Surviving encroaching major social, environmental and economic change in Hawke's Bay, New Zealand
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Financial decline

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The Last Oil Shock - David Strahan

Hawke's Bay Local Currency

Hawke's Bay Local Currency

Migrant mother - 1930s depressionUnemployment - 1930s depressionOut of work - 1930s depression

Hawke's Bay Local Currency




IMF Boss predicts Gloom for 2009

The head of the International Monetary Fund (IMF) has said 2009 will be a bad year for the global economy and that governments will have to spend more money to stimulate growth.

Dominique Strauss-Kahn says that about $1.8 trillion would be needed to tackle the financial crisis.

I'm specially concerned by the fact that our forecasts are already very dark, but they will be even darker if not enough fiscal stimulus is implemented, he said.

The question of having social unrest has been highlighted by journalists and I can understand that but it's only part of the problem.

The problem is that the whole of society is going to suffer.

In November the IMF lowered its forecast of global economic growth, and Mr Strauss-Kahn says he expects that forecast to be lowered again in January.

- BBC, 21 December 2008

Economy in for a Tough Ride in 2009

The Australian economy is heading for a tough year in 2009, with policymakers hoping interest rates cuts and recent fiscal stimulus will help prevent a recession.

But compared with the recessionary economies of the US, the eurozone and New Zealand, the Australian economy is in a far better position to ride out the buffeting headwinds of a global slowdown.

The World Bank downgraded its forecast in December for the global economy, with growth expected to be 2.5 per cent this year and 0.9 per cent in 2009, dragged down by most developed economies.

The International Monetary Fund (IMF) said commodities prices were likely to plunge 23 per cent in 2009, ending a five-year boom and hurt Australia's income.

In February, the Australian jobless rate touched 3.9 per cent, a 33-year low. Commonwealth Bank senior economist Michael Workman said he expected unemployment here to reach near seven per cent in 2010.

- The Age, Australia, 30 December 2008

James Kunstler's Forecast for 2009

Many were stunned this year to witness the parabolic rise and fall of oil prices up to nearly $150 and then back around $36 by Christmas time. However, the price and supply prospects for oil still look ominous. My prediction for 2009 is that we will see two things occur, possibly at the same time: a resumption of rising oil prices, and spot shortages. The tragic part of all this, of course, is that the temporary plunge in oil prices has prompted an incurious American public to assume, once again, that the global oil predicament is some kind of a fraud.

The big theme for 2009 economically will be contraction. The end of the cheap energy era will announce itself as the end of conventional growth and the shrinking back of activity, wealth, and populations. Contraction will come as a great shock to a world of conventionally programmed economists. They will toil and sweat to account for it, and they will probably be wrong. Unfortunately, this contraction will do its work in unpleasant ways, driving down standards of living, shearing away hopes and expectations for a particular life of comfort, and introducing disorder to so many of the systems we have depended on for so long. People will starve, lose their homes, lose incomes and status, and lose the security of living in peaceful societies. It will become clear that the Long Emergency is underway.

My hope for the year, at least for my own society, is that we will transition away from being a nation of complacent, distracted, over-fed clowns, to become a purposeful and responsible people willing to put their shoulders to the wheel to get some things done. My motto for the new year: "no more crybabies!"

-, 30 December 2008 [full article here]

It's Worse than we Thought

New Zealand is facing the longest recession on recent record. We can't find any period in New Zealand's historic experience when a recession has extended to five quarters, ANZ Bank.

Analysts widely agreed the figures [from the most recent business confidence survey by the NZ Institute of Economic Research] showed a worse 2009 than previously expected, with an intensifying recession more likely than an abating one. Economists described the survey as bleak to literally dreadful.

Deutsche Bank Chief Economist said Unemployment [in NZ] could rise from 4.2 percent to almost 8 per cent this year.

- extracted from The Dominion Post, 14 January 2009

Worse than the Great Depression

Now, obviously these are very difficult economic times. I readily concede I chucked aside some of my free market principles when I was told by my chief economic advisors that the situation we were facing could be worse than the Great Depression. So I've told some of my friends who said — you know, who have taken an ideological position on this issue — why did you do what you did? I said, well, if you were sitting there and heard that the depression could be greater than the Great Depression, I hope you would act too.

- George Bush's final presidential news conference, 20 January 2009


The financial and economic crisis now upon us is by far the most menacing of the past century – even more so than the Great Depression of the 1930s. It is systemic – affecting the entire financial system. It is also global.
- James Cumes (former Australian Ambassador to the European Union), Asia Times, 10 April 2008

The Bank for International Settlements, the world's most prestigious financial body, has warned that years of loose monetary policy has fuelled a dangerous credit bubble, leaving the global economy more vulnerable to another 1930s-style slump than generally understood. "Virtually nobody foresaw the Great Depression of the 1930s".
- The Telegraph, 25 June 2007

We will not have any more crashes in our time.
- John Maynard Keynes, 1927

1930 will be a splendid employment year!
- US Department of Labor's New Year Forecast, December 1929

All safe deposit boxes in banks or financial institutions have now been sealed and may only be opened in the presence of an agent of the I.R.S.
- President F.D. Roosevelt, 1933

