Australians remain exposed to the world's global credit markets,
to the tune of roughly 60% of GDP. That is not Govt debt, Costello
paid that off, but mostly private debt, to finance buying some of
the world's most expensive houses.

The last interest rate rise created uproar, yet in historic terms,
our present interest rates are by no means high. I was a victim
of 18% interest rates in the early 90s, it taught me many lessons.

Our present problem is thus not interest rates, but sheer volumes of
debt. Many younger ones have never known hard times, they might yet
get a shock.

We face a couple of potential scenarios. If things became crook in
China, commodity prices would drop, our economy would struggle.

More likely, China now produces more cars then the USA, they mostly use
petrol etc. Copper is already at market highs, so is
cotton. Wheat is rising due to floods, droughts around the globe.
Should the US and Europe start burning more oil, along with Asia,
oil could easily go to 200$ a barrel in the future. Inflation would
set in, leaving the RBA no choice but to dramatically increase
interest rates, to curb inflation.

There will be many tears, yet that is what the economic tea leaves
are predicting.

How will you cope, if interest rates jump by 2-3%?

Yabby pinches out butts and asks:

How will you cope, if interest rates jump by 2-3%?

SIMPLE...BUY GOLLLLLLLD :)

(Beck recommends that.. 1800-goldline..(hushed tones) *Thankyou Goldline*)

Looking at the all time high price yesterday....the strategy has merit.

Other than that...(puts on 'Prophet' hat) I hereby predict the Economic future.

1/ Eventually, we will either run out of stuff in the ground..OR..some other less developed country will find the same minerals in huge quantities and sell it cheap to our customers.

2/ This will expose our vulnerable underbelly of over-reliance on the Mining sector to generate original money income to our nation.
-That will suddenly expose our "no..we must not have tarrifs" policy of destroying our manufacturing sector for the sham that it is, and we won't be able to afford even Chinese stuff. (but hey..we might be able to 'just' afford a loaf of bread from time to time, and hey..that dripping looks pretty good now)

3/ Massive unemployement..social unrest... descent into tribalism and 'me first' (me, my tribe/community/race) MultiCulturalism= 'Divide and Rule'

4/ The Socialist Alternative and Marxists Unions will be out on the streets agitating for 'workers rights'....many working people will, in desperation, join them.

5/ The Revolution will arrive..and we will be slaves of the new Socialist Utopia :)

*THERE*..don't say I didn't warn you.

Yabby an interesting thread, and one that deserves a look at.
Probably not helped by the lost nature of your first poster after you.
Indeed this can not go on.
We will feel much pain and only time separates us from it.
Uncharitable, even unchristian to blame workers/unions/socialists, for our coming problems.
I seem to remember the very rich, along with greed bought us to this.
How will I be? long ago, after falling for spending what I did not have, more importantly what I did not need, I found my answer.
I got out off debt out off wast and pay cash, live well spend well am far from rich.
Far even from well off, but I owe no man anything, higher interests will put more in my super pension fund.
I did not spend my golden handshake,I can see some who do not being happy about it in a few years.
AGiR.
Mate only telling my view of truth, you seem to be far from a Christian, while I am proud not to be,I would not judge conservatives the way you judge and even defame left of center, me in fact.

the bankers went bankrupt..[despite having/holding an eclusive franchise on fiat money]...*legal tender...

made value
by govt..fiat[decree]...

then govt got sukkerd
thus the poor got sukkered

the banks are bust...have been bust since the 80.s
its only cause they control the fed..their scam has remained hidden

anyhow..govt bailouts of the bankers..is legally called odious debt
[its not obligatory on the people to pay it back...[in fact to pay it back with intrest is doubly absurd

see all money..is made by borrowing..it at ursury
but the ursury...wasnt ever made..it to had to be borrowed

so bankers began giving easy credit to people who could never repay
any fool with a credit card..thus the capitalists get the capital..to repay..their debt...

this bying of gold is ok for yankies
who's value of their yankie dollar is going to fall big time..thanks to quantitive easing[pumping yet more fiat dollars out there..AT INTREST]..interst that can only come from some other mug defaulting..their obligations..

the cure is to let the bankers fail
let those who lent to these bwankers cop the default

then for govt to seize back the fede...and keep the banks going..for the sake of the savers..[who allways loose..their savings..everytime the bankers run this same scam]

ofr course ursury is the real evil
[thats the odious debt]

make sure that every debitor..repays..every penny of their debt
[no cents on the dollar settlement..]

jesus wearned you lot about this
read about him driving out the money-changers

bah whats the use

go buy ya big screen tv on credit..
if its cost dont send ya bankrupt...or its intrest rate]
thenm the power bills will...we are all too greedy...greed is not god

Interesting question, Yabby, but I don't think that interest rates themselves are particularly key to our economic future.

We have over the years failed to develop any alternative industry to that of growing stuff, shearing stuff, or digging stuff out of the ground. The only thing we will have left is a vast playground in which other, richer countries can enjoy some R&R.

We have no inalienable right to prosperity. It needs to be earned, from day you day, year to year and century to century. The world changed for previously world-leading economies - India, China, Spain, Greece, Rome - and will change again.

Ah, Boaz. One question for you.

>>How will you cope, if interest rates jump by 2-3%? SIMPLE...BUY GOLLLLLLLD :)<<

How will that protect you from paying interest?

Actually, make that two questions.

Why pick on gold?

What is it about this particular metal that sets it apart from other minerals that you dig out of the ground?

Especially when, as you yourself point out...

>>Eventually, we will either run out of stuff in the ground..OR..some other less developed country will find the same minerals in huge quantities<<

After all, it is a finite resource, just like all the others.

And what do you think will happen to the price of gold if everybody suddenly decided to use it to "back" their currency? Take a pencil and paper, and work out how you would go about buying a loaf of bread, in 12 months time.

It won't be a pretty picture.

Yabby:

Possibly this would encourage people to sell up in the big cities, pay off their mortgages and move to rural areas where properties and cost of living is cheaper. Unfortunately, due to certain professions and specialty of trade some people don't have that choice. But that problem existed in the US - when people lost their income from the aerospace industry and had to re-invent themselves in order to survive. Migrants after the second world war who were doctors, lawyers, professors, became laborers, mechanics, brick-layers, to survive in a new country. An economic inversion may be good for the country it would revitalise the regional and rural Australia - because at the moment people are preferring to live in the cities.

Yabby, can't resist this discussion;
My take on it all is the the financial system is in a mess internationally
but that we cannot expect to remain immune for much longer.
Here is my list of things going wrong.

1. Growth world wide is low, countries having problems increasing it.
2. Even the IEA now admitting peak crude oil occurred 2005-2006.
3. China cannot keep on at approx 10% growth. 7 yrs would double it.
4. We are borrowing $100M + a day.
5. Politicians world wide ignoring these problems.
6. Only Aus pollies to mention these problems, Christine Milne and
Barnaby Joyce are ridiculed.
7. Food shortages world wide threatening.
8. Phosphorous shortages developing.
9. Governments finding the economy is not supplying sufficient funds.

My reccomendations are;
Get rid of debt.
Start learning how to grow vegetables.
Start rethinking how to reorganise your finances.

Thats enough for now, what are your suggestions ?
This is the first time the world can expect to press the rewind button.

Continued; I went off to watch midday ABC news.

I have noticed that we are spending approx $30 Billion per year on oil.
This is almost as much as we are spending on the NBN, but every year.
This figure could double in only a very few years.
Perhaps, 20% higher by the end of next year.
Nothing will be done until the gag is lifted from Martin Ferguson.

It is this cost of fuel that is limiting what can be done by government.
It comes directly out of the GDP, reducing income and profit & tax.
Remember it is now three times what it was about 2003. You cannot
increase overheads like that without major impact on the economy.
It is also directly impacting on the price of food.

When China pulls the plug on its growth engine watch Australia catch
the Euro & US disease.
Here is a tip, listen carefully to the financial experts on the TV/radio.
They are all talking about recovery, growth returning, China growth
and how we are protected from the European and US borrowing problems.
Not a word from any of them about the cause of lack of growth.

I think I mentioned it once previously that my son is a financial
advisor. I asked him what he is advising his clients.
Well things have not changed much, international and Australian shares
trusts etc etc. I said knowing that peak oil is now with us should
you not be changing your recommendations ?
His reply was that no one would want to invest in the way I suggested
and they may as well shut the office doors and go fishing.

Even those who know whats coming really don't want to know.

