June 28, 2016
Britain's Credit Rating
The downgrade of Britain's credit rating has got to bring the credit rating agencies into disrepute, surely. The recent announcement by S&P has got to be politically motivated.
June 25, 2016
Brexit
Britain has done the sensible thing and voted to leave the EU. Now listen to all that bleating from the rest of Europe will you. And the markets were down, yay, cheap buys for all us value investors.
Will Britain's exit be a negative for Britain or the EU? I think neither. If you look at what Britain manufactures, it is of more interest to the rest of the world than western Europe. Most of the rest of the EU already make lots of what Britain makes, and they skew the playing field to freeze Britain out. Now the playing field can be levelled up.
For the EU, they lose a cash cow in the UK. But life will just go on for them as it does now.
A significant event then, rather like the Arab spring. But it will not foreshadow a crash.
Will Britain's exit be a negative for Britain or the EU? I think neither. If you look at what Britain manufactures, it is of more interest to the rest of the world than western Europe. Most of the rest of the EU already make lots of what Britain makes, and they skew the playing field to freeze Britain out. Now the playing field can be levelled up.
For the EU, they lose a cash cow in the UK. But life will just go on for them as it does now.
A significant event then, rather like the Arab spring. But it will not foreshadow a crash.
June 20, 2016
Game 7 NBA Finals 2016
Wow, the Cavaliers have their first championship, what a tight game. Like I said, the Cavs were the better team on paper, and on the court, they only just squeaked past the Warriors. Three in a row and to win playing away from home - a great effort.
June 17, 2016
NBA Finals Game 6
I've got to start being consistent. I said at the start that the Cavaliers looked to have the better team and that's the way it looks now they're going to game 7. Maybe the Warriors have internal strife as Thompson was seen to leave the arena before the hooter. That's totally unacceptable in my book, not a good look and it does nothing for team unity. Right now you'd have to put your money on the Cavs even though they're playing away from home.
June 15, 2016
Bitcoin Building Society
This is my answer to the problem of bitcoins being highly volatile in terms of value. I still think my formula for linking a digital currency to the real world has legs, whether it is linked to precious metals, or a basket of goods and services or even Caterpillar tractor output.
However the solution below deals with things as they are now:-
1. A building society be formed that accepts bitcoin deposits along with other currencies both real and virtual.
2. The building society exists to lend to its members for the purpose of buying real property, but mostly real estate.
3. It is a building society with shareholders and members holding bitcoin balances. A member with a bitcoin balance need not be a shareholder, but all shareholders are members whether they hold a bitcoin balance or not.
4. When a member deposits bitcoins to the building society, an account fee is charged, one half of the fee to cover the cost of running the society and the other half to be invested in real property, precious metals, cash and cash equivalents for the benefit of members.
5. No fee for withdrawing funds.
6. The society will operate a platform whereby bitcoins are exchanged for cash. No fee for cashing in or switching currencies, apart from the quoted exchange rate.
7. Loans are made available to members, which may use bitcoins as security to cover part of the loan. If a mortgage is advanced, then the property would be secured as well as a bitcoin balance.
(eg) A loan applicant wants to borrow to buy a $1,000,000 house. 1,000 bitcoins are held in the applicants membership account. Assuming income is available to service the loan, the applicant qualifies for a $750,000 loan, and as $650,000 is held in bitcoins, $250,000 of that becomes the equity in the house, a proportion of the balance is then locked up to provide additional security for the loan (suggest half of the balance, or 308 bitcoins, which would be 'advanced against' and thus could not be withdrawn but would still carry limited voting rights - those 'advanced against' coins could not vote on any policy influencing lending).
8. Repayments may be made in any currency but must always equal the minimum loan repayment amount stated in the loan agreement.
9. If the building society winds up, or bitcoins become unfeasible, then the amount payable from the reserve to each member will be pro rata the balance of each members shares, bitcoin balance, plus any other balance from the members accounts.
