jh Says:
April 29th, 2008 at 3:04 pm
How would the government deal with too large a deficit… ? Once it would have devalued.

in my view the proper response is to regulate capital flows & foreign ownership - here’s where we went into a bit more depth on this: http://blog.greens.org.nz/index.php/2008/03/21/trade-and-debt/

our deficits didn’t just come about because we suddenly became poor at producing or at exporting, nor did a previously sober race suddenly say “hey these credit cards are great! we can spend more than we earn!� in fact we’re probably better exporters than ever before, with an economy more focussed on our export industries instead of on the old inefficient import-replacement manufacturing.

while a situation like this is more complex than can be fully accounted for in generalities, in the main we didn’t get into debt from trade imbalances - the problem is primarily generated from the other side of the equation - trade imbalances arise from capital movement imbalances. the precipitate liberalization of capital markets & ownership regulations along with the sale of state assets have dragged investment into the country (not so much into new productive capacity but simply into acquisitions), which has kept the dollar high & hence foreign stuff cheap.

(part of a long post in that thread)

jingyang Says:
April 29th, 2008 at 6:24 pm
Well we can cover a few months of the deficit from the sale of Vector’s electricity network in Wellington..:-)
But of course, in the longer term profit repatriated to Hong Kong will add to the deficit

alas, it’s the other way around - a huge capital inflow does not cover deficit, it creates deficit, & is the opposite to the direction the government should be looking to move in.
this really could be the key moment at which they choose to win or lose the next election

http://www.nytimes.com/2008/04/28/business/worldbusiness/28oil-WEB.htm l?_r=2&hp=&pagewanted=all&oref=slogin&oref=slogin

Services are completely ignored of course, making this post little more than quaint onanism.

Nitrate fertilizers are made from ammonia which in turn is made from hydrogen, which is often made from natural gas (at Kapuni in NZ). However hydrogen can be made by electrolysis so if we had spare renewable electricity resources, we can use them for that. It is one way of exporting energy.

Trevor.

By Joe Carroll
Until the tools needed to exploit the reservoirs are invented, the crude will remain locked under the sea, said Matt Cline, a U.S. Energy Department economist.
http://www.bloomberg.com/apps/news?pid=20601086&sid=aalWn.eJHGZk&refer =latin_america