US economy teeters on the brink.
- The Globe and Mail, 18 January 2008

The International Monetary Fund today warned authorities worldwide to "think the unthinkable" in planning to cope with a mounting crisis in the global financial system.
- CNBC, 12 March 2008

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.
- The Telegraph (UK), 19 June 2008

Facing bankruptcy threat, General Motors to slash thousands more jobs.
- The Intelligence Daily, 8 July 2008

We're a very different country than we were in 1932. In that earlier crisis our society still possessed fantastic resources. We had plenty of everything that our land could provide. We had a railroad system that was the envy of the world and millions of family farms owned by people who retained age-old skills not yet degraded by agribusiness. We had fully-functional cities with operating waterfronts and ten thousand small towns with local economies, local newspapers, and local culture. What's happening now is that American society is sliding into a greater depression than the one Grandma lived through.
- adapted from the Kunstler Newsletter, James Howard Kunstler, 30 June 2008

Food stamps are the symbol of poverty in the US. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive – a sure sign the world’s richest country faces economic crisis.
- The Independent (UK), 1 April 2008

Over two million families are expected to lose their homes in the US within the next couple of years.
- BBC News, 29 October 2007

If people don't start thinking for themselves and preparing, then we will follow the scenario our leaders have mapped out for us. Why is the media trying to sell us a lie? Simply to keep up consumer confidence.
- Dale Pfeiffer, The Mountain Sentinel, 1 October 2007

A new survey by Statistics New Zealand shows that the distribution of wealth has become even more unequal in 2003-04 than in the previous survey in 2001, when the richest 10 percent owned only 48 per cent of the country's wealth. They now own 52 percent.
- NZ Herald, 4 April 2007

In another shock for the financial sector, Clegg & Co became yesterday the 10th New Zealand financial company in 16 months to collapse.
- Dominion Post, 5 October 2007

Auckland-based company Geneva Finance has stopped repaying investors, owed more than $112 million, as it struggles to remain afloat.
- Dominion Post, 17 October 2007

New Zealand's third largest nonbank finance company, Hanover Finance Ltd., froze investor funds Wednesday, citing the collapse of the industry for halting its business. The nonbank finance company is New Zealand's 24th to face serious difficulties in the wake of the subprime mortgage crisis in the United States. Nearly NZ$2.5 billion of investor cash has been caught up in failures in the nonbank sector so far.
- International Herald Tribune, 23 July 2008

Nineteen NZ property firms go bust.
- Sydney Morning Herald, 13 February 2008

Auckland’s biggest real estate agency group, Barfoot and Thompson, has reported sales volumes fell 56.2 per cent in March from a year ago.
- New Zealand Herald, 4 April 2008

Possible Solutions

It must be emphasised that a) the present writer of this site is in no way a qualified financial advisor, b) any 'solutions' considered here are mainly passed on from other sources, c) decisions you make should be appropriate for you and your loved ones, d) the disclaimer at the bottom of this page should be carefully read.

Apart from cutting the umbilical cord to the fuel pump, insulate yourself financially. What’s the nature of your employer’s business. Is it vulnerable? Many economists are forecasting a series of economic shocks, followed by serious recession or even full-scale depression. Slash that household debt – your mortgage, your credit card balance. Look hard at your investments – do they rely on energy-intensive production?
- NZ Listener, 26 February 2008

The following is adapted from David Strahan's The Last Oil Shock (© 2007 - John Murray Publishers):

Reduce your Fossil Fuel Dependency
In the worst-case scenario markets could collapse and remain permanently depressed, making pensions and endowment policies worthless. Spending now to reduce your fossil fuel dependency is in effect a risk-free pension investment. Remember that a stock market crash can never take away your solar hot water system.

Pay off your Debts
A stock market crash could, however, take away your job, and indeed your home, if you can't keep up the mortgage payments. So, the other imperative is to pay off your debts as quickly as possible.

Invest Surplus Funds in Renewables
After reducing your fossil fuel dependency and paying off your debts, if you still have money to spare you could invest in a range of renewable energy companies, where demand for their products in the longer term is more or less guaranteed.

Reduce your use of
- plastic shopping bags (current global usage = 1 trillion per year)
- bottled water (save money and the environment by refilling your own bottle)
- non-seasonal fruit and vegetables (especially imported)
- patio heaters (a wicked waste of gas)
- meat (may become prohibitively expensive as grain prices continue to soar)
- SUVs

Positive Steps
- get fit, lose weight, and save money by investing in a bicycle
- save money by taking holidays closer to home


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How to Plan for Peak Oil on a Limited Budget
This document details seven key areas to consider when preparing for the fallout from peak oil: 1) develop a positive attitude, 2) remain fit & healthy, 3) get out of debt, 4) decide where to live, 5) buy a good sleeping bag, 6) store a month's supply of food, 7) surround yourself with trustworthy people who will help each other out.
Click to download this publication

When all the trees have been cut down, when all the animals have been hunted, when all the waters are polluted, when all the air is unsafe to breathe, only then will you discover you cannot eat money.

- Cree Prophecy

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