Japan’s Demographic Disaster IS ALSO OURS

Japan is faced with an unprecedented population challenge that will have social, economic, and political consequences for years to come.

Projections by the Japanese government indicate that if the current trend continues, the population of Japan will decline from its current 127.5 million to 116.6 million in 2030, and 97 million in 2050. This is truly astonishing and puts Japan at the forefront of uncharted demographic territory; but it is territory that many other industrial countries also are beginning to enter as well.

While predicting the future of these demographic trends is difficult, the causes are at least somewhat decipherable. Various studies of demographic change in Japan have linked declining fertility to other changing social factors such as increased education, delayed marriage age, more economic opportunities for women, and the expense of raising children in modern, urban societies. All of these have played a role in reducing fertility over the past few decades.

Another problem Japan faces is that the general low fertility rate means there are not enough younger people paying into the national pension program, and this will cause increasing strain on government coffers as the proportion of elderly (currently about 23% of the population is over 65) continues to grow.

Finally, the decline of the population over the next few decades, and the shortage of young people in particular, will have a significant impact on the Japanese labor force.

One obvious solution to this would be for Japan to relax immigration policies and allow for more workers, particularly healthcare workers, to enter the country.

Obviously, only time will tell. But Japan is faced with an unprecedented population challenge that will have social, economic, and political consequences over the next century—consequences that will not only affect Japan, but also influence Japan’s trading partners as well as its political and military allies.

Link -
http://www.zerohedge.com/news/2013-02-01/japan%E2%80%99s-demographic-disaster
================================
Japan has already started down a path, which most other countries will follow.

It started earlier than most, because its Population Growth Peaked earlier than most & Declined quicker, after WW2. Japan also has the additional issue of being anti immigration, although I expect immigration to become more of a problem elsewhere, as well, albeit for different reasons.

The usual answer to this problem, in the past, would simply be another Baby Boom, to generate additional Demand, which is one of the usual two major Economic drivers. However, the Economic Boom created by the Baby Boomer generation, meant that many women were promoted to enter the workforce, as a means to increase the Worker participation rate and that, plus increasing costs & awareness by women, led to a continued Decline in Fertility rates, when they would usually increase.

That said, even if TPTB wanted another Baby Boom, several major factors would stand in the way -
1) Demographics - The Global Human Population has already grown from 1 Billion in 1800, to 2 billion in 1930, to 7 Billion in 2012 and we are already at the outer limits of being able to sustain the existing Population, in terms of Food, Water & most importantly Energy, SO ANOTHER GLOBAL BABY BOOM IS JUST NOT POSSIBLE.

2) Energy - Existing per capita Energy Supply has been in Decline already, for some time. However, over the last 10-15 years that has started to translate into actual & substantial Price increases. Most important of all the EROEI (Energy Return On Energy Invested) has started to go into serious Decline & this means that spare Energy capacity to push Productivity is also in serious Decline. Also in Decline, is the level of Disposable income that is available to individuals, Businesses & Governments and as the Energy position deteriorates over the next 10-20 years, the amount of Disposable income will shrink dramatically!

3) Climate Change - Whatever anyone thinks of the reasoning, we are obviously headed towards a Peak of the current cycles Warming period. That situation will lead to a greater frequency & intensity of Extreme weather events, with wet areas more susceptible to flood events, drier areas being more susceptible to droughts, BUT overall the planet will warm.
So whether anyone believes in AGW or not, we are at that part of the cycle. That said, I find the basic science on AGW is most likely correct and that will result in us speeding up the cycle to Peak Earlier, before sending us into the next Ice Age.
All of which means, the "goldilocks" climate is ending & with that Global Food Production will increasing become more difficult to feed the existing Population, let alone any more!

So, there will be no more Baby Booms & Japan will very much be "the Canary in the Coal Mine"!
Sorry, couldn't resist the pun!

Finally, Bill Clinton said, “it’s the Economy stupid” AND what this scenario translates into is exactly that. With Population & Energy both set to go into Decline, the Global Economy can only follow & the longer Politicians & TPTB try to avoid the inevitable Decline in Demand & REAL GDP's, the worse the REAL Economy will finally become!

Our Pollies need to start thinking outside the square!!!

So, during forthcoming Election campaigns, WHEN you hear Politicians saying, “trust me/trust us”, we will –
1)      “Make the Economy grow”, like it used to!
2)      We will “Create jobs by the millions”!
3)      We will run the Budget in Surplus!
4)      We will spend Billions on necessary infrastructure!

THEN, you will know “they are either inept or they are lying”, as –
1)      The Global & Local Economy can not Grow again, like it did at the Peak of the Baby Boomer Boom, from 1995-2006, because Demand is now in reverse due to Demographics & Energy Issues.
2)      Real Economic Growth is actually negative and therefore jobs will Decline not grow, particularly when Government & Central Bank Stimulus are withdrawn and that must happen, as Debt can not continue to rise.
3)      Running Budgets at a Surplus when the REAL GDP is in Decline is IMPOSSIBLE AND even if it is achieved it would be at the cost of sending the Economy into a further/deeper Decline, where future Revenue would Decline even further!
4)      The Billions will have to come from vital services, such as Health Care, where costs are increasing rapidly, on an Aging Baby Boomer generation.

We are now in a completely different Economic paradigm, where the old rules no longer apply & our Politicians need to start thinking outside their tired old regimes, because the old fixes just won’t work, anymore!   

That said, it is unlikely the Politicians will change without being prompted, SO I suggest we VOTE OUT EVERY INCUMBENT, UNTIL THE POLITICIANS & TPTB TAKE NOTICE, CHANGE THEIR WAYS & PUT OUR (the Publics) LONG TERM INTERESTS, AS THE NUMBER ONE PRIORITY! 

Interesting observations, and probably correct. While a decline in population has pluses it also has minuses.

We can't allow the elites to use immigration as a means to rob the Australian people of their security and safety.  Immigration and population growth is not a cure all and its time to hold our leaders accountable... :)

skippy. wrote on Feb 2^nd, 2013 at 8:17pm:

Interesting observations, and probably correct. While a decline in population has pluses it also has minuses.

From the longer term perspective, we really don't have any choice, the Global & Local Population must Decline or the final result would be, Humanity would totally collapse, due to lack of Food, Water & Energy.

So, from that point of view, you are correct, it is a positive move, going into a Population Decline.

However, the management actions &/or inactions of our Politicians & TPTB have so far been abominable, in the transition stages.

They are hell bent on trying to save the status quo and that is simply NOT AN OPTION, so IF they continue, THEN the final outcomes would be a lot worse than they would otherwise have been and that is definitely a big negative!

corporate_whitey wrote on Feb 2^nd, 2013 at 8:33pm:

We can't allow the elites to use immigration as a means to rob the Australian people of their security and safety.  Immigration and population growth is not a cure all and its time to hold our leaders accountable... :)

I agree, it is time to hold the Politicians accountable, BUT I'm not sure there are too many REAL leaders amongst them!

As for immigration, I would suggest we will see a substantial Decline in overall immigration levels, over the next 10-20 years, as the main factor that attracts immigration into countries such as ours, loses its appeal.

That factor being a fast growing Economy & plenty of jobs to go around.

However, as the Local & Global Economy goes into Decline, the major reason why people come to countries such as OZ will also go into Decline and the current levels of immigration are likely to Decline accordingly.

That said, there will still be major competition for some expert fields, particularly in areas such as Health Care expertise, for the Aging Baby Boomers.

BUT, that will apply to nearly every developed country & I suspect that even though our Politicians may be planning on immigration to solve some of their problems, they are likely to find that competition from other developed Economies & competition from their home countries, MAY prevent sufficient expertise from immigrating to OZ!

perceptions_now wrote on Feb 2^nd, 2013 at 9:51pm:

skippy. wrote on Feb 2nd, 2013 at 8:17pm: Interesting observations, and probably correct. While a decline in population has pluses it also has minuses. From the longer term perspective, we really don't have any choice, the Global & Local Population must Decline or the final result would be, Humanity would totally collapse, due to lack of Food, Water & Energy. So, from that point of view, you are correct, it is a positive move, going into a Population Decline. However, the management actions &/or inactions of our Politicians & TPTB have so far been abominable, in the transition stages. They are hell bent on trying to save the status quo and that is simply NOT AN OPTION, so IF they continue, THEN the final outcomes would be a lot worse than they would otherwise have been and that is definitely a big negative!

I am all for a lower population

Immigration is one of the major pressures on our emissions footprint on this continent... 8-)

Sprintcyclist wrote on Feb 2^nd, 2013 at 10:26pm:

perceptions_now wrote on Feb 2nd, 2013 at 9:51pm: skippy. wrote on Feb 2nd, 2013 at 8:17pm: Interesting observations, and probably correct. While a decline in population has pluses it also has minuses. From the longer term perspective, we really don't have any choice, the Global & Local Population must Decline or the final result would be, Humanity would totally collapse, due to lack of Food, Water & Energy. So, from that point of view, you are correct, it is a positive move, going into a Population Decline. However, the management actions &/or inactions of our Politicians & TPTB have so far been abominable, in the transition stages. They are hell bent on trying to save the status quo and that is simply NOT AN OPTION, so IF they continue, THEN the final outcomes would be a lot worse than they would otherwise have been and that is definitely a big negative! I am all for a lower population

Me too - especially/mainly those from the Left!

corporate_whitey wrote on Feb 3^rd, 2013 at 12:27am:

Immigration is one of the major pressures on our emissions footprint on this continent...

Does the location these people use power from make a lot of difference over all.

Wouldn't thay be a more positive contribution located in a country trying to reduce is levels?

Bring them in and teach them to use less may be the best way to go.

Dnarever wrote on Feb 3^rd, 2013 at 7:56am:

corporate_whitey wrote on Feb 3rd, 2013 at 12:27am: Immigration is one of the major pressures on our emissions footprint on this continent... Does the location these people use power from make a lot of difference over all. Wouldn't thay be a more positive contribution located in a country trying to reduce is levels? Bring them in and teach them to use less may be the best way to go.