10. Shareholders and members have a voting right related to their shares or membership account held in bitcoins. The bitcoin balance is always backed by the reserves set aside in 4 above. Shareholders and members may transfer or sell their shares or bitcoin balance to anyone. If not already a member then any new shareholder becomes a member automatically.
11. Voting rights for each member will be capped at 5% of the total bitcoin member pool (based on the idea that the building society starts with 20 equal members). There is no cap on how many bitcoins can be held and all bitcoins pro rata participate in any profit. However individual members can only vote up to a maximum of 5% of the total membership.
(eg) A member has been in the society for 13 months and qualifies to vote at the next AGM. The member has deposited a total of one million bitcoins, 500,000 upon joining, with the rest added over the following months. The AGM will have total member votes available of 20 million bitcoins. The member may vote all his initial stake of 500,000 bitcoins (2.5% of the total pool) but none of those units after as none of them have been in the system for over a year. If the pool is the same size the following year, and the member still has the same bitcoin balance, the member may vote all bitcoins possessed as they represent no more than 5% of the membership pool.
For the purposes of the example above, the 5% threshold applies to the aggregate of all accounts for that member, where the member has control of that account (being 50% or more control or power of attorney), and whether separate accounts exist (or not) for that member.
12. As the building society exists for legitimate reasons, and is principally there to provide member benefits, there would be no problem getting banking facilities. The bitcoins form the members but in every other respect the organisation is exactly the same as any building society.
An advantage of my approach - the problem of bitcoins being a poor store of value is addressed. Members with a significant balance of bitcoins in their membership account would have a reserve backing up their bitcoins. The coins held within the membership account would always be worth more than zero. Bitcoins outside of a system like this can indeed be worth nothing.
A possible flaw I can see already I've addressed in 11 above. Not all bitcoins in member accounts would be equal. Someone may have been a member for ten years, while another member only a year. Having said that however, their bitcoins rank equally for distribution of reserves or profit after the qualifying period.
The above problem is addressed in two ways, firstly a minimum membership term must be established to begin with, say, one year (see 7 above). Then secondly, beyond that each member receives a share of the profit, provided there is a profit to distribute from the society. Thus, a member for a long period of time should build up significant equity. If the society was wound up, new memberships would be closed off so new subscriptions could not flood in to pounce on those reserves.
If anyone is interested in this, by all means contact me to discuss. There is a contact form to the right under my photo.
However the solution below deals with things as they are now:-
1. A building society be formed that accepts bitcoin deposits along with other currencies both real and virtual.
2. The building society exists to lend to its members for the purpose of buying real property, but mostly real estate.
3. It is a building society with shareholders and members holding bitcoin balances. A member with a bitcoin balance need not be a shareholder, but all shareholders are members whether they hold a bitcoin balance or not.
4. When a member deposits bitcoins to the building society, an account fee is charged, one half of the fee to cover the cost of running the society and the other half to be invested in real property, precious metals, cash and cash equivalents for the benefit of members.
5. No fee for withdrawing funds.
6. The society will operate a platform whereby bitcoins are exchanged for cash. No fee for cashing in or switching currencies, apart from the quoted exchange rate.
7. Loans are made available to members, which may use bitcoins as security to cover part of the loan. If a mortgage is advanced, then the property would be secured as well as a bitcoin balance.
(eg) A loan applicant wants to borrow to buy a $1,000,000 house. 1,000 bitcoins are held in the applicants membership account. Assuming income is available to service the loan, the applicant qualifies for a $750,000 loan, and as $650,000 is held in bitcoins, $250,000 of that becomes the equity in the house, a proportion of the balance is then locked up to provide additional security for the loan (suggest half of the balance, or 308 bitcoins, which would be 'advanced against' and thus could not be withdrawn but would still carry limited voting rights - those 'advanced against' coins could not vote on any policy influencing lending).
8. Repayments may be made in any currency but must always equal the minimum loan repayment amount stated in the loan agreement.
9. If the building society winds up, or bitcoins become unfeasible, then the amount payable from the reserve to each member will be pro rata the balance of each members shares, bitcoin balance, plus any other balance from the members accounts.
