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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (19575)	6/13/2007 7:13:57 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 217557

TJ, have you checked NEM lately? It's looking very much like dead money. finance.yahoo.com G isn't doing all that great either vs Q which is hanging in there around $42 after a year of pummeling over patent fights. The Rapture is still not happening with going on two years of housing declines [in the USA]. Meanwhile, NZ, being the world's economic powerhouse [if uridashi debt is ignored] continues to roar, with the NZ$ reaching all-time highs since the gold standard was in place. Give or take a bit. Houses continue to increase in price even faster than the NZ$ increases. Kiwis are now worth about 7 times what they were in Y2K [in NZ$, if we also exclude debts]. No wonder the economy is booming. The Wealth Effect and Sudden Wealth Syndrome has gone to their heads. For example, consider a NZ$400,000 house in Y2K [which was a pretty nice house in upmarket areas]. In US$, that would have been US$200,000 at the exchange rate then. The house "owner" would have had, for example, a NZ$200,000 mortgage. So they had about NZ$200,000 in assets then, or US$100,000. Now, the same house is worth about NZ$800,000 or NZ$900,000. Let's assume the mortgage principal hasn't dropped much because the owner bought a lot of coffees and a few trips to sunny places. The NZ$ is now worth US75c. So the house owner's house is worth about US$650,000. Suppose they sell it and get their NZ$800,000 and repay the NZ$200,000 mortgage. That would leave them NZ$600,000 or about US$450,000. Meanwhile, they haven't been paying rent, which was nice [though the mortgage would have felt much the same in outgoings]. They have enjoyed a tax-free capital gain of US$350,000. In those 7 years, they would have been earning about $50,000 a year [before tax] [if they were fairly well paid]. It's nice to earn, tax free, the same as one's actual salary. You can see why NZers are feeling quite wealthy these days and why the economy is booming. Meanwhile, GDP per capita has NOT been increasing so fast. NZ is still a farm with a lot of rain. The population is about the same [give or take a couple of hundred thousand newly-rich Chinese, Koreans, etc]. Swarms of productive NZers have left for countries where they are not used and abused by government imposts, regulations and suffocatocracy and kleptocracy in general. They have been replaced by swarms of Indians, Iraqis, Somalis and general escapees from harder places. Many have fled to the provinces. I have heard a vicious rumour that debts have to be repaid some time, even if one's pay rate is not increasing. It's true that debts don't have to be repaid if benefactors keep lending more. So far, so good. Japanese just love our high interest rates compared with their Unhappy Meal rewards for money in their post office account. New Zealand in general has a good reputation in Japan, so they think we are "safe". I think something will happen. Sure enough, something did happen. The Reserve Bank decided that if people want to buy NZ$ so much, and the Reserve Bank has a method of producing more of them for sale by simple expedient of putting some zeroes on a piece of paper, they might as well supply the buyers what they want. So they did, in a big enough way to cause a sudden drop by 1c - a warning shot across the bows of people who over-value the NZ$. Personally, I think that's an excellent idea. I have always thought that one shouldn't tell customers "No". Just tell them "Yes" and how much it will cost. If Japan wants to buy every NZ$ there is, I'd be happy to sell the whole lot and throw in another truckload of freshly minted NZ$ as well. We might as well get something instead of giving them away to any dead-beat bludger who can trick their way into NZ. Mqurice