It seems that a case will soon be set to make legal history in a New South Wales court. In June last year two young men accompanied by two teenage boys coerced a sixteen year old girl to accompany them into an underground car park in the Sydney suburb of Liverpool. The teenage boys waited outside and one of the young men brutally raped the girl. She managed to call police on her mobile phone and when the police arrived the two young men were arrested - and DNA evidence linked a rapist to the victim.
That is where the investigation faced an impossible situation. The two men were identical twins, and while the DNA match to the crime established that the owner of that DNA was the rapist, the DNA of identical twins - is also identical. At this stage of technology, it is impossible to differentiate which twin raped the girl with any degree of certainty.
If the testimony from the victim establishes that she was raped by only one person, then the prosecution has a dilemma. Obviously the girl can not tell one identical twin from the other and yet the physical evidence clearly proves that both are the guilty party. It would go against all the tenets of both common sense and justice to charge both with this crime, and yet as far as the principles of science indicate, in a biological sense they are one and the same person.
This conundrum has resulted in bail being granted because magistrates are not comfortable with the lack of certainty provided by the prosecutors when it comes to establishing a case for the matter to go to trial. No doubt it is also sending both sides of the legal fraternity scrambling for precedence in the law books. Identical twins have existed for as long as the human race has populated planet earth and it is possible - indeed likely - that some sort of identification issue has vexed the law in the past.
The time factor is now working against a solution. The crime will soon be over a year old and testimony collected at that time would not have concentrated on identification evidence because it would have been assumed that DNA would have proved guilt. The recollection of those present is now unlikely to be sharp or clear, and would most likely be successfully challenged by the defence if presented.
No doubt this matter will have attracted keen interest from the judiciary. Some judges may be keen to sit on such a case and make legal precedent with their decision. Some defence counsel may be equally keen to deliver the sort of summation that goes into the history books - and elevates their standing to bring them both fame and fortune.
Society being what it is, there is an even better chance that this will never grace the inside of a courtroom. It is a subject that will be eagerly devoured by the shock jocks of talkback radio and on Facebook and Twitter. When the public become involved it automatically moves into the political arena - and here we have two conflicting scenarios that seem ripe for political gamesmanship.
On the one hand an innocent young girl has been raped - and is seeking justice. On the other, an innocent young man and a guilty one can not be separated. Unless the prosecution can find some new form of compelling evidence, a fair trial seems impossible.
It may be that society will have to fall back on an old wisdom that is said to be the cornerstone of our justice system. " It is better that a hundred guilty men remain free than one innocent serve imprisonment for a crime he did not commit. " !
Saturday, 7 March 2015
Friday, 6 March 2015
Poor Judgement !
The ICAC case against leading Crown Prosecutor Margaret Cuneen is nearing collapse. The hearing was postponed for ninety minutes because ICAC had failed to lodge key documents and this impelled the Chief Justice to describe the omission as a "scrappy hand up ".
This whole matter reeks of personal scores being settled and the NSW Deputy Premier has seen fit to accuse ICAC of "pretty poor judgement " in pressing ahead with a case that clearly lacked merit. It comes at a time when decision making in senior police ranks is also under fire. The people we look to be be totally impartial and deliver justice without bias are showing the propensity to settle personal scores by using their power to involve the courts to blacken characters by guile and innuendo.
Another case of the "tall poppy syndrome " ended up with a judgement by the High Court which will have uncertain repercussions. Back in December 2012 when the Duchess of Cambridge was suffering morning sickness and was hospitalized Radio Station 2DayFM Dejay's Mel Greig and Michael Christian pulled an audacious stunt by phoning the hospital and pretending to be the Queen and Princes Charles. They convinced a nurse who answered the phone to connect them to the Royal patient's ward.
Unfortunately, the nurse that connected that call was mortified - and committed suicide, and since then the matter has swirled around between an examination of the legal aspect - and what punishment should be inflicted on what some consider an "act of gross stupidity "! The DJ's have apologised and it seems an unfortunate coincidence that the particular nurse involved was highly strung and had previously attempted to take her own life - and this incident finally pushed her over the edge.
It quickly became evident that competitive radio would milk this incident for all it was worth. It became an issue in the courts and last year the Federal court found in favour of the station and decided that the Australian Communication and Media Authority ( ACMA ) had overstepped it's boundaries in handing out punishment. This was then appealed to the High Court, and that court has upheld the ACMA contention that it had the power to to make an administrative finding - or express an opinion that a person had committed a criminal offence ".