10. Shareholders and members have a voting right related to their shares or membership account held in bitcoins. The bitcoin balance is always backed by the reserves set aside in 4 above. Shareholders and members may transfer or sell their shares or bitcoin balance to anyone. If not already a member then any new shareholder becomes a member automatically.
11. Voting rights for each member will be capped at 5% of the total bitcoin member pool (based on the idea that the building society starts with 20 equal members). There is no cap on how many bitcoins can be held and all bitcoins pro rata participate in any profit. However individual members can only vote up to a maximum of 5% of the total membership.
(eg) A member has been in the society for 13 months and qualifies to vote at the next AGM. The member has deposited a total of one million bitcoins, 500,000 upon joining, with the rest added over the following months. The AGM will have total member votes available of 20 million bitcoins. The member may vote all his initial stake of 500,000 bitcoins (2.5% of the total pool) but none of those units after as none of them have been in the system for over a year. If the pool is the same size the following year, and the member still has the same bitcoin balance, the member may vote all bitcoins possessed as they represent no more than 5% of the membership pool.
For the purposes of the example above, the 5% threshold applies to the aggregate of all accounts for that member, where the member has control of that account (being 50% or more control or power of attorney), and whether separate accounts exist (or not) for that member.
12. As the building society exists for legitimate reasons, and is principally there to provide member benefits, there would be no problem getting banking facilities. The bitcoins form the members but in every other respect the organisation is exactly the same as any building society.
**********
The are hurdles to cross in respect of gaining regulatory approval to accept deposits. These are not insurmountable.
Why not form a credit union? That would work too and I read about an attempt to do this in the USA. Credit unions are smaller and have a lower threshold, but by contrast a building society can offer bonus issues by ballot in New Zealand (a form of gambling).
Why not form a credit union? That would work too and I read about an attempt to do this in the USA. Credit unions are smaller and have a lower threshold, but by contrast a building society can offer bonus issues by ballot in New Zealand (a form of gambling).
An advantage of my approach - the problem of bitcoins being a poor store of value is addressed. Members with a significant balance of bitcoins in their membership account would have a reserve backing up their bitcoins. The coins held within the membership account would always be worth more than zero. Bitcoins outside of a system like this can indeed be worth nothing.
A possible flaw I can see already I've addressed in 11 above. Not all bitcoins in member accounts would be equal. Someone may have been a member for ten years, while another member only a year. Having said that however, their bitcoins rank equally for distribution of reserves or profit after the qualifying period.
The above problem is addressed in two ways, firstly a minimum membership term must be established to begin with, say, one year (see 7 above). Then secondly, beyond that each member receives a share of the profit, provided there is a profit to distribute from the society. Thus, a member for a long period of time should build up significant equity. If the society was wound up, new memberships would be closed off so new subscriptions could not flood in to pounce on those reserves.
If anyone is interested in this, by all means contact me to discuss. There is a contact form to the right under my photo.
June 14, 2016
NBA Finals Game 5
Being without the suspended Draymond Green the Warriors didn't look complete. On top of that the Warriors shots weren't dropping while James and Irving were playing superbly for the Cavs. This is turning into a gripping series, at this rate it will go the full seven games.
June 13, 2016
Ken Horlor's Digital Currency
Okay, after criticising bitcoin yesterday, what would I do?
The following is my outline.
Link a digital currency to the production of silver. Silver is a finite resource that is readily mined. We know how much has been mined thus far, and how much can be produced each year.
If you like, this system could work in a decentralised way, with the bitcoin type of mining operation. Alternatively it could be centralised and run by a charitable foundation. Either way works, but I'll go with decentralised for now, just to describe what I'm thinking about:-
1. There have been 40.5 billion ounces of silver produced since the beginning of time, according to the US Geological Survey. We take a small proportion of that to form the core of what may be mined virtually. Let's say 40,550,000 ounces or coins.
2. Each coin at the current price would be nominally worth $17.22, which is the current silver price each ounce.
3. At current rates of extraction silver is mined at about 887 million ounces a year. This forms the rate of inflation, on top of the starting figure of 40.55 million, 887,000 coins (or ounces) would be added each year. You'll notice that I'm dividing production by one thousand.