If you need to invest some money, look at energy companies of one
type or another. Fixed deposits are OK now until the real returns
gets too small, as it will before long.
Which raises the point, can government guarantees of the
banks hold up ?
Will the government crumble or just print the money to met the guarantee ?

ohh bazz
govts ARNT ALLOWED TO PRINT MONEY
really..only the fed can order the mint to do it..[or not]
and bankers own the fed..govt needs to borrow EVERY PENNY

ok the fed/costs of printing..ANY face value note
is arround 7 cents each..but it can create UNLIMITED credit..[for govt TO LEND..from the bankers...WITH INTREST..]

personally i never stopped collecting the poor mans gold
[silver..then the fake silver..the fed replaced it with in "666"

you recall that predecimal coin..6 pences pennies etc
threepences..and pounds...

[well THAT POUND*NOTE..had a promise wrote upon it...saying this note can be taken to the commonwealth bank..and ONE POUND of SILVER..[sterling grade/quality/QUANTITY...*weight9..given in its place]

see mate..the coin AFTER deciminalisation...our coin..wasnt SILVER
it was nickle...[recall the queens-head..*is ON the coin..to assure the quality..[lol]..of silver..but now she has here face..on NICKLE

any how the nickle coin..now has a HIGHER VALUE
than its weight in nickle...[so i dont collect paper/plastic..now i collect nickle]

i used to collect copper coin too
near the end...a one cent copper coin..had 5 cents of copper in it

we dont need to hold gold
[most of the people..ONLY hold a promise of it at any-rate]
you see..EVERYDAY..in usa alone..

5 times the..TOTAL AMMOUNT..of all gold..EVER mined...is traded

one day people going to be left with THE PROMISE..
but not the gold..*to back the promise...

even last year there was a REAL gold shortage..its only fake trading..by the gold "bond"/paper market...that stops the collapse...

but its comming..anyday now
those holding promises..will be left holding EMPTY promises

talk is cheap

One thing is for sure, we live in interesting times!

Boaz, if you have enough money to invest in gold, you have
nothing to complain about.

*but I don't think that interest rates themselves are particularly key to our economic future.*

I fully agree Pericles, I simply raised it as the next short term
disaster that I can see happening, for those mortgaged to the roof
on the back of sky high house prices. The Economist has been pointing
it out for years.

I am also aware as to how difficult it is to predict the future.
Last week I sold a bit of wheat, this week the price jumped 10%,
because it won't stop raining in NSW. So IMHO the most dangerous
position to take, is to think that any of us know it all. Better
to accept that we know that we don't know and spread our risks.
So that is what I try to do.

As to the longer term, I think Australia will simply ride on the
back of mining to pay the bills.

*Possibly this would encourage people to sell up in the big cities, pay off their mortgages and move to rural areas*

I think that is already happening, Lexi, certainly in my town.
You can still buy a house for 200k$ here, or 100 acres for 150k$.
So city slickers are moving in, all cashed up with money from
city real estate.

*If you need to invest some money, look at energy companies of one
type or another*

I tend to agree Bazz, but the Australian market lacks solid oil play
companies, most are focussed on gas. Gas is less secure, as there
are some serious contamination issues with coal gas and shale gas.
The investment cost of export terminals is also enormous, unlike oil,
where they simply pump it into a ship.

http://www.news.com.au/business/business-owner/sold-aussie-web-gurus-hit-web-jackpot/story-e6frfm5i-1225965140497

btw Pericles, this story warmed my entrepreneurial heart. A couple
of Melbourne guys, starting with nothing, creating a 90 million $
company in a couple of years.

It just goes to show, that despite the moaning and groaning, the
internet has opened up huge opportunities, for those who choose to
think outside of the square.

A good friend of mine took advantage of Australia's comparative
advantage of growing sandalwood and became the major supplier to
French perfume houses.

So we are still a land of opportunities in many respects. But
to be honest, the majority are doing so well in global terms, that
as a nation we have become pretty fat, lazy and complacent and don't
realise how easy we really have it.

Absolutely, Yabby.

>>Pericles, this story warmed my entrepreneurial heart. A couple
of Melbourne guys, starting with nothing, creating a 90 million $
company in a couple of years.<<

A couple of Sydney guys did much the same thing with Atlassian, which receives award after award for innovation, export, you name it.

http://blogs.atlassian.com/news/2010/07/atlassian_closes_60_million_investment_from_accel_partners.html

http://www.exportawards.gov.au/Case-Study---Atlassian--NSW-/default.aspx

Unfortunately, as a country we have absolutely no comparative advantage in software development. And because the barriers to entry are so low financially, we are competing globally from the very first minute.

That's not a bad thing, of course. But it does mean that there is a finite limit on the number of these success stories that we are able to produce each year.

Interestingly, I see no reference to any "help" from government for either retailmenot or Atlassian..

Capitalism, the best system we have,rides very much on the back of consumerism and credit.
Without both we are in trouble but it is gambling with credit that threatens us most.
I have my doubts Australia can ever compete in most manufacturing, or the China will stop growing.
As for another country finding it has minerals and taking our markets, not very much chance of that.
If Australia is threatened the mining tax a once off payment for once off product looks fair to me.
Well past time to end the bank prop up it only gives fools insurances if they fail we pay.

Yabby said;
As to the longer term, I think Australia will simply ride on the
back of mining to pay the bills.

Not in the longer term. It just won't happen. China will definately
slow, indeed it must. A 10% growth rate is so high that they would
suck up all the worlds iron ore and oil etc in just a few years.
Doubling every 7 years is impossible. 2, 4, 8, 16 etc etc !
Remember the story of the Chinese philosopher and the Emperor.

Yabby also said;
I tend to agree Bazz, but the Australian market lacks solid oil play
companies, most are focussed on gas

For good reason, there have been no decent oil finds for yonks.
What we have is depleting quite fast, about 6% per year if I remember
correctly. We only export some particular types as we import just
over 50% of our usage. As soon as we can no longer afford imported
oil the objections to gas will disappear.

I will stick my neck out !
There will be a major drop in China's economy sometime during 2011.

Remind me of this if it does not happen.

*As for another country finding it has minerals and taking our markets, not very much chance of that.*

Don't be so sure Belly. Commodities go through cycles. There are
huge new iron ore mines and coal mines being built right now.
It just takes years to build them, ports, rail etc. At some point,
both iron ore and coal prices will drop substantially. But I'd
say its a few years off, meantime we can cash in. Luckily our
gas production is about to rise dramatically, once present projects
are completed. So we'll have more irons in the fire.

*Not in the longer term. It just won't happen.*

I think you will find that it will, Bazz, for the following reason.
Right now there is some 200 billion$ of investment going ahead in
new mining developments. Once that infrastructure is in place, it
will generate export dollars for the forseeable future. Yes,
commodity prices will drop, but it will still be profitable and
the infrastructure can't be moved elsewhere.

China doesen't need to keep growing at present rates. But China
and India are both so large, that local consumption by an extra
2 billion people, will use alot of our resources.

Pericles, your Atlassian sounds like an interesting company.
Perhaps Australia is just short of intelligent entrepreneurs who
have access to venture capital.

im looking for the latest keiserr report..[re ice,land/imf]
revealing some huge decietes

interesting search result here

http://www.google.com/search?client=gmail&rls=gm&q=keiser%20report%20rt%20youtube

leads here
http://www.google.com/search?q=keiser+report+rt+youtube&hl=en&client=gmail&rls=gm&prmd=iv&source=univ&tbs=vid:1&tbo=u&ei=qUP_TPKDNsTBcbLNtLQG&sa=X&oi=video_result_group&ct=title&resnum=1&ved=0CCMQqwQwAA

anyhow here is whats been goingdown in iceland
http://www.youtube.com/user/RussiaToday#p/u/12/PRREY3nOncU
you will recall
thats where much of this began..
to bite big chunks out..of the tax/payers

Yabby, have you not heard the story of the philosopher and the emperor ?
One grain of rice on the first square of the chessboard, 2 on the
next, 4 on the next etc etc. Think of exponential mathematics.

What you suggest is impossible !
They would have to do it with oil, gas, coal, steel, aluminium etc etc.
They would starve to death before they were half way.

Bazz, you are trying to accurately predict the future, when you
don't know all the variables. Get one wrong and the whole game
changes.