It seems that 2DayFM may be stripped of it's broadcasting license under this finding. It is one of the leading stations and if it is forced off the air this will seem a huge overreaction to what was intended to be a fairly harmless gag. It certainly was not intended to do harm and by pure chance the person who picked up that phone was somebody whom fate had disposed to suffer a nervous disposition that would lead to tragedy. Hundreds of others may have chanced to take that phone call - and the incident would have been treated as pure comedy on both sides of the world.
Radio lives and dies by the ratings bestowed by listeners. Performers who drag in audience numbers earn big money - and keeping those numbers tuning in depends on the crazy entertainment offered.
Competitors using this issue to try and damage a rival couldn't care less about the unfortunate death of a nurse. To them, it is a chance to score a victory and destroy a rival - and that is an aim they will pursue even if it takes years and involves a huge expenditure.
It seems that those in high places who should be earning our respect - in places like the courts, law enforcement and the big end of town - are just as prone to run personal vendettas and play fast and loose with the truth as the criminal milieu they profess to despise.
This whole matter reeks of personal scores being settled and the NSW Deputy Premier has seen fit to accuse ICAC of "pretty poor judgement " in pressing ahead with a case that clearly lacked merit. It comes at a time when decision making in senior police ranks is also under fire. The people we look to be be totally impartial and deliver justice without bias are showing the propensity to settle personal scores by using their power to involve the courts to blacken characters by guile and innuendo.
Another case of the "tall poppy syndrome " ended up with a judgement by the High Court which will have uncertain repercussions. Back in December 2012 when the Duchess of Cambridge was suffering morning sickness and was hospitalized Radio Station 2DayFM Dejay's Mel Greig and Michael Christian pulled an audacious stunt by phoning the hospital and pretending to be the Queen and Princes Charles. They convinced a nurse who answered the phone to connect them to the Royal patient's ward.
Unfortunately, the nurse that connected that call was mortified - and committed suicide, and since then the matter has swirled around between an examination of the legal aspect - and what punishment should be inflicted on what some consider an "act of gross stupidity "! The DJ's have apologised and it seems an unfortunate coincidence that the particular nurse involved was highly strung and had previously attempted to take her own life - and this incident finally pushed her over the edge.
It quickly became evident that competitive radio would milk this incident for all it was worth. It became an issue in the courts and last year the Federal court found in favour of the station and decided that the Australian Communication and Media Authority ( ACMA ) had overstepped it's boundaries in handing out punishment. This was then appealed to the High Court, and that court has upheld the ACMA contention that it had the power to to make an administrative finding - or express an opinion that a person had committed a criminal offence ".
It seems that 2DayFM may be stripped of it's broadcasting license under this finding. It is one of the leading stations and if it is forced off the air this will seem a huge overreaction to what was intended to be a fairly harmless gag. It certainly was not intended to do harm and by pure chance the person who picked up that phone was somebody whom fate had disposed to suffer a nervous disposition that would lead to tragedy. Hundreds of others may have chanced to take that phone call - and the incident would have been treated as pure comedy on both sides of the world.
Radio lives and dies by the ratings bestowed by listeners. Performers who drag in audience numbers earn big money - and keeping those numbers tuning in depends on the crazy entertainment offered.
Competitors using this issue to try and damage a rival couldn't care less about the unfortunate death of a nurse. To them, it is a chance to score a victory and destroy a rival - and that is an aim they will pursue even if it takes years and involves a huge expenditure.
It seems that those in high places who should be earning our respect - in places like the courts, law enforcement and the big end of town - are just as prone to run personal vendettas and play fast and loose with the truth as the criminal milieu they profess to despise.
Thursday, 5 March 2015
Snail Mail. Dearer and Slower !
The writing has been on the wall for letter post since the electronic age ushered in emails and the ability to pay bills with the click of a mouse. Postage stamps have had four price rises since 2008 - and now the price is about to jump to a dollar and the delivery will take an extra two days. There is the expectation that not only will mail volumes shrink further - faster - but whole industries will see this thrust change upon them.
We are heading into a two speed letter rate. The present 70 c will increase to a dollar for "Standard "delivery, which will take two days longer to arrive in your letter box, but for those who need a faster service a yet not disclosed "priority " price will apply. Pensioners and concession card holders will be shielded by a 60 c post charge and Christmas cards will receive a 65 c discount rate.
It seems inevitable that this will convince the last holdouts still paying bills by posting a cheque to move to the cheaper electronic alternative and industry will become more aggressive in moving their accounting to direct debit and electronic billing. It is quite possible that those who lack computer access will be still offered the old mail billing, but at a premium cost for what will be termed a "special "service.