These are tired old arguments and deflections from the elite who refuse to be accountable to the social security of the Australian people and totally irrelevant...In fact the elite are using immigration to wage war on the social security of their Australian people and are failing in their duty of care as leaders in doing so. 8-)

Quote:

While predicting the future of these demographic trends is difficult, the causes are at least somewhat decipherable. Various studies of demographic change in Japan have linked declining fertility to other

Noticed the words.....predicting, trends, linked and not to mention "difficult"

It's all about an opinion on things that are difficult to predict and at best they are just assumed trends

I am always a little bit sus on people who claim to be able to predict and prophecy the future...Its a common pagan trait - an error of logic and rational thought known as chiliasm or futurism... :)

Armchair_Politician wrote on Feb 3^rd, 2013 at 7:53am:

Sprintcyclist wrote on Feb 2nd, 2013 at 10:26pm: perceptions_now wrote on Feb 2nd, 2013 at 9:51pm: skippy. wrote on Feb 2nd, 2013 at 8:17pm: Interesting observations, and probably correct. While a decline in population has pluses it also has minuses. From the longer term perspective, we really don't have any choice, the Global & Local Population must Decline or the final result would be, Humanity would totally collapse, due to lack of Food, Water & Energy. So, from that point of view, you are correct, it is a positive move, going into a Population Decline. However, the management actions &/or inactions of our Politicians & TPTB have so far been abominable, in the transition stages. They are hell bent on trying to save the status quo and that is simply NOT AN OPTION, so IF they continue, THEN the final outcomes would be a lot worse than they would otherwise have been and that is definitely a big negative! I am all for a lower population Me too - especially/mainly those from the Left!

Good luck, with that one AP.

However, it may prove a little difficult to arrange Political exclusivity across all local &/or Global births?

Maqqa wrote on Feb 3^rd, 2013 at 10:04am:

Quote: While predicting the future of these demographic trends is difficult, the causes are at least somewhat decipherable. Various studies of demographic change in Japan have linked declining fertility to other Noticed the words.....predicting, trends, linked and not to mention "difficult" It's all about an opinion on things that are difficult to predict and at best they are just assumed trends

Well Maqqa, we could stumble along a bit longer, listening to Politicians (both Left & Right) telling us to "trust them", BUT all they are really doing, is much the same as you.

Politicians & their helpers (YOU), are hell bent on maintaining the status quo and in doing so they (& YOU) produce a whole pile of CRAP, just like you have just done.

CRAP being -
Credible
Reliable
Abundant
Paradoxes 

Apart from your normal SPIN, what is incorrect in what I am saying & the facts that I use?

Why would any sane society, prefer to "trust a Politician", in preference to reviewing "known facts", as supplied by Demographers ) worldwide, showing established Demographic Facts, which lead to some inescapable conclusions!

YOU call it "predicting", BUT it is merely using solid, Scientific measures to establish good Public policy, instead of relying on Politicians, who like you have NFI and are either inept or lie! 

In terms of linkage, there is an abundant amount of information available to anyone who wants to learn, which probably leaves you out, that DEMOGRAPHICS IS THE MAJOR ECONOMIC DRIVER & THAT ENERGY IS ITS NUMBER ONE ASSISTANT!

Just for a change, TRY FACTS, INSTEAD OF SPIN? 

if you think its status quo then you know very little about macro-economics

Maqqa wrote on Feb 3^rd, 2013 at 12:17pm:

if you think its status quo then you know very little about macro-economics

Facts Maqqa, Facts rule in Macro Economics, NOT SPIN!

Facts, like the population of Japan declining from its current 127.5 million to 116.6 million in 2030, and 97 million in 2050. That means Demand is going to Decline & like a Boa Constrictor, it will slowly strangle Japans Economy, therefore the status quo can not be maintained!

And that is why the Politicians & TPTB can not maintain the status quo that they want, because the Facts & the Paradigm are now different!

So, IF you have any relevant facts, put them up for discussion!

Otherwise, I suggest you join Longy for a LONG NAP, lest you be exposed with your "normal" NFI comments?

perceptions_now wrote on Feb 3^rd, 2013 at 12:46pm:

Maqqa wrote on Feb 3rd, 2013 at 12:17pm: if you think its status quo then you know very little about macro-economics Facts Maqqa, Facts rule in Macro Economics, NOT SPIN! Facts, like the population of Japan declining from its current 127.5 million to 116.6 million in 2030, and 97 million in 2050. That means Demand is going to Decline & like a Boa Constrictor, it will slowly strangle Japans Economy, therefore the status quo can not be maintained! And that is why the Politicians & TPTB can not maintain the status quo that they want, because the Facts & the Paradigm are now different! So, IF you have any relevant facts, put them up for discussion! Otherwise, I suggest you join Longy for a LONG NAP, lest you be exposed with your "normal" NFI comments?

Then you should also know the word "macro" refers to size as such you want to turn the Queen Mary on a coin

Maqqa wrote on Feb 3^rd, 2013 at 12:49pm:

perceptions_now wrote on Feb 3rd, 2013 at 12:46pm: Maqqa wrote on Feb 3rd, 2013 at 12:17pm: if you think its status quo then you know very little about macro-economics Facts Maqqa, Facts rule in Macro Economics, NOT SPIN! Facts, like the population of Japan declining from its current 127.5 million to 116.6 million in 2030, and 97 million in 2050. That means Demand is going to Decline & like a Boa Constrictor, it will slowly strangle Japans Economy, therefore the status quo can not be maintained! And that is why the Politicians & TPTB can not maintain the status quo that they want, because the Facts & the Paradigm are now different! So, IF you have any relevant facts, put them up for discussion! Otherwise, I suggest you join Longy for a LONG NAP, lest you be exposed with your "normal" NFI comments? Then you should also know the word "macro" refers to size as such you want to turn the Queen Mary on a coin

No, that's not possible, BUT if you don't start to turn, THEN you will continue on the same course.

AND, if your existing course is blocked by a massive iceberg, THEN the boat your on won't be the Queen Mary, it will be the Titanic!

Well, there are actually a number of massive icebergs ahead, which we are probably going to hit because we didn't change course soon enough.

What is still in doubt, is whether we hit a glancing blow OR whether we hit them head on?

Do you even know what the largest Macro Factors are?

perceptions_now wrote on Feb 3^rd, 2013 at 2:47pm:

Maqqa wrote on Feb 3rd, 2013 at 12:49pm: perceptions_now wrote on Feb 3rd, 2013 at 12:46pm: Maqqa wrote on Feb 3rd, 2013 at 12:17pm: if you think its status quo then you know very little about macro-economics Facts Maqqa, Facts rule in Macro Economics, NOT SPIN! Facts, like the population of Japan declining from its current 127.5 million to 116.6 million in 2030, and 97 million in 2050. That means Demand is going to Decline & like a Boa Constrictor, it will slowly strangle Japans Economy, therefore the status quo can not be maintained! And that is why the Politicians & TPTB can not maintain the status quo that they want, because the Facts & the Paradigm are now different! So, IF you have any relevant facts, put them up for discussion! Otherwise, I suggest you join Longy for a LONG NAP, lest you be exposed with your "normal" NFI comments? Then you should also know the word "macro" refers to size as such you want to turn the Queen Mary on a coin No, that's not possible, BUT if you don't start to turn, THEN you will continue on the same course. AND, if your existing course is blocked by a massive iceberg, THEN the boat your on won't be the Queen Mary, it will be the Titanic! Well, there are actually a number of massive icebergs ahead, which we are probably going to hit because we didn't change course soon enough. What is still in doubt, is whether we hit a glancing blow OR whether we hit them head on? Do you even know what the largest Macro Factors are?

Again, I take your silence, as confirmation that you really do have NFI.

You are simply a Liberal Lacky, with No Idea about anything, except for what your Political masters tell you AND WHEN IT COMES TO ECONOMICS, THEY ARE EITHER INEPT OR SIMPLY TELL LIES! 

So, it seems that NFI Maqqa is taking a rest from this thread, whilst she makes a fortune, spreading Liberal party paid threads?

Anyway, back to reality!

If anyone thinks there is any substantial difference between Left leaning Political Party's & Right leaning Conservative Political party's, THEN I SUGGEST YOU NEED TO CATCH UP WITH REALITY.

There is nothing inherently "Honest, Skilful or Professional" about either the Liberals OR Labor.

Just because one party supposedly supports Business & the other supposedly supports Unions, does not mean that the Public can expect anything inherently from either.

Both are limited by Global Economics, to some extent, depending on where the Global Economic cycle is, at that point and to some extent the advice provided by "the professionals" in Treasury.

That said, we have already entered a new paradigm in Global Economics, BUT neither major Australian Political party, nor Treasury have as yet accepted that fact, let alone taken action/s based on our new REALITIES!

There are many examples of inept &/or dishonest Politicians, within the Australian context, BUT the following article about Spain should be noted, as we could be headed for both the similar Economic & Political issues?
===============================

Spain: A Deepening Recession Amid A Widening Political Scandal

Contraction 'Worse than Expected'
Once again economic forecasters are 'surprised' by the depths of Spain's recession. They really shouldn't be. After all, one of the most egregious housing bubbles of all time has burst in Spain. The bubble has produced malinvestment on a truly breathtaking scale. Moreover, it has left the banking system in tatters.

The banking system is now on artificial life support, but effectively the events have left it 'zombified'.

Given the numerous interventions designed to forestall liquidation and keeping the size of the State untouched while 'fixing' its debt problems, it takes much longer than would otherwise be necessary to get the economy back to a sustainable configuration. It is of course clear that the process is very painful; one cannot expect one of the biggest real estate bubbles in history to unwind painlessly. What is at issue is only how to best achieve the best outcome as quickly as possible.

The European Commission this week signaled it may recommend easing Spain's budget goals for the fourth time in a year as unemployment in the euro region's fourth-largest economy rose to a record 26 percent at the end of Prime Minister Mariano Rajoy's first year in power.

