Archive for April, 2011
Source: Daily Mail. HRH Catherine Duchess of Cambridge and HRH William Duke of Cambridge
Congratulations to Prince William and Princess Catherine on their wedding today just after leaving Westminster Abbey. This morning Miss Kate Middleton was a commoner, now she is a royal. HRH Princess Catherine Elizabeth Mountbatten-Windsor, Duchess of Cambridge is her new name. Whilst Will has a longer name with HRH Prince William Arthur Phillip Louis Mountbatten-Windsor, Duke of Cambridge, Earl of Strathearn and Baron Carrickfergus. William will likely in a few decades time become a future King of England, after his grandmother (who turned 85 last week) and father’s reigns end.
I also enjoyed the Breakers winning the Australian Basketball League to become the first New Zealand sporting team in an Australian competition to win it, and also the Blues beating the Highlanders tonight.
Oil is the world’s most traded commodity with world exports averaging US$1.8 trillion annually in 2007 – 2009. The price of Brent crude oil rose over US$100/barrel in January this year, and like many other commodities is facing a surge in price. The Government decided against imposing an additional fuel tax today. This will be welcomed by most with petrol prices around NZ$2.20 per Litre at the pump. The International Monetary Fund (“IMF”) stated that there is a growing issue of oil scarcity where supply consistently exceeds demand. Here is a graph of global oil production (supply):
This shows that 75 million barrels per day is around the cap we are at. The demand side makes very interesting viewing. This graph is sourced from Figure 3.5 of the IMF’s World Economic Outlook in January 2011:
Whilst the United States and rest of the OECD’s consumption has gone down slightly, the rapid growth of China can be seen. There has also been growth in oil use by India and the Middle East too. The interesting thing from the IMF world economic outlook was that the per capita usage in China is still only 1/10th that of the usage in the US.
Some people speculate that we have consumed half the world’s oil supply and it is getting increasingly harder to dredge up, and say that oil prices could rapidly double or triple as China in particular buys more oil. This would be a peak oil situation, which is think a bit of scaremongering. It is however a more widely accepted belief that oil prices will rise on the back of global consumption rising and supply remaining fairly constant. The price of oil will put pressure on New Zealand’s inflation, and not just from what we pay at the pumps. We also have oil costs impacting the transport costs of goods.
The Future
I am excited about the future. What we have accomplished in the past 50 years has been amazing, and with technology advancing at ever-increasing rates the next 50 years will be very interesting to look back on our progress if I am lucky enough to still be living.
I believe that we will be using sea-water to power our vehicles and act as an energy source on a massive scale. There is no shortage of this and if the global warming theorists are correct then we will have more sea water than ever before as polar ice caps melt. So this should be a fantastic solution to oil scarcity issues.
The Consumers Price Index (“CPI”) for the March 2011 quarter rose to 4.5%. This is seen as being high in light of the Reserve Bank’s target inflation range set in 2002 of 1 – 3% over the medium term. In the 1990s the average inflation was 2.4% and in the 2000s the average inflation was 2.7%.
How much of an issue is this?
High inflation erodes savings (term deposits, cash) and causes harm by eroding the purchasing power of money itself. Inflation at just 2.5%, causes your purchasing power to half in just 30 years. Those in retirement or approaching retirement typically suffer the most as their retirement nest egg loses its purchasing power, with future income struggling to match it. For those working it is less of an issue since wages generally keep rise with inflation. As inflation rises usually interest rates do too. This can impact property investors and business owners with higher interest costs. The underlying value of the assets we property investors and business owners however rise though.
Lets have a look at inflation from 1970 onwards – a period which includes the high inflation 1970s and 1980s.
If you have all of your assets in cash and are approaching retirement, perhaps you should seek some expert advice on whether to include into your asset mix a prudently geared or freehold property, or perhaps some exposure to the commodities boom. If inflation keep rising with fuel, power, rates, water, food, beverages etc all increasing in price (as is housing, but this is conveniently excluded from the CPI calculations), what is your plan to combat this for the future?
On Tuesday the 12th of April, international super investor Kevin Green lands in New Zealand. He is delivering a very special event in Auckland with leading education company NZ Wealth Mentor with two full days packed with practical strategies and tools delivered by a master of property investment, on Saturday 16th – Sunday 17th April 2011. Kevin is scheduled to be on TV One’s Close Up on Wednesday 13th April at 7:00pm talking live with Mark Sainsbury about this successes and thoughts on how you can improve your life as he did. Learn how Kevin went from being an unsuccessful dairy farmer to becoming one of the largest private landlords in the United Kingdom with almost 400 properties to his name worth around NZ$80 million in just over 12 years.
KEVIN GREEN: The BBC Secret Millionaire Star with nearly NZ$80 million portfolio
Here is Kevin Green on the BBC Secret Millionaire programme:
Kevin was star of the hit BBC series The Secret Millionaire. He is the largest Social Housing landlord in the UK and he runs one of the most successful lease options businesses in the world. His lease options strategy to success is definitely worth the ticket investment. His other specialty is asset stripping and he will explain how he made his first $250,000 using this strategy, and much more more so you can profit from this method too.
Kevin Green’s Property Profit Strategies event is all about giving you an easy to follow action plan to improve your cashflow. This event is sold out apart from the Auckland Property Investors’ Association special ticket allotment. However there is a wait list for tickets as we had a number of booking from Christchurch prior to the devastating February 22nd earthquake, and if anyone can’t make it NZ Wealth Mentor is issuing full refunds if you are unwilling or unable to attend, which could free up a ticket for you. In addition there is a small chance APIA members will not take up their allotment, so please don’t call me about this, just simply go to the booking page and click the put me on the waitlist button immediately. 
So whilst the sold out signs are up, there may be a few tickets given to those on the wait list, so please don’t give up as we are doing our best to accommodate everyone. Leave you name, email address and phone number and we will contact you if a ticket becomes available.
Kevin Green at APIA
Finally Kevin Green is talking to the Auckland Property Investors’ Association on Tuesday 12th April. What can you learn in just 55 minutes? Quite a lot. This will give you a taste of what Kevin Green and NZ Wealth Mentor are about. We have sponsored this meeting and have 50 tickets that we negotiated with APIA as a special allotment for the Kevin Green event. So come to APIA to hear from the investor with the largest residential property investment portfolio that we have ever had present to our members since APIA’s inception in 1995.