4. This is where it gets interesting, I'd link the success of mining these units to the actual cost of mining the same resource in the real world. Overburden ratios, process costs, distribution - the lot. The more scarce silver becomes or more uneconomic to mine, so too goes the digital currency. If real output of silver falls globally then the amount of inflation of the virtual currency reduces.
Also, mining the virtual silver would have a skill factor included. This is so that those with just computing power could not dominate the 'industry.' Just as in real life, a small operator who is a good miner would be able to produce.
5. Then the secondary market kicks in and the currency is traded and exchanged amongst users.
With this decentralised model, the digital coins are created by virtual miners who are faced with the same uncertainty real world miners face. I'm starting with a figure to reflect where civilisation is at to this point, but adding to it each year to reflect progress. There is an element of intervention, in the case of how many coins to add at an anniversary each year, but this could be done through an auction or consensus model, and of course this wouldn't take too long as it only involves determining how much silver has been produced the previous year.
Derivatives could come into play as well. Miners could sell their output forward just as real miners do. This would create price stability.
What about tangible backing for the currency? In the decentralised model this would be very hard to achieve. But if centralised, then a charitable foundation could tax the miners and create a reserve of real silver and of derivatives. The proceeds of the charity could go towards anything worthwhile.
The underpinning of any system like this is trust. My model attempts to establish trust by pinning the creation of the currency to real-world values.
We could call this digital coinage bitDenarii. Derived from the Roman coin.
The following is my outline.
Link a digital currency to the production of silver. Silver is a finite resource that is readily mined. We know how much has been mined thus far, and how much can be produced each year.
If you like, this system could work in a decentralised way, with the bitcoin type of mining operation. Alternatively it could be centralised and run by a charitable foundation. Either way works, but I'll go with decentralised for now, just to describe what I'm thinking about:-
1. There have been 40.5 billion ounces of silver produced since the beginning of time, according to the US Geological Survey. We take a small proportion of that to form the core of what may be mined virtually. Let's say 40,550,000 ounces or coins.
2. Each coin at the current price would be nominally worth $17.22, which is the current silver price each ounce.
3. At current rates of extraction silver is mined at about 887 million ounces a year. This forms the rate of inflation, on top of the starting figure of 40.55 million, 887,000 coins (or ounces) would be added each year. You'll notice that I'm dividing production by one thousand.
4. This is where it gets interesting, I'd link the success of mining these units to the actual cost of mining the same resource in the real world. Overburden ratios, process costs, distribution - the lot. The more scarce silver becomes or more uneconomic to mine, so too goes the digital currency. If real output of silver falls globally then the amount of inflation of the virtual currency reduces.
Also, mining the virtual silver would have a skill factor included. This is so that those with just computing power could not dominate the 'industry.' Just as in real life, a small operator who is a good miner would be able to produce.
5. Then the secondary market kicks in and the currency is traded and exchanged amongst users.
With this decentralised model, the digital coins are created by virtual miners who are faced with the same uncertainty real world miners face. I'm starting with a figure to reflect where civilisation is at to this point, but adding to it each year to reflect progress. There is an element of intervention, in the case of how many coins to add at an anniversary each year, but this could be done through an auction or consensus model, and of course this wouldn't take too long as it only involves determining how much silver has been produced the previous year.
Derivatives could come into play as well. Miners could sell their output forward just as real miners do. This would create price stability.
What about tangible backing for the currency? In the decentralised model this would be very hard to achieve. But if centralised, then a charitable foundation could tax the miners and create a reserve of real silver and of derivatives. The proceeds of the charity could go towards anything worthwhile.
The underpinning of any system like this is trust. My model attempts to establish trust by pinning the creation of the currency to real-world values.
We could call this digital coinage bitDenarii. Derived from the Roman coin.
June 11, 2016
NBA Finals Game 4
Okay, so back to the usual settings, the Warriors are the better team. Is there disunity within the Cavaliers?