"We should be circumspect; the domestic demand contraction is severe and more of the same is likely in the first half of 2013,"said Guillaume Menuet, a senior economist at Citigroup Inc. in London. "The current market momentum is such that investors have to chase the rally, masking economic fundamentals to a large degree."

A Worsening Political Scandal
In the meantime, prime minister Rajoy's government has been caught up in a bribery scandal that seems to become ever more serious, as new allegations emerge all the time. Recently they have ensnared Mr. Rajoy personally, but not only him - practically the entire ruling stratum of his party suddenly stands accused.

According to Reuters:
        Spain's ruling People's Party denied on Thursday that Prime Minister Mariano Rajoy and other leaders received payments from a slush fund after a newspaper published what it said were secret party accounts.

        El Pais published images of excerpts of almost two decades of handwritten accounts that it said were maintained by People's Party treasurers. The newspaper said the accounts showed 11 years of payments to Rajoy of 25,200 euros ($34,200) a year.

        The accounts - which El Pais said amounted to a parallel unofficial bookkeeping system - indicate donations from companies, mostly builders, and regular payments of thousands of euros to a number of party leaders. The report is the latest twist in a scandal that has damaged the credibility of 57-year-old Rajoy as he battles a deep recession and one of Europe's highest unemployment levels.

Rajoy - a longtime politician widely thought of as boring but honest - has demanded sacrifices of Spaniards as he slashed public spending to avert a fiscal crisis that could push Spain into an international bailout.

Hundreds of Spaniards gathered outside party headquarters in central Madrid on Thursday evening in peaceful protests, chanting 'Thieves!' and bearing placards reading 'Resign Now!'.

It has long been known that Spain's political class is e.g. using state-owned industries as a kind of personal demesne, a place where retired politicians go to get cushy and well-paid jobs. 96% of Spaniards are correct with their suspicions: their political class is thoroughly corrupt.

Link -
http://seekingalpha.com/article/1152351-spain-a-deepening-recession-amid-a-widening-political-scandal?source=email_macro_view&ifp=0
===============================

So, Labor OR Liberal, there is a fair chance you are not getting what you think you should be getting!

Btw, Spain's ruling People's Party is a Conservative Party, BUT it could just as easily have been a Labour oriented party, as they all have a similar problem -
Power corrupts & absolute Power, corrupts absolutely!

To both Labor & Liberal stalwarts

Be it Federal or State elections, there is absolutely no valid reason that the incumbent government can not or could not, have their relevant Treasury Department provide a detailed & fully costed & updated Budgetary situation, a fixed 4 months prior to the election date.

In turn, there is absolutely no valid reason that the alternative government (the current Opposition) can not or could not, be able to provide their detailed & fully costed alternative Budgetary proposals, at least 3 months prior to the election date.

And, to answer one obvious question, Yes, I support fixed 4 year terms, at all levels of Australian government AND to ensure greater Productivity & Expenditure Reductions, I also support the notion that all Elections should be held simultaneously!

When I say all levels of Australian government, that should exclude Local Councils, as I also support that all Local Councils should cease to exist, after they are all rolled up into one Federal government Department or a department in each State/Territory government, to save on expenditure, to provide continuity of "Rules & Regulations" Australia wide, to save on doubling up & to save on one level of ineptitude & to stamp out one level of corruption!

The Twilight of Petroleum

http://1.bp.blogspot.com/-t1zrpFlb84c/UQ4bg22otjI/AAAAAAAAHbQ/7D6Zay7rQqg/s640/sunset+of+petroleum_html_22336159.png

This graph, as earlier mentioned, shows that on a global level production of crude oil soon will begin its decline. The forecasts of the IEA contain certain elements which are at the very least “slightly optimistic”, to not say outright fanciful, regarding the expected future production from reservoirs yet to be discovered and developed as well as considerably inflated prospects regarding non-conventional oil

With this as my starting point I prepared a continuous graph (a simple linear extrapolation for the years for which we don’t have data); the colors approximately correspond  to those of the IEA graph:
http://1.bp.blogspot.com/-2ksVLKKaShw/UQ4ccD1gBQI/AAAAAAAAHbc/yX4ha-2q71o/s400/sunset+of+petroleum_html_m4a31535e.png

We are adding various categories of hydrocarbons assuming they are equivalent, when in fact, they are not. Non-conventional oils, (all of them) have lower energy densities per volume, and roughly 70% that of crude oil. In addition, the refining improvements refer to the increase in volume of products derived from the refining of petroleum, and such an increase in volume obviously does not assume an increase in the energy which is extracted from the petroleum.

In reality such products contain more energy than that of the original barrel because their processing uses natural gas for the hydrogenation of the less saturated hydrocarbons. What obviously occurs is that the energy of the refined products from a barrel of oil is equal to the energy of the original barrel plus that of the natural gas used in refining it. Making these adjustments (non conventional oils have about 70% of the energy by volume as normal crude oil(*), the improvements in refining do not increase the energy of the petroleum), we then obtain the following graph in millions of barrels of oil equivalents to crude oil per day:
http://1.bp.blogspot.com/-6mo8E2IQCaA/UQ4dZbRCx6I/AAAAAAAAHcc/tUy2xUnm9e8/s400/sunset+of+petroleum_html_5797a7c7.png

This is the graph which the IEA should have presented if it had counted properly, that is, by reporting energy flows, not volumes. As one easily can see the prospects for an increase in production when expressed in terms of associated energy are much more meager and less attractive: We will go from 79.5 Mb/d (now understood as energy equivalents) in 2011 to 87.5 Mb/d in 2035.

To do an estimate of the net energy we need to know the EROEI (Energy Returned on Energy Invested) of the various sources of hydrocarbons mixed in with the petroleum.

EROEI = Te/Ep
Where Te is the total energy produced by a source and Ep is the energy required for its production with both taken over the entire usable lifetime of the source in question.

With this formulation, the net energy En which an energy source delivers during its useful life (and if we have many sources at different moments of their useful lives it is equally valid as a snapshot of the whole) is:
En = Te - Ep = Te x (1 – 1/EROEI)

Here are my own values;
+ For crude oil presently in production I assume an EREOI value of 20
+ For the more expensive crude oil which is not being extracted I assume an EROEI of 5.
+ For the petroleum which is yet to be discovered I assume an EROEI of 3
+ For non-conventional petroleum, including shale oil, I assume an EROEI of 2
+ Regarding shale oil, we have indicated already that these estimates are very inflated. I reduce them by half.

With these premises, the graph of net energy that we obtain is as follows:
http://1.bp.blogspot.com/-L_lp0BzWamM/UQ4eCC_r6RI/AAAAAAAAHdg/bGYr9h_cUfw/s400/sunset+of+petroleum_html_781e6bbe.png

We know already that classic economic education cannot recognize the concept of EROEI and therefore the explanation which will be given when petroleum production will decline, will be that there is insufficient investment in exploration and development

The final fact is that the petroleum era has come to its end. Our epoch of accelerated economic development based on inexpensive petroleum is already over.

Link -
http://www.resilience.org/stories/2013-02-05/the-twilight-of-petroleum
==============================
The other big Fossil fuel, being Coal, is now also headed down a similar path!

Of the 3 great Economic drivers, 2 are already in relative Decline, prior to going into absolute Decline.

Both Population & Energy Growth are already slowing & have been for some time, BUT the relative effects started becoming apparent for Energy issues around 2000, whilst the Demographic issues followed around 2006.

These major Economic drivers are already slowing, prior to going into reverse. Japan is the Canary in the Coal mine, so to speak & no Politician (Left or Right) can simply "wish" these issues away.

No matter what any Politician may say, the next 20 years will be nothing like the last 20 years, with Economic Growth slowing, before going into actual  Decline and no amount of government or Central Bank action/s will prevent that from happening.

If any Politician says any different, you have my permission, to tell him or her, that they are inept or lying & they have NFI.

Both the Public & Politicians need to face Reality & we need to do it now!

perceptions_now wrote on Feb 6^th, 2013 at 1:32pm:

The other big Fossil fuel, being Coal, is now also headed down a similar path! Of the 3 great Economic drivers, 2 are already in relative Decline, prior to going into absolute Decline. Both Population & Energy Growth are already slowing & have been for some time, BUT the relative effects started becoming apparent for Energy issues around 2000, whilst the Demographic issues followed around 2006. These major Economic drivers are already slowing, prior to going into reverse. Japan is the Canary in the Coal mine, so to speak & no Politician (Left or Right) can simply "wish" these issues away. No matter what any Politician may say, the next 20 years will be nothing like the last 20 years, with Economic Growth slowing, before going into actual  Decline and no amount of government or Central Bank action/s will prevent that from happening. If any Politician says any different, you have my permission, to tell him or her, that they are inept or lying & they have NFI. Both the Public & Politicians need to face Reality & we need to do it now!

Well, it seems there are no dissenting voices?

This must means unnaminty of purpose?

America's Baby Bust

http://si.wsj.net/public/resources/images/RV-AJ678_POPULA_NS_20130212155103.jpg

For more than three decades, Chinese women have been subjected to their country's brutal one-child policy. As a result, Chinese women have a fertility rate of 1.54. Here in America, white, college-educated women—a good proxy for the middle class—have a fertility rate of 1.6. America has its very own one-child policy.

Forget the debt ceiling. Forget the fiscal cliff, the sequestration cliff and the entitlement cliff. Those are all just symptoms. What America really faces is a demographic cliff: The root cause of most of our problems is our declining fertility rate.

The fertility rate is the number of children an average woman bears over the course of her life. The replacement rate is 2.1.

Today, America's total fertility rate is 1.93

The nation's falling fertility rate underlies many of our most difficult problems. Once a country's fertility rate falls consistently below replacement, its age profile begins to shift. You get more old people than young people. And eventually, as the bloated cohort of old people dies off, population begins to contract. This dual problem—a population that is disproportionately old and shrinking overall—has enormous economic, political and cultural consequences.

