needs v wants

at the Gold Symposium a few weeks ago, it was stated that you should expect to see inflation in the things you need and deflation in the things you want. Cars and white goods and plasma TVs are getting cheaper in a world with excess productive capacity and over production. But where the rubber meets the road in daily life for billions of people, inflation is pushing up food and fuel prices.

Blowout

The Federal Government is expecting a bigger budget deficit this financial year than originally forecast.
The updated budget papers predict a $41.5 billion deficit, which is almost $1 billion more than the July forecast.
Key points: Budget to return to black in 2012/13 with $3.1b surplusProjected budget surplus in 2012/13 down $400mBudget deficit to increase to $41.5b in 2010/11Unemployment rate to fall to 4.5% by June 2012
Treasurer Wayne Swan's release of the Mid-Year Economic and Fiscal Outlook (MYEFO) confirmed predictions that a rising Australian dollar would hinder the Government's bottom line.
But while the 2010-11 budget forecast has blown out, the Government is still on track to return a surplus of $3.1 billion in the 2012-13 financial year.
This compares with the $3.5 billion predicted by Treasury and Finance in the Pre-election Economic and Fiscal Outlook (PEFO) released in July.
The economic update also shows employment conditions will continue to strengthen, with the jobless rate falling to 4.5 per cent by 2012.
A return to surplus by 2012-13 was one of the Labor Government's key election pledges.
Mr Swan says it is the fastest positive turnaround in the budget in more than 40 years.
And he says the Government is determined not to repeat the mistakes of the past.
"We put our fiscal rules in place in February last year because we understood that as we moved to strengthen the economy we had to formulate the exit strategy for the future," he said.
Mr Swan says he is optimistic about Australia's economic future.
"A strong economy is an economy that creates jobs, creates opportunities for people," he said.
"What they (the figures) represent is hundreds of thousands of more Australians in work.
"To be coming back to surplus in three years, well ahead of any other major advanced economy, is something that we should all be optimistic about."
Mr Swan also defended changes to the revenues generated from the minerals resources tax.
He says the revised forecast for the tax relates to the change in the exchange rate.
"What we're dealing with is solely here the exchange rate effect. That's why tax [revenues] overall are down about $10 billion. It largely reflects lesser company profitability," he said.

fiat currency

when a countries economy is backed and based on a fiat currency, that is one that has no real value other than the paper its printed on without an intrinsic physical value then this currency becomes useless and when the population registers this in their consciousness and devalues it in their mind, then the country faces financial and economic ruin. this is where america is now. the empire is crumbling at the foundation, the chain reaction was started quite some time ago and will now rapidly deteriorate

AUS $

Mr Swan told Saturday AM the Government will lose billions in revenue because of the high value of the Australian dollar. He says profits for Australian exporters will fall and this will have consequences for the Government's tax take."There's no doubt we're going to cop a fairly significant whack to our revenue in the mid-year budget update, that's just the reality of having a higher dollar," he said."The Australia dollar has appreciated by around 15 per cent against the US dollar in recent months. What that does is really hit the profitability of our exporters and as a result of that is reduces companies and resource taxation."Some estimates say the Government's mid-year economic outlook - due within days - will show a $10 billion loss in revenue over the next four years.Mr Swan would not confirm that number, but says the impact of the lost revenue will be significant."None of that alters our determination to continue the budget discipline that we've put in place over the past couple of years and to make sure that our public finances remain the strongest in the developed the world," he said.