An array of magazines still reach readers through the post and these are negotiated on a bulk rate by consultation, but it seems inevitable that this rate will also rise and that can only mean an increase in subscription rates that will drive many to embrace the "e " version in replacing print. The proprietors of titles such as Time magazine, the Economist, The Monthly, National Geographic - will all face decisions now that transmission costs are running against the print version.
Then there is the giant greeting card industry, the mainstay of most newsagencies. Will the increased cost of postage doom the habit of mailing birthday cards ? Even Christmas cards are fast becoming age sensitive. The volumes are dropping as the younger generation embraces the novelty aspect offered by the many apps enabling colourful messaging.
The postal service is a big employer of labour and we are yet to learn what cuts will occur to trim the workforce to this new delivery timetable. It seems likely that the sorting of mail will be reduced to a day shift to avoid the present overtime paid for night sorting, and mail transport between delivery centres will be less frequent. It is possible that road transport may replace air cargo as a cost measure and mail box clearance times may face time extensions.
We are still retaining the universal cost of mailing from any point in Australia to any address in this country, but now there is a speed option geared to the stamp cost. A vast quantity of business mail passes directly into post office boxes, but the post office is still required to retain a vast network of mail delivery people and their equipment to hand deliver an ever diminishing volume of letters to every mailbox in every city, town and village in this huge continent.
Basically, Australia post is fast morphing into a courier service. As the number of postal items needing delivery to a suburb decreases the cost of handling each item steadily increases. There was talk that mail deliveries might be restricted to each alternative day, but that has not been implemented - so far ! Instead, delivery has been slowed to reduce costs and the letter rate increased - and it is likely that hard headed decisions will see that rate rise further.
We live in a time of great change. The urgency of what arrives through the mail is steadily decreasing as faster means of communication fill that gap. Now it is a matter of industry and the public adjusting to a new reality !
We are heading into a two speed letter rate. The present 70 c will increase to a dollar for "Standard "delivery, which will take two days longer to arrive in your letter box, but for those who need a faster service a yet not disclosed "priority " price will apply. Pensioners and concession card holders will be shielded by a 60 c post charge and Christmas cards will receive a 65 c discount rate.
It seems inevitable that this will convince the last holdouts still paying bills by posting a cheque to move to the cheaper electronic alternative and industry will become more aggressive in moving their accounting to direct debit and electronic billing. It is quite possible that those who lack computer access will be still offered the old mail billing, but at a premium cost for what will be termed a "special "service.
An array of magazines still reach readers through the post and these are negotiated on a bulk rate by consultation, but it seems inevitable that this rate will also rise and that can only mean an increase in subscription rates that will drive many to embrace the "e " version in replacing print. The proprietors of titles such as Time magazine, the Economist, The Monthly, National Geographic - will all face decisions now that transmission costs are running against the print version.
Then there is the giant greeting card industry, the mainstay of most newsagencies. Will the increased cost of postage doom the habit of mailing birthday cards ? Even Christmas cards are fast becoming age sensitive. The volumes are dropping as the younger generation embraces the novelty aspect offered by the many apps enabling colourful messaging.
The postal service is a big employer of labour and we are yet to learn what cuts will occur to trim the workforce to this new delivery timetable. It seems likely that the sorting of mail will be reduced to a day shift to avoid the present overtime paid for night sorting, and mail transport between delivery centres will be less frequent. It is possible that road transport may replace air cargo as a cost measure and mail box clearance times may face time extensions.
We are still retaining the universal cost of mailing from any point in Australia to any address in this country, but now there is a speed option geared to the stamp cost. A vast quantity of business mail passes directly into post office boxes, but the post office is still required to retain a vast network of mail delivery people and their equipment to hand deliver an ever diminishing volume of letters to every mailbox in every city, town and village in this huge continent.
Basically, Australia post is fast morphing into a courier service. As the number of postal items needing delivery to a suburb decreases the cost of handling each item steadily increases. There was talk that mail deliveries might be restricted to each alternative day, but that has not been implemented - so far ! Instead, delivery has been slowed to reduce costs and the letter rate increased - and it is likely that hard headed decisions will see that rate rise further.
We live in a time of great change. The urgency of what arrives through the mail is steadily decreasing as faster means of communication fill that gap. Now it is a matter of industry and the public adjusting to a new reality !
Wednesday, 4 March 2015
Supply - and Demand !
Perhaps it is the glamour that swirls around jobs in the information technology industry but one of the basic trades of yesteryear is not attracting apprentices. New South Wales is desperately short of bricklayers. We are going through a boom in new house building and this lack of tradespeople is both slowing completions - and sending prices through the roof.