What we know right now is that 200 million peasants have moved
to Chinese cities, another 300 million are on their way. We know
that China is massively investing in major infrastructure, for
instance national very fast trains etc. Just recently they
achieved 460km/hr, which is not to be sneezed at.

We know that Australia, Africa, South America, still have massive
reserves of the basic elements. We know that the Chinese have
serious plans about building nuclear power stations. We know
they are serious about making electric cars. So will most of
their cars be electric? Possibly.

Fact is that in 20 years, Asians and Arabs will most likely have
the serious money, Europe and America more likely to be those
with debts.

Australia has land and minerals. We can supply both with food
and minerals, if we just try a little bit. That should be enough
to keep our small population out of jail.

At the moment, we don't even know what minerals that we have.
Most of Australia has never seen a drill.

Pericles asks:

1/ How will that protect you from paying interest?
Actually, make that two questions.
2/ Why pick on gold?

In my case I chose real estate, but that 'causes' me to pay interest.

Buying gold is just a protection against inflation. If you buy $100 worth of gold today, it will be worth a lot more in the future.
If you 'have' a $100 in the bank today, it will be worth $80 in a few years time whereas gold might be worth $120 (indicative only). "Money" won't have the same buying power as gold over time.

Of course.. you have to cash in your gold at some point. But presumably you can continue buying as funds become available, and cash in some as needed.

It's only a hedge against inflation, not interest.

Why gold ? : why of course.. "Beck says so" (sorry..that's a tease I can't resist)

Perhaps, Yabby.

>>Pericles, your Atlassian sounds like an interesting company.
Perhaps Australia is just short of intelligent entrepreneurs who
have access to venture capital<<

The thing about Atlassian was that they built it without venture capital. This approach is only really possible where i) the barriers to entry are very low (i.e. it is all brainpower) and ii) you hit the market absolutely on its sweet spot, before too many competitors pile in. Google is a good example, except that it built a sufficiently better mousetrap that blew the existing competition away. Who now remembers LookSmart (an Australian company), or Altavista?

Incidentally, "access to venture capital" are four words rarely heard in the same sentence in Australia, especially in Web/IT projects. I haven't done any form of formal research on this, but I suspect that you will find that most of the success stories started with a trawl around family, friends and acquaintances for the start-up money. Think wotif, or Seek.

Unfortunately, we seem trapped in a mid-twentieth-century mindset on everything from education onwards. Even on this forum, we find more people hankering after a fifties lifestyle than people trying hard to understand the realities of the present, and the opportunities of the future.

They don't like to think about it, because thinking about it is uncomfortable.

We have become so immersed in our prosperity, and cocooned in our comfort zone, that we haven't noticed that the world around us hasn't stopped moving and shaking.

And our response, rather than wake up and start moving ourselves, is to protest about how nasty the rest of the world is, and moan that wouldn't they, too, like to rest on their shovels.

But if we put our minds to it, and accepted reality instead of finding excuses to avoid it, we can still make sure that we continue living reasonably well, in the best country in the world.

Sorry, Boaz. That will not work.

>>Buying gold is just a protection against inflation. If you buy $100 worth of gold today, it will be worth a lot more in the future.<<

So, I suspect, will $100 worth of neodymium. Or lutetium. Or thulium.

If your sole rationale for buying gold is as a hedge against inflation, then you are just another speculator in the commodities market, are you not?

>>If you 'have' a $100 in the bank today, it will be worth $80 in a few years time whereas gold might be worth $120 (indicative only). "Money" won't have the same buying power as gold over time.<<

True, But who, in their right mind, would leave that $100 to moulder away in the Bank for all those years? It will be invested, will it not. Mostly in Super, which still has some useful tax advantages.

>>Of course.. you have to cash in your gold at some point. But presumably you can continue buying as funds become available, and cash in some as needed.<<

Ay, there's the rub.

Same as any investment, anytime, anywhere. It's either out there earning, or it's in your pocket, wasting away.

>>Why gold ? : why of course.. "Beck says so" (sorry..that's a tease I can't resist)<<

Beck wants all your currency to be backed by gold. Which is why I asked earlier...

"...what do you think will happen to the price of gold if everybody suddenly decided to use it to "back" their currency? Take a pencil and paper, and work out how you would go about buying a loaf of bread, in 12 months time."

Do the exercise. It is highly educational.

The US government has confiscated private gold on two occasions - once in 1917 (because of "trading with enemy nations") and again in 1933 when it made "hoarding" illegal and citizens were only allowed to own no more than $100 in gold coins. The remainder was "bought" and held by their government and subsequently revalued upwards.

While this was during the era of the Gold Standard that standard may yet be reinstated if the global economy starts to collapse again and people lose faith in the existing bogus system.

If the US does it then we would naturally follow.

A pity that China has bought most of what our (and Britain's) government dumped onto the market years ago.

My problem with that, wobbles, is a practical one.

>>While this was during the era of the Gold Standard that standard may yet be reinstated if the global economy starts to collapse again and people lose faith in the existing bogus system.<<

There simply isn't enough gold available, with which to back any currency.

Aproximately 140 million kilograms of gold has been mined.

Ever.

The best guess is that around 30 million kilograms of that are held in bank vaults around the world.

The rest has been turned into jewellery, electronic components, teeth etc.

But let's assume, just for the moment, that every single piece of gold is available to back the world's currency.

At today's price of $45,110 per kilo, "all the gold in the world" has a total value of $6.315 trillion.

Which works out at a touch less than half the national debt of the USA.

http://www.usdebtclock.org/

I'm always open to suggestions, but I completely fail to see how anyone can conceive that we will ever again have a currency that is "backed" by stuff we dig out of the ground.

The arithmetic simply does not work.

Not only that, but there is absolutely no logic in it, whatsoever.

Gold - or any other lump of dirt - has no intrinsic value, only that which is placed upon it by the market.

That is exactly how currencies work.

Your dollar - as well as the US dollar, the pound sterling, the Yuan, whatever - has only the value that is placed upon it by the market. The "fundamentals" that drive that price are simply a combination of factors, that include the state of the economy, relative interest rates etc., instead of the notion of a lump of yellow metal.

Our own economy is around a trillion dollars.

We'd need the combined gold reserves of USA, Germany, France, Switzerlan, Italy and the IMF, just to support it.

Over to you - (and Boaz - see, I did your homework for you, again) - to let me know what's missing from this analysis.

*We have become so immersed in our prosperity, and cocooned in our comfort zone, that we haven't noticed that the world around us hasn't stopped moving and shaking.*

An extremely good post Pericles and I agree with your sentiments.

It concerns me that Australia is becoming bogged down by the
EU disease of massive regulation and administration, holding
back innovation and creativity.

It also concerns me that so many Australians, see a world of them
and us. At the end of the day Australian business and its population,
will sink or swim together.

In WA the attitude seems a little different, as its very much an
export focussed state. Singapore etc is our closest market, not
the East.

The East seems to be becoming more and more inward looking. Look
at the amount of people on OLO calling for tariffs to be raised etc.
They might get a real shock, if it were to happen and what it would
cost them, as consumers.

Perhaps Aussies have simply had it too good for too long, to
appreciate what they have.

debt enslaves. Our Government sets the worst example possible spending beyond its means in order to stay electable (and only just). The wastage on a multitude of non productive departments and agencies shows we still have heaps of fat. The best way to avoid financial destruction is to show mercy to the poor. That does not mean lining the pockets of ngo's and charlatans. The world's richest man wrote

'He who has pity upon the poor lends to Jehovah, and He will reward his dealing to him. (Proverbs 19:17)'

God is well able to keep the wise through good and bad times.

Yabby; there is a point that you did not make in that reply.
What effect is peak gold having ?
One reason gold has been rising in value is that poorer ores are being
exploited now and that is causing the rise in price.
However the rise in price may never be related to its value as a
currency backup but to the physical cost of getting it out of the ground.
This cost will rise and rise until nobody can afford it.

I think it would need a monetary expert to explain that.

Bazz you can not eat gold, investors keep it because it buys more money, you can not eat that either.
Yabby those who call for tariffs to come back call for destruction of our economy.
Blind only to jobs, ones that we could never have or hold world trade gives us more than it takes.
I do not fear A mining bust, we have uranium and gas, other products too.
But a world crisis?
it will come.
Here just in our country, people who have never known hard times will.
Housing first, it can not go on without a bust.
Personal credit will bring about big trouble and your 2 to 3 percent interest rise may be 5 or ten one day.
Some will thrive on others failures but we will have a lower standard of living one day.

