Here's our summary of key economic events overnight that affect New Zealand, with news inflation is a tough dragon to slay.
The American inflation rate slowed only slightly to 6.4% in January from 6.5% in December, less than market forecasts of 6.2%. Still, it is the lowest in 15 months. The annualised rate between December and January however is still over 6% so the main message the markets received is that inflation is persistent and the Fed's work is far from done. If you strip out food and energy, the annual rate is down to 5.6% while it ran at over a 5% annualised rate in the month. These 'core' measures are still well above the Fed's target and are little-changed over the past six months. The medicine is working, but very slowly, which is probably not a surprise given the strength of their labour markets still.
Retail sales last week came in +4.9% higher than a year ago on a same-store basis, and that was a tick higher than the prior week, but really no more than can be accounted for by inflation.
Financial markets are now pricing in further Fed rate hikes at the next three meetings, the next of which is on March 23 (NZT).
Singapore said it will raise taxes for buyers of higher-value properties and luxury cars, as it tackles a growing wealth gap brought on by the arrival of rich families, mainly from China. They are also extending family support measures as their birth rate stays very low.
Japan turned in a very lackluster economic performance in Q4-2022, one that was below expectations. And their Q3 was revised lower. About the only 'good' thing about these results is that at least their aren't contractions. (But remember, these are 'flash' results and subject to revision.)
In India, Air India has ordered 470 new planes, 250 from Airbus and 220 from Boeing. Its larger fleet has been Boeings, the smaller aircraft from Airbus. Air India is owned by the Indian industrial group Tata.
In Australia, January has revealed a serious wavering of consumer sentiment. (and here.) Sentiment is back to recessionary levels and historic lows. Over half of consumers expect mortgage rates to rise by +1% from here (3.35%) or more. And they are reporting intense pressure on their finances, in the mortgage belt especially (remembering OCR hikes hit instantaneously in Australia). Attitudes towards major household purchases are very low. Confidence around jobs is still positive but starting to get rattled again.
And we should probably note there are signs that Australian rents are starting to rise sharply too.
The UST 10yr yield starts the week at 3.75% and up +3 bps from yesterday after the US CPI data. The UST 2-10 rate curve is still inverted at -84 bps. And their 1-5 curve inversion is also little-changed at -96 bps. Their 30 day-10yr curve is also less inverted at -81 bps. The Australian ten year bond is up +6 bps at 3.82%. The China Govt ten year bond is unchanged at 2.91%. The New Zealand Govt ten year is starting today at 4.33% and up a minor +1 bp from yesterday.
Wall Street has started its Tuesday session with the S&P500 is down a mere -0.1% near the close. Overnight, European markets were all little-changed. Yesterday Tokyo finished up +0.6%. Hong Kong ended down -0.2%. But Shanghai ended its Tuesday session up +0.3%. The ASX200 ended up +0.2% but the NZX50 ended unchanged with an end-of-session dive.
The price of gold will open today at US$1849/oz and down -US$3 from this time yesterday.
And oil prices start today down -US$1.50 at just on US$79/bbl in the US. The international Brent price is now just over US$85/bbl.
The Kiwi dollar is down -¼c today, now at 63.3 USc. Against the Australian dollar we are up +½c at 91.8 AUc. Against the euro we are softer at 59 euro cents. That all means our TWI-5 starts today back at 70.7.
The bitcoin price is now at US$22,039 and up +2.6% from this time yesterday. Volatility over the past 24 hours has remained modest at +/- 2.2%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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113 Comments
If you strip out food and energy
Wouldn't they be the most important items for consumers?
Exactly my thought too! I know i'm unsophisticated but saying things like 'The medicine is working, but very slowly' seems a wee bit like wishful thinking.
When people have to pay for higher power, food, rates and insurance the price of non essentials will ultimately be forced down as businesses do what they can to survive including discounting stock.
Also remembering that 'food is energy'. The sheer quantum of food consumed by humanity is basically generated by fossil fuels. I'm afraid we're not getting out of this scenario by a few small upward rises to the OCR.
Put another way: if you strip out everything except food and energy then inflation rose
India will be the place to watch in the next 10 years
For climate change disasters and political corruption maybe.
At least they'll have a lot of shiny new CO2 belching planes to escape their disasters.
how's that trade deal coming along Labour ?
We are starting to see what happens when one species overshoots; too much infrastructure pushed too far into non-resilient territory, done by short-term betting at all levels; from Government through all who wish to profit.
Compound(ing) issues; resource-quality reduction, resource-availability reduction, increasing entropy-parrying demands competing with new-wishes, reducing real amounts of available energy; we are entering a new era.
