the Japanese government can afford to maintain its levels of government debt with higher interest rates.
At the moment the Japanese government and central bank are doing everything they can to keep interest rates low and inflation out of the economy, including the central bank buying massive amounts of government bonds to keep interest rates low:
as well as the govt selling massive amounts of its US government bond holdings and then with the proceeds then buying Yen to hold up the Yen (and keep import prices low, holding out inflation from the economy).
Remember a previous graph I posted a few days ago showing that Japan has the largest holding of US government bonds of all countries. Hence, Japan can keep up this US govt bond selling and Yen buying - in order to hold out inflation - for quite a while since its stock of US bonds is massive.
Japan is hoping that it can keep doing this (i) central bank Japanese govt bond buying, and (ii) US govt bond selling and Yen buying, until the world gets back on top of inflation and global interest rates can fall again.
Japan is basically hoping that they can ride out this whole global inflation episode without experiencing any inflation and thus without having any need to increase interest rates domestically.
If they can't do this then there is a very good chance that the Japanese government will have to default on its bonds.
flollo wrote:All this discussion proves the fact that no one is fully in control. It's quite contrary to that other thread where people believe that there is a coordinated, master-planned power with the goal of controlling humanity. There is nothing I learned in life that would convince me that this is the case. I worked on some large projects in life and all I'm going to say is that it's painfully hard. It's super hard even when you have enough resources. I can't even imagine someone making decisions on a global scale. If someone is truly out there controlling the world all I'm going to say to them is - good luck!
I believe the path forward needs to involve less ideology. The focus needs to be on speed and implementation. Governments need to be open-minded to respond to the information as it comes in. Here's a small, quick example regarding housing. When we started lockdowns due to covid and banned people from leaving one could safely assume that people will holiday locally. This, of course, led to the explosion of demand for Airbnb-style properties. Imagine if at that moment we did some straightforward taxation changes like removing negative gearing from holiday rental properties. And charing higher council rates for holiday rentals which is what Brisbane is doing now I believe. Our public budgets would be better off. Would this have a negative impact on the demand? Absolutely no, nothing would change. But what did we do? Nothing. Too slow.
Conversely, I also believe there is a time when lowering taxes makes sense. I don't see these things as black and white, I see them as quality responses to particular situations. However, they seem to be ideologically driven and they rotate between electoral cycles regardless of what the conditions are at any given time. And one needs to be agile to deliver within tight timeframes. And this is not an attribute that governments can be proud of.
What?
“All this discussion proves the fact that no one is fully in control. It's quite contrary to that other thread where people believe that there is a coordinated, master-planned power with the goal of controlling humanity. There is nothing I learned in life that would convince me that this is the case. “
In 1922 the British Empire controlled the futures of 480 million people. That represented over a quarter of the worlds population at the time. They also had extreme influence on many other peoples including the Chinese. The British Empire was not controlled by the 40million British citizens at the time. It wasn’t controlled by bakers in Cornwall or Secretaries in Wales. The British Enpire was controlled from the top down by an amazingly few people. Only the top few dozen of the hierarchy could be considered to have serious power over the direction of the Empire. From a few square kilometres in London, the fate of an Empire upon which the sun never set was decided.
A couple of dozen people controlled the fate of a quarter of the world’s population. They could send them to kill or be killed in wars. They could impoverish them through taxes individually r ruin their communities through trade sanctions and bureaucracy.
The Empire was no secret and only one example of the endless ways that control of vast swa5hes of people are exercised by small handfuls of people working in unison to exert that power. Sometimes this power is obvious such as empire, sometimes this power is clandestine or hiding in plain site like the mafia or the CIA. Or Blackstone and Vanguard which control a huge slice of the planet’s wealth. Or the WEF. Too many examples to believe that some still find the proven human tendency towards hierarchical dominance to be an imaginary fantasy of overactive imaginations. It’s all pretty banal stuff really.
But….apparently everything humans do comes down to mismanagement and accident and to believe otherwise is fanciful quasi-religious blindness!
Sure it is.
thanks gsco great explanation.
A term I read long ago to describe what Japan is doing
'Monetary Bukkake'
to which I lol'd
Now, if the Japanese Govt and the BOJ look into each others' eyes and 'wink-wink' - nobody goes bankrupt and shitshow continues? What's to stop that? Also, the more they sell UST's the more the market pricing of US interest rates rise, no? Surely that cannot be helping.
They really should have just allowed their debts to go bad after 1989, written them off, and then started afresh and actually had decent growth for the last 30 years. That's like a whole generation! #savingface
DudeSweetDudeSweet wrote:In 1922 the British Empire controlled the futures of 480 million people. That represented over a quarter of the worlds population at the time. They also had extreme influence on many other peoples including the Chinese. The British Empire was not controlled by the 40million British citizens at the time. It wasn’t controlled by bakers in Cornwall or Secretaries in Wales. The British Enpire was controlled from the top down by an amazingly few people. Only the top few dozen of the hierarchy could be considered to have serious power over the direction of the Empire. From a few square kilometres in London, the fate of an Empire upon which the sun never set was decided.