For two generations we've been lectured about the dangers of overpopulation. But the conventional wisdom on this issue is wrong, twice. First, global population growth is slowing to a halt and will begin to shrink within 60 years. Second, as the work of economists Esther Boserups and Julian Simon demonstrated, growing populations lead to increased innovation and conservation.

Low-fertility societies don't innovate because their incentives for consumption tilt overwhelmingly toward health care. They don't invest aggressively because, with the average age skewing higher, capital shifts to preserving and extending life and then begins drawing down. They cannot sustain social-security programs because they don't have enough workers to pay for the retirees.

There has been a great deal of political talk in recent years about whether America, once regarded as the shining city on a hill, is in decline. But decline isn't about whether Democrats or Republicans hold power; it isn't about political ideology at all. At its most basic, it's about the sustainability of human capital. Whether Barack Obama or Mitt Romney took the oath of office last month, we would still be declining in the most important sense—demographically. It is what drives everything else.

But our fertility rate isn't going up any time soon. In fact, it's probably heading lower. Much lower.

America's fertility rate began falling almost as soon as the nation was founded. In 1800, the average white American woman had seven children. Since then, our fertility rate has floated consistently downward, with only one major moment of increase—the baby boom. In 1940, America's fertility rate was already skirting the replacement level, but after the war it jumped and remained elevated for a generation. Then, beginning in 1970, it began to sink like a stone.

By 1973, the U.S. was below the replacement rate, as was nearly every other Western country. Since then, the phenomenon of fertility collapse has spread around the globe

If you want to see what happens to a country once it hurls itself off the demographic cliff, look at Japan, with a fertility rate of 1.3.

The Japanese fertility rate began dipping beneath the replacement rate in 1960 for a number of complicated reasons (including a postwar push by the West to lower Japan's fertility rate, the soaring cost of having children and an overall decline in the marriage rate). By the 1980s, it was already clear that the country would eventually undergo a population contraction.

From 1950 to 1973, Japan's total-factor productivity—a good measure of economic dynamism—increased by an average of 5.4% per year. From 1990 to 2006, it increased by just 0.63% per year.

Because of its dismal fertility rate, Japan's population peaked in 2008; it has already shrunk by a million since then. At the current fertility rate, by 2100 Japan's population will be less than half what it is now.

Conservatives like to think that if we could just provide the right tax incentives for childbearing, then Americans might go back to having children the way they did 40 years ago. Liberals like to think that if we would just be more like France—offer state-run day care and other programs so women wouldn't have to choose between working and motherhood—it would solve the problem. But the evidence suggests that neither path offers more than marginal gains.

Which leaves us with outsourcing our fertility. We've received a massive influx of immigrants from south of the border since the late 1970s. Immigration has kept America from careening over the demographic cliff.

If you strip these immigrants—and their relatively high fertility rates—from our population profile, America suddenly looks an awful lot like continental Europe, which has a fertility rate of 1.5., if not quite as demographically terminal as Japan.

America's Baby Bust (Cont)

Relying on immigration to prop up our fertility rate also presents several problems, the most important of which is that it's unlikely to last. Historically, countries with fertility rates below replacement level start to face their own labor shortages, and they send fewer people abroad.

Many countries in South America are already below replacement level, and they send very few immigrants our way. And every other country in Central and South America is on a steep dive toward the replacement line.

That is what's happened in Mexico. In 1970, the Mexican fertility rate was 6.72. Today, it's just at replacement, a drop of 72% in 40 years. Mexico used to send us several hundred thousand immigrants a year. For the last three years, there has been a net immigration of zero. Some of this decrease is probably related to the recent recession, but much of it is likely the result of a structural shift.


In the face of this decline, the only thing that will preserve America's place in the world is if all Americans—Democrats, Republicans, Hispanics, blacks, whites, Jews, Christians and atheists—decide to have more babies.

The problem is that, while making babies is fun, raising them isn't.

If we want to continue leading the world, we simply must figure out a way to have more babies.

Link -
http://online.wsj.com/article/SB10001424127887323375204578270053387770718.html?mod=WSJ_article_comments#articleTabs%3Darticle
================================
As usual, there are issues on which I agree with the author & issues where I do not agree.

In respect of Demographics, I certainly agree that it is the major Global Economic driver. However, it should be noted that Demographics has been ably assisted by two great Economic enablers, over the last 200 years or so -
1) Abundant Supplies of Energy at Cheap Prices.
2) A Goldilocks Climate 

However, those two enablers are now in Decline and that will prevent another Baby Boom, which will prevent any Economic resurgence!

Of ,is the authors comments on immigration Decline, which I agree is an area where we should realise it will become more difficult to rely on, as one of our "standard" fixes. It will become more akin to the "land export" model in Oil Export, where the land of origin realises it has an increased need for the Oil/Skilled Labour & they start to retain more & more of what is produced, for use in the land of origin. This will have significant impact in many areas, BUT the impact on our Aging Boomers & the Health Care sector, will be particularly difficult to handle, as some 40-50% of all health care personnel (Baby Boomers) will retire over the next 10-15 years and other countries will start fighting (tooth & nail) to retain their health care professionals.

perceptions, peak oil is in relative terms a myth, a boogie man to scare people with and a nagging fear for the dire pessimists.
For one reason, you don't know what you don't know.
Case in point, Linc Energy, which may or may not be proved up.

hadrian_now wrote on Feb 15^th, 2013 at 12:48pm:

perceptions, peak oil is in relative terms a myth, a boogie man to scare people with and a nagging fear for the dire pessimists. For one reason, you don't know what you don't know. Case in point, Linc Energy, which may or may not be proved up.

Myths don't force a 1000% increase in price, in 10 years!

The Realities of the "free enterprise system" are the basic reason for that sort of increase.

What happened was that Supply lagged behind Demand, from the late 90's until the GFC came along.

The Reality is that the Supply of Energy in general & Oil specifically has slowed in total terms, if not plateaued already and it has certainly outpaced Demand. Hence the big Price increases. 

Btw, the other Energy BIGGIE, being Coal, also has similar problems!

And, both Oil & Coal are also slipping behind the curve, when viewed from an EROEI perspective!

Of course, from an Economic perspective, it means that the Public, Business & Government are all finding their bottom line is being affected and all are having to do more, with less, as their Disposable income is being reduced!

So, all of this is not a myth, a boogie, nor is it anything to do with pessimism.

It is simply REALITY!


As for Linc Energy, it will go the same way as Tar Sands & Shale Oil in general, it won't make any substantial, positive impact on the Global "Supply/Demand" equation!

G20 steps back from currency brink, heat off Japan

MOSCOW: The Group of 20 nations declared on Saturday there would be no currency war and deferred plans to set new debt-cutting targets, underlining broad concern about the fragile state of the world economy.

Japan's expansive policies, which have driven down the yen, escaped direct criticism in a statement thrashed out in Moscow by policymakers from the G20, which spans developed and emerging markets and accounts for 90 percent of the world economy.

Analysts said the yen, which has dropped 20 percent as a result of aggressive monetary and fiscal policies to reflate the Japanese economy, may now continue to fall.

"The market will take the G20 statement as an approval for what it has been doing -- selling of the yen," said Neil Mellor, currency strategist at Bank of New York Mellon in London. "No censure of Japan means they will be off to the money printing presses."

"I have explained that (Prime Minister Shinzo) Abe's administration is doing its utmost to escape from deflation and we have gained a certain understanding," Finance Minister Taro Aso told reporters.

"We're confident that if Japan revives its own economy that would certainly affect the world economy as well. We gained understanding on this point."

NO FISCAL TARGETS
The G20 also made a commitment to a credible medium-term fiscal strategy, but stopped short of setting specific goals as most delegations felt any economic recovery was too fragile.

The communiqué said risks to the world economy had receded but growth remained too weak and unemployment too high.

The G20 put together a huge financial backstop to halt a market meltdown in 2009 but has failed to reach those heights since. At successive meetings, Germany has pressed the United States and others to do more to tackle their debts. Washington in turn has urged Berlin to do more to increase demand.

Backing in the communiqué for the use of domestic monetary policy to support economic recovery reflected the U.S. Federal Reserve's commitment to monetary stimulus through quantitative easing, or QE, to promote recovery and jobs.

QE entails large-scale bond buying -- $85 billion a month in the Fed's case -- that helps economic growth but has also unleashed destabilising capital flows into emerging markets.

Russia, this year's chair of the G20, admitted the group had failed to reach agreement on medium-term budget deficit levels and expressed concern about ultra-loose policies that it and other emerging economies say could store up trouble for later.

On currencies, the G20 text reiterated its commitment last November, "to move more rapidly toward mores market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments".

It said disorderly exchange rate movements and excess volatility in financial flows could harm economic and financial stability.

Link -
http://www.thenews.com.pk/article-88403-G20-steps-back-from-currency-brink,-heat-off-Japan
================================
We are now getting to the point of who is going to blink first!

The Japan Debt is escalating, like there is no tomorrow, on the pretext that it is to reflate the Japanese Economy.

However, the major driver of their Economy, which is Demographics, is now set (in concrete) to both Age & Decline in total, for decades to come.

So, THERE IS ZERO CHANCE OF ANY REAL RESURGENCE IN THE JAPANESE ECONOMY!

But, because the US is in a very similar position, of using "magic money" to achieve what they can not achieve in the REAL ECONOMY, it seems they are happy to allow Japan a continued "leeway", as that then allows the US similar "leeway".

And, with both Japan & the US continuing down "Alice in Wonderland's Yellow brick road", there is no other realistic choice for the other nations, but to go along with Japan & the US & HOPE LIKE HELL THAT A MIRACLE HAPPENS!

However, that is most unlikely to occur & whoever holds the reigns of power after the next OZ Federal election will find they have won a poison chalice, as the world Economy deteriorates back into the worst Economic Crisis since the Great Depression!   