A good bricklayer can lay about fifteen hundred bricks a day and on most jobs the rate of pay is on the basis of a rate per brick. A year ago the going rate was eighty five cents a brick, but now demand is so strong that desperate people have raised this to as much as a dollar ninety per brick laid. It is not uncommon for top tradesmen to work a four day week and earn $ 6,000.
Bricklaying is definitely a young persons job. It is physically fatiguing and the worker is exposed to the full range of weather conditions and often work is at heights on scaffolding that presents the ever likely risk of falls. It is a highly skilled trade and it is noted for a sharp drop out rate for those who do enter apprenticeships.
Many older bricklayers avoid new home construction and concentrate on renovation work. The average age of existing housing stock ranges between twenty-five and thirty-five years old and the bricklaying involved is both smaller - and requires skill to blend with existing patterns. The older bricklayer who specialises on this growing market has the advantage of quoting it as "piecework " and can virtually name his own price.
This is becoming a worry to the brick manufacturing industry. The shortage of bricklayers and the ever rising price of getting a job done is causing the home industry to avoid bricks in favour of other types of building materials - which are cheaper and quicker to erect. There is a defining trend to replace bricks with pre-cast concrete slabs in commercial construction and architects are following this trend in house design.
Young people under twenty-five figure sharply in the unemployment statistics and these are the very people who would be most suited to fill this growing gap. For some strange reason, bricklaying does not seem to feature in trade promotion to school leavers. The career advisers seem infatuated with the cyber world and are eager to push jobs in the technology industry, but ignore the basics which were the bread and butter of the workforce in past decades.
All this amounts to that golden word - opportunity ! The holy grail for any young person looking to the future is to find an under supplied market - and train to fill that gap. We are still building houses in exactly the same manner as the time when Julius Caesar was the big boss of the Roman empire - by putting one brick on top of another - and it seems that a brick house is still the dream of most new home owners.
It seems that what is now termed a "career " is subjected to fashion and class divide. A century ago the children of the wealthy went on to university - and then the "professions ". The children of the "working class " were absorbed in the various " trades "! This was a clear divide of both status and earnings, but times have changed and now many of those qualified in a trade earn much more than their professional counterparts.
This shortage of bricklayers is sounding a warning. We need to look carefully at the broad labour market and tune TAFE and similar training facilities to the opportunities offering. The original idea of apprenticeships was little more than slave labour. Young people worked for a pittance in return for learning the basics of their trade from a qualified boss. All this training was "on the job " until the advent of Technical Colleges introduced the need for a broader "technical "understanding. Now apprenticeships are a mix of on the job training and classroom learning - and include subjects such as accounting and management because most trades become self employed and need to learn how to run a professional business.
It simply reeks of incompetence that we have a vast pool of unemployed young people desperately seeking work - and at the same time there is a shortage of those learning the skills to plug an enormous hole in a vital building industry. That can be successfully accommodated by - matching demand with supply !
TAFE and other training venues need to look to their curriculum.
A good bricklayer can lay about fifteen hundred bricks a day and on most jobs the rate of pay is on the basis of a rate per brick. A year ago the going rate was eighty five cents a brick, but now demand is so strong that desperate people have raised this to as much as a dollar ninety per brick laid. It is not uncommon for top tradesmen to work a four day week and earn $ 6,000.
Bricklaying is definitely a young persons job. It is physically fatiguing and the worker is exposed to the full range of weather conditions and often work is at heights on scaffolding that presents the ever likely risk of falls. It is a highly skilled trade and it is noted for a sharp drop out rate for those who do enter apprenticeships.
Many older bricklayers avoid new home construction and concentrate on renovation work. The average age of existing housing stock ranges between twenty-five and thirty-five years old and the bricklaying involved is both smaller - and requires skill to blend with existing patterns. The older bricklayer who specialises on this growing market has the advantage of quoting it as "piecework " and can virtually name his own price.
This is becoming a worry to the brick manufacturing industry. The shortage of bricklayers and the ever rising price of getting a job done is causing the home industry to avoid bricks in favour of other types of building materials - which are cheaper and quicker to erect. There is a defining trend to replace bricks with pre-cast concrete slabs in commercial construction and architects are following this trend in house design.
Young people under twenty-five figure sharply in the unemployment statistics and these are the very people who would be most suited to fill this growing gap. For some strange reason, bricklaying does not seem to feature in trade promotion to school leavers. The career advisers seem infatuated with the cyber world and are eager to push jobs in the technology industry, but ignore the basics which were the bread and butter of the workforce in past decades.
All this amounts to that golden word - opportunity ! The holy grail for any young person looking to the future is to find an under supplied market - and train to fill that gap. We are still building houses in exactly the same manner as the time when Julius Caesar was the big boss of the Roman empire - by putting one brick on top of another - and it seems that a brick house is still the dream of most new home owners.