June 10, 2016
Advantages of Investing in Stocks
New Zealanders are obsessed with real estate. Apart from a few savings in the bank, that's about all they invest in, be it their own home or home plus other property as an investment. Residential rental makes up a large proportion of the latter.
With the just announced bank restrictions on financing available to investors, it's possible they may look to the share market. If they do, there are several advantages over direct personal investment in real estate:-
1. It's a relatively passive form of investment (this is not to say you turn your brain off and don't let the company know what you think). With real estate you need to be concerned about maintenance, paying rates, insurance, making mortgage payments, finding tenants - the list goes on.
2. Gains can be outstanding and so long as you don't buy with the intent to sell, then like real estate investment the capital gains are tax free. With real estate, over time, the gains are definitely there, but do those gains all occur within a year? You can do that in stocks. But like deciding which property to buy you need to do your research and be satisfied that the company you're investing in, and becoming part-owner of along with all those other shareholders, is well managed and has prospects.
3. You can adjust your portfolio and do it easily. By that I mean, if you own the shares, you can sell as many of them as you like if you choose to (any marketable parcel). Can you sell half of that house you rent out? Or sell doors and windows? And if you can you need to get your hands dirty, and if selling the building you need a lawyer and likely an agent. Then if subdividing the property there are tax implications.
4. Income from dividends, return of capital, bonus issues and dividend reinvestment schemes make the returns often better than real estate.
Think about it, but beware, I think the most important thing is to be disciplined. The share market is a roller coaster and you need to think for yourself and be prepared to go in the opposite direction to the herd. That is, buy when everyone is selling and sell when everyone is buying.
An example of what is possible:-
ASX Bradken (BRK)
Jan 21 - they were at Aus$0.38
Jun 9 - they closed at Aus$1.22
You'd find it hard to triple your money in months in real estate. Some bright spark will point out, no doubt, that the above company is losing money and having to restructure. And they'd be right. But think about this, the company is not going to disappear overnight and if it fails will be gobbled up by someone else. It's a pretty solid company, not fly-by-night stuff.
Our bright spark will rightly reply that with investment real estate, you get the advantage of mortgage gearing and the tenant pays off the mortgage. How does mortgage gearing work? Well, the lender is not participating in the asset, they're just lending the investor money and charging for it while keeping the real estate as security. If you buy a $450,000 house and put in the minimum amount of equity, say, $135,000 and the property rises 10% in value during the first year, you book a $45,000 profit (at least on paper). Rounded down that's a 33% return on that $135,000. All the capital gains are yours.
This all sounds good and it looks like real estate is by far the better bet. But think about this - while things are going great, real estate is a sure-fire winner, but as an investor it is you with everything on the line. If the market tanks, you still have that mortgage to pay back. If you can't find tenants, tough, you still have to pay the mortgage. Everyone thinks of the times when things are going great and they never think about what may happen if things go wrong.
I think this is where investing in the companies listed on the share market comes into its own. If things go bad, you have no ongoing obligation to anyone so long as you haven't borrowed to buy those shares. You may have to forgo a dividend, or wait for the company to recover, or even sell at a loss, but that's where your obligations end. The company may ask for a further contribution, a rights issue, but you're never compelled to invest in those (they're often a very good idea by the way).
If we go back to our $135,000 equity example above, it's hard to get that 33% return on the share market across the whole portfolio. But get this, you also have far less risk than with real estate. If you apply the time honoured principle of compounding your investment, by reinvesting capital gains when realised, participating in dividend reinvestment schemes, buying shares offered in a rights issues, and taking your dividend income and reinvesting part of that (I'm assuming at least some of the dividend income is used to pay expenses, such as brokerage when due), then I'm sure returns can be better than real estate investment.
Whatever you do, my own experience of using advisers is they're often useless. My advice is use your own research, like you would when buying a house, know the market and what you want. What company do you like and why?