I re-post the following here, because it is relevant.


perceptions_now wrote on Feb 20^th, 2013 at 12:53pm:

There are some basic flaws, at the crux of the FHOG scheme! It inflates Government Debt. It often enables younger Home Buyers to enter the Home market, by providing them with a sufficient deposit, even though their previous (particularly savings history) may have meant they would NOT qualify for a Housing Loan. All of which sound a little like the aim of the US subprime system?    In any event, it does distort the system & it is now doing so at a time when Housing Prices are struggling to increase and in many instances they are actually in Decline. This is completely different to much of the last century when housing Prices were virtually guaranteed to rise. IF, as seems likely, Australia follows the trends already shown in Japan, the USA & many European countries, then Housing Prices will continue to Decline further, over the next several decades, WHICH WOULD MEAN MANY YOUNG AUSTRALIANS WILL LOSE THEIR HOUSING DREAM & THEN STRUGGLE WITH THEIR BAD CREDIT RATING! If my memory serves me, the FHOG was introduced around 2000 as an offset to the GST, which is now well entrenched and I would suggest that the FHOG has now outlived its usefulness, along with some other benefits, such as the Baby Bonus and it's time to get rid of some of these benefits. At the same time, we should also enact many of the Henry Report suggestions and then keep going, with an eye on Productivity, with additional measures to ensure ALL segments, including companies & the top 10% of income earners also pay their fair share of taxes! Just as an aside (some would no doubt say useless), did you know that, in the USA - 1) The bottom 50% of income earners in the US, collectively own less than 1% of the national wealth. 2) Between 2001-2007 66% of income growth went to the top 1% of US citizens. 3) The wealthiest 1% of US citizens owns more wealth than the bottom 95% combined. The situation in OZ may not be quite as bad, BUT we are certainly heading in that direction.

Retail, business power prices to soar

Consumers and business face the prospect of a new wave of power and gas price increases driven by shortages of natural gas.

The average Queensland household may be hit with an electricity price increase of 21.4 per cent next financial year following the lifting of a one-year price freeze instituted by the new Liberal National Party government.

The NSW energy regulator is expected in May to decide to jack up electricity prices in the state.

Gas producers expect wholesale gas prices in eastern Australia will rise from the historical average of about $3.50 a gigajoule to as high as $9 when LNG plants start operating in Gladstone in Queensland, a move which will incorporate eastern Australia into the global gas market.

Three big LNG projects, worth about $60 billion, will come on line in the next two years. All of their gas will be sold overseas through long-term contracts, mostly to Asian countries for use in power generation. Gas has to be liquefied for transport across oceans.

Link -
http://www.afr.com/p/national/retail_business_power_prices_to_hxTOyltdZNB18GAP4S20FJ
================================
No matter what any Politician (Labor or Liberal - State or Federal) says, Power Prices are set to increase dramatically, particularly in the medium to longer term.

I repost this here, because it is relevant.


perceptions_now wrote on Feb 24^th, 2013 at 4:39pm:

Btw, you MAY be interested in the table on the following website, which lists the Deficits/Surpluses for a number of countries. Most countries show Deficits, BUT Norway is a glaring example, where Surpluses are ingained into Politics. http://www.oecd-ilibrary.org/economics/government-deficit_gov-dfct-table-en The chart at the following site also shows ups & downs, BUT in Norway they have always showed a Surplus since 2000, no matter whether the Right or Left of Politics is in government!  http://www.tradingeconomics.com/norway/government-budget FYI the Left have been in power since 2005 and their lowest surplus was 9.7%, with their hightest being 19.7%. Prior to that the Right had something similar, with their lowest surplus being 7.3% and their highest being 15.7%. Finally, the following website gives a run down on Norway. http://en.wikipedia.org/wiki/Norway The Economy & Resources areas make for some "interesting viewing - Norwegians enjoy the second highest GDP per-capita and fourth highest GDP (PPP) per-capita in the world. Today, Norway ranks as the second wealthiest country in the world in monetary value, with the largest capital reserve per capita of any nation. The Norwegian economy is an example of a mixed economy, a prosperous capitalist welfare state featuring a combination of free market activity and large state ownership in certain key sectors. The Norwegian welfare state makes public health care free (above a certain level), and parents have 46 weeks paid parental leave. As of March 2011, the Government Pension Fund of Norway controlled assets valued at is approximately US$570 billion which is about 140% of Norway's current GDP. Norway has a very low unemployment rate, currently 2.6%. 30% of the labour force are employed by the government, the highest in the OECD. The hourly productivity levels, as well as average hourly wages in Norway are among the highest in the world. The state has large ownership positions in key industrial sectors, such as the strategic petroleum sector (Statoil and Aker Solutions), hydroelectric energy production (Statkraft), aluminium production (Norsk Hydro), the largest Norwegian bank (DnB NOR), and telecommunication provider (Telenor). Now, whilst there are certainly differences between Norway & Australia, Norway does demostrate that Left wing Politicians can do a good job, just as can the Right wing Politicians. And, in Norway, they have both shown they can work together, for the betterment of the entire Public, WHICH IS NOT SOMETHING THAT ANY OF OUR OZ POLITICIANS CAN REASONABLY CLAIM!  Btw, if the OZ Future Fund was doing as well as the Norway Fund, THEN WE WOULD HAVE AROUND $2 TRILLION, NOT $60 BILLION. Of course, at the other end of the spectrum the USA has around $200 Trillion in "unfunded Liabities" related to their Aging Population. It will be interesting to see how Norway fares, with the Baby Boomer Retirement constriction now moving in and they already have only a 2.6% Unemployment rate, it will shortly start to get very restrictive in the "skilled Labour" area AND some tough decisions LOOM!

Geography - Norway area is 385 252 km2 and Australia area is 7,692,024 km2

Lets start with that difference

Maqqa wrote on Feb 24^th, 2013 at 5:04pm:

Geography - Norway area is 385 252 km2 and Australia area is 7,692,024 km2 Lets start with that difference

I think I already said -
there are certainly differences between Norway & Australia

BUT, I also said -
Norway does demostrate that Left wing Politicians can do a good job, just as can the Right wing Politicians. And, in Norway, they have both shown they can work together, for the betterment of the entire Public

And, I also said -
1) WHICH IS NOT SOMETHING THAT ANY OF OUR OZ POLITICIANS CAN REASONABLY CLAIM!
2) if the OZ Future Fund was doing as well as the Norway Fund, THEN WE WOULD HAVE AROUND $2 TRILLION, NOT $60 BILLION.

Finally, in the other thread, where you elected not to respond, I also said -
Unlike your attempts at SPIN, to direct opinion in one direction (the Liberals), I am only interested in Facts & likely directions, arising from facts!

Based on those facts & likely directions, I have already said previously, on many occasions, that the Liberals will win the next election.

So, I have agreed that voters have switched off Labor!

As for the rest of your post, I'll take it as an admission that you did not respond already to the information I raised, as you previously claimed!

perceptions_now wrote on Feb 24^th, 2013 at 5:46pm:

Maqqa wrote on Feb 24th, 2013 at 5:04pm: Geography - Norway area is 385 252 km2 and Australia area is 7,692,024 km2 Lets start with that difference I think I already said - there are certainly differences between Norway & Australia BUT, I also said - Norway does demostrate that Left wing Politicians can do a good job, just as can the Right wing Politicians. And, in Norway, they have both shown they can work together, for the betterment of the entire Public And, I also said - 1) WHICH IS NOT SOMETHING THAT ANY OF OUR OZ POLITICIANS CAN REASONABLY CLAIM! 2) if the OZ Future Fund was doing as well as the Norway Fund, THEN WE WOULD HAVE AROUND $2 TRILLION, NOT $60 BILLION. Finally, in the other thread, where you elected not to respond, I also said - Unlike your attempts at SPIN, to direct opinion in one direction (the Liberals), I am only interested in Facts & likely directions, arising from facts! Based on those facts & likely directions, I have already said previously, on many occasions, that the Liberals will win the next election. So, I have agreed that voters have switched off Labor! As for the rest of your post, I'll take it as an admission that you did not respond already to the information I raised, as you previously claimed!

Go back and read about the Future Fund before making a comment

What you deem as "certain differences" suggests that they are minor differences

If at this level you don't understand its significance then how do you hope to discuss macroeconomic issues?

As for the left and right government - it goes back to geography as well as attitude

Maqqa wrote on Feb 24^th, 2013 at 6:07pm:

perceptions_now wrote on Feb 24th, 2013 at 5:46pm: Maqqa wrote on Feb 24th, 2013 at 5:04pm: Geography - Norway area is 385 252 km2 and Australia area is 7,692,024 km2 Lets start with that difference I think I already said - there are certainly differences between Norway & Australia BUT, I also said - Norway does demostrate that Left wing Politicians can do a good job, just as can the Right wing Politicians. And, in Norway, they have both shown they can work together, for the betterment of the entire Public And, I also said - 1) WHICH IS NOT SOMETHING THAT ANY OF OUR OZ POLITICIANS CAN REASONABLY CLAIM! 2) if the OZ Future Fund was doing as well as the Norway Fund, THEN WE WOULD HAVE AROUND $2 TRILLION, NOT $60 BILLION. Finally, in the other thread, where you elected not to respond, I also said - Unlike your attempts at SPIN, to direct opinion in one direction (the Liberals), I am only interested in Facts & likely directions, arising from facts! Based on those facts & likely directions, I have already said previously, on many occasions, that the Liberals will win the next election. So, I have agreed that voters have switched off Labor! As for the rest of your post, I'll take it as an admission that you did not respond already to the information I raised, as you previously claimed! Go back and read about the Future Fund before making a comment What you deem as "certain differences" suggests that they are minor differences If at this level you don't understand its significance then how do you hope to discuss macroeconomic issues? As for the left and right government - it goes back to geography as well as attitude

The future fund is there purely to ensure that federal pollies and public servants can retire early on big fat taxpayer funded superannuation packages.
In short..the future fund is one big scam.
Pollies and public servants should have no more than the same employer funded super as every other Australian worker and like all other super the final figure should not be guaranteed or indexed.

adelcrow wrote on Feb 24^th, 2013 at 6:12pm:

The future fund is there purely to ensure that federal pollies and public servants can retire early on big fat taxpayer funded superannuation packages. In short..the future fund is one big scam. Pollies and public servants should have no more than the same employer funded super as every other Australian worker and like all other super the final figure should not be guaranteed or indexed.

