Power Prices, Gerry Brownlee, Rail, Treasury putting it all together

This is a dance on a unicycle, while juggling, on the deck of a sinking ship. By which I mean, there are several variables in the mix, all morphing concurrently. Boolian Algebra, perchance?

Power prices will reflect any shift from fossil fuels, like a partial move to electric transport (cars/trains/buses) and from diesel heaters etc. To that extent, they will relatively escalate. The problem will be compounded by the relative lessening in incomes, due to the lack of energy. Tack on a growing demand, and a lack of ability (fuel to build infrastructure – or even maintain existing) to grow, and you just compound the problem. The only pressure-relief is efficiency, aided perhaps by more home generation.

Brownlee has promised ‘savings, from a programme we’ve put (or are putting) in place. Read: selling off the state enterprises. Why do I predict that? He’s intellectually probably not capable of thinking further than that, he’s mixed up with a Cabinet awash with that ideaology, and it has in turn made Treasury go the Scott way – so there’s no query, no devil’s advocate.

Joyce is in the same intellectual band, in my opinion. The monetarist approach just doesn’t do anticipation very well – read: at all. His comments about rail, are just dumb ideaology. Hey boys, we can’t have that in Government hands, so if we can’t sell it without howls of protest, we’ll choke it to death, then say ‘we told you so’. Tragic that such a socially essential service will be curtailed by such a clodhopper. Just hope it isn’t too far gone in five years time or so, when we need it.

Treasury – and in behind it Bill English via Scott – is tramping on through the Government services. I don’t mind an audit from time to time, but a mature society needs to acknowledge the need for governance, and ensure it exists.

Monetarism is just an excuse for greed, and if things are sold off by this Administration, we must cogitate upon ways to get back what is socially essential. If, for instance, we need to get rail back from an overseas owner, that can be done. If fiscal systems are operating still, you can boycott the service, and pick it up for a song, you can buy it as Cullen did, or you can comandeer it as is done in wartime. All are on the table.

We can expect that somewhere around 2011-15, there will have to be a ‘fireside chat’, where the PM acknowledges that things are not flash, that it will require sacrifices, all hands to the pumps, esprit de corps, blah blah. I think it may be sooner rather than later. Excess capacity is running at about 4 mbpd at the moment, on a depletion rate of say 5%. That says no excess by next year – which is exactly what Birol is saying. Demand growth will not be answered at that point – prices will rise, bubble and burst. One more of them, and you can’t see them blaming investors again. It will be interesting to see who does what internationally. Suppliers will hold onto their stocks more, unless militarily threatened. Whether ‘demand for dairy products’ holds up in that scenario, is anyone’s guess. I don’t think fiscal systems will survive, but that may be pessimistic – it’s a big juggernaut to fail overnight.

Don’t be in debt – grow plenty of Veges, invest in having a community of friends…….

Don’t come visiting the Thunderdome, I’m not as receptive as Tina, and besides, there won’t be the plastic around…


2 Responses

  1. I hear the don’t be in debt meme a lot.

    Is that because supposedly the interest rates will go through the roof? But aren’t high interest rates a result of inflation, not deflation?

  2. Cowbell,

    Inflation vs deflations, we are likely to have both in extremes in quick sucession…

    The Global financial crisis, has resulted in Deflation (evidenced by Countries falling economic activity, GDP numbers)…

    The Policy response has been to incease the supply of money, but if that newly printed money can not generate corresponding economic value, it’s purchasing power falls resulting in Inflation.

    Given the scale of the USD Money Prinitng… and that fact that Oil is only traded in USD… we in NZ get to import their inflation (money printing) and wel get to pay again with higher interest rates when RBNZ lifts the OCR to compensate for higher prices (CPI).

    Debt Slavery to the unelected “Banksters” that control the US Federal reserve… Welcome to the real world Neo.

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