Afra Raymond

Property Matters – State Offices

by AfraRaymond

The PM’s address to the nation on the evening of 29 December 2015 was an official announcement as to the need for shared sacrifice and reduced State expenditure to tackle the decline in our collective fortunes. I also took particular note of the statement by new Central Bank Governor, Dr Alvin Hillaire, during his first meeting with the media on 31 December 2015 – “…I won’t distance myself from the recession statement. The situation is serious and demands attention…“. Dr Hillaire was of course referring to the 4 December disclosure of a recession by his predecessor, Jwala Rambarran.

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7 Comments on “Property Matters – State Offices”

  1. David January 8, 2016 at 6:17 AM #

    VIDEO: 2015 Year In Review on 107.7 FM

    by AfraRaymond

    Brunch at 107.7 with Rennie Bishop featuring; Dr. Winford James, Lecturer at the University of the West Indies, St Augustine Industry Higher Education Sunity Maharaj, media consultant and managing director of the Lloyd Best Institute of the West Indies. Afra Raymond Chartered Surveyor, Past President: Joint Consultative Council for the Construction Rhoda Bharath Lecturer – […]

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  2. Well Well & Consequences2 January 8, 2016 at 7:27 AM #

    The severe drop in oil prices will have an equally severe recessionary effect on countries that produce oil on a smaller scale. Canada’s dollar refuses to stop dropping, everything is up in the air for those countries and they are desperately trying not crash.

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  3. lawson January 8, 2016 at 10:55 AM #

    Well Well Canada is not dead yet, why do you think Germany and Canada etc are bringing in refugees…from some great feeling of moral duty…hardly as the dollar crashes we need people who will work for less, and replace our high priced retiring population , since oil is tanking ,manufacturing will have to pick up the slack, and it needs people to produce it but it cant compete with a strong dollar and somebody has to keep our pensions intact.

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  4. Well Well & Consequences2 January 8, 2016 at 2:01 PM #

    Lawson…I know Canadians will not sit idly by, their politicians are not Bajan remember, and allow the country to sink without using their alternatives, neither will the US…..am just a little pissed that the dollar is now 70 cents to the US and I have some interest, if it falls below 70 cents, other arrangements will have to be made. That is an inconvenience. Hoping it drops no further.

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  5. David January 8, 2016 at 4:06 PM #

    One cannot help but marvel at the wanton waste of public funds by Caribbean governments. Is there hope to see better in our life time?

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  6. Green Monkey January 9, 2016 at 6:39 AM #

    Well Well & Consequences2 wrote:

    The severe drop in oil prices will have an equally severe recessionary effect on countries that produce oil on a smaller scale. Canada’s dollar refuses to stop dropping, everything is up in the air for those countries and they are desperately trying not crash.

    US based actuary Gail Tverberg explains in her blog, Our Finite World, the effect of low oil prices on world economies (and warns of even lower oil prices to come as crude oil storage facilities could soon run out of space to store the unsold oil) :

    2016: Oil Limits and the End of the Debt Supercycle

    I expect that the particular problem we are likely to reach in 2016 is limits to oil storage. This may happen at different times for crude oil and the various types of refined products. As storage fills, prices can be expected to drop to a very low level–less than $10 per barrel for crude oil, and correspondingly low prices for the various types of oil products, such as gasoline, diesel, and asphalt. We can then expect to face a problem with debt defaults, failing banks, and failing governments (especially of oil exporters).

    The idea of a bounce back to new higher oil prices seems exceedingly unlikely, in part because of the huge overhang of supply in storage, which owners will want to sell, keeping supply high for a long time. Furthermore, the underlying cause of the problem is the failure of wages of non-elite workers to rise rapidly enough to keep up with the rising cost of commodity production, particularly oil production. Because of falling inflation-adjusted wages, non-elite workers are becoming increasingly unable to afford the output of the economic system. As non-elite workers cut back on their purchases of goods, the economy tends to contract rather than expand. Efficiencies of scale are lost, and debt becomes increasingly difficult to repay with interest. The whole system tends to collapse.

    snip

    The US government has recently decided to raise interest rates. This further reduces the buying power of non-elite workers. We have a situation where the “economic growth pump,” created through the use of a rising quantity of cheap energy products plus rising debt, is disappearing. While homes, cars, and vacation travel are available, an increasing share of the population cannot afford them. This tends to lead to a situation where commodity prices fall below the cost of production for a wide range of types of commodities, making the production of commodities unprofitable. In such a situation, a person expects companies to cut back on production. Many defaults may occur.

    China has acted as a major growth pump for the world for the last 15 years, since it joined the World Trade Organization in 2001. China’s growth is now slowing, and can be expected to slow further. Its growth was financed by a huge increase in debt. Paying back this debt is likely to be a problem.

    Figure 5. Author’s illustration of problem we are now encountering. (graph snipped here)

    Thus, we seem to be coming to the contraction portion of the debt supercycle. This is frightening, because if debt is contracting, asset prices (such as stock prices and the price of land) are likely to fall. Banks are likely to fail, unless they can transfer their problems to others–owners of the bank or even those with bank deposits. Governments will be affected as well, because it will become more expensive to borrow money, and because it becomes more difficult to obtain revenue through taxation. Many governments may fail as well for that reason.

    http://ourfiniteworld.com/2016/01/07/2016-oil-limits-and-the-end-of-the-debt-supercycle/comment-page-2/#comments

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  7. Green Monkey January 9, 2016 at 6:44 AM #

    Sorry, link above takes you to the readers’ comments at the bottom of Gail Tverbergs article,2016: Oil Limits and the End of the Debt Supercycle. Just page up to see the article itself.

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