Letters of the Week

The market and the economy, monetary supply problems, and upping the super fight.

The Market & the Economy

Alan Kohler’s latest Weekend Briefing was a gem. Mr Kohler hit the nail on the head several times with standout words of wisdom, including: “Our own assets and our own incomes seem secondary to the market indices and the national accounts in determining how we feel... The reason we are not all significantly poorer right now is that certain central banks have reduced the price of money to zero and have been standing on street corners giving the stuff away…The fact that it will also loot the accounts of savers and send those on fixed incomes to the poorhouse is apparently neither here nor there.”

It seems that company fundamentals are just a pipe dream and we have to rely on market sentiment and follow the trend to wealth. I think it’s an opportune time for Eureka Report to actively engage more in technical analysis and perhaps even introduce a share trading competition to expose buying and selling opportunities.

Vasso Masonic

Monetary supply problems

I have just read Alan Kohler’s Weekend Briefing on the economy and monetary policy.

In my view, it shouldn’t matter if the world’s central banks take a hit. They are owned by governments and if, for example, they write off government bond assets, they can similarly write off liabilities. From what I understand, there is a money supply issue in the non-public sector of the economy that governments can’t control unless they re-introduce some sort of reserve deposits or by prescribe sectoral lending policies for banks. The introduction of these controls would then mean lower returns for banks until the demand-supply for money reached equilibrium. This would likely take many years. However, given the GFC was, to a large extent caused by the banks, this would represent some kind of ironic justice and could help bring bankers’ pay packets back in line with some reality.

Name withheld

Supporting the fight against super changes

From recent letters I’ve read on Eureka Report, it seems to me that a great number of the “senior” voting public have had enough of politicians tinkering with the superannuation system and their contempt for self-managed retirees. I would like to know where Eureka Report stands in relation to the latest developments from Canberra? Is it going to seize the initiative and help put a stop to any more changes? Will Eureka Report use its position to influence policy? I am sure all readers would like to know if and how you might support the fight against further changes to the super system.

Mike Levy

Editor’s note: Eureka Report launched the Save Our Super campaign in October, with a specific focus around this area. Since then, we have published regular articles around potential Gillard Government changes to superannuation legislation, specifically highlighting potential moves to increase taxes. Read the published articles by Alan Kohler, Robert Gottliebsen, James Kirby and Bruce Brammall by selecting their articles from The Team list, including Bruce’s article today: Don’t ignore the super army.

For more Letters of the Week, click here.

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