After years of sanctions that were obviously starting to bite, Iran finally came to the negotiating table -- and got everything they wanted. The 'deal' will lift the sanctions that were impacting Iran's economy (which some western critics had complained simply punished the innocent population of Iran -- but what better way to incite the population to be disaffected with their leadership and encourage change from within?) and in exchange Iran was not 'agreed' to halt research into developing nuclear weapons, but instead has reached an 'understanding' that includes some limits to the use of its nuclear research facilities and the amount of enriched uranium it can stockpile.
What this means in reality is that instead of the 'worst case' scenario of Iran being theoretically (but never realistically) being able to stockpile enough enriched uranium for a single nuclear weapon 'within months' (but not having the ability to actual build a nuclear weapon for many years to come), we now have a situation where they can continue developing the knowledge and technology required to produce a functional and effective nuclear weapon (which was always going to take several more years or research, and time to steal/buy technology from Russia, North Korea, Pakistan etc.) and can still produce enough enriched uranium for a weapon within a year or so of being ready to make use of it...
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Friday, 3 April 2015
Monday, 16 March 2015
Quick, Sell (Lease) the 'poles and wires' before they're not worth anything!
The latest opinion polls suggest that the NSW election is likely to see the coalition remain in government for another term. Theoretically that should mean that their policy to 'sell' (actually a 99-year lease of 49%) the electricity system 'poles and wires' should go ahead, with most of the proceeds going to build other much-needed public assets (ie. infrastructure). Of course, with the minor parties still having enough senators to block any government legislation that Labor is opposed to, just winning another state election isn't a guarantee that this policy will ever get implemented. But it should - if for no other reason that if they wait too long the 'poles and wires' are likely to be entirely worthless within a few decades.
Just as the sale proceeds from selling the electricity generation assets (coal-fired power stations) were eventually much less when the sale went through a decade or so after it was first proposed (due to the move towards alternative electricity generation sources to address the need to reduce greenhouse gas emissions), the value of the existing 'poles and wires' used for distributing bulk generated electricity is likely to plummet when rooftop solar power generation starts to eliminate the need for many houses to remain connected to 'the grid'. Already a house could be self-sufficient in electricity generation if the entire rooftop was covered with standard PV panels (and expensive storage batteries), but developments in PV technology mean that within a decade or so the required set of 20 or so large panels could be replaced by a single panel around 1 square meter in size, and at much lower cost. It would only need improvements in the cost of batteries (or the development of alternative energy storage systems like hydrogen fuel cells, room temperature superconducting magnets etc.) to make it affordable for most houses to be self-sufficient in terms of energy. How much will the old 'poles and wires' be worth then?
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Just as the sale proceeds from selling the electricity generation assets (coal-fired power stations) were eventually much less when the sale went through a decade or so after it was first proposed (due to the move towards alternative electricity generation sources to address the need to reduce greenhouse gas emissions), the value of the existing 'poles and wires' used for distributing bulk generated electricity is likely to plummet when rooftop solar power generation starts to eliminate the need for many houses to remain connected to 'the grid'. Already a house could be self-sufficient in electricity generation if the entire rooftop was covered with standard PV panels (and expensive storage batteries), but developments in PV technology mean that within a decade or so the required set of 20 or so large panels could be replaced by a single panel around 1 square meter in size, and at much lower cost. It would only need improvements in the cost of batteries (or the development of alternative energy storage systems like hydrogen fuel cells, room temperature superconducting magnets etc.) to make it affordable for most houses to be self-sufficient in terms of energy. How much will the old 'poles and wires' be worth then?
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Monday, 2 March 2015
Net Worth: February 2015
A significant rise in the Australian Stock market over the past month gave a major boost to my net worth via increases in the valuation of my geared stock portfolio (gearing is fun when the market is rising -- not so much during the GFC) and also a rise in my superannuation account balance. Our house price estimate also managed another slight increase. Overall my net worth hit a new high of over A$1.75 million.
Subscribe to Enough Wealth. Copyright 2006-2015
Subscribe to Enough Wealth. Copyright 2006-2015
Thursday, 5 February 2015
Net Worth: January 2015
The three major components of my net worth (my share of our house, my geared stock portfolio, and my retirement savings account) all enjoyed substantial gains during January, pushing my net worth total up by just over 3%. The strength of the Sydney real estate market shows no sign of abating, and with inflation remaining low there is even the prospect of a rates cut by the RBA providing further stimulus to the housing market as a by-product of their attempt to stimulate the economy as the impact of the resources bust continues to drag on economic growth and boost unemployment. In hind-sight it would have been better to postpone selling our investment property for another couple of years, but I'm glad to be free of the hassles of being a land-lord. The Australian stock market is likely to benefit from any economic stimulus provided by a rates cut, as despite recent gains the ASX200 is still well below the pre-GFC levels. While it would be foolish to try and predict how things will develop during 2015, from this point the prospect of achieving a net worth of two million by the end of this year or next seems possible. How likely it is remains anyone's guess. One month (October) of employer superannuation contributions were paid into our SMSF bank account during the month, with the other two monthly contributions for the quarter due any day now (they had to be paid by the end of the month after the end of the Oct-Dec quarter).
As usual I've left unchanged (at $325,000) the initial valuation for the rural property I was given last March as I intend leaving the property to my sons, so any potential capital gains will remain unrealised. I only include it at all as the holding costs (council rates, house insurance etc.) are a drain on my cash flow. While I don't include notional gains in its valuation in my monthly net worth figures (the current monthly valuation estimate is $366,450) I will add any large capital expenditures (such as building an extension to the existing house) to its valuation to 'balance the books'. The monthly valuation estimates for this property are not very reliable in any case, as the source data is movements in the average house sale prices in the nearby township, and not sales data for similar rural 'hobby farm' properties.
Subscribe to Enough Wealth. Copyright 2006-2015
As usual I've left unchanged (at $325,000) the initial valuation for the rural property I was given last March as I intend leaving the property to my sons, so any potential capital gains will remain unrealised. I only include it at all as the holding costs (council rates, house insurance etc.) are a drain on my cash flow. While I don't include notional gains in its valuation in my monthly net worth figures (the current monthly valuation estimate is $366,450) I will add any large capital expenditures (such as building an extension to the existing house) to its valuation to 'balance the books'. The monthly valuation estimates for this property are not very reliable in any case, as the source data is movements in the average house sale prices in the nearby township, and not sales data for similar rural 'hobby farm' properties.
Subscribe to Enough Wealth. Copyright 2006-2015
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