With the just announced bank restrictions on financing available to investors, it's possible they may look to the share market. If they do, there are several advantages over direct personal investment in real estate:-
1. It's a relatively passive form of investment (this is not to say you turn your brain off and don't let the company know what you think). With real estate you need to be concerned about maintenance, paying rates, insurance, making mortgage payments, finding tenants - the list goes on.
2. Gains can be outstanding and so long as you don't buy with the intent to sell, then like real estate investment the capital gains are tax free. With real estate, over time, the gains are definitely there, but do those gains all occur within a year? You can do that in stocks. But like deciding which property to buy you need to do your research and be satisfied that the company you're investing in, and becoming part-owner of along with all those other shareholders, is well managed and has prospects.
3. You can adjust your portfolio and do it easily. By that I mean, if you own the shares, you can sell as many of them as you like if you choose to (any marketable parcel). Can you sell half of that house you rent out? Or sell doors and windows? And if you can you need to get your hands dirty, and if selling the building you need a lawyer and likely an agent. Then if subdividing the property there are tax implications.
4. Income from dividends, return of capital, bonus issues and dividend reinvestment schemes make the returns often better than real estate.
Think about it, but beware, I think the most important thing is to be disciplined. The share market is a roller coaster and you need to think for yourself and be prepared to go in the opposite direction to the herd. That is, buy when everyone is selling and sell when everyone is buying.
An example of what is possible:-
ASX Bradken (BRK)
Jan 21 - they were at Aus$0.38
Jun 9 - they closed at Aus$1.22
You'd find it hard to triple your money in months in real estate. Some bright spark will point out, no doubt, that the above company is losing money and having to restructure. And they'd be right. But think about this, the company is not going to disappear overnight and if it fails will be gobbled up by someone else. It's a pretty solid company, not fly-by-night stuff.
Our bright spark will rightly reply that with investment real estate, you get the advantage of mortgage gearing and the tenant pays off the mortgage. How does mortgage gearing work? Well, the lender is not participating in the asset, they're just lending the investor money and charging for it while keeping the real estate as security. If you buy a $450,000 house and put in the minimum amount of equity, say, $135,000 and the property rises 10% in value during the first year, you book a $45,000 profit (at least on paper). Rounded down that's a 33% return on that $135,000. All the capital gains are yours.
This all sounds good and it looks like real estate is by far the better bet. But think about this - while things are going great, real estate is a sure-fire winner, but as an investor it is you with everything on the line. If the market tanks, you still have that mortgage to pay back. If you can't find tenants, tough, you still have to pay the mortgage. Everyone thinks of the times when things are going great and they never think about what may happen if things go wrong.
I think this is where investing in the companies listed on the share market comes into its own. If things go bad, you have no ongoing obligation to anyone so long as you haven't borrowed to buy those shares. You may have to forgo a dividend, or wait for the company to recover, or even sell at a loss, but that's where your obligations end. The company may ask for a further contribution, a rights issue, but you're never compelled to invest in those (they're often a very good idea by the way).
If we go back to our $135,000 equity example above, it's hard to get that 33% return on the share market across the whole portfolio. But get this, you also have far less risk than with real estate. If you apply the time honoured principle of compounding your investment, by reinvesting capital gains when realised, participating in dividend reinvestment schemes, buying shares offered in a rights issues, and taking your dividend income and reinvesting part of that (I'm assuming at least some of the dividend income is used to pay expenses, such as brokerage when due), then I'm sure returns can be better than real estate investment.
Whatever you do, my own experience of using advisers is they're often useless. My advice is use your own research, like you would when buying a house, know the market and what you want. What company do you like and why?
June 09, 2016
NBA Finals Game 3 Warriors v Cavaliers
Lebron James was fired up on his home court. Can he maintain the intensity from here on? Are the Warriors legs beginning to fade?
June 08, 2016
New Zealand Defence White Paper 2016
Finally we seem to be getting somewhere. Back in 2009 I made a submission toward the 2010 White Paper. It was ignored. But now with the latest effort, voices like mine seem to be getting through.
You can find a summary of what is proposed...>>HERE<<
* Tactical airlift - replace the current C130's - check. Proposed acquisition of C17's - check; they just need to add in four or so latest model C130's.