You can thank Keating for this debacle

He made unfunded Superannuation promises that he can't keep

Maqqa wrote on Feb 24^th, 2013 at 6:07pm:

perceptions_now wrote on Feb 24th, 2013 at 5:46pm: Maqqa wrote on Feb 24th, 2013 at 5:04pm: Geography - Norway area is 385 252 km2 and Australia area is 7,692,024 km2 Lets start with that difference I think I already said - there are certainly differences between Norway & Australia BUT, I also said - Norway does demostrate that Left wing Politicians can do a good job, just as can the Right wing Politicians. And, in Norway, they have both shown they can work together, for the betterment of the entire Public And, I also said - 1) WHICH IS NOT SOMETHING THAT ANY OF OUR OZ POLITICIANS CAN REASONABLY CLAIM! 2) if the OZ Future Fund was doing as well as the Norway Fund, THEN WE WOULD HAVE AROUND $2 TRILLION, NOT $60 BILLION. Finally, in the other thread, where you elected not to respond, I also said - Unlike your attempts at SPIN, to direct opinion in one direction (the Liberals), I am only interested in Facts & likely directions, arising from facts! Based on those facts & likely directions, I have already said previously, on many occasions, that the Liberals will win the next election. So, I have agreed that voters have switched off Labor! As for the rest of your post, I'll take it as an admission that you did not respond already to the information I raised, as you previously claimed! Go back and read about the Future Fund before making a comment What you deem as "certain differences" suggests that they are minor differences If at this level you don't understand its significance then how do you hope to discuss macroeconomic issues? As for the left and right government - it goes back to geography as well as attitude

If you wish to make a comment about the OZ Future Fund, in addition to the fact that it should be bigger, then please do so!

As for our Politicians, it is all about attitude or more to the point, a lack of proper attitude, to to the correct thing by all Australians, for the longer term!

Maqqa wrote on Feb 24^th, 2013 at 6:16pm:

adelcrow wrote on Feb 24th, 2013 at 6:12pm: The future fund is there purely to ensure that federal pollies and public servants can retire early on big fat taxpayer funded superannuation packages. In short..the future fund is one big scam. Pollies and public servants should have no more than the same employer funded super as every other Australian worker and like all other super the final figure should not be guaranteed or indexed. You can thank Keating for this debacle He made unfunded Superannuation promises that he can't keep

Both Liberal & Labor, can be thanked for the debacle, BUT Keating did at least introduce the Super Guarantee, which made a start, although it was enough & the Liberals certainly made sure it didn't get high enough, by squash subsequent rises in the super guarantee!

perceptions_now wrote on Feb 24^th, 2013 at 10:42pm:

If you wish to make a comment about the OZ Future Fund, in addition to the fact that it should be bigger, then please do so! As for our Politicians, it is all about attitude or more to the point, a lack of proper attitude, to to the correct thing by all Australians, for the longer term!

You've intertwined the OZ fund with the Norwegian Fund in terms of management - so understand the difference between the two funds before making a comment

The hint is it's in the article you posted

I have said to you before just because you can search it on Google does not mean you have the capacity of understanding what it says

perceptions_now wrote on Feb 24^th, 2013 at 10:46pm:

Maqqa wrote on Feb 24th, 2013 at 6:16pm: adelcrow wrote on Feb 24th, 2013 at 6:12pm: The future fund is there purely to ensure that federal pollies and public servants can retire early on big fat taxpayer funded superannuation packages. In short..the future fund is one big scam. Pollies and public servants should have no more than the same employer funded super as every other Australian worker and like all other super the final figure should not be guaranteed or indexed. You can thank Keating for this debacle He made unfunded Superannuation promises that he can't keep Both Liberal & Labor, can be thanked for the debacle, BUT Keating did at least introduce the Super Guarantee, which made a start, although it was enough & the Liberals certainly made sure it didn't get high enough, by squash subsequent rises in the super guarantee!

both the LIBs and ALP??!!  ;D ;D

Once again you have no understanding of the underlining Superannuation concept that the Future Fund is underwriting  ;D ;D ;D

Maqqa wrote on Feb 24^th, 2013 at 10:57pm:

perceptions_now wrote on Feb 24th, 2013 at 10:46pm: Maqqa wrote on Feb 24th, 2013 at 6:16pm: adelcrow wrote on Feb 24th, 2013 at 6:12pm: The future fund is there purely to ensure that federal pollies and public servants can retire early on big fat taxpayer funded superannuation packages. In short..the future fund is one big scam. Pollies and public servants should have no more than the same employer funded super as every other Australian worker and like all other super the final figure should not be guaranteed or indexed. You can thank Keating for this debacle He made unfunded Superannuation promises that he can't keep Both Liberal & Labor, can be thanked for the debacle, BUT Keating did at least introduce the Super Guarantee, which made a start, although it was enough & the Liberals certainly made sure it didn't get high enough, by squash subsequent rises in the super guarantee! both the LIBs and ALP??!!  ;D ;D Once again you have no understanding of the underlining Superannuation concept that the Future Fund is underwriting  ;D ;D ;D

As I said previously, enlighten us?

Maqqa wrote on Feb 24^th, 2013 at 10:57pm:

perceptions_now wrote on Feb 24th, 2013 at 10:46pm: Maqqa wrote on Feb 24th, 2013 at 6:16pm: adelcrow wrote on Feb 24th, 2013 at 6:12pm: The future fund is there purely to ensure that federal pollies and public servants can retire early on big fat taxpayer funded superannuation packages. In short..the future fund is one big scam. Pollies and public servants should have no more than the same employer funded super as every other Australian worker and like all other super the final figure should not be guaranteed or indexed. You can thank Keating for this debacle He made unfunded Superannuation promises that he can't keep Both Liberal & Labor, can be thanked for the debacle, BUT Keating did at least introduce the Super Guarantee, which made a start, although it was enough & the Liberals certainly made sure it didn't get high enough, by squash subsequent rises in the super guarantee! both the LIBs and ALP??!!  ;D ;D Once again you have no understanding of the underlining Superannuation concept that the Future Fund is underwriting  ;D ;D ;D

As I said previously, enlighten us?

perceptions_now wrote on Feb 24^th, 2013 at 11:10pm:

Maqqa wrote on Feb 24th, 2013 at 10:57pm: perceptions_now wrote on Feb 24th, 2013 at 10:46pm: Maqqa wrote on Feb 24th, 2013 at 6:16pm: adelcrow wrote on Feb 24th, 2013 at 6:12pm: The future fund is there purely to ensure that federal pollies and public servants can retire early on big fat taxpayer funded superannuation packages. In short..the future fund is one big scam. Pollies and public servants should have no more than the same employer funded super as every other Australian worker and like all other super the final figure should not be guaranteed or indexed. You can thank Keating for this debacle He made unfunded Superannuation promises that he can't keep Both Liberal & Labor, can be thanked for the debacle, BUT Keating did at least introduce the Super Guarantee, which made a start, although it was enough & the Liberals certainly made sure it didn't get high enough, by squash subsequent rises in the super guarantee! both the LIBs and ALP??!!  ;D ;D Once again you have no understanding of the underlining Superannuation concept that the Future Fund is underwriting  ;D ;D ;D As I said previously, enlighten us?

so you don't know?

Maqqa wrote on Feb 24^th, 2013 at 11:16pm:

perceptions_now wrote on Feb 24th, 2013 at 11:10pm: Maqqa wrote on Feb 24th, 2013 at 10:57pm: perceptions_now wrote on Feb 24th, 2013 at 10:46pm: Maqqa wrote on Feb 24th, 2013 at 6:16pm: adelcrow wrote on Feb 24th, 2013 at 6:12pm: The future fund is there purely to ensure that federal pollies and public servants can retire early on big fat taxpayer funded superannuation packages. In short..the future fund is one big scam. Pollies and public servants should have no more than the same employer funded super as every other Australian worker and like all other super the final figure should not be guaranteed or indexed. You can thank Keating for this debacle He made unfunded Superannuation promises that he can't keep Both Liberal & Labor, can be thanked for the debacle, BUT Keating did at least introduce the Super Guarantee, which made a start, although it was enough & the Liberals certainly made sure it didn't get high enough, by squash subsequent rises in the super guarantee! both the LIBs and ALP??!!  ;D ;D Once again you have no understanding of the underlining Superannuation concept that the Future Fund is underwriting  ;D ;D ;D As I said previously, enlighten us? so you don't know?

I don't play games, either you have something to say or you don't, it's entirely up to you!

perceptions_now wrote on Feb 24^th, 2013 at 11:42pm:

Maqqa wrote on Feb 24th, 2013 at 11:16pm: perceptions_now wrote on Feb 24th, 2013 at 11:10pm: Maqqa wrote on Feb 24th, 2013 at 10:57pm: perceptions_now wrote on Feb 24th, 2013 at 10:46pm: Maqqa wrote on Feb 24th, 2013 at 6:16pm: adelcrow wrote on Feb 24th, 2013 at 6:12pm: The future fund is there purely to ensure that federal pollies and public servants can retire early on big fat taxpayer funded superannuation packages. In short..the future fund is one big scam. Pollies and public servants should have no more than the same employer funded super as every other Australian worker and like all other super the final figure should not be guaranteed or indexed. You can thank Keating for this debacle He made unfunded Superannuation promises that he can't keep Both Liberal & Labor, can be thanked for the debacle, BUT Keating did at least introduce the Super Guarantee, which made a start, although it was enough & the Liberals certainly made sure it didn't get high enough, by squash subsequent rises in the super guarantee! both the LIBs and ALP??!!  ;D ;D Once again you have no understanding of the underlining Superannuation concept that the Future Fund is underwriting  ;D ;D ;D As I said previously, enlighten us? so you don't know? I don't play games, either you have something to say or you don't, it's entirely up to you!