*This cost will rise and rise until nobody can afford it.*

Afford it for what Bazz? Gold has very few industrial
uses. People buy it to look at it and hold it in their hands.

There was an interesting discussion on Charlie Rose last night,
where a group of informed old fellas were discussing gold.
Their take is that fear is driving the gold price. Alot of
seemingly very rich people got badly burned during the GFC,
by companies and investments that turned out to nothing in
thin air. Many of those individuals have seemingly become
so mistrusting of the system, that they have invested huge
amounts in gold. So far most of them have done ok.

Pericles,

You're absolutely correct.

However, the true value of gold is what is placed on it by, for want of a better term - the marketplace.

It can easily be revalued by mutual assent to whatever amount is agreed, but only after the governments hold enough to back up their own economies, and then it can start over again.

Also, even when we had a gold standard, nobody really knew if there was enough gold physically stored in the treasury to back it up. It worked on blind faith.

That's how the whole fractional reserve system started - Gold Merchants borrowing and lending on more than the amount they actually held in their vaults.

More than one commentator has said that the current system's too broken to be fixed and will need to be replaced with something else.

I have no idea what that may be.

Runner,
Just replace government with church and you are right on the money.
Ignorance sure is bliss.

nairbe
'Runner,
Just replace government with church and you are right on the money.
Ignorance sure is bliss.'

Sorry mate a bad idea. I would never vote for it. Church is not an organisation as such but a group of called out ones. When church has ruled in the past it has been as corrupt as secular Government. Any smart Government though will govern with God's principles in mind. If they don't we end up in the mess we have now with epidemic drug usage, teen pregnancies, std's, perversions, everyday violence, abortions on tap etc. Any honest observer can see the stupidity of ignoring the commonsense found in God's word.

I runner need to ask why?
Mate why do you move in to so many threads and bring your hobby horse to play?
Yes know we all, me too, divert threads.
But why, this is nothing about God, I could tell of the millions of dollars Sydney C of E or what ever it is called invested badly and lost,God punishing them?
Gold first was wanted for its look if a true fall comes to the world economy it will have no value.
Like the coins and paper money it can not be eaten not buy goods that do not exist.

Easier said than done, wobbles.

>>It can easily be revalued by mutual assent to whatever amount is agreed<<

With world GDP around $60 trillion, the price of gold would need to increase at least tenfold to meet the needs of gold-backed currencies. Which, as I'm sure you can see, would create utter chaos around the world, especially in poor countries.

The puzzle to me is why there is all this fuss about "fiat currencies".

>>That's how the whole fractional reserve system started - Gold Merchants borrowing and lending on more than the amount they actually held in their vaults.<<

Well... exactly.

They realized that there was no point in actually holding gold, when you could issue a promise. And once people accepted that promise at its face value, it didn't need gold any more. A currency's value rose and fell on the solidity of that promise, which was itself founded on the credibility of the economy that backed it.

And don't forget that the gold standard relied upon the price of gold being fixed.

At $35 an ounce. It is presently $1,400. And to back world trade, it would need to be $14,000.

Do you see the problem?

In a very real sense, having a currency backed by the performance of the country that produces it is a far more intelligent way in which to conduct world trade, than to rely upon the "value" of a lump of metal.

@Pericles

"""
The puzzle to me is why there is all this fuss about "fiat currencies".
"""

I thought it was because it gave a select few the power to create any amount of it when ever it suited them with consequences for the little guy and windfalls for the big guy?

Quantitative easing 1,2,3 seems to show this quiet well wouldn't you say?

I'm no economist, just my observation, perhaps it's wrong?

the only....*CONSTITUTED legal tender..*is COIN

notes were* promises to PAY..in COIN
credit..is a promise to pay...IN legal tender..[COIN]

wether the coin is gold or silver..[or coppers]..isnt the case in point...its that those who hoarded the gold silver copper [coin]...

and issued..BANKbills..BANK notes...[a means by which banks move credit between banks...by a CONTRACT...[note]..to supply COIN by written promise]..hence each note has two sig-natures

its too late to rebuke..the bassthardry..that saw the bankers steal the giold silver[and lease it out to the member bankers...who then sold it onto the market..but who signed a LEASE on it..[a lease that must be redeemed..in lawfull [constituted coin..like for like]...gold for gold..silver fior silver..copper for copper]

thing is all banks/bankers are complicite in this colluded theft
add the fact..they are all bankrupt...[and keep needing more ofr the govts baqilouts]..its clear the reason..for giving control of the fed to the bankers is gone

govts must seize back the running of the mint and the fed
seize back control of the assets..the bankers have given to the imf..and the world bank etc..[seize back the origonal shares..bought with the unlimited credit..that has bought our total global debt...[private and govt..to over 4 QUADRILLION..[$us]...

the total of the issued notes coin..in us dollars..is near 800 billion
but the fed was sold for the fixed price of 44.4 billion...[12 plate size gold coins...[issued under govt right of seignorage]..with a total face value of 1/12..th..of 44.4 billion..would buy back the us fed/mint..fort knox etc

ok the 'gold'..held in fort knox sems to be RUSTING[according to the cleaners]..so its not really gold...but we are now in a most dangerous state...

we have CRIMINALS running the money supply..have used it for the last 70 years..to FORCE govt to tax its people..just to pay back..*ursury..while ever more endebiting the rest of us mugs..as intrest accumulates upon intrest..for what is after all only a fiction

govts lending..ITS OWN MONEY..from,..a criminal cartel
who inflate..or deflate its worth..GLOBALLy..to bring to power tyrants and imbisiles..willing to murder or abuse their own people..without the hindsght of wikiexposure..for a safe sound SWISS baqnk account...held in swiss money backed by silver..[or gold]

lets start again with nickle
one cent equals one fiat dollar
issue all NEW govt funds in coin..[under right of seignorage]

and let those who play their games on the mug punters..
run their fiat credit scam...BUT NOT ON TAXPAYERS..living persons

only multinationals and miners
fissure men..and loggers..[those raping the earth..for easy credit..to their own discredit]

Anyway, the discussion on gold is indeed a diversion.

To paraphrase, it is the energy stupid !

The major mistake being made by all these talking head we see on TV
is to think it is all about finance.
It is not, without energy, there is nothing.
If to make energy available we have to put in too much energy in then we have gained nothing.
Net energy is the key to any growth.
It is the energy cost of getting energy that is at the heart of the problem.
The tar sands are a good example. The amount of gas needed to melt the
tar is taking gas from other parts of Canada. It cannot last.

That is indeed the populist mantra, RawMustard.

>>I thought it was because it gave a select few the power to create any amount of it when ever it suited them with consequences for the little guy and windfalls for the big guy?<<

It makes a good sound-bite, but it is not based in reality.

Fiat currencies have been around forever. After all, carrying lumps of metal around wherever you went was at best hazardous. So the concept of a promise became the norm.

The curbs on creating "any amount" of it are that you will devalue that promise. So you can only create as much as you may reasonably be able to support. Which is of course why the Irish government chose to borrow from the EFSF at 5% interest, rather than create new money of their own.

>>Quantitative easing 1,2,3 seems to show this quiet well wouldn't you say?<<

Not sure what you believe that the QE programme shows. Sure, they are creating a debt that will be required to be repaid from the economy over time. But the decision to take that path rather than turn the screws on the economy and risk massive deflation was not a simple one.

If you think that QE has adverse consequences for "the little guy", take a moment to reflect on how he would be affected by the alternative.

Hey, none of this is easy. A good percentage of the developed world over-borrowed for years, and is now facing up to the consequences.

Making scapegoats of a few arrogant and high-profile bankers may be quite cathartic, even play a positive role in channelling everyone's anger.

But it cannot completely hide the fact that we have all benefited slightly overmuch from the twenty-plus years of boom, and some re-balancing of both prosperity and expectation is not an entirely bad thing.

You worry too much Bazz energy is safe.
ALL energy we are only separated from new energy's safe cheap for all purposes, by time.
And profit, as I said earlier oil holds its place for now because true new energy would harm some, who have more power than we will ever have.
My power bill came yesterday.
It shows the smallest use in twelve months, and the highest bill.
Cost or profits you tell me what drove it up, think NSW Labor government.
My team, selling consumers with power by inflating profits before the sale.
We shall over come mate painful but true we will get energy and continue growing .

Subject: Who got the bail out money? shocking
http://finance.groups.yahoo.com/group/Mobux/message/3375

Earlier this week, the federal gangsters were
forced to pull back the curtain on who got the
bailouts and how much.