Increasing triage will be the order of the next few years; better we anticipate the end-stage rather than waste effort replacing the unmaintainable. But we won’t; we’ll peddle growth as the panacea for the problems caused by……
Growth…..
done by short-term betting at all levels
This is the nature of humans. It's why people fear immediate peril like shark attacks and plane crashes, when it's way more likely something with a longer tail like heart disease or diabetes is going to take them out.
Then again, we're even less adept at predicting the future.
There's unlikely to be an "end stage", more likely change and evolution.
Agree again, we're just built to have a very short term bias. There won't be an end stage - as George Carlin said, "the world's doing perfectly fine, it doesn't care that it's windy or rainy, it'll be around for another billion years, humans on the other hand....".
There is a good reason the uber rich are spending their fortunes on on mars colonies and virtual worlds.
For humans continued living on the surface of Earth is looking pretty shaky. By the time our short term threat radar picks up the issue.. it will be way too late for us pheasants. Hopefully Musk, gates, mark and besos will let us share their opulant mansions on mars (for a small mknthly subscription) via the Metaverse before we all pass.
I think you underestimate the fragility of any attempt to live on Mars.
Yes it’s a bit like the futile efforts of rich people building bunkers in case of nuclear war
Ah, Ready Player One was truly prophetic, apart from the bit about the benevolent creator of the Metaverse
Love your work Power. I think Ashley Church is heading down a similar path as you but his is all fire and brimstone. The way you explain things as fragile systems is far more valuable.
Then let's set a population target. Set some max number and stick to it.
The drive for growth benefits few and costs most of us.
Unless you were imposing some sort of Matrix-level people farming operation, maintaining a desired population level would be an exercise in futility.
Spellchecker playing up?
An exercise in fertility, surely....
...just stop incentivizing breeding via the welfare system - job done.
Our benefit system is crazy but it does not incentivize breeding except for a small number of single women who find having a baby easier than holding down a job. There is zero benefit for a working couple to have a second or third child. We know from the behaviour of certain politicians it makes economic sense not to admit the identity of a father and certainly not live with him.
Left to Kiwi born young couples our population would plummet.
We've had Working For Families for around 2 decades now. That's a 'tax credit' as opposed to a straight out benefit, but part of the drive for it was to try and smooth our aging demographic issues.
I did receive WFF when i was a younger immigrant on a conditional residency visa. I have a memory that four children was too many - WFF works better for small families.
No. Stopping immigration, or balancing against outflows would significantly slow natural population growth. Ensure standard of living is high to lower the desire/need to breed. But the population target that I believe is required and would make it extremely difficult is less than the current population. But population size is the discussion the whole planet should be having. Problem is so solutions are very frightening!
The inescapable problem is we have aging societal issues today, and new workers take 25 odd years to grow.
Coupled with that is the deferment of having children by the change to higher education and careers by women (not saying that's a bad thing), and the diminishing number of male partners for our higher achieving women leading to decreased long term relationships and therefore children.
How you 'plan' to define a population level in light of that is beyond me.
Maintain status quo by issuing a residency visa only when a Kiwi emigrates.
Reduce population slowly be issuing 9 residency visas for every 10 Kiwis emigrating.
You have to account for age as well.
Plus if we have botched our education system we end up with short term demand issues with certain jobs.
Pa1nter, you're paradigming into the old model that has to change. The radical change I suggested would never occur with the current and foreseeable crop of politicians. None of them have the understanding, vision or courage. Elderly are not an issue. The economy is.
There's problems around every corner, pointing them out is usually easy, it's finding an actual workable solution that's the problem. For instance, working sucks and going to the beach is primo, but it's hard for anyone to paradigm shift away from having to work to exist.
People float vague notions of "just get technology to make up the difference", or "just pivot to more productive industry", but the devil is in the details, and in some cases there is no workable alternative. Some technology is decades away, and if you're trying to pivot to some reduced labour industry, you're competing in a very large pond with other countries desperately trying to do the same thing.
Much more controllable societies than ours are not adjusting well to this issue. NZ is in a fortunate place to watch this happen elsewhere first and learn, and given our much smaller population make modifications easier.
Take your first paragraph; every society, every culture, every philosophy, every religion has had 'work' at the core of it's ethos. the reason - survival. as a species we've had to do it since the stone age. so it shouldn't be that hard to paradigm shift towards having to work for a living.
Modern technological 'quick fixes' such as JK's technology economy are just BS myths for the gullible.