So, it would seem you didn't have anything of substance to say, you were just playing SPIN games, as usual!

perceptions_now wrote on Feb 25^th, 2013 at 10:43am:

perceptions_now wrote on Feb 24th, 2013 at 11:42pm: Maqqa wrote on Feb 24th, 2013 at 11:16pm: perceptions_now wrote on Feb 24th, 2013 at 11:10pm: Maqqa wrote on Feb 24th, 2013 at 10:57pm: perceptions_now wrote on Feb 24th, 2013 at 10:46pm: Maqqa wrote on Feb 24th, 2013 at 6:16pm: adelcrow wrote on Feb 24th, 2013 at 6:12pm: The future fund is there purely to ensure that federal pollies and public servants can retire early on big fat taxpayer funded superannuation packages. In short..the future fund is one big scam. Pollies and public servants should have no more than the same employer funded super as every other Australian worker and like all other super the final figure should not be guaranteed or indexed. You can thank Keating for this debacle He made unfunded Superannuation promises that he can't keep Both Liberal & Labor, can be thanked for the debacle, BUT Keating did at least introduce the Super Guarantee, which made a start, although it was enough & the Liberals certainly made sure it didn't get high enough, by squash subsequent rises in the super guarantee! both the LIBs and ALP??!!  ;D ;D Once again you have no understanding of the underlining Superannuation concept that the Future Fund is underwriting  ;D ;D ;D As I said previously, enlighten us? so you don't know? I don't play games, either you have something to say or you don't, it's entirely up to you! So, it would seem you didn't have anything of substance to say, you were just playing SPIN games, as usual!

Just admit you don't know and I will explain

Maqqa wrote on Feb 25^th, 2013 at 10:47am:

perceptions_now wrote on Feb 25th, 2013 at 10:43am: perceptions_now wrote on Feb 24th, 2013 at 11:42pm: Maqqa wrote on Feb 24th, 2013 at 11:16pm: perceptions_now wrote on Feb 24th, 2013 at 11:10pm: Maqqa wrote on Feb 24th, 2013 at 10:57pm: perceptions_now wrote on Feb 24th, 2013 at 10:46pm: Maqqa wrote on Feb 24th, 2013 at 6:16pm: adelcrow wrote on Feb 24th, 2013 at 6:12pm: The future fund is there purely to ensure that federal pollies and public servants can retire early on big fat taxpayer funded superannuation packages. In short..the future fund is one big scam. Pollies and public servants should have no more than the same employer funded super as every other Australian worker and like all other super the final figure should not be guaranteed or indexed. You can thank Keating for this debacle He made unfunded Superannuation promises that he can't keep Both Liberal & Labor, can be thanked for the debacle, BUT Keating did at least introduce the Super Guarantee, which made a start, although it was enough & the Liberals certainly made sure it didn't get high enough, by squash subsequent rises in the super guarantee! both the LIBs and ALP??!!  ;D ;D Once again you have no understanding of the underlining Superannuation concept that the Future Fund is underwriting  ;D ;D ;D As I said previously, enlighten us? so you don't know? I don't play games, either you have something to say or you don't, it's entirely up to you! So, it would seem you didn't have anything of substance to say, you were just playing SPIN games, as usual! Just admit you don't know and I will explain

As I said, I don't play games, so either you have something of substance to say or you don't, it's entirely up to you!
If you don't, then obviously you were just playing SPIN games, as usual!

skippy. wrote on Feb 2^nd, 2013 at 8:17pm:

Interesting observations, and probably correct. While a decline in population has pluses it also has minuses.

Problem is, not enough new taxpayers to support Welfare.

A strong broom to sweep out the bludgers on Welfare would be a help.

The world is crowded already so Japan might be the sensible ones in under-populating.

You don't have to worry about Australia's decline in breeding. I'm sure migrants are doing their best, especially those who breed at the expense of taxpayers (like having four wives)

Not bad people, just a bit selfish "making hay while the sun shines"

. . . that is why asylum seekers clamour onto boats to get here.

SHALE AND WALL STREET:
WAS THE DECLINE IN NATURAL GAS
PRICES ORCHESTRATED?

In 2011, shale mergers and acquisitions (M&A) accounted for $46.5B in deals and became one of the largest profit centers for some Wall Street investment banks. This anomaly bears scrutiny since shale wells were considerably underperforming in dollar terms during this time.

As prices plunged, Wall Street be gan executing deals to spin assets of troubled shale companies off to larger players in the industry. Such deals deteriorated only months later, resulting in massive write-downs in shale assets.

As documented in this report, emerging independent information on shale plays in the U.S. confirms the following:

Wall Street promoted the shale gas drilling frenzy, which resulted in prices lower than the cost of production and thereby profited [enormously] from mergers & acquisitions and other transactional fees.

U.S. shale gas and shale oil reserves have been overestimated by a minimum of 100% and by as much as 400-500% by operators a ccording to actual well production data filed in various states.

Shale oil wells are following the same steep decline rates and poor recovery efficiency observed in shale gas wells.

The price of natural gas has been driven down largely due to severe overproduction in meeting financial analysts’ targets of production growth for share appreciation coupled and exacerbated by imprudent leverage and thus a concomitant need to produce to meet debt service.

Due to extreme levels of debt, stated proved undeveloped reserves (PUDs) may not have been in compliance with SEC rules at some shale companies because of the threat of collateral default for those operators.

Industry is demonstrating reticence to engage in further shale investment, abandoning pipeline projects, IPOs and join t venture projects in spite of public rhetoric proclaiming shales to be a panacea for U.S. energy policy.

Exportation is being pursued for the
differential between the domestic and international prices in an effort to shore up ailing balance sheets invested in shale assets.

It is imperative that shale be examined thoroughly and independently to assess the true value of shale assets, particularly since policy on both the state and national level is being implemented based on production projections that are overtly optimistic (and thereby unrealistic) and wells that are significantly underperforming original projections.

Unconventional oil and gas from shales has been claimed to be a game changer, revolutionary, “a gift and national treasure”. Resource estimates for the U.S. have been giddily referred to as larger than “two Saudi Arabias” by Chesapeake Energy CEO Aubrey McClendon. It has even been said that shale oil and gas will provide energy independence for the U.S. While such statements are expected from an industry which stands to gain monetarily, a careful, thorough and independent examination of shale production data and company filings demonstrate that shale promises have been vastly overstated, leading to troubling prognostications for the shale industry as a whole and for those regions exploited or planning to be exploited for this resource.

Shale development is not about long-term economic promise for a region. Such economic promise has failed to materialize beyond the first few years of a shale play's life in any region of the U.S. today that has relative shale maturity.

Shale development is not about the long-term financial viability of shale wells. The wells have not performed up to expectations. Well decline curves are precipitously steep in shale gas and even steeper in shale oil based on historical production data filed by the operators in various states.

Shale development is not about vast reserves or “100 years of gas.” A recently published report reviewing production data of over 60,000 shale gas and oil wells observes that U.S. shale gas has been on a plateau since December 2011, and that 80 percent of shale gas production comes from five plays, several of which are in decline. Further, according to a recent report by the Oil and Gas Journal, and industry publication, it is confirmed that the recovery efficiencies of shale plays are truly dismal.

The energy context
For the past 100 years fossil fuels have held the primary position as the drivers of the U.S. and western economies. Nevertheless, fossil fuels are finite. New deposits of hydrocarbons have proven harder and harder to replace. 

Further, there are various grades and types of hydrocarbons, some much more efficient as fuels than others. Additionally, some hydrocarbons simply require such an expenditure of energy to extract and produce that their use becomes questionable. This measure is referred to EROI (energy returned on investment) and is often seen as a ratio. For
instance, it is estimated that in the early days of the U.S. oil industry, the EROI for oil was 100:1 (that is, 100 units of energy recovered for every one unit of energy invested) but this has since declined to an EROI of under 20:1.
Because unconventional hydrocarbons like tar sands and shales are by definition more challenging (i.e., more energy-intensive) to produce, they generally have very low EROIs:  ikely well under 5:1.

Link -
http://shalebubble.org/wp-content/uploads/2013/02/SWS-report-FINAL.pdf
=========================
In short, this field is high on HOPIUM!

perceptions_now wrote on Feb 25^th, 2013 at 11:01am:

Maqqa wrote on Feb 25th, 2013 at 10:47am: perceptions_now wrote on Feb 25th, 2013 at 10:43am: perceptions_now wrote on Feb 24th, 2013 at 11:42pm: Maqqa wrote on Feb 24th, 2013 at 11:16pm: perceptions_now wrote on Feb 24th, 2013 at 11:10pm: Maqqa wrote on Feb 24th, 2013 at 10:57pm: perceptions_now wrote on Feb 24th, 2013 at 10:46pm: Maqqa wrote on Feb 24th, 2013 at 6:16pm: adelcrow wrote on Feb 24th, 2013 at 6:12pm: The future fund is there purely to ensure that federal pollies and public servants can retire early on big fat taxpayer funded superannuation packages. In short..the future fund is one big scam. Pollies and public servants should have no more than the same employer funded super as every other Australian worker and like all other super the final figure should not be guaranteed or indexed. You can thank Keating for this debacle He made unfunded Superannuation promises that he can't keep Both Liberal & Labor, can be thanked for the debacle, BUT Keating did at least introduce the Super Guarantee, which made a start, although it was enough & the Liberals certainly made sure it didn't get high enough, by squash subsequent rises in the super guarantee! both the LIBs and ALP??!!  ;D ;D Once again you have no understanding of the underlining Superannuation concept that the Future Fund is underwriting  ;D ;D ;D As I said previously, enlighten us? so you don't know? I don't play games, either you have something to say or you don't, it's entirely up to you! So, it would seem you didn't have anything of substance to say, you were just playing SPIN games, as usual! Just admit you don't know and I will explain As I said, I don't play games, so either you have something of substance to say or you don't, it's entirely up to you! If you don't, then obviously you were just playing SPIN games, as usual!

