US inflation rise rocks the Fed; US jobless claims fall; US budget possibly in surplus; China goes on debt funding spree; Aussie inflation expectations up; UST 10yr 2.03%; oil and gold up; NZ$1 = 67.2 USc; TWI-5 = 71.4

The stars are aligning for a mass exodus of 18-30 year olds to the West.......

YoY so presumably it's the change in wage vs 12 months ago, not the actual wage.

The worker might have got a 5% pay rise, but with inflation at 7.5% their wages had a real decrease in purchasing power by 2.5% for eg. 

Except despite what the crypto bulls keep trying to tell us, we didn't print money, we monetised debt. As rates increase, this debt will either be paid down or defaulted on, both of which are highly deflationary.

Japan might be a more appropriate example to use here, although Japan had the distinct advantage of having a strong manufacturing base during what has probably been the biggest consumer boom in history. NZ doesn't produce much of anything anymore, and even if it did, people don't have the money to pay for it.

Zerohedge laments "big government", but the US has one of the lower 'general government expenditure to GDP' ratio in the OECD. link

Wages are low, but the minimum wage increase on 1 April only really affects anyone already below $21.20. They are the only ones who will actually see a change.

What you don't see is a further devaluing of the middle class professions, many of whom amassed student debt, who have had pay increases that are lower than the increase in minimum wage as a percentage over time. There's no sudden increase for them, they just have to wait and see whether they get an increase at all this year. In fact, the additional cost pressure from an increase in minimum wages may well end up being a reason for them to be denied any adjustment at all. For some this will be the second year running, at a time of record inflation.

It doesn't automatically mean a pay increase for everyone and that's what I think gets lost in the minimum wage debate. A real solution would be wholesale tax rate reform, so that we're not saying people need to earn $44K to survive but then aggressively tax them at the same rate we did 10 years ago. But that's already been ruled out, presumably because the Govt wants that revenue to brag about their fiscal management credentials. 

The problem is that in many instances pay parity is getting crushed.

We have benefit rates right up there (and often above)  min wage.

We have min wage right up there with tertiary qualified and other great workers who have made an effort.

We have become a country that does not reward work, effort and qualifications - particularly in the Public sector. 

We have an attitude that we have rights to everything and anything without earning that right.

So 6% on the wages bill is "brutal".

But that's only the same as the increase in the workers living expenses. I guess that's extremely brutal.

I'll admit when I first saw the headline I thought it high. But then I put it in the above perspective.

Businesses like hospitality outlets and smaller retailers frequently relied on docile immigrants who were hoping for residency.  Minimum wages were paid but hours fudged and some immigrants paid for the job.  NZ has few labour inspectors.  The businesses that broke the law were slapped with a wet bus ticket.

With our border almost closed it will be interesting to see these jobs (pump attendants, bottle shops, supermarket checkouts) filling with Kiwis.

How about our standard of living is too high for our Country's ability to pay its way

This government have shown their financial illiteracy, ONCE AGAIN.

So many hospo and retail businesses are teetering, this increase in the minimum wage will take them further to the edge.

A much better thing to do would be to adjust the taxation thresholds. 

Min wage is pushing some young into a life of poverty. If an unskilled worker is required to be paid more than the value he produces he will not be employed.

He does to get the opportunity to start out and gains skills and increase his income

We are saying - you are not allowed to work because you do not have the skills.

Bonkers.

True, that's the only end thinking of everyone who's paying more than million for a house. Talked to 3 people yesterday who sold their existing property and just to buy another upscale property and top up their mortgage. Their thinking is to keep working till 70 and pay off their mortgage ( whatever they can) & then sell their property because it would have doubled or triple. Then move to a small place in retirement.

So all good assumptions I guess? But is that a life everyone wants to live? Work the ass off till 70 and then move to smaller place just for a bigger than current house they live in? 

Rate rises will not curb the underlying problem. As I've said forever here, energy is required to do anything; produce food, mine, process, transport, dispose.

The energy cost of energy is rising - we burnt the best/easiest stuff, first - and that is percolating through into the 'cost'  of everything. We have no choice but to swallow it, food-wise. Or to put up with it, essential-wise. Petrol and potatoes are going to get 'dearer', as long as the system holds.

But we will discard discretionary items, increasingly, as interest-rates side with lowering profit-margins (all forced by a reduction in energy - looks like the global peak all-in was 2018).

In a rendezvous with credit, at some disputed interest-rate (to channel Alan Seeger) the system will break. In panic, they will back off. The result will be stagflation, is my pick - permanent and increasing. The problem is that the currently-held debt (plus the currently-held expectations, like pensions) cannot be meaningfully repaid (not enough remaining underwrite). They've kept the system artificially alive for 13 years - a heroic attempt - but it was doomed.

I agree, he's talking a load of rubbish. No chance they will be 7%. 