If you've ever done the tour of London, one thing which is profound is just how close all the important offices are to each other, and Westminster. You literally walk over the road to call on the people running Navy or Army, the Foreign Office, to send a bill to the parliament, to see the Health Minister etc etc. All bomb proof after the Luftwaffe, too! For a pre-internet - or even pre-telephone - system of communication, it's very fast and efficient.
London is actually two cities, The City and Westminster. I particularly like all the gargoyles atop street signs at the perimeter of The City, as if they are defending it. The river is big enough to sail an old-school fleet into, so it's a port too... There's also an Egyptian obelisk outside a big law building on the Thames, so tin foil hat on...
velocityjohnno wrote:thanks gsco great explanation.
A term I read long ago to describe what Japan is doing
'Monetary Bukkake'
to which I lol'd
Now, if the Japanese Govt and the BOJ look into each others' eyes and 'wink-wink' - nobody goes bankrupt and shitshow continues? What's to stop that? Also, the more they sell UST's the more the market pricing of US interest rates rise, no? Surely that cannot be helping.
They really should have just allowed their debts to go bad after 1989, written them off, and then started afresh and actually had decent growth for the last 30 years. That's like a whole generation! #savingface
To answer your 2nd question first, yes selling US govt bonds puts down pressure their price and hence up pressure on their yields, so they are in a way making life harder for themselves in the currency war.
Re your 1st question, the happy little relationship between the Japanese govt and the BoJ can last only in the low inflation (particularly a cheap energy) and hence low (well <0%) interest rate environment they’ve been able to enjoy up to now.
If inflation occurs, the BoJ will have to stop quantitative easing and raise interest rates and hence Japanese govt bond yields. Plus quantitative tightening, also to counter inflation, involves the BoJ selling bonds to reduce the money supply and pushes yields higher.
But if yields go to say 5% then at a debt level of 2.5 times GDP, the annual interest pmts would eventually (as bonds mature and are rolled over by the govt) be 12.5% of GDP, which is incomprehensible.
Where would the Japanese govt get the money from to pay these interest pmts…?…from taxes…?…from borrowing more money...?
The Japanese govt could consider paying back the debt (by say letting it mature and not roll over), but again where would it get the money from at that scale? Paying off the debt will take decades, and in the meantime it would have to make massive interest pmts.
So the concern now is if Japan was to run out of US bonds to sell (which will eventually happen) in order to keep propping up the Yen, then inflation might (more than certainly will) occur.
The other concern is that the BoJ is starting to lose the battle with yield curve control anyway, so yields are edging up no matter what…
The Japanese govt is insolvent if interest rates go up. It can only exist in a low inflation, 0% interest rate environment in which it doesn’t have to pay off the debt, but instead roll it over and even keep borrowing more, like it has been.
Note that the BoJ holds about 50% of the Japanese govt debt that’s outstanding, with the market holding the rest.
We all know what would happen if Japan defaulted, even if it was just to the BoJ.
They should have stopped worshiping at the neoliberal altar a couple decades ago.
gsco wrote:Where would the Japanese govt get the money from to pay these interest pmts…?…from taxes…?…from borrowing more money...?
Ah, that's where I can help. I suggest they mint a Trillion Dollar Coin, in platinum or something impressive, and make the sucker big, like about 4 or 5 feet wide. The coin can be used to repurchase the bonds, or as security to do so. If they need more, mint more.
We came pretty close to sending a Trillion dollars* to the ECB during the Greek debt crisis, but when Draghi said he would do anything it takes, we kept our powder dry.
*Zimbabwean
DudeSweetDudeSweet wrote:This should really go in the Daily Good news thread
Holy shit…a win!
https://www.abc.net.au/news/2022-10-21/scotts-head-development-withdrawn...
That's huge!!
gsco wrote:NZ house prices have nearly identically tracked the money supply:
Bingo.
And thank you Stu and flollo for the LM comments.
An interesting read:
https://thenewdaily.com.au/finance/2022/10/24/deficit-debt-economics-koh...
"If deficits were an economic problem rather than just political, Australia would be in serious economic trouble, and Japan would be in worse trouble, having had nothing but huge deficits for 30 years.
But they’re not, and we’re not.
“Deficits” and “debt” are actually the wrong words – the number simply represents the amount of government spending financed by bonds instead of taxes.
The “deficit” is not a loss, like a company’s, but represents the money the government is injecting into the private economy. The bonds are private savings to be returned later rather than taxes that citizens only get back as government services and pensions."
Yeah, I agree with that.
I noticed that Kohler seems to have lost the plot over the past few years and turned into a borderline crackpot.
Japan actually is in trouble and is consequently having to frantically prop up its currency and maintain yield curve control in order to keep interest rates at 0% since with a debt to GDP of >250% it doesn't have the ability to make interest pmts at positive bond yields without racking up more debt or getting an IMF bailout.
Australia is nowhere near that situation of having a debt problem because ours is only 36% of GDP, so we have a lot more borrowing capacity left. We're miles away from facing economic trouble due to excess government debt.
An actually accurate statement that Kohler made in that article is it's where the borrowed money is spent that's important.
Nations should only spend borrowed money on investments in infrastructure, education, technology and productivity, etc, in order to build up the productive capacity and future taxation base of the nation enabling the country to safely pay back the debt.
No different to any business.
House prices - going to go up , down or sideways ?
Opinions and anecdotal stories if you could.
Cheers