Yes, believe it or not, until this week this data
was a state secret.

Some revelations:
http://tinyurl.com/2fago7y
http://ampedstatus.com/the-wall-street-pentagon-papers-biggest-scam-in-world-history-exposed-are-the-federal-reserves-crimes-too-big-to-comprehend


The Wall Street Pentagon Papers: Biggest Scam In World History Exposed -
Are The Federal Reserve's Crimes Too Big To Comprehend?

1. $3 TRILLION was given away

2. Goldman Sachs would have gone bankrupt
without the help

3. Money even went to companies like GE,
McDonalds, and Harley Davidson.

Video:
http://www.realecontv.com/page/765.html
- Brasscheck



http://www.commondreams.org/view/2010/12/03-6
December 3, 2010 by The Huffington Post
A Real Jaw Dropper at the Federal Reserve
by Sen. Bernie Sanders

video:
Sen Bernie Sanders Amazing Speech!
http://www.youtube.com/watch?v=H5OtB298fHY

http://www.infowars.com/sanders-the-rich-against-everybody-else/

EXCLUSIVE WORLD PREMIERE ~ Ben Bernanke: Public Enemy #1 – Mr. Big Shot (((Music Video)))
http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=OdonzaE9JnrA8IdSJs5BlvTng0O65haX

The News Dissector has a new post: Top 12 Books On The Financial Crisis
http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=YsaU7brVAbcKBzsmk1WmyPTng0O65haX


Jim Rogers on The Bailouts
http://www.brasschecktv.com/page/710.html

more here:
http://www.brasschecktv.com/index.php?call=category&id=27

Press TV-On the edge with Max Keiser-Max Keiser talking to Paul Craig
Roberts-07-16-2010(Part3)

How the US economy is being deliberately destroyed
http://www.youtube.com/watch?v=GeeePaoMPQI

China, Russia quit using the U.S.dollar (China Daily)
:http://disc.yourwebapps.com/discussion.cgi?id=149495;article=134226
Crisis By Design
http://tinyurl.com/2ea5xr9

http://www.behindthewizardscurtain.com/




Revolution Roundup #2: As Mass Rebellion Spreads Throughout Europe, Americans Dance With The Stars
http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=IxzvwGIe0j1pm54rvsbOW%2BdexX36GWMi


The Global Insurrection Against Banker Occupation (GIABO) rages on... Over the past few days the people of Ireland, Italy, Britain, Austria and Portugal have all held massive demonstrations against the Global Banking Cartel. [Read More]


The Two-Party Oligarchy Vs. The People
http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=nVef9w9W0cprdshM7Ayi8%2BdexX36GWMi

*Net energy is the key to any growth.*

To a certain point Bazz. But don't forget,
services can grow, many using very little
energy.

Because our energy is still relatively cheap,
we waste huge amounts. Now lets say oil spikes
in price. Improved logistics and so on, would
become huge new growth industries. Ways of cutting
waste, would become growth industries.

So its not all gloom and doom and that is perhaps
the point. I read a book about the year 1000 and how
people lived. Their big concern was that the world
would end right there and then. We are still alive and
kicking, 1000 years later.

But I think that people have cried wolf so many times,
over so many things, only to be proven wrong, because
they overlooked some variable. So even if some real
calamity was heading their way, they would find it hard
to accept. Fair enough.

So my best advice Bazz, is relax and smell the roses :)

We live in interesting times.

Sheesh UOG. Has it ever occured to you, that if you spent the
time that you seemingly spend, posting pages of links on OLO,
out in the real economy, doing real work, for real money,
that you could stop worrying about being ripped off, as you
would have some extra money in your pocket?

I understand what you are saying Yabby.
>services can grow, many using very little energy.

However they don't produce much. A few, very few, in these days of its
broke throw it a away and buy another, services repair anything.
Most services are paying them to do something you can do yourself.

Fuel will either be rationed by price or regulation.
The resources needed to transition to other energy sources,
electricity, natural gas (as a temporary measure), solar and wind may
be very expensive also. With a reduction in supply will come a
decrease in commercial activity and employment.
I think it will be gradual and could be like the boiled frog.
However some think it will be sudden.
I don't know which it will be, but this where the politicians should
be engaged, after all thats why we pay them.

Our cost of fuel will rise quite significantly and as a wheat farmer
you must already have a really high yearly bill.
As happened in the US, what if we poor city dwellers cannot afford bread ?

Our own supply of fuel is depleting around 4 or 5 percent a year.
So our import bill is rising and hopefully we won't get elbowed out
of the international market.
There are some real crocodiles out in that water !
That is what our pollies should be working on, just like the Chinese
have done. I now suspect Kevin Rudd knew that.

Not long ago Bazz oil was over twice its current price, we survived.
If it gos to twice that we will still use it.
Solar electricity is going back wards, but still exists.
Those who had the cash to take early government hand outs have done well.
I could spend 6 grand, maybe a bit more and be neutral, not pay bills but not get returns.
Wind generation can be much smaller single homes, something will come.
We could use liquid natural gas, should use it, Australian governments,any of them could make it happen.
IF capital took second place to our needs we could stop importing fuel.
No overnight black out no crash we may face hard times but we will not Be stalled by fuel for too long.

*A few, very few, in these days of its
broke throw it a away and buy another, services repair anything.*

Ah, there you go Bazz. Another potential growth industry!

*Fuel will either be rationed by price or regulation.*

Well its rationed by price now. If it was any cheaper, we
would waste more. We have plenty of opportunity to waste
less. The way that I understand it, the cost of actually
generating electricity is not the main cost in power bills.
Its maintaining all those power poles and wires over a huge
countryside.

* I don't know which it will be, but this where the politicians should
be engaged, after all thats why we pay them.*

Well that is the danger, Bazz. Politicians, running amok, spending
billions as they think that they can predict the future.
I think that is a very bad idea lol, for they hardly have a record
of being wise or accurate. More likely just billions wasted.

*As happened in the US, what if we poor city dwellers cannot afford bread ?*

That would have little to do with the price of wheat. More to do
with the many costs from farmgate to consumer. The actual wheat in
a loaf of bread, is worth around 20c or so. So even if it tripled
in price, the cost of the wheat, would not be the issue.

"""
It makes a good sound-bite, but it is not based in reality.
"""

I dunno, Pericles, it's not exactly false either. I mean reports like this seem to be all too frequent these days.

http://ampedstatus.com/the-wall-street-pentagon-papers-biggest-scam-in-world-history-exposed-are-the-federal-reserves-crimes-too-big-to-comprehend

"""
If you think that QE has adverse consequences for "the little guy", take a moment to reflect on how he would be affected by the alternative.
"""

See, I only look at it from my own perspective. Giving huge wads of cash to the big people in the hope that it will filter down to the little people doesn't really help me in any way, also not in way that I would want it to help me. And from what I've seen in the news, it doesn't seem to have helped most other little people either. And lets not forget the resentment of giving people money that should have gone broke. The little people don't have that luxury, so now we have people like Assange coming out and trying to expose any bit of dirt they can find to make the big people look as bad as they are. It may have helped in some ways but has caused problems in others. It remains to be seen if they chose the right way.

Do you think the little people will forget they have been stolen from?
Because that's how they feel and because of that, will always warm to stories about the big people peeing on them.

cont...

"""
Fiat currencies have been around forever. After all, carrying lumps of metal around wherever you went was at best hazardous. So the concept of a promise became the norm.
"""

I think most people know that, Pericles. It's the people in charge of creating the money that's got most peoples knickers knotted. They're certainly an arrogant bunch with little regard for little people.

"""
Hey, none of this is easy. A good percentage of the developed world over-borrowed for years, and is now facing up to the consequences.
"""

So true, Pericles and I keep telling little people to wait till they have the money to buy things, but those Jones's are a persuasive bunch. Perhaps more conspiracy stories about the evilness of that family should be propagated across the digital grape vine? Also the little people need to learn they have the power to change things if they want to. The trouble with little people is they can't even agree amongst themselves what to change it to.

"""
But it cannot completely hide the fact that we have all benefited slightly overmuch from the twenty-plus years of boom, and some re-balancing of both prosperity and expectation is not an entirely bad thing.
"""

Yes I agree with that. It's just the way it's being handled that's causing the problems, though I don't know how it could be done better.
I guess it depends on which run of the ladder you're standing on, as to how you think things should be handled, no one will ever agree on the correct solution I don't think.

