I’m writing this from a hotel room in Santa Monica in California. I’m on holiday here with my lovely wife Lynn and our two equally gorgeous daughters, Eilish and Maddie, and am about to embark on an RV trip across America to Orlando in Florida.

Lynn will attend a conference on digital scrapbooking at Disneyland in Orlando in a fortnight if we make it. I’ll tell her story about how she came to be a digital design exporter (earning a lot more than me…) in this blog at a later date.  Suffice to say, this trip will more than pay for itself in US dollar earnings.

I’ll try to blog about the trip and what I learn from an economic and business point of view as often as I can. It should turn out a lot easier to do than in New Zealand. Free cable broadband or WiFi access

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a href="http://www.nzherald.co.nz/business/news/article.cfm?c_id=1501241amp;objectid=10549778amp;pnum=0"Liam Dann: Keep calm, all things must pass - Best of business analysis - NZ Herald News/a:br /br /strikeMoney/strike Funny quote.br /br /blockquoteThere will be a downturn. It will fall somewhere between Mad Max and 'a bit bumpy' in severity./blockquotebr /br /On a related note I wrote about a href="http://www.greenfaucet.com/intl/theory-time-kiwi-style/14189"New Zealand port stocks/a for greenfaucet today. I hope you can check it out.

Well not really…

But I do think this orgy of consumption around Christmas is a pointless and painful waste of time. It simply stores up even more foreign debt that will have to be serviced and eventually repaid.

We simply can’t afford to keep spending the way we have. The charts below show why. We need to reduce our consumer spending to reduce our imports and drag that current account deficit back closer to 4-5% than the 8-10% range it is in now.

I was simply stunned to see the pictures of shoppers thronging to the malls on Boxing Day, as Stuff reports. There is an illusion of a deal which means people spend just as much as they would have without the sales, but get more things they don’t really need. It’s still stuff we don’t need.

I watched another

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Gold hit two historic milestones in 2008. First, in early March, the “yellow metal” hit its all-time high of $1,030 an ounce. Just three months later, the price of gold for December delivery had plummeted to $681 an ounce, a 21-month low and 33.9% drop from its record high. Most gold bugs were equal parts puzzled and broken-hearted.

The world’s stock markets tanked, as did some of its biggest economies. In such an environment, they thought, gold should have risen. After all, gold is widely considered to be a safe-haven investment when everything else is spiraling south.

However, Money Morning Contributing Editor Martin Hutchinson – an investment banker with more than 25 years’ experience on Wall Street and a leading expert on the international financial markets – understood perfectly what other investors did not.

“Gold is not a safe haven against recession,” said

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The Shijiazhuang-headquartered Chinese dairy group Sanlu has confirmed that the group had handed in a bankruptcy liquidation application to the Intermediate People's Court of Shijiazhuang and all the work was being carried out in accordance with legal procedures. At the same time, Sanlu's largest foreign shareholder Fonterra Cooperative Group of New Zealand released the information on [...]

US data may wake up the markets… Toyota reports a loss…  NZD falls, AUD gains… Will the Rupee shine in 2009?… And Now… Today’s Pfennig! Good day… The currency markets remained in a tight range through the day yesterday with no movement from the majors currencies vs. the US$. Japan has a public holiday today, so trading this afternoon will be very quiet. Jennifer, who is doing all of our currency trading while Chuck is out, let me know that the trading desks were extremely quiet yesterday afternoon. But the markets may wake up a bit this morning, as we wait for data on 3rd quarter growth in the US.

GDP is expected to have fallen .5% in the 3rd quarter, and

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Currency markets stabilize (for now)…  Data packed holiday shortened week…  China cuts rates… Indian rupee falls… And Now… Today’s Pfennig!

Good day…The dollar settled in at the slightly higher levels it reached Friday morning and is trading in a narrow range heading into a holiday shortened week. Trade desks across the globe will be mostly staffed by the backups as the big bosses take Christmas week off. Volume will likely be lighter, which can sometimes lead to an increase in volatility.

The data calendar is empty today, but chock full tomorrow and Christmas eve. Markets will be closed on Christmas day, and most will be closed again on the day following Christmas (known as boxing day). GDP, Personal Consumption, U of Michigan consume

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The IMF finally announced it's Latvia "bailout" plan on Friday. The plan involves lending about €1.7 billion ($2.4 billion) to Latvia to stabilise the currency and financial support while the government implements its economic adjustment plan. The loan, which will be in the form of a 27-month stand-by arrangement, is still subject to final approval by the IMF's Executive Board but is likely to be discussed before the end of this year under the Fund's fast-track emergency financing procedures, and it is not anticipated that there will be any last minute hitches (although I do imagine some eyebrow raising over the decision to support the continuation of the Lat peg). The Latvian government admits that some of the IMF economists involved in the negotiations advocated a devaluation of the lat as a way of ammeliorating the ...

FOMC to cut further…  Bernanke turns his back on inflation…  Kiwi and Australia rally…  Gold continues to shine… And Now… Today’s Pfennig!

Good day…and welcome to another week, hopefully the currency markets can continue their assault on the dollar which began a few weeks ago. The dollar index peaked back on November 21, and with the exception of a few days around the beginning of December, the greenback has consistently fallen vs. most of the major currencies. Friday was no exception, and the dollar continued to give back gains over the weekend with the Euro climbing back over $1.35 for the first time in two months.

This morning the markets are focusing on the Fed’s Open Market Committee meeting and rate announcement which will come tomorrow. It is widely expected that Bernanke and his compatriots will push US interest rates close to just 0.5%, the lowest on records dating back to July

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In 1971 a nuclear physicist Ralph Lapp used the phrase “China Syndrome” to describe what might happen in an extreme example of a nuclear power plant meltdown. His theory was that the molten core of the reactor might be so hot and toxic that it would burn through the floor of the power plant and sink through the earth’s crust before exiting the other side of the earth through China.

This has never happened in the various nuclear accidents, but it’s a powerful idea that spawned the 1979 movie called The China Syndrome, which was released just 12 days before an accident at the Three Mile Island nuclear power plant in Pennsylvania.

I only mention it because the idea captures quite nicely the potential economic impact here of a Chinese economic slump. New Zealanders underestimate the impact of Chinese economic boom on the global economy generally and on our own economy.

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