Sunday 31 July 2011

Interest rates: will they or won't they rise


Posted to The Age (31/7/2011) on 31/7/2011 at 1:25 PM
Commenting on "Interest rates: will they or won't they rise?"

http://theage.domain.com.au/real-estate-news/interest-rates-will-they-or-wont-they-rise-20110729-1i3qu.html

CPI (consumer price index) used to determine inflation rate is incorrect and deceptive. I even go to extent to condemn such impractical approach, whether it is based on standard or weighted index calculation, as unethical and immoral.

Under normal circumstances, without the influence of new taxes being imposed / introduced, adverse climatic and unforseen disastrous conditions, if supply and demand are played fairly in a market, increase in prices due to shortage is a legitimate parameter for the index calculation.

It is nonsensical to increase interest rate because the CPI and hence the inflation rate shows an increase. The increase in prices for banana, tobacco, alcohol, utility charges, etc. is not due to demand driven. It is bad enough for the consumers to cop with price increases, but to rub salt to the wound to increase interest rate will lead to a new round of vicious whirlpool of increases in mortgage payment, wage, fares, property price, etc. Some of the items which are affected abnormally should be removed from the basket of items until normality is resumed. A weight factor (index) should be introduced and incorporated to items which are affected by new taxes.

If RBA is going to increase interest rate on Tuesday 2/8/2011, the wealth gap in Australia will widen, more small businesses will face closure and many families go further below poverty line. Many Australians are facing utility cut-off, and stress related illnesses are on the increase. For those who are still in the workforce, spare a thought for those who suffer through no fault of theirs. By the way, $16 million just to go to a particular person is an obscene amount. It is a lot of dough to feed many hungry Australians!

Monday 18 July 2011

Price war drives up supermarket sales

Posted to Adelaide Now (18/7/2011) on 18/7/2011 at 1:51 PM
Commenting on "Price war drives up supermarket sales"

http://www.adelaidenow.com.au/price-war-drives-up-supermarket-sales/story-e6frea6u-1226096438411

For the last few years, I have been travelling to Hong Kong, China, Malaysia, Singapore, UAE, Egypt, USA, Canada, UK, Russia and several European countries. In the end, I still call Melbourne, Australia home. Eating out is cheaper in many places, but life is more than just food. GST or similar taxes in many of these countries are much higher, and wages are lower.

Farmers and suppliers to large supermarkets must unite to negotiate a better deal. Their long term survival is also an interest to the supermarkets. Gone are the days when farmers just grow produce, they must learn to grow their bottom line now!

Supermarkets make more money from shoppers spending their savings on other more expensive items. No wonder these shoppers always cry poor, and accept and embrace a PM who can't manage taxpayer's money readily! Think about using the savings to reduce mortgage stress or spend on other essential items!

As for Michael Schneider, what sort of accommodation is he getting for that price in SE Asia? Once he steps out of his living compound, very likely he sees congested, noisy and dirty streets. Soon he probably seeks shelter in the Australian embassy due to political uprising.

Wednesday 13 July 2011

Carbon tax is generating more heat than global warming

Contribution of carbon dioxide towards global warming is negligible. A degree or so increase is no comparison to 10 or 20 degrees Celsius difference in daily minimum and maximum temperatures. When somewhere in the world experiences drought, another part will receive the extra rainfall, which means while somewhere experiences higher temperature, another part of the world is colder or else the rain will not fall.

The reason why Australia is high on carbon dioxide production per capita is because of her small population. In any business, there are always fixed and variable costs involved. The same principle applies here that certain amount of carbon dioxide produced is fixed no matter how large the population is.

Compounding this is transmission of power over vast distances to generally very low population density cities and towns, unlike many smaller but higher population density European or Asian countries.

If coal power plants are closed, the brown coal will either laid buried in the ground in Australia, or dumped in the world market.

The latter option will be a total disaster for the future of our planet - assuming that coal power plants are evil. Developing countries will be buying the coal to power their generators, likely to be dirtier than our existing plants, creating more pollution than anyone can ever imagine.

Australia plays tough and acts as the good guy, but it actually is an accessory to the murder of plant Earth!

Coal power plants use a lot of Australian resources and labour - good for our own economy and employment. The resources are not overseas import and the labour cannot be outsourced overseas.

Starting from mining the brown coal to the final stage of burning it, involves a long chain of industries - transport, fuel, supply and maintenance of all related plant, equipment and vehicle, food and beverages, uniform, accommodation, etc.

It is undeniable that China is the factory of the world. Anything or component can be built in a country can be built in China at much lower cost.

China is going to release her new aircraft C919 at USD50m each in less than 5 years time to compete with Airbus A320 at USD93m and Boeing 737 at USD80m respectively, is a clear demonstration that any equipment and components used for renewable energy power plants will likely to be manufactured in China at a fraction of the cost.

Loss of employment is disastrous and NOT renewable. Don't be a statistics!

Year after year, utilities and rates charges increase at a rate higher than the CPI (or loosely speaking the inflation rate), while the increase of the inflation rate itself remains relatively low. This only means that the imported goods are cheaper or getting cheaper, and that spells doom to our self-sufficiency and manufacturing industries.

For the past decade, Australia has been riding high on the primary and tertiary (service) industries. On the contrary, the secondary (manufacturing) industry is fixed on reverse gear. Business confidence and consumer confidence have been very high. Although Australia is a large island far away from the rest of the world, it is not isolated from them economically. It is time Australia has to face the music.

Australia has been blessed by the increasing demand of coal and iron ore in China, Korea, Japan, and India. However, the fortune of some these countries have changed negatively as a result of the financial misfortune and financial mismanagement of other countries or natural disasters that have occurred within. The demand of minerals will decline because Australia’s buyers are experiencing lower demand of their products.

Service or tertiary industries flourish during boom time, be it local, national or worldwide. This is evident in the downturn of Australia’s tourism industry. On the local scene, retail and housing industries have slowed down dramatically, too.

In recent weeks, the world climatic conditions have gone topsy-turvy. Soaring heat waves hit many states in USA as well as large part of Europe. Scandinavian and Baltic countries experience many more warm sunny days than usual. China has unusual big floods that affect millions of people. To a smaller extent, Australia did not escape the destructive force of Mother Nature.

How can things just happen so suddenly? Is it due to global warming, extra-terrestrial influence or activities taking place under the surface and within the Earth? During the last few years, large earthquake, tsunamis, volcanic eruptions cause immense damages to many cities and affected neighbouring countries. There is no way in the world that these natural disasters are caused by global warming. On the contrary, these could be the cause of global warming!

Carbon tax is a nonsensical tax. Will Australians be taxed for polluting the planet by exhaling carbon dioxide every time they breathe out? Some Australians may be a few dollars better off the first year of carbon tax implementation, but the benefit will go sour in subsequent years because inflation will swallow up all the miserable handouts.

Few years ago, Target 155 was introduced by the former Victorian government to encourage people to save water during the drought. It was a very successful campaign. The success of the campaign lied not on taxing the Victorians; people used over 155 litres per person per day were not penalised, and yet majority of the Victorians wanted to save water. Saving water and energy should be a way of life, and NOT political or economic policies imposed by the Government.

If the government really want to flex her muscle, deadlines can be imposed on industries to clean up their act, invest in alternative power generation or their business registration / licence will not be renewed. Taxes on any industry will have a flow on effect on ordinary people. No business wants to be shut down!

By ignoring the poll is a sign of arrogance to the nth degree, self-centredness and disrespectful of the intelligence of the Australian public.

Will Julia Gillard continue to ignore what the rest of Australia is telling her that she is NOT on the right track?