I don't think NZ should spend much time watching and learning and start doing. The information, knowledge and skills are there. We just need the imagination, vision, and courage.
The information, knowledge and skills are there.
They're not though. I see it every day, we have industry demands and gaping gaps in the ability to supply labour to do things, and it's getting worse, not better.
Although I'm open to more elaboration outside of imagination and vision.
Hardly. Growth is mainly coming across the border. Once the burden of competing with immigration for life's essentials is lifted, who knows, perhaps people living here can afford families of their own?
Most of its not a cost issue, it's cultural.
No Pa1nter. You have been watching too many drama movies
Actually in the real world, with a near level birth death ratio already amongst New Zealanders, it's easy to manage.
But having no target means planning to be poor.
No drama movies, our birth rate is 1.6 and we have more older people, living longer. Our ability to produce more workers naturally is outnumbered by the amount of dependents they have to support.
I think Paul Ehrlich maintains that about 1.5 billion is the number and given we're closing on 8 billion, there might be a few dissenters amongst us. A New Zealand or Aotearoa (whichever you prefer) with 1.5 million would be quite nice and natural, very quiet. But don't say boring because it probably wouldn't be peaceful from a human perspective. Can't see a diplomatic way of getting there.
Let's just carry on and be doozers - fix the storm damage, raise the OCR 50bp and see what happens at Fraggle Rock.
PE is yet to be correct about anything...
It is 100% correct that you'll be dead. Probably in the next few decades, perhaps the next few years, perhaps tomorrow.
YET? YET?
That's the kind of flawed thinking which projects exponential growth in consumption, forever, on a finite planet.
Or suggests the commentator is an economist.....
It is 100% correct that you'll be dead. Probably in the next few decades, perhaps the next few years, perhaps tomorrow.
So life is fleeting and best not wasted living in a circular myopic mindset of doom.
Thank you for taking the time to reply to my comment PDK.
Yes, I shall certainly perish one day, yet this doesn’t change the validity of my comment nor make PE’s predictions any more accurate.
I write this looking over green paddocks on my small holding, lambs munching away happily, calves playing around, chickens picking at things, venison harvested on the weekend in the chiller, fresh fish ready to be cooked tonight. A bit sore from working hard clearing some bush to increase the vegetable production as there are more and more people interested in swapping fresh produce in our area.
We are very alike, you and I, the difference perhaps might be me believing in people’s innovative abilities, resilience and ultimately, if left alone, deciding to do the right thing. What do I know however, apparently where I live people are a bit backwards… 😉
A New Zealand or Aotearoa (whichever you prefer) with 1.5 million would be quite nice and natural, very quiet.
As long as you understand that the winter holidays to Fiji or ski trips to Whistler will no longer be available. And I think it's fair that any culling of people starts with the non-indigenous people. Those of Anglo Saxon stock are probably first to go considering their history of privilege and exploitation of others.
NZ does not have an indigenous population. Some who paddled here quicker than others, but not indigenous (though they have messed with the definition in these sensitive times).
NZ does not have an indigenous population. Some who paddled here quicker than others, but not indigenous (though they have messed with the definition in these sensitive times).
You know what I mean. First in, first serve.
History shows the world doesn't work that way
Creepy J.P.
As long as you understand that the winter holidays to Fiji or ski trips to Whistler will no longer be available.
Yep I understand. Given some of the unfortunate situations unfolding around the North Island currently, which clearly illustrate that when power and supplies are intermittent or non existent at best, overseas trips are not high on the agenda.
As for change, it's not best practice to be too specific with numbers and time frames because other social commenters will come along and tell you how 'wrong' you are, cough cough Yvil.
It is happening. Just check out registered baby names or visit an Auckland pre-school or attend Rhymetime at your local library. The Anglo-Saxons are in rapid retreat.
Its not as simple as one number. We would need to include numbers of people in work, likely in particular industries as well.
There's no point in saying "We want only 4 million people", when you have 3 million people over 70.
You are exaggerating a bit there on the number ratio bobbles.
But ratios will change. And imagine not being always chasing to catch up with infrastructure. Currently about 50 years behind.
Is he though? Lets say they turn off immigration and discourage (or even prevent) people having kids to get the population down, at some stage we will get to a point where there are no young people left.
The problem was created a long long time ago (the boomer bulge), we can't afford to have such a high percentage of the population retired when our superannuation is a pyramid scheme.
Exponential population growth and ignoring it does not end well.