As usual, I will again take your silence as confirmation that you did not have anything of substance to say & you were simply playing your usual Political SPIN games.

Boring!

Squaring Up To A Low Growth World

There wasn't much of an outcry in the media when the U.S. Congressional Budget Office told the Senate Budget Committee and the House Budget Committee that instead of achieving 3.0% growth in 2013 as had been widely reported, the CBO expected the U.S. economy to grow by no more than 1.5% by the end of this year. That is way below trend for the U.S. economy.

Reduced Federal spending and the expiration of the 2% point cut in the Social Security payroll tax, plus increases in tax rates on income above certain thresholds, will all have a dampening effect of around 1.5% in total on the economy, the CBO says.

As a result, unemployment in the U.S. will continue to run at around 7.5% through 2014, giving the U.S. its sixth consecutive year with unemployment at or higher than 7.5%, the worst performance in terms of jobs for 40 years.

This would be depressing enough as a view of the likely course of the U.S. economy, but Jeremy Grantham, co-founder and chief investment strategist at GMO (Grantham, Mayo Van Otterloo), with $97 billion in assets under management, argues in a November 2012 Newsletter that the good old days of the U.S. enjoying trend growth in excess of 3% a year are not just "hiding behind temporary setbacks", they are gone forever!

"Going forward GDP growth conventionally measured for the U.S. is likely to be only 1.4% a year, and adjusted growth about 0.9%," he says.

But Grantham points out that the U.S. population growth is set to "bob along at less than half a percent" instead of the 1.5% a year seen in the 1970s. This means that man-hours worked annually are likely to be growing at only 0.2%, hardly a massive boost to GDP. Moreover productivity improvements are seen at their best in manufacturing, and manufacturing now only accounts for around 9% of the U.S. economy. Not good.

The following paragraph from the GMO newsletter on the impact of demographics on growth is worth pondering:

    The demographic inputs peaked around 1970 at nearly 2% a year growth (there are many ways to do these calculations, each yielding slightly different results). They fell to about 1% average growth for the last 30 years and demographic effects are now down to about 0.2% a year increase in man-hours where they are likely to remain until 2050, with possibly a very slight downward bias.

The demographic issue is hard enough to get around, but GMO says that there are two further structural issues that will simply confirm that growth will be very hard to find going forward. The first of these is diminishing resources and increasing pressure to account for those resources properly, including water. The second is the damaging effects of climate change, which GMO sees as adding significantly to costs, especially from 2030 and beyond.

Link -
http://seekingalpha.com/article/1291761-squaring-up-to-a-low-growth-world?source=email_macro_view&ifp=0
==============================
A few observations -
1) "Demographics is destiny" ― Arthur Kemp
2) I would suggest that large boosts to immigration in the US or elsewhere is unlikely for various reasons and as the Boomer generation is set to start dying in ever increasing numbers, over the next 5-20 years, it is likely that the average Growth attributable to Demographic effects will actually go negative over the next 5-10 years & it will then continue that trend for some time!
3) In isolation, this Demographic time-bomb would provide some formidable Economic obstacles!

However, on this occasion, with diminishing resources, including Energy & Water Resources (although some areas may get too much water), plus the effects of Climate Change gathering pace, THE COMBINATION OF THESE 3 MAJOR ECONOMIC FACTORS ARE VERY LIKELY TO CREATE A ONCE IN HISTORY SET OF ECONOMIC PROBLEMS, WHICH WILL PERSIST FOR DECADES. 

As I have said previously, THIS TIME IS DIFFERENT & NO AMOUNT OF POLITICAL RHETORIC WILL CHANGE THESE FACTORS.

This puts an entirely new perspective on Bill Clinton assertion that, "IT'S THE ECONOMY, STUPID"! 

Worse drought news: No rain on the horizon

The Government has declared a state of drought in the Buller and Grey Districts on the West Coast.


"It is very unusual for the West Coast to experience drought conditions and is not something that local farmers are used to. It shows just how extreme this dry period has been."

The entire North Island remains in a state of drought.

DRY FORECAST
Weather experts have heartbreaking news for farmers struggling to cope with drought throughout the country - no rain is likely for at least another 10 days.

Rivers were also at record lows, Niwa said.

Such droughts were likely to become more frequent, chief climate scientist David Wratt said.

This year, high-pressure belts in the tropics had expanded further south than normal and this would become more common.

Work on the effect of rising greenhouse gas emissions showed a one-in-20-year drought would occur at least twice as often in the 2080s in parts of Otago, Canterbury, Marlborough, Wairarapa, Hawke's Bay, Bay of Plenty and Northland.

Link -
http://www.stuff.co.nz/national/8460590/Worse-drought-news-No-rain-on-the-horizon
=====================
You know something is happening, IF New Zealand is in Drought, particularly IF the South Island is affected!

In fact, it seems some cities on the North Island, are now starting to run low on drinking water.

And, all of this is increasing pressure on the NZ Economy, confirming that Climate Change Costs the REAL Economy!

http://www.nznewsuk.co.uk/news/?id=38817&story=Downpours-worsen-Wellington-s-water-woes

Dollar "defying gravity" as forecasts lift

Treasurer Wayne Swan says the Australian dollar is “defying gravity” as commodity prices fall and analyst forecasts lift.

It comes as the trade-weighted index for the Aussie reached its highest level since 1985 yesterday, spurring analysts to reverse course after cutting year-end forecasts for the currency.

Policymakers and executives at the Bloomberg Australia Economic Summit in Sydney yesterday singled out the local dollar’s strength as the biggest challenge for business, while conceding there’s little that can be done to restrain it.

“The global economy requires the big economic engines to grow so we can all grow together, and if that requires expansionary monetary policy because fiscal policy has reached its limits or can't be implemented then so be it,” the treasurer said.

The economy expanded 3.6 per cent in 2012, the fastest pace in five years, while employers added 71,500 jobs in February, the most in almost 13 years, government data showed last month.

But clouding the outlook, BHP Billiton chief financial officer Graham Kerr told a Bloomberg economic summit yesterday he expects annual economic growth in China to moderate toward 6 per cent, and that prospects in its largest customer present the company's main business risk.

The dollar was at $US1.055 this morning and has remained above $US1 for a record nine-month stretch.

The RBA's trade-weighted index climbed to 79.9 yesterday, the highest level since 1985.

'Decimating' manufacturing
Australia’s defiance of the global slowdown is now backfiring on manufacturing after the currency soared 75 per cent against the US dollar and 87 per cent versus the yen from its low in October 2008.

Terry Davis, managing director at Coca-Cola Amatil Ltd., said the Aussie is “decimating” manufacturers, while Robert Mead, head of portfolio management in Sydney at Pacific Investment Management Co., said businesses are deferring spending.

The government and Reserve Bank of Australia say the cash flowing into the economy - fueled by quantitative easing in the US and Japan - is beyond the control of policy makers in a small nation.

“That’s the hand that the world has dealt us,” RBA Assistant Governor for economics Christopher Kent said at the summit, reiterating that the central has no plans for intervention to weaken the Aussie.

AAA Rating
UBS Global Asset Management expects the Aussie to stay high as investors "just love" the yields it offers.

Australia is one of eight nations that hold stable AAA grades from all three main credit-rating companies.

With $270 billion ($US285 billion) in sovereign debt, Australia has the second-largest government bond market among stable AAAs.That compares with $US11.6 trillion for the US, which Standard & Poor's reduced to AA+ in 2011, and $US9.2 trillion for Japan, graded AA- by S&P.

Aussie 'Floor'
"Ongoing demand for AAA rated credit may put a floor under the Australian dollar," said Darcie Sunnerberg, a vice president and sovereign analyst at Boston-based Loomis Sayles & Co. "Overall, fundamentals would suggest a weaker Australian dollar in the short-term," she said..

'Quality Place'
"The main theme is that China's still got this diversification bid out there for the Australian dollar and that has limited declines in the currency above the parity level," said Adrian Foster, the Hong Kong-based head of financial- markets research for Asia at Rabobank.

Rabobank, the most accurate firm at picking the Aussie over the past four quarters according to data compiled by Bloomberg, forecasts it will end the year at $US1.06.

Link -
http://www.smh.com.au/business/dollar-defying-gravity-as-forecasts-lift-20130411-2hmlm.html
===============================
This has nothing to do with defying gravity!

As per my earlier posts, I suggest the OZ$ will continue to appreciate, against some other major currencies, such as the Japanese Yen, the US$ & the Euro.

perceptions_now wrote on Jan 9^th, 2013 at 8:23am:

OZ$ back above $1.05 against US$ - http://au.finance.yahoo.com/q/bc?s=AUDUSD=X&t=5y&l=on&z=l&q=l&c= Despite US$ index being back above $0.80 - http://www.marketwatch.com/investing/index/DXY At some point, the US$ will collapse, due to the weight of US Debt and the OZ$ will then spike higher against the US$. We will also rise against the Euro, as Europe continues its woes.

There are several major reasons, why the OZ$ will go up, not down, against these currencies -
1) There is a race to the bottom, with a number of major currencies, as governments & CB's continue to throw away mountains of money.
These governments/CB's (Japan, US & Europe) are not  throwing away Billions, they are into Trillions, many Trillions AND the likely result is Currency wars, Trade Wars & Wars!

2) In comparison, the OZ Economy looks like a Paragon of virtue, with Real Growth still existing, albeit on its way out & returns on invested $'s that far outweigh what is available under the zero interest rate of  regimes of Japan, US & Europe!

As for the “The global economy requires the big economic engines to grow so we can all grow together and therefore this sort of "expansionary monetary" is ok, all I can say is CRAP!!!