Belly said;

Not long ago Bazz oil was over twice its current price, we survived.

No it wasn't ! It touched $90 this week but in 2008 it reached $147.
Whats more we did not survive, we had the biggest financial crash
two months later.

Belly also said;
IF capital took second place to our needs we could stop importing fuel.

Not sure what you mean there. If you mean that the oil could be used
even if it made no profit, well what that actually means that it takes
more energy to get the oil out and get it to market than there is
energy in the end product.
Thats what it ultimately boils down to in the end.
Anyway, no way we could double what we produce now.

Yabby said;
Well that is the danger, Bazz. Politicians, running amok, spending
billions as they think that they can predict the future.

So true, they don't have a good performance record do they ?

Yabby said;
That would have little to do with the price of wheat.

No, but every time it moves, or gets processed, energy costs get added on.
That is what happened in the US when oil reached $147. Food went up
because fertiliser, transport costs plus the cost of maize went up
because they used it to make ethanol.
I understand here we use wheat and sugar cane to make ethanol.

Up until about 40 years ago, Our own manufacturing provided economic and profitable industries for our states and commonwealth, they kept our workers employed, our large and small businesses alive and active, there was a 66.6% top tax. So what has happened in the meantime.
First, our politicians realised that the taxes applied then, supplied much more income than was needed. So reduce the taxes. When the top tax was reduced, it was an incentive for those who were in a position to increase their income, to do so.
Over the last 40 years, the top tax has been decreased from the 66.6% on an amount which would be somewhere about $450,000 today. Unfortunately, the consistently increasing salaries of those uncontrolled people have created such high prices on all the goods we had been manufacturing, and services, that our workers cannot now afford to buy the homes they could before nor clothing made in Australia, etc..
The mining enthusiasts claim high prices and profits, and if this was justified, why is Anna and the Queensland Government crying poor? I have never heard of any responsible evaluation on the price of coal or any other of our non-value-added mined goods, coal, iron ore, bauxite, uranium ore or any others and when you get 65 ships lining up at Dalrymple Bay port and another 15 at Gladstone, you have to wonder – are we being short changed for our coal, and what do we get in lieu for it.
Well what we do get, is all of those goods, or quite a lot of them, that Australia used to manufacture previously, that now put our wage earners out on the street and damn near the gutter. Woolworths, Coles-Myers Wesfarmers and hundreds of others are buying these goods to pay the price for the coal and other exports in preference to buying Australian manufactured products, which would keep Australian workers properly employed in keeping Australia's economy viable.
Why is this happening?

My friends will not join a party, say they have pride in their integrity, and suggest it would be a slur on their intelligence. Of both the Liberal and Labor parties, they both breach their constitution. You might as well say they prostitute themselves as far as their constitution goes, with their decisions which affect the wage earners. It is doubtful that they ever look at their own constitution or even of that of the commonwealth, because this is sometimes in doubt. The depression in 1930, and recessions or depressions appear in countries when the top tax rate gets below about 50%, Here also is showing the tax applied around the world, explaining why our politicians claim we are in a recession because it is a “global recession” it is global because the politicians around the world can't be described as anything else but stupid. It needs only a tax of an average of 30% to pay for the needs of the country, but our people in parliament can't get it through their skull that – as some people will take as much as they can get their hands on, the top tax has also got to be be high enough to to prevent this, and the tax on lower incomes could be dropped, no tax below $30.000 or so. Such an attitude seems to cause our members of Parliament no end of worry, a brain seizure as they would not be able to point to the newspapers and say “it's a global problem”.
Look at the History and learn. “ The only thing we learn from history is – we never learn from history”. The economy of our country is being destroyed by our own members of Parliament and Previous members, They never learn, they have neither the intelligence or the integrity. Look On the internet at "Tax history of the US", "Tax history of Australia"' "Tax history of the UK", and "Taxes around the world". See if you gain some information, and for party members, some intelligence.

*No, but every time it moves, or gets processed, energy costs get added on.*

True Bazz, but cheap energy prices for the last 100 years have
encouraged wasteful energy systems along the way, so small
amounts are carted long distances, due to consumer choice.

So bread production, marketing and distribution, involves huge
waste. IMHO, that would change, if energy costs forced change.

For instance, AFAIK, you can't legally sell yesterdays bread,
or freeze it. So its thrown out, huge amounts. In the end,
the consumer pays for that. Our little town, has a small
bread van, driving long distances, just to deliver a few
loaves every day. Its all built into the price.

Technology has changed alot. Today I can buy a small flour
mill, grind my own wheat and bake a loaf of bread, right here.
For me its even easier, the wheat is right here in a silo.
I actually bought a small mill as an experiment.

So my point is this: People in our town, or even in cities,
could be supplied with bread which has used a whole lot less
energy down the chain, then is presently the case.

See it this way Bazz. A hundred years ago, people lived quite
happy lives, without all the huge energy consumption that we
have today. A backyard with some fruit trees, veggies and
chooks, is not a bad way to live. No doubt if energy costs
rocket, many will go back to that. So its not all gloom and
doom.

Good post, Yabby. People seem to forget that for the most part of humanity's time on this rock, we lived without oil at all.
Some would even welcome a return to those days :)

The problems I see is bureaucrats legislating to make being self sufficient harder, because it cuts into their revenue stream.
Councils are making it near impossible to do anything on your own land these days. And the greens, they're a pox on humanity that needs DDT'ing.

Bazz ok.
I said early in the thread we could run on gas,you rebutted LPG but said natural.
I agree.
I also spoke about governments owing those who own oil,service stations, exploration projects, the whole lot.
And gave my thoughts the cash invested is stopping true new fuels being given mass support.
We could switch our fleet to gas, not import oil,, ever but is any party any government game enough?
Bazz bloke, oil played no part none in the GFC

*The problems I see is bureaucrats legislating to make being self sufficient harder, because it cuts into their revenue stream.*

Yup RawMustard, but that is today. If we were truly required
to change, bureaucrats would have no choice but to comply with
how people change.

In my last venture, I was once threatened by a bureaucrat.
She claimed that she could shut me down, if she wished.
So I made it quite plain that her name would be on the ABC,
Channel 7 and Channel 9 news, if she tried. She never bothered
me again :)

People forget, we've also developed technology to save huge
amounts of energy and raw materials. For instance, I still
have a huge cupboard full of old LPs, from years ago. It
would have taken a huge amount of oil and energy to produce
them all. Today the whole lot would fit onto one of those
keyring storage devices. Its the same with books. A whole
bunch of e-readers are coming on the market, Google are
starting with 3 million downloadable books. In a few years
most papers will be downloaded, no need for all that energy
to chop forests down and ship papers around the countryside.

So lets say that high energy prices mean that we don't flit
around the world anymore, for our holidays. So what? We'll
simply holiday locally.

Virtually every car company around will have their first
electric vehicles on the market next year and 2012. People
will have a real option, to use cheap power at night to charge
batteries, base download power, much of which is being wasted
right now.

I watched an interesting doco yesterday on Discovery Science,
about the history of flight. In the 1930s, the Boeing 247
held exactly 10 passengers!

"""
In the 1930s, the Boeing 247
held exactly 10 passengers!
"""

Don't worry about air travel, we'll be flying whales soon enough :)

http://gizmodo.com/5381365/beautiful-concept-airship-looks-85-years-into-the-future

Belly said;
Bazz bloke, oil played no part none in the GFC

Sorry Belly, it was the direct cause of the GFC.
During 2007 oil prices were rising steadily. Unemployment in the US was
rising with it. Banks were getting into trouble.
Fertiliser, maize and petrol prices were rising.
Mortgages were starting to fail.
Why ? because people had the choice of buying food, petrol or paying
the mortgage. Well everyone drives to work in the US so they had to
drop the mortgage payment. Finally in July 2008 oil reached $147 a
barrel and two months later all hell broke lose in the financial world.
These were people who should never have been given a loan.

Then oil prices plummeted to $35 a barrel. Just as had always been
predicted by Kenneth Defreyes and Colin Campbell way back in the 1990s.

Note every one of the last five recessions except one were preceded
by a spike in oil prices.