* No mention of adding air strike capability. The need to fly high and to strike is essential. Maybe they can acquire drones to do the job, fine if they can do that. Otherwise this is just another sop to the weak kneed.
* Air Surveillance - get rid of P-3 Orions - check. Replace with drones (UAV's) - check.
* Naval combat - replace Anzac frigates - check. Replace with patrol vessels - check. But they haven't addressed the need for amphibious operations and an ice breaker, preferring to go for ice strengthened only - shame that.
* Replace the oiler - check. Need more support - check.
* Network enabled and the ability to fight unconventionally - check.
* Update the army - check
Where I've said check, I covered these areas in my 2009 submission and they've gone for my suggestions. Did someone read my submission or was there so many people on about the same thing, they had to buckle?
But they're still slow and behind the times, right now I'd consider the following as well:-
1. Use fewer contractors and do more in-house. With threats emerging, conflict means the cost of using contractors escalates.
2. Submarines - patrol, observe, slip special forces ashore; the advanced technology, like that of the Japanese Soryu class, means we'd be silly not to investigate.
3. Ice breaker - a real one - C'mon
4. Air strike - essential.
5. Army - amphibious operations.
6. Give up the pretence of separate forces and go Marines.
Ken Horlor's Force
Army: amphibious brigade of marines (4,000 personnel), light armour;
Air force - UAV's and UCAV's (Unmanned Combat Aerial Vehicles) for surveillance, air and ground strike, latest 4 x C130's, 2 x C17's, (or alternatively an intermediate option, go with the the Kawasaki C-2 to do all airlift), helicopters as now (NH90's and Seasprite) but add 4 x heavier lift helicopters, lease replacements for 757's, such as 767 or similar.
Navy - 2 x amphibious warfare ships with landing dock and helicopter decks with hangars on each - with cruise missile etc., plus an ice breaker, patrol and support vessels but add 2 x submarines.
Like this...
Delete - Anzac frigates (2 of), C-130 Hercules (5), 757's (2), P-3 Orions (6), old oiler, support vessels.
Add - amphibious warfare ships (two to replace the frigates), six Kawasaki C-2's (to replace C-130's), four heavy lift helicopters (equivalent to Chinook), UAV's and UCAV's, two Soryu class submarines, add larger and more versatile oiler - standing in as patrol vessel as well, plus new role support vessel, then finally the all-important ice breaker.
Merge or demote - Canterbury multi-role vessel becomes a non-commissioned disaster relief ship, dive support and hydrographic merge to new single vessel.
I delete 18 units and add back in 23.
You can find a summary of what is proposed...>>HERE<<
* Tactical airlift - replace the current C130's - check. Proposed acquisition of C17's - check; they just need to add in four or so latest model C130's.
* No mention of adding air strike capability. The need to fly high and to strike is essential. Maybe they can acquire drones to do the job, fine if they can do that. Otherwise this is just another sop to the weak kneed.
* Air Surveillance - get rid of P-3 Orions - check. Replace with drones (UAV's) - check.
* Naval combat - replace Anzac frigates - check. Replace with patrol vessels - check. But they haven't addressed the need for amphibious operations and an ice breaker, preferring to go for ice strengthened only - shame that.
* Replace the oiler - check. Need more support - check.
* Network enabled and the ability to fight unconventionally - check.
* Update the army - check
Where I've said check, I covered these areas in my 2009 submission and they've gone for my suggestions. Did someone read my submission or was there so many people on about the same thing, they had to buckle?
But they're still slow and behind the times, right now I'd consider the following as well:-
1. Use fewer contractors and do more in-house. With threats emerging, conflict means the cost of using contractors escalates.
2. Submarines - patrol, observe, slip special forces ashore; the advanced technology, like that of the Japanese Soryu class, means we'd be silly not to investigate.
