The Mike Hosking Breakfast

If you have time, there's a podcast from The Economist that features Elon Musk in it and he argues that AI will lead to so much productivity that you won't need money because things won't cost anything.
It was so odd that;
1) It didn’t make sense.
2) I'm not sure even he understood what he was saying or, even if he did, if he believed it.
But the thrust was, when things are produced in abundance if they are not free, they are pretty close to it.
My question is if it gets to that then who is going to produce anything?
Someone has to build the robots. If there's no return, why build them?
Which is where the price of power comes in. The wholesale price spiked this week because of the cold weather. But did it spike more than it needed to because supply, although better than it was, is not what it should be?
It went from $64 to $240 a megawatt per hour. In a world of renewables why are we not at the point where we have abundance?
Abundance is argued to be the cornerstone of growth. If your base materials are cheap, you can do more for less. That is productivity.
But to get to abundance in power someone has to dig a hole, or build a panel, or a windmill, or provide a battery. And although we seem to be doing that, do we ever do it to a scale where the conversation in winter is not about issuing notices to generators that Transpower needs more sauce to pump through to the heaters on a cold night?
Or is a $64 to $240 jump as good as it gets?
Also remember our current state for this winter of generation is helped by good rainfall, which remains a crap shoot. In other words, this year we are lucky. In other years we may not be.
Also remember in this new renewables age we are currently being told power prices for commercial operators is at last dropping. But they aren't for the rest of us because of retail and fees and lines and so on. In other words, can one ask whether Nirvana is never actually coming?
There will always be someone in the chain having to boost the prices and that offsets gains elsewhere.
Is your power bill dropping? No. The new age is here.
There seems no way around the tension that you must have profit to encourage the investment.
Which makes Elon wrong, doesn’t it?
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There’s just under 100 days until the US midterms arrive.
Broadly, the Democrats have an edge in the polls, but both the House and the Senate are tight – the Republicans holding a narrow majority.
There are a few key factors that are likely to play a role in the election’s outcome – Donald Trump’s war in the Middle East, his unpredictability, and the business with the Supreme Court.
Expert in US politics, Nick Bryant told Mike Hosking the economic disruption caused by Trump’s war with Iran is so politically problematic.
“One of the key things about this war, Mike, is that Trump cannot warp reality,” Bryant explained.
“He cannot get even his most ardent supporters to ignore the evidence of their own eyes and the evidence of their own wallets.”
A Washington Post-Ipsos poll shows waning support for Trump, with his overall approval rating sitting at 37%.
The way he’s handling the economy and Iran are viewed even more negatively, with only 33% saying they approve of his economic stewardship, and 29% approving of his handling of Iran.
"Even amongst Republicans, it’s terrible,” Bryant told Hosking.
“Just 19% of Republicans have told CNN in the latest poll that they are enthusiastic about the rest of his second term.”
“That’s just one in five Republicans.”
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Mortgage rates look set to continue creeping higher.
The cost of two-year wholesale borrowing for banks has jumped from 3.35% to around 3.70% in just four weeks.
The increase reflects markets pricing in higher inflation, rising global borrowing costs, and expectations the OCR could stay higher for longer.
Independent Property Commentator Tony Alexander told Mike Hosking it’s primarily a result of domestic factors – with the extra pressure from rates moving up in Australia and the United States.
He says New Zealand is currently in a mild recovery mode and inflation is unusually high for this point in the cycle, so our monetary policy will be tightened further.
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Farming is powering strong small business sales growth.
A Xero Small Business Insights report reveals an 8.6% year on year increase in sales in the June quarter.
Agriculture saw a 16.3% increase, construction climbed 11%, and manufacturing rose 8.6% during the same time period.
Country Manager Bridget Snelling told Mike Hosking it is a bit of a two-speed recovery, with retail only growing by 6.4%.
She says there’s some ongoing uncertainty around fuel costs and geopolitical events which will continue to influence small businesses when it comes to hiring and investment decisions.
Plus, Snelling told Hosking, consumers are still going to be a bit circumspect with their discretionary spend heading towards the election.
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On the Mike Hosking Breakfast Full Show Podcast for Thursday 30th of July, Health Minister Simeon Brown discusses the Government’s response to the second Royal Commission into Covid.
The fireworks debate is going to rage again after the Government rejected the calls to ban public sales.
US political expert Nick Bryant is back on the show as we're about 100 days out from the very important midterms.
Get the Mike Hosking Breakfast Full Show Podcast every weekday morning on iHeartRadio, or wherever you get your podcasts.
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