Bazz sorry never agree with that long bow you have there.
Cheap loans to people who NEVER had the money to service them had nothing to do with oil.
By the time of the GFC oil was down very much in price.
Yabby has it right that plane is a good way to look to our future.
Fact is we nearly give our natural gas away, profit is made but think about this.
IF Australian went gas, government would tax it at about petrol rates, making it maybe less than petrol.
Lets not dream profits and extra tax same price.
Any day any year we could find knew power knew fuels but what we will not do is return to the dark ages.
International trade needs consumers ,we need that trade locally great pain will come but not over oil or fuel.
Personal debt is not covered by government,we pay for banks but it will be us who feel the pain, if we are not in control of our finances.

No Belly, look at the timing of the peak price and the GFC.
It occurred just as the banks crashed but the rising price during
the previous year put increasing pressure on the economy.
Then the economy crashed.
The economists say that when the cost of either energy or just oil,
I don't remember which, reaches 4% of GDP then the economy crashes.

Thats it, it is just too much for the economy.
Go do a search on the oil drum on oil price spike and GFC.
It is all there somewhere graphs and all.

Go read Jeff Rubin's book;
"Your World is About to Get a Whole Lot Smaller"
He was head economist at the Canadian CIBC and a well known
Nth American economist. You can find him on Utube also.
73

Bazz, high oil prices can affect economies, but the GFC was a whole
lot more then that. Oil prices just brought things to a head, but the
boil was already festering for a long time before that.

GM and Chrysler had been on the edge of bankrupcy for ages, the US
housing bubble in terms of buildings and price, had been cooking
away, as people reckoned that house prices could only ever go up.
Americans had been borrowing more on inflated house prices and
spending the money. It had to burst eventually, one way or another.

RawMustard, the wheel might yet turn full circle! I'm pretty sure
I read an article over this weekend, which suggested that Palmer
was investing in Zeppelins. The way I understand it, its actually
a fairly energy efficient method of air travel, as long as they don't catch
fire

VFT and Rail improvements and lines are still the best options for the near future; to assist work commuters and people who are and have always been low income earners missing out on a holiday[s] in their 30's 40's and 50's, faced with obstacles and unexpected rip-offs throughout their lives.

As we age and our last day on earth seems close, some seem to find reason the rest of us will follow.
I do not fit that mold, my life is not ending yet but my home is passing one day to another generation of my family.
They will have no public transport no town water no sewage but they will live well.
Their children will see communications that would leave us stunned.
Fuel in cars that lets them go the same places and more I do.
Electricity may not be the power that lights them runs the home, but they will be ok.
Wars will come and go man is unable to think yet that we need not be so different.
But we are resourceful we have come so very far from those caves and hard times bring new inventions.
oil Bazz did not bring about the GFC greed did.

yes greed did...lol

have yiou noticed the latest sceme for greedy investers?

[i got sick of news radio..playing piefloater sports
so went across..to some easy listening...and hear the latest scam for investers..[subsidised by govt ..ie the rest of us]

this is a grand sceme
offers positive cash flow FROM THE FIRST YEAR
[watch them do some other tax offset sceming too]

anyhow the scam is buy a house[unit]..for under 300,000
to 'house'..an essential qld govt worker...who pays his govt assured rent..paying off ya investment..[guess thats why we sold..{GAVE AWAY}..our state forrest for 800 million

thing is govt kicks in over 100 grand..for the invester's benifit
and the invester...gets positive return..for..[likely?]..a cheap rent
but an investment..he can get capital gains from

i seem to recall thenm saying it will double in ten years
[lol]...looks like anna blight still thinks realestate can only go up

thing is..thats how these retards think..[ie they dont]
they could have parcelled out 35.000 hectare lots for 30 billion[payed off half the debt..instead of serving a few logging companies..state forrests for less than one billion]

se the thing is..govt gave away bogga road...then a developer..'developed'..it..then leased it back to many govt depts[centralising many govt depts]...but the thing is..they live on the northside[like where these new appartments..will be built

and work on the south side...thus will need the cross tunnels..and pay tolls etc...see govt can only think of serving its own needs..and those of the party machine

why bother getting angry..at fools
being decieved by greedy

heck why bother explaining any of this
to those who couldnt care less..or just see a new investment oppertuinity

thing is the essential servants..ARE STILL RENTING...!
essentially paying OFF..the inestment..for the clever guys
wanting sure rent returns...assured by govt guarentee...till govt goes bust

or we dont need them anymore..essentially speaking

the poor slobs will never know
govt could have gifted them THE..plus $100.000..to BUY their own homes

and cut their wages..instead of giving their extra wages..to investers

bah im still spewing bile

but here is more

public servants will be installed into slums
perpetually renting...then in their old age sold-out at private inester whim...put into homes..[old people homes]...living on the publick purse..till death

in the end..having no asset
no ownership...[unless they buy each others rentals]

paying tolls...[or maybe getting free public transport..
or govt cars and free toll cards..[who knows]..

these retards are too clever
[who was that govt member that joined devine..or went into realestate development..wonder if he cam,e up with this and the bogga road scam..or if public servants scemed the whole scam themselves

we could have been having a huge development occuring in the state forrests...building a northern town..like logan ...or redlands..but instead are going to have hundreds of units built in the northern subburbs..[ie not near where their work is]

whatever happend to decentralisation
who was the bogga road developer..that cleaned up on bogga road redevelopment..[back to the govt purse]

indeed who now owns copntrols all them former govt offices/lands..now they all been centralised..in bogga road...whats going down..the media simply dont bother asking about..let alone explaining

bah

essential workers
why arnt you angry?

cant you read the tea leavings
do you even have a tea lady anymore?

The problem with your "not exactly false" theory, RawMustard, is the quality and content of "reports like this".

>>I dunno, Pericles, it's not exactly false either. I mean reports like this seem to be all too frequent these days.<<

I'm not sure if you've read the piece that you linked to, but it is nothing more than hysterical nonsense.

"...the Fed doled out $12.3 trillion in near-zero interest loans, without Congressional input.<<

They lent this money, they didn't "dole it out".

The "near zero" interest was entirely appropriate in the circumstances, given the short-term nature of the loans. In fact, it turned out that both Westpac and NAB picked up a slice of the action, to the benefit of their customers in Australia.

And they didn't need "Congressional input" to do their job.

The entire article is an emotion-driven, fact-free beat-up, from start to finish.

Sadly, on the internet it is all too easy to propagate this sort of rant as if it were factual.

Even more sadly, people tend to believe it simply because it has been published, and fail to perform even the most cursory reality-check on the stuff they read.

pericules..quotes a quote..<,"...the Fed doled out $12.3 trillion in near-zero interest loans, without Congressional input.<<

then replies with this

<<They lent this money,..they didn't "dole it out".

<<The "near zero" interest was entirely appropriate in the circumstances,..given the short-term nature of the loans.>>

SO HOW MUCH WAS THE INTREST/rate...
on usa.. govt bonds..they used to create the money?

alex jones tells me the differential was 2 percent..LOSS

ie if all they did...was take the NEAR intrest free LOAN
and bought govt bonds with them
AND DID NOTHING ELSE....[whats two percent of 12.3 TRILLION]

heaps of yanki dollars..
to give to the world's bankers?

with them holding govt bonds too...

<<In fact,..it turned out that both Westpac and NAB picked up a slice of the action,..to the benefit of their customers in Australia.>>.

ok...so they get a loan...[near intrest free]
and we get near a two percent INCREASE..in intrest?

you do funny math master
how can you defend the indefens-able?

banks enriching themselves
and getting govt bailouts from us as well

[and still they shall go bust next year
and still they got their xmass bonus

and still..they dont realise how bad..they screwed the globe up
with cheap loans for them...and high credit card intrest for the working slobs..trying to pay..the services bills[water/electicity]

do you even know...where the pension fubnds went to
who holds the real assets...we think the bank owns..

but bundeled...to the world bank...imf..etc

who holds securitised paper[shares..gold certificates..food futures]..so we can trade in PROMISES..yet never gaining hold of the actual security..or actual product..

the scam is beyond defence
wiki begins releassing the info...next year
next year some huge marbles.. start to tilt...and then watch the media wilt

http://www.austal.com/index.cfm?objectid=CE9A579D-65BF-EBC1-2B2FA8460BFE2C23

There we have it, a good news story! Mind you, you'd hardly know,
our press would rather cover something else.

Another unsung export hero from the West! A 100 million $ ferry,
for export to Denmark-Sweden, built right here in WA, the export state.