Per my comment below in this section – is it swaps or the OCR that is the biggest determinant of mortgage rate settings – ie how much sway does Orr actually have in this.

Yields on US2-YR jumping .267 to a yield of 1.615 overnight.

I don’t really understand the complexities of swaps but would this not have quite an impact in terms of NZ mortgage rate settings.

Exactly my take on it, and of course same for the US which we follow.

All roads lead to currency collapse.  Our rulers have nowhere near enough courage and vision to pull out of the doom loop.

That’s the same logic as ‘fat people and smokers shouldn’t get operations’ et cetera. How about if they all signed waivers guaranteeing they won’t seek medical treatment if they get COVID. Would that make you feel better?

The overwhelming majority of people, vaccinated or not, will not require emergency care due to COVID-19. You're tilting at windmills.

Can't agree with this.  We have already partially suspended the medical ethics surrounding the right to choose medical treatment.  Suspending more medical ethics (here that triaging patients is not done solely on a patient need basis) and asking doctors to essentially betray more of their ethics, is starting to go down slippery slope.  Better to say something like "If you aren't vaxxed and receive treatment for COVID, you have to pay for it", which affects people after the fact, rather when they need immediate medical treatment.

GV 27 Omicron is here vaccines do not stop it . Over 90% of people have had jabs and they seem to help stop severe illness not much more anyone can do, if you and your family don’t think vaccines are good enough stay at home and stop criticising other people for doing what they consider best for their family.

The amount of hate I'm seeing at work for these people is ugly. They should be pitied. I also admire them in a way for sticking to their principles, however misguided. I'm vaccinated but have always opposed mandates, even going out on a limb at work to oppose them. I haven't taken the principled approach and refused to show my vaccine pass however. I'm slightly ashamed of that, but I would be even more ashamed of threatening the wellbeing of my family (as the sole breadwinner)

Eloquent and well-considered treatise

You have to laugh.



Mandates are a apparently a consequence of people exercising their freedom not to get vaccinated. If the consequence of exercising your freedom is to have that freedom removed, is it really a freedom?

Meanwhile, vaccinated people exercising their freedom to mingle shouldn't have to face the consequences of their actions, i.e. risk having their "right to remain virus free" (what?) violated in the middle of a global pandemic.

I wouldn't normally comment, but the mental gymnastics involved here is just astounding.

We can't escape long term effects forever. COVID will become endemic, it's inevitable. Omicrons long term effects appear to be considerably less than earlier variants.

So the best chance to escape long term effects is for us to be exposed to the virus, while vaccinated, to build up our immunity, so we don't get long term effects.  If we do it in say 6 months when everyones vaccination immunity is lower (because booster vaccination rates will likely drop), then we will get more long term effects as the virus will hit more people harder.  So, as vaccination wanes with time, it's best that we are exposed earlier than later, when our immunity from being double vaxxed (and boosted) is higher.  That should mean less long term side effects.

We have to accept elimination isn't an option anymore, at some point endemic effects of the virus are inevitable.  The best we can do is choose our time wisely to minimise the endemic effects of the virus.

Agree, the graphics dept did a good job on the first 1 pager with some criteria for each. Accepting that covid would spread through the community but trying to limit this when the hospital system was under severe pressure was the goal and made sense. It seems they have done such a good job whipping people up into a fear frenzy previously that this wasn't politically paletable, so we're just back to winging it with an abundance of caution now. 

My brother lives there and they are living close to a normal existence. His whole family contracted it last week, they had to self isolate for 5 days, then they could go back to work/ school.

But for a while it's been illegal to discriminate employment oppourtunities based on medical history.  You can't ask someone "When was your last MMR vaccine?" or "Do you have syphylis?" or any number of medical questions that don't relate to their ability to do the job.  This has been suspended during COVID for good reason... but those reasons start to pale in comparison to having a potential underground insurgent group who are severely disaffected by these changes. And who model themselves as "freedom fighters", the catch call of any potential terrorist. 

At some point we have to re-integrate these people, I would suggest going back to what we had previously, being unable to ask for medical status.  Sure, you are allowed to protect YOURSELF, you have likely got vaccinated for that reason and have the greatest individual protection available.  While having unvaccinated people running around your workplace might seem scary, they are the ones that are going to suffer the severe consequences. If you do get COVID from them, well you were going to get it at some point anyway. We are past the elimination stage, we are into the management phase.  And as we likely won't be vaccinating forever, it's better if you catch it early while your immunity is still primed for a response, not in a few years when your immunity is waning.

It's time to think about this in more complex terms, not the simple "vaccine mandate & elimination" strategy. Omicrons going to get us all as it becomes endemic, this means we need to change our thinking.

Do you realise that no amount of jabs will stop you either getting it, or spreading it?

(that's a yes or no question...)

And its my right to decide what personal information I want to share with you. 

As a medical professional, we’re not even allowed to ask vax status of anyone entering our practice, and certainly not allowed to deny access based on vax status.