It seems that what is now termed a "career " is subjected to fashion and class divide. A century ago the children of the wealthy went on to university - and then the "professions ". The children of the "working class " were absorbed in the various " trades "! This was a clear divide of both status and earnings, but times have changed and now many of those qualified in a trade earn much more than their professional counterparts.
This shortage of bricklayers is sounding a warning. We need to look carefully at the broad labour market and tune TAFE and similar training facilities to the opportunities offering. The original idea of apprenticeships was little more than slave labour. Young people worked for a pittance in return for learning the basics of their trade from a qualified boss. All this training was "on the job " until the advent of Technical Colleges introduced the need for a broader "technical "understanding. Now apprenticeships are a mix of on the job training and classroom learning - and include subjects such as accounting and management because most trades become self employed and need to learn how to run a professional business.
It simply reeks of incompetence that we have a vast pool of unemployed young people desperately seeking work - and at the same time there is a shortage of those learning the skills to plug an enormous hole in a vital building industry. That can be successfully accommodated by - matching demand with supply !
TAFE and other training venues need to look to their curriculum.
Tuesday, 3 March 2015
The " Reserve " Question.
There is concern that the growing demand for natural gas on world markets is eroding the quantity available for Australian use as gas miners seek long term supply contracts at ever rising prices. There are calls for a proportion of this Australian product be "reserved " to guarantee the local gas market.
There is no doubt that we would face financial disaster if the supply of gas to industry faced a supply interruption. A huge number of jobs depend on it. A lot depends on just what we mean when we talk of a "gas reserve ". To some people that applies to insulating a given quantity of gas production from becoming available for export - and for others it means freezing the price Australians pay for gas at a point below what it can bring on the open market.
This whole gas question is complex because gas is a very divided market. Australia is fortunate to have giant pockets of natural gas both inland and offshore in various states, and at the same time there is another source directly under our feet which has only been discovered in recent times - and that raises the "fracking "question.
Tapping these huge gas pockets is a costly operation and getting it to where it can be used or sent to export involves a mix of gas pipelines and terminal hubs, and that can run into very big money. The firms involved only commit those funds on the expectation of a growing market and rising prices which will return them a profit. If the gas produced is to be subjected to export limitations and a form of price control, that should have been part of the agreement when exploration licenses were granted.
If "Gas Reserves "are to be part of our gas strategy they must become an integral part of all new gas ventures - and they will be costed in accordingly when financing decisions are being made. They may cause some investors to withdraw, but provided sensible limits apply there is no reason that they should harm this growing industry. Such limits apply in some other countries which continue to expand gas exploration and collection.
There is a school of thought that wants to reserve local supply to the fracking option - which is opposed by many people. It seems that there is plenty of gas in the ground beneath out feet and this can be collected by drilling wells and extracting the gas tapped in shale deposits by pumping liquids under pressure to cause the rock to fracture - and release the gas. When this method was discovered and put into practice in the United States it certainly caused some problems. A film called "Gasland "
depicted tainted water wells and bath water catching fire from gas contamination - and frightened the Australian public. There is a serious "anti fracking " sentiment amongst a significant number of people.
The gas industry contends that fracking is now safer and that horizontal drilling has sharply reduced the number and distance of the gas wells needed to supply our needs. Some people contend that gas from fracking should be a prohibited export and reserved for local use, and only tapped by a government instrumentality to quarantine it's price from the world pricing regimen.
Basically, this issue should be part of a broader question. We are fortunate to people an entire continent which is rich in natural resources. Surely the provision of our own needs should take precedence over exports - and that covers all aspects of industry - including food. We are a major food exporter and it would be unthinkable if Australians were to starve because foreigners who owned our farms sent the bounty we produce to the export market.
At the moment, gas is at the top of the list and there is a real danger that high world prices and a voracious demand may cripple Australian industry and impoverish Australian families. It would be reasonable to implement safeguards to guarantee the gas sufficient to meet our needs is not siphoned off to export - and that sanity prevails in it's pricing.
There is no doubt that we would face financial disaster if the supply of gas to industry faced a supply interruption. A huge number of jobs depend on it. A lot depends on just what we mean when we talk of a "gas reserve ". To some people that applies to insulating a given quantity of gas production from becoming available for export - and for others it means freezing the price Australians pay for gas at a point below what it can bring on the open market.
This whole gas question is complex because gas is a very divided market. Australia is fortunate to have giant pockets of natural gas both inland and offshore in various states, and at the same time there is another source directly under our feet which has only been discovered in recent times - and that raises the "fracking "question.