Then we have people complaining on OLO, because we import 4$ t-shirts
from China. Next they would want to use tariffs, to force us to
buy their crappy products, no matter how crappy.

yeah great stuff yabby
you should convert all ya holdings to euro's

http://www.youtube.com/user/RussiaToday#p/u/24/m2Dydw2u-AI

better vidios in the colum to the right
but if ya think money...anyone making money is god

your 4 dollar tshirts arnt that hot
bet you never even..owned one

keep selling off the farm
all them yanki dollars
all then fiat euroes

you must be in heaven...lol

im sick of tea leavings
im a coffee man myself

The Hidden History of Money
and New World Order Usury Secrets,

The Plan by International Banklords Feudals to Control the World

Free pdf download: http://www.lulu.com/content/165077

someone has to create money..and it’s the bankers who have expropriated this power from THE PEOPLE.

*They create it..as a ledger entry from..*nothing
with no liability to themselves and collect interest eternally from the taxpayers.

Banks don’t lend you anything*...

Bankers understand the difference between money..and wealth. Money buys things...If you could counterfeit money,..you could buy the whole world and control Congress...and this they HAVE done.

Wealth is anything..that you can sell.

When bankers create new*money..and lend it to you, you must work for the banker for free..to repay the loan..or he forecloses and gets your home or car...*for free.

The money creator gets more..of your wealth for free..using a suit and tie than a gunman does..pointing a gun to your head.

The banker says,..repay the loan*..because

the bank lent you money.

We simply ask one question...did they have it..before* lending..or did our borrowing..CREATE IT..?

Should the one..*who funded the loan..be repaid the money?

If they answer YES or NO,..
the bank must forgive the loan..and zero out the debt.

That is the one question that they do not what to answer because the borrower funded the loan..as proven by the bank's own bookkeeping entries.

Where did all the money come from*

Nearly every business and family has huge debts.
If they had money,..they would not have loans.

The banks created the new money..as a ledger entry from nothing..and with no liability*..to themselves,

a.k.a. counterfeiting with no assets of their own,..and lent it to you.

More explanation below……

The Hidden History of Money and New World Order Usury Secrets, The Plan by International Banklords Feudals to Control the World

For more info on the enslaving financial system imposed on us by the World’s Ruling Elite,

please watch these video documentaries:

· The Money Scam VIDEO
http://www.thepeoplesvoice.org/TPV3/Videos.php/2010/11/21/the-money-scam

VIDEO Sacred prostitution and the history of money

http://www.freedomsphoenix.com/News/079707-2010-12-04-sacred-prostitution-and-the-history-of-money.htm?From=News

Liberty Cap Press/The Invisible Hand
In this video, the origin of coin money in the ancient practice of "sacred prostitution" is explored, as well as the origin of the word "money

· http://video.google.com/videosearch?q=9050474362583451279 Money as Debt
· http://www.informationclearinghouse.info/article18205.htm Explaining the banking money fraud
· http://video.google.com/videosearch?q=money+masters&hl=en The Money Masters
· http://video.google.com/videoplay?docid=-4991544789166784731&q=money+masters&hl=en
· http://video.google.com/videoplay?docid=-2641342891593561909&pl=true Masters of the Universe - The Secret Birth of the Federal Reserve
· http://www.youtube.com/watch?v=RHmflEATK4E&NR=1 "Cash (Money)" by Prince Charles and the City Beat Band
· http://video.google.com/videosearch?q=%22monopoly+men%22 Monopoly Men
· http://video.google.com/videoplay?docid=-329290799725919064 Collapse of the Federal Reserve: The Second American Revolution
· http://www.youtube.com/watch?v=1dp6PuT_eH4 Ring of power”
· http://www.notjustnotes.ws/howbanksrobyou.htm Money as debt, how the Banking Dynasties Rob YOU

http://www.mecfilms.com/update.htm http://www.mecfilms.com/fiat/ FIAT EMPIRE - A Closer Look at the Federal Reserve

http://video.google.com/videoplay?docid=5232639329002339531&hl=en FIAT EMPIRE - Why the Federal Reserve Violates the U.S. Constitution
http://www.youtube.com/watch?v=eVBDwAuCdPw&feature=channel_page Canada for Sale to the Bankers

http://video.google.com/videoplay?docid=-1649840529243379722&q=cheney+%2B+rockefeller Plans of the international bankers to dominate the entire world both economically and politically

http://video.google.com/videoplay?docid=449294564876413449&q=genre:documentary&total=256924&start=660&num=10&so=0&type=search The Capitalist Conspiracy: An Inside View ... CFR AND BANKS ... The history.

http://www.zeitgeistmovie.com/ THE ANCIENT CONNEXIONS ... WATCH THEM ... THEN CONNECT THE DOTS.

http://video.google.ca/videoplay?docid=8667011121551944391&q=eustace+mullins Eustache Mullins on the Federal Reserve System

http://www.youtube.com/watch?v=4LSnkcWRYB8&NR=1 Louis Farrakhan on the Fed fraud

http://www.youtube.com/watch?v=JxO-z0XWaLc&feature=related Farrakhan exposing the Biblical "Synagogue of Satan" and its agents: The Rothschilds and Warburgs. This lecture was done during a very special Saviours Day in 1995, preceding the Million Man March to Washington D.C.

http://www.youtube.com/watch?v=UGxdB1bhL24&feature=related Video on Russia TV: Ex-Marine explains why the Federal Reserve does not want to be audited and is trying to block legislation introduced to finally audit it in depth:
video documentary: Fiat Empire http://video.google.com/videosearch?q=FIAT+EMPIRE&hl=en&emb=0&aq=f

http://video.google.com/videoplay?docid=3051024550497129264&q=3051024550497129264&ei=NgIaSNPZHpq2rALF6KjzBw Conquering the Spirit of Debt This amazing sermon given in Sept 2003 by Rod Parsley at Breakthrough Church in Columbus Ohio details the story of how Paul Warburg, John D. Rockefeller, and J.P. Morgan met with Senator Aldridge at a conference in Jekyll Island to create the Federal Reserve Banking System in America circa 1913.

Most people hear about the "national debt" but few ask what it means or who we owe. This was the best quality video I could get, but I hope this gets the message through.

· http://www.freedom-force.org/videos/video.cfm?&player=2-1-05mandrake G. Edward Griffin interviews 83 year old Norman Dodds in the year 1982 in a rare interview that exposes the New World Orders infiltration by large corporations that are merging the USA into a world government(New World Order).

He explains the infiltration of banking and the infiltration of the public education system...Dodd served as an investigator for Congressman Reece's Special Committee on Tax Exempt Foundations..(commonly referred to as the Reece Committee).
http://www.youtube.com/watch?v=C8cC21jB9E

http://www.youtube.com/watch?v=C8cC21jB9EE

1984:..Grace Commission Report under Ronald Reagan..showed IRS is a fraud*..that collects taxes for the Banking Dynasties.."100% of what is collected is absorbed..*solely by interest*..on the Federal Debt

...all individual income tax revenues..*are gone before one nickel is spent on the services..taxpayers expect from government."-Grace Commission report submitted..to President Ronald Reagan-January 15, 1984

“Like it or not,..you are a slave.
You admit you are a slave every April 15th!..[tax day]

That’s when you sign forms that “voluntarily” lay bare to the government the most private details of your life! And few people realize the income tax is a slave tax. It can never be compatible with the life of a free people”. ALAN KEYES - Republican Nominee for President, unfortunately, the only Republican willing to speak out along with Ron Paul.

Even the inventor of the electric light,..Thomas Edison, joined the fray in criticizing..the system of the Federal Reserve:.."If our nation can issue a dollar bond,..it can issue a dollar bill.

The element that makes the bond good,
makes the bill good,..also...

It is absurd to say..that our country can issue $30 million in bonds and...not $30 million in currency...

Both are promises to pay,..but one promise fattens the usurers..and the other helps the people."

In President Lincoln’s words (he was assassinated by the Banksters’ agent) “"The Government should create, issue, and circulate all the currency and..credits needed to satisfy..the spending power of the Government

and the buying power of consumers...By the adoption of these principles,the taxpayers will be saved immense sums of interest."

"In a recent conversation with an official at the Internal Revenue Service,..I was amazed when he told me that

'If the taxpayers of this country ever discover that the IRS operates on 90% bluff the entire system will collapse'".-Henry Bellmon, Senator(1969

there is PAGES AND PAGES OF MORE PROOF
[only posted a third so far

read the full exposure HERE

https://mail.google.com/mail/?ui=2&ik=2b2311b2c5&view=lg&msg=12cdc4a34f8441d8