3. Ice breaker - a real one - C'mon
4. Air strike - essential.
5. Army - amphibious operations.
6. Give up the pretence of separate forces and go Marines.
Ken Horlor's Force
Army: amphibious brigade of marines (4,000 personnel), light armour;
Air force - UAV's and UCAV's (Unmanned Combat Aerial Vehicles) for surveillance, air and ground strike, latest 4 x C130's, 2 x C17's, (or alternatively an intermediate option, go with the the Kawasaki C-2 to do all airlift), helicopters as now (NH90's and Seasprite) but add 4 x heavier lift helicopters, lease replacements for 757's, such as 767 or similar.
Navy - 2 x amphibious warfare ships with landing dock and helicopter decks with hangars on each - with cruise missile etc., plus an ice breaker, patrol and support vessels but add 2 x submarines.
Like this...
Delete - Anzac frigates (2 of), C-130 Hercules (5), 757's (2), P-3 Orions (6), old oiler, support vessels.
Add - amphibious warfare ships (two to replace the frigates), six Kawasaki C-2's (to replace C-130's), four heavy lift helicopters (equivalent to Chinook), UAV's and UCAV's, two Soryu class submarines, add larger and more versatile oiler - standing in as patrol vessel as well, plus new role support vessel, then finally the all-important ice breaker.
Merge or demote - Canterbury multi-role vessel becomes a non-commissioned disaster relief ship, dive support and hydrographic merge to new single vessel.
I delete 18 units and add back in 23.
June 07, 2016
Bruce Greenwald: Death of Manufacturing
I found the following video from an embedded link on the Columbia University website. Bruce Greenwald describes the death of manufacturing and the global deflation:-
He makes perfectly valid points. But it is interesting to hear that agriculture is finished. New Zealand is a country that relies on agricultural exports. Oh no, are we in trouble or what? Then we have manufacturing, New Zealand is a bit anaemic there, but that too is finished. Again, oh no.
But something he may have overlooked - productivity gains are still achievable in both agriculture and manufacturing. The answer I think lies in automation. Machines making other machines and machines doing the actual farming and manufacturing. Then the next development is machines deciding what to produce and when and in what quantities.
But where Greenwald nails it, is talking about the structure of an economy. Getting the structure right is key, and New Zealand needs to look at it as their structure is weak. NZ is vulnerable, it's just that it dodged the bullet back in 2008/09.
He makes perfectly valid points. But it is interesting to hear that agriculture is finished. New Zealand is a country that relies on agricultural exports. Oh no, are we in trouble or what? Then we have manufacturing, New Zealand is a bit anaemic there, but that too is finished. Again, oh no.
But something he may have overlooked - productivity gains are still achievable in both agriculture and manufacturing. The answer I think lies in automation. Machines making other machines and machines doing the actual farming and manufacturing. Then the next development is machines deciding what to produce and when and in what quantities.
But where Greenwald nails it, is talking about the structure of an economy. Getting the structure right is key, and New Zealand needs to look at it as their structure is weak. NZ is vulnerable, it's just that it dodged the bullet back in 2008/09.
June 06, 2016
NBA Finals Game 2
Is this series going to be a classic contest of a great team against a team of great players? It looks like it as the Warriors go 2-0 up on a blow out 33 point margin of victory. Looking at the scoring, the Warriors bench averaged 5 points each with only two not scoring at all. What a great team effort from the Warriors.
June 03, 2016
2016 NBA Finals Warriors v Cavaliers Game 1
The Cavs have played 14 games to get to the finals while the Warriors have played 17. The Warriors coach did a masterful job in trusting his bench to do the job, and limiting the minutes of Curry and Thompson. It paid off, the bench stood up, while the Cavs shot poorly and had poor shot selection. Many times they'd give up the obvious shot to force the ball to a more difficult position. So the Warriors won the first game of the series easily. Hand it to the Warriors coach who on paper does not have the better team, but he's an expert at maximising his resources.
June 02, 2016
Basketball Obsession - Free as NBA Final Gets Under Way
You can download a free copy of my first novel, Basketball Obsession, from the Amazon Kindle store. Get a basketball fix as the NBA finals are about to get under way.
>>Basketball Obsession Free<<
>>Basketball Obsession Free<<
