Wednesday, October 15, 2008

Do politicians ever learn? More stimulus

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Most OECD countries are burdened with huge debts. These debts are the result of policies that encouraged debt creation. The solution of the Australian government is to 'double-up', to in effect support the policy of the Australian Liberal Party by not only continuing the policy of offering cash grants to home buyers, but increasing the grants to make it easier for them to buy. This is great short term policy. But understand where this is going. ITS GOING TO SCREW BUYERS and everyone else, and here is why. These people are going to be taking out variable rate loans because they can see that interest rates are falling, asset prices seem to be reflating. The problem is inflation. We are going to see a lot more inflation. These people are going to be screwed by higher interest rates at some time. That's not to say you should not buy, but this is a traders market, not an investors market. The long cycle is over. This is the time to jump on short waves (rallies), and play on the soft stuff. Do you really want to commit to another home. What else is there? Well I recommend foreclosed Asian property because its still very cheap and higher yields will drive a lot of money there. Otherwise I would stick to trading equities, particularly precious metals. But what them first. They might fall back in the short term because of falling interest rates and a resurging stock market. More likely I see gold consolidating until the rally is over, then gold will take off.
This is another example of politicians compromising the long term future of the country for their short term political careers. We need political reform! Watch my blogs for the answer. I've got a book on this coming.
Andrew Sheldon

Saturday, October 11, 2008

The politics of wind farms

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There is an emerging battle in Australia centered in NSW, Victoria and Tasmania. The pertinent governments are pushing for the development of wind farms to meet the government's target of 20% renewable energy. It seems an unlikely target. The power is required to meet the needs mostly of the cities, but the generation will occur in the countryside. Therein lies the problem. Some farmers witnessing a decline in on-farm earnings and few opportunities to generate off-farm earnings are keen to receive royalties and upfront payments for a wind farm. The problem is - the neighbours are not happy. I have some sympathy for their position. Many farmers value the rural life and wind turbines on the horizon are not an attractive feature for many people. Some don't mind them. Clearly these people are put out by the personal gain of certain farmers.
I actually think farmers should have the right to do with their property as they wish so long as it doesn't impact on the neighbours property. Herein lies the problem. The scenic view of a property is impacted by what your neighbour does. Should the neighbour have recourse to prevent a development?
Rural communities are very cohesive, yet such issues are dividing farmers as much as coal mines in Gunnedah, NSW. Business people welcome the jobs and prospect of more patrons. Farmers and lifestylers lament the prospect of damage to their lifestyle and the ambience of the place. Sometimes the risks are exaggerated. There are coal mines in the Gloucester area, but if you were driving through you would never know. There are also mines in the Hunter Valley and they are ever-present. Clearly people want and expect a say in how their environment is developed. As it stands, they don't have that power. State governments generally make such planning decisions, and mining is conducive to job creation.

It is difficult to stop mining because the right to mine is vested with the state governments. The right to export is vested with the Federal government. In the case of wind farms its a personal decision by the farmer. The best suggestion I can make to farmers who don't want wind farms is:
1. Decide if your property has a consistent wind breeze
2. Get all the property owners in the area to sign an agreement to have their property placed on a register of 'no wind farms'. This agreement would be a legal document preventing the person from developing a wind farm, and that restriction would be transferred with the property.
3. A legal requirement for the owner to sell the property with a notice of restraint on the development of wind farms

Critics of wind farms might be unreasonable, but that depends entirely on their point of objection. The proponents of wind farms have equally dubious opinions. The idea that wind farm critics are 'scared of progress' is a stretch. There are valid reasons for not wanting them.
Andrew Sheldon

How constitutional is your constitution?

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Ever wondered how fair governments are? Is it lone individuals, or is there something fundamentally wrong with the way government’s are organised. In the UK yesterday, the Chancellor of the Exchequer Alistair Darling ordered that all assets held in Britain by a troubled Icelandic bank be seized in order to protect the interests of British depositors with funds in the Iceland bank. There are several problems with this:

1. He used anti-terrorism legislation in order to seize the assets
2. He effectively placed Britain’s interests above those of bank depositors in general.

This was a gross misuse of authority for several reasons:
1. British banks which loaned funds to the Icelandic bank are more culpable for the Iceland bank failure than any depositors
2. British depositors should rank equally with all other depositors
3. The Chancellor is over-extending himself on this issue, using powers he does not have. It’s a total misuse of power. There is no element of terrorism, and it highlights the danger of countries enacting legislation in times of emergency
4. The capacity of governments to act this way highlights the dangers of arbitrary rule, and undermines the credibility of the justice system

We need to draw a distinction between the two elements of the justice system. There is the part of the justice system concerned with common land, which is basically logical. Then there is the enacted laws which are approved by parliament. It is these laws which cause all the grief because they are arbitrary. It matters little whether they are created for the purpose intended, misused or serving the interests of the country, they are immoral. The parliament of each country needs to be abolished and a few framework needs to be established on a similar framework to common law – a framework based on reason. Reason permits no contradictions or arbitrary actions as we have seen evidenced today. Such actions reflects flaws in Western constitutions. It is not so much a loophole in the law as an illogical legal structure inherent in the constitutions of all Western governments, which are for the most part based on the UK model of governance. There will come a time when others will question this model – just as I have been doing. Mind you, I could be labelled a terrorist in a number of countries for questioning the validity of the constitution. Need I say more! Reason has been quashed by coercion. Well....not quite.
Andrew Sheldon

ConvinceMe.Net - Anyone up for a debate?