Tapping these huge gas pockets is a costly operation and getting it to where it can be used or sent to export involves a mix of gas pipelines and terminal hubs, and that can run into very big money. The firms involved only commit those funds on the expectation of a growing market and rising prices which will return them a profit. If the gas produced is to be subjected to export limitations and a form of price control, that should have been part of the agreement when exploration licenses were granted.
If "Gas Reserves "are to be part of our gas strategy they must become an integral part of all new gas ventures - and they will be costed in accordingly when financing decisions are being made. They may cause some investors to withdraw, but provided sensible limits apply there is no reason that they should harm this growing industry. Such limits apply in some other countries which continue to expand gas exploration and collection.
There is a school of thought that wants to reserve local supply to the fracking option - which is opposed by many people. It seems that there is plenty of gas in the ground beneath out feet and this can be collected by drilling wells and extracting the gas tapped in shale deposits by pumping liquids under pressure to cause the rock to fracture - and release the gas. When this method was discovered and put into practice in the United States it certainly caused some problems. A film called "Gasland "
depicted tainted water wells and bath water catching fire from gas contamination - and frightened the Australian public. There is a serious "anti fracking " sentiment amongst a significant number of people.
The gas industry contends that fracking is now safer and that horizontal drilling has sharply reduced the number and distance of the gas wells needed to supply our needs. Some people contend that gas from fracking should be a prohibited export and reserved for local use, and only tapped by a government instrumentality to quarantine it's price from the world pricing regimen.
Basically, this issue should be part of a broader question. We are fortunate to people an entire continent which is rich in natural resources. Surely the provision of our own needs should take precedence over exports - and that covers all aspects of industry - including food. We are a major food exporter and it would be unthinkable if Australians were to starve because foreigners who owned our farms sent the bounty we produce to the export market.
At the moment, gas is at the top of the list and there is a real danger that high world prices and a voracious demand may cripple Australian industry and impoverish Australian families. It would be reasonable to implement safeguards to guarantee the gas sufficient to meet our needs is not siphoned off to export - and that sanity prevails in it's pricing.
Monday, 2 March 2015
Funny Money !
It seems that us "Hayseeds " without a string of letters after our names are completely bamboozled by what is happening in the financial world. A few decades ago the enemy threatening to decimate our superannuation savings was - inflation. Everything kept getting more expensive - and that was bad ! Now we are told that because things are getting ever cheaper - the new enemy is - Deflation !
Most world economies are putting into practice plans to try and get inflation to rise to at least two percent a year. We are being goaded to go out and spend money - and now the watchword is that "Debt is good " ! Whatever happened to that motto of "Saving something for a rainy day ? "
Another weird thing is happening to the money we do have stacked away for old age. The interest it accrues in a term deposit or a savings account is shrinking to near zero - in fact in some parts of the world it is now in reverse. The banks are actually making a charge for the privilege of allowing you to park your money in their vaults.
In Europe, the European Central Bank ( ECB ) has set interest at -0.1% and then lowered it again to -0.2% a few months later - and Denmark, Sweden and Switzerland have applied negative rates to deposits by their customers. The interesting thing is that most countries require the banks to maintain reserves in their Reserve bank to ensure liquidity. Even that now attracts a negative interest. It seems that we are returning to the old age remedy of stuffing any spare money under the mattress for protection.
The whole idea of banking used to be so simple. Wise people saved money and put it in the bank where it drew interest for them. The bank used this money to grant loans to people who were starting a business - and this new business provided the jobs that put meals on the table for families. It seems that today there are not enough people wanting to start businesses or willing to apply for loans - and the banks have money they can no longer lend.
Another aspect of world finance puts the heads of ordinary people into a spin. We had a disastrous financial crash back in 2008 and most governments went on a spending spree to try and "buy our way out of trouble ". They bailed out the banks and other big financial institutions and this money came mostly from the issue of government bonds - which are guarantees that the capital will be repaid with interest at a nominated future time.
Now it seems that this debt tied up in government bonds is something of a "time bomb " and clever people have devised a strategy to diffuse it. It's called "Quantative Easing " - and it simply means printing new money to buy back those government bonds. Put simply, we create what is really "phoney money " by printing banknotes that will buy back debt that becomes the property of treasury - and will never be repaid or have interest added because it is solely now owned by a government instrumentality. If only that solution was available to us mere mortals !
Unfortunately, this entire reversal of financial normalcy will have a dire effect if ever the chickens come home to roost - or if we have another recession of the 2008 magnitude. In a deflationary era pay rates cease rising and may even drop as work hours retreat from permanent to casual - and fixed charges such as home mortgage payments become harder to meet. At the same time, institutions such as credit unions and building societies which exist on the margin of attracting deposits and making loans face ruin.