Why assume over 70 can't work? We are living longer and also healthier. The problem is not age but health. Our medical system is keeping the seriously ill alive longer and that applies to any age from the handicapped baby to the centenarian who breaks a hip. The cost of invalidity benefits is ever increasing.
Some over 70s can work but the range of tasks they can do diminishes inline with their faculties. Staying healthy helps but you can't fight nature.
True, my computer programming abilities declined and now in my mid-seventies I reckon 6 hours is a long working day. However there are many jobs I could do - notice the age of security guards at banks for example. I did enjoy being a chimney sweep after retiring. Other jobs could be parking attendant, barista and what I would like most - teaching maths to kids.
They can work, but likely not in new industries, where the newer higher productive jobs are. Not without significant retraining and if you have ever had to train an over 70yo something on a cell phone, you will understand why.
The flipside of that is the new industries are actually over subscribed, because boomers wanted better for their kids and pushed them into white collar jobs. So there's a void in blue collar jobs, and the white collar ones are more likely to be automated first.
Blue collar jobs generally won't be done by over 70yos, their bodies mostly aren't up to it. They would more likely be advising the young only.
My numbers were just examples, I don't mean for them to be taken literally. I am just saying that if we decide to cap population numbers, we will have to put caps on age population numbers somehow too.
Yep, can't just cap it at a raw number. If 10% of your population was working age, you've probably got problems.
The flooding in Auckland gives Chippy an out for light rail if he wants to take it.
You floating the idea?
There's a strong current for investment elsewhere
I get your drift
“River of Dreams.” Billy Joel.
Looks like it's raining puns today
It's water under the bridge....next project pse.
Water is under, over and through. Coromandel, Bay of Plenty, Hawkes Bay. Water goes where mother nature tells it to go. Speaking of projects, wonderhow that area in Napier, recently purchased by the government for housing, is faring given that it was said to be a flood plain but once the government acquired it, according to Minister Woods, it wasn’t.
My old biddy who just died. We suggested rest home Te Awa. No way she would say...that land is way to low..should never be built on.
Te Awa including Somerset has just been evacuated.
That little old lady could see what engineers, councillors and ppty people chose not to see.
.
Down the drain.
Just about every business owner I've talked to in the last 30 days is pulling back. Est 15 folks over a range of industries.
- Fewer hires
- Use the opportunity to cut bad clients
- Reduce costs
- Pause on new internal expenditure projects. Make do for a year and reassess
- Build cash reserves
Basically the corporate version of what consumers are, or should, be doing. B2B is in the same boat.
If you haven't already... look at redundancy insurance.
I pulled back in March 2020. Hard to say if it's turning out better or worse than I felt it would.
Hey, maybe it's a good time for people to retrain in a vocation we have a severe skills shortage in. Two birds with one stone, keep an income, keep out a pesky foreigner.
Is this a dig at the RE industry,
Those of us in IT know all about retraining. Not much use for Wang OS, RSTS or COBOL these days.
It's advice for anyone that thinks they need redundancy insurance.
Same feedback I'm hearing as well (apart from some of the Grant Cardone-reading "manifest your destiny" types who reckon that if you go big on leverage you'll be forced to work harder to make the sales ... seems a bit cultish to me but whatever. Interestingly enough there is a strong correlation between that mindset and being involved in property development or related lines of work).
I'm having the exact same conversations on a daily basis:
- Lowered hiring intentions
- Trying not to re-hire if someone has quit
- Deferring new equipment purchasing
- Cutting advertising/marketing costs
- A general feeling of "the best times are past us"
In terms of my own business, I don't have any staff - just a few contractors on an as-needed basis - and I don't have particularly high costs anyway apart from paying myself.
However, I am cutting what costs I do have where I can, and I am trying hard to build up a big cash moat to weather any storm (pun and offence to those affected by the cyclone not intended).
I am definitely noticing it's taking longer to get paid, and I'm having substantially more of those awkward "oh we totally didn't see your invoice in the inbox"-type conversations.
The medicine is working, but very slowly, which is probably not a surprise given the strength of their labour markets still.
The medicine is at best a placebo - the US rate hikes are almost certainly doing more to push up prices than they are to bring them down for five reasons:
- Increasing costs for businesses are being passed onto customers (same as in NZ)
- Rate hikes are making no difference to consumer disposable income because mortgages are almost entirely on a 30-year fixed term (very different to NZ)
- House buying has slowed down - people are sitting tight - that's why there are some sign of rent increases as people wait out the market (inflationary on rents) (same as NZ - see yesterday's figures)
- HIgher interest payments on reserves mean billions of dollars of stimulatory dollars are being handed to banks (higher US debt as % of GDP ensures that this on a much bigger scale than in NZ)
- Because people have jobs and salaries to spend, the consumer economy keeps going and businesses keep hiring, and the 'inflation reduction act' investment will also add jobs (different to NZ). The labour market is not tight - it is moving towards actual full employment (as it was in NZ before Adrian stuck his Orr in)
What is bringing the rate of price increases down is the unwinding of knots in supply chains, US strategic interventions in energy markets, and lower imported costs (shipping etc).