It seems that the fate of world finances rests heavily on the decisions made by a handful of people whose faces appear regularly on television as they grapple with the levers of finance. These are reputed to be people of extraordinary wisdom. They represent a range of countries and their pronouncements are listened to avidly by everybody from Kings and Presidents to the far corners of the industrial world. It is said that they possess crystal balls that foretell the future with incredible accuracy.
It is an unnerving thought to wonder how they got it so wrong in the run up to 2008 !
Most world economies are putting into practice plans to try and get inflation to rise to at least two percent a year. We are being goaded to go out and spend money - and now the watchword is that "Debt is good " ! Whatever happened to that motto of "Saving something for a rainy day ? "
Another weird thing is happening to the money we do have stacked away for old age. The interest it accrues in a term deposit or a savings account is shrinking to near zero - in fact in some parts of the world it is now in reverse. The banks are actually making a charge for the privilege of allowing you to park your money in their vaults.
In Europe, the European Central Bank ( ECB ) has set interest at -0.1% and then lowered it again to -0.2% a few months later - and Denmark, Sweden and Switzerland have applied negative rates to deposits by their customers. The interesting thing is that most countries require the banks to maintain reserves in their Reserve bank to ensure liquidity. Even that now attracts a negative interest. It seems that we are returning to the old age remedy of stuffing any spare money under the mattress for protection.
The whole idea of banking used to be so simple. Wise people saved money and put it in the bank where it drew interest for them. The bank used this money to grant loans to people who were starting a business - and this new business provided the jobs that put meals on the table for families. It seems that today there are not enough people wanting to start businesses or willing to apply for loans - and the banks have money they can no longer lend.
Another aspect of world finance puts the heads of ordinary people into a spin. We had a disastrous financial crash back in 2008 and most governments went on a spending spree to try and "buy our way out of trouble ". They bailed out the banks and other big financial institutions and this money came mostly from the issue of government bonds - which are guarantees that the capital will be repaid with interest at a nominated future time.
Now it seems that this debt tied up in government bonds is something of a "time bomb " and clever people have devised a strategy to diffuse it. It's called "Quantative Easing " - and it simply means printing new money to buy back those government bonds. Put simply, we create what is really "phoney money " by printing banknotes that will buy back debt that becomes the property of treasury - and will never be repaid or have interest added because it is solely now owned by a government instrumentality. If only that solution was available to us mere mortals !
Unfortunately, this entire reversal of financial normalcy will have a dire effect if ever the chickens come home to roost - or if we have another recession of the 2008 magnitude. In a deflationary era pay rates cease rising and may even drop as work hours retreat from permanent to casual - and fixed charges such as home mortgage payments become harder to meet. At the same time, institutions such as credit unions and building societies which exist on the margin of attracting deposits and making loans face ruin.
It seems that the fate of world finances rests heavily on the decisions made by a handful of people whose faces appear regularly on television as they grapple with the levers of finance. These are reputed to be people of extraordinary wisdom. They represent a range of countries and their pronouncements are listened to avidly by everybody from Kings and Presidents to the far corners of the industrial world. It is said that they possess crystal balls that foretell the future with incredible accuracy.
It is an unnerving thought to wonder how they got it so wrong in the run up to 2008 !
Sunday, 1 March 2015
A New Evolving Danger !
It is said that those who fail to learn from history - are destined to repeat it ! Events between Russia and Ukraine bear a striking resemblance to what occurred between Germany and Poland in 1939. This raises the question of exactly what intentions Vladimir Putin has for Russia and how forcefully he will put them into practice.
There is no doubt what Adolph Hitler had in mind for Germany. It was his intention to conquer the whole of Europe by military force and impose a form of "Germanization " by way of culling what he considered inferior races and replacing them with Aryan German stock. It is likely that he would eventually try and impose this concept on the entire world.
Bluff and bravado let him get away with much territorial gain, until the unmistakeable invasion of Poland crossed the line that led to war. At the end of that war one of the victorious allies used military gains in defeating Germany to impose a Communist form of government on the nations reclaimed from German control - and this led to the "Cold War " between east and west that persisted for decades.
Fortunately, cool heads prevailed. The development of nuclear weapons imposed a stalemate. A nuclear exchange would destroy all involved and the concept of MAD - "Mutually Assured Destruction " - kept itchy fingers off the button. Eventually, the Soviet Union imploded financially and it seemed that the world had returned to stability.
The rise of Vladimir Putin as the undisputed Czar of Russia is a troubling event. Both Putin and Hitler achieved the pinnacle of power and in each case it is and was the dictates of those individuals which determine the course of history. What Putin has in mind is not clear.
The subversion of Ukraine by sending both men and materials to aid insurrection by a Russian speaking segment of the Ukrainian population is precisely the method Hitler used to subjugate his near neighbours. Putin rattles sabres by hinting that similar moves may be undertaken in the Baltic states and he seems determined to restore the authority of the old Soviet Union on what Russia claims to be it's national orbit of rule. The guise is to restore a closed trading market to counter the EU.
The Russian economy is reliant on oil and gas exports, and the drop in world oil prices has clipped Putin's wings in sharply expanding his military, and yet that remains a formidable force now that the United States no longer keeps a standing army in Europe. If Putin stirs trouble in the Baltic states it will constitute a challenge to NATO. Whether individual countries still have the resolve to meet such a challenge - is doubtful !
The alarming question is how much the deteriorating Russian economy will push Putin to beat the Nationalist drum to unite his people against what he will present as a threat to their country. His Crimean foray was wildly popular and he has full control of the Russian media. The levers of mind control are in his hands and so far he has been successful in destroying any form of opposition to his rule.
Putin is an enigma. He presents himself to the Russian people as a heroic man of action and there is a danger than the need for adoration may lead to military excess. We face an uncertain world with danger on many fronts. The rise of Islamization is roiling the Middle East and Africa - and it is also bubbling away within Russia. The rise of China raises many questions of future intentions and likely outcomes - and then there is the matter of rising sea levels and a warming planet.
The closest immediate danger is how Putin reacts to his worsening economy and whether it pushes him to aggression to mask the deficiencies in living standards which will affect his people. Just what thoughts are forming in his mind may involve the lives of billions spread across the globe.
Once again the fate of many rests on the decisions made in a single mind !
There is no doubt what Adolph Hitler had in mind for Germany. It was his intention to conquer the whole of Europe by military force and impose a form of "Germanization " by way of culling what he considered inferior races and replacing them with Aryan German stock. It is likely that he would eventually try and impose this concept on the entire world.
Bluff and bravado let him get away with much territorial gain, until the unmistakeable invasion of Poland crossed the line that led to war. At the end of that war one of the victorious allies used military gains in defeating Germany to impose a Communist form of government on the nations reclaimed from German control - and this led to the "Cold War " between east and west that persisted for decades.
Fortunately, cool heads prevailed. The development of nuclear weapons imposed a stalemate. A nuclear exchange would destroy all involved and the concept of MAD - "Mutually Assured Destruction " - kept itchy fingers off the button. Eventually, the Soviet Union imploded financially and it seemed that the world had returned to stability.
The rise of Vladimir Putin as the undisputed Czar of Russia is a troubling event. Both Putin and Hitler achieved the pinnacle of power and in each case it is and was the dictates of those individuals which determine the course of history. What Putin has in mind is not clear.
The subversion of Ukraine by sending both men and materials to aid insurrection by a Russian speaking segment of the Ukrainian population is precisely the method Hitler used to subjugate his near neighbours. Putin rattles sabres by hinting that similar moves may be undertaken in the Baltic states and he seems determined to restore the authority of the old Soviet Union on what Russia claims to be it's national orbit of rule. The guise is to restore a closed trading market to counter the EU.
The Russian economy is reliant on oil and gas exports, and the drop in world oil prices has clipped Putin's wings in sharply expanding his military, and yet that remains a formidable force now that the United States no longer keeps a standing army in Europe. If Putin stirs trouble in the Baltic states it will constitute a challenge to NATO. Whether individual countries still have the resolve to meet such a challenge - is doubtful !
The alarming question is how much the deteriorating Russian economy will push Putin to beat the Nationalist drum to unite his people against what he will present as a threat to their country. His Crimean foray was wildly popular and he has full control of the Russian media. The levers of mind control are in his hands and so far he has been successful in destroying any form of opposition to his rule.
Putin is an enigma. He presents himself to the Russian people as a heroic man of action and there is a danger than the need for adoration may lead to military excess. We face an uncertain world with danger on many fronts. The rise of Islamization is roiling the Middle East and Africa - and it is also bubbling away within Russia. The rise of China raises many questions of future intentions and likely outcomes - and then there is the matter of rising sea levels and a warming planet.
The closest immediate danger is how Putin reacts to his worsening economy and whether it pushes him to aggression to mask the deficiencies in living standards which will affect his people. Just what thoughts are forming in his mind may involve the lives of billions spread across the globe.
Once again the fate of many rests on the decisions made in a single mind !
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