If we follow the Fed with futile rate hikes, we are going to be royally screwed here.
"It doesn't matter what should happen, but what's going to happen that does"
That's how money is made, as I'm sure you know.
So we can ignore The Fed and RBNZ etc if we wish, but we shouldn't be surprised if what they tell us they are going to do, they do.
I would definitely not ignore the Fed or RBNZ. The Fed is crushing economies across the world - whilst its own economy is ironically (purposefully?) very well insulated from its destructive action!
What RBNZ are doing is simply crazy - and they will crash the economy and send tends of thousands of people onto the dole and misery. I wish they would go back and read what Bill Phillips (the kiwi of Phillips curve fame) actually wrote in his 1958 paper on inflation; particularly the section on what happens when the import price of key input price commodities spike.
if interest rates here keep going up kanga ora will pick up some bargains
silver linings.
Talked to someone yesterday who told me their house price is going up according to their bank evaluation app. I expressed my surprise, given the REINZ and QV data yesterday... then they mentioned two houses on their street were bought by KO in the last month - who overpaid by more than $200k ($650k for houses valued at $450k in the height of 2021).
KO is stuck in a feedback loop of people not affording homes needing to be housed, whilst KO pushes prices up, causing more people needing to be housed.
Hopefully the wider market crash will be able to overpower this, but in some communities it looks unlikely.
Today's CPI was mostly shelter imputations. A little bit of transitory (yeah, I said it) rebound in gasoline prices. Other than that, damn I now have to agree with Jay Powell. The full disinflationary process has reached its fourth month in a row. Link
This is also the reason why market curves globally reacted so heavily and decisively in early November - that was when the October CPI in the US was released which showed outside of shelter and the non-economic factors in energy, price pressures had materially changed. Link
I'm over Jeffrey Snider and find his ideas too challenging and / or oblique for me to reconcile. While I understand the idea of the Eurodollar and the distributed ledger and the irrelevance of the central banks, it still doesn't make any sense to me how this is all one big game between commercial banks. Perhaps I need to do the Eurodollar University course to really understand things. But Jeffrey needs to understand that as well because I'm sure that I'm not the only person who doesn't fully understand his narratives.
Rings true to me - I worked at a US owned Eurodollar bank based in London. The London branch dwarfed the US head office and didn't report to any central bank.
The CME retains the world’s most actively traded futures contract but for how long?
The CME Eurodollar contract traded a $127 trillion of notional value on turnover of 509 million contracts in 2020
Off balance sheet OTC swap trading hedges in the interest rate and currency markets are magnitudes greater.
The CME Eurodollar contract traded a $127 trillion of notional value on turnover of 509 million contracts in 2020
Off balance sheet OTC swap trading hedges in the interest rate and currency markets are magnitudes greater.
Right. I think your life experience puts you in a better position to understand these things. But even this short illustration is a moment of clarity for me.
When inflation was b all no one complained about interest rates being virtually nil. Now inflation is over 6% and rates are below that the whining never stops . Rates should be above inflation or they are in fact negative and hence still stimulative. Economies with v low unemployment shouldn’t be stimulated. Trying to remove the economic cycle is v silly and dangerous
Agreed
IMF says El Salvador's bitcoin risks have not materialized but 'should be addressed'
Feb 10 (Reuters) - Risks over El Salvador's embrace of bitcoin "have not materialized," but use of the cryptocurrency still requires transparency and attention, the International Monetary Fund (IMF) said Friday in a statement after a visit to the Central American country.
Real GDP is projected to grow by 2.4 percent in 2023, the IMF said, above the historical average.
"Singapore said it will raise taxes for buyers of higher-value properties and luxury cars, as it tackles a growing wealth gap"
We used to have higher duties on luxury cars back in the 70's. If you wanted to display your apparent wealth then you had to pay for it.
Singapore is taxing the wealthy and increasing tax deductions (subsidies) on qualifying R&D expenditure from 250% to 400%.
As much of the world shuns neoliberal policies, NZ stays firm on this road to socioeconomic ruins.
Emergency move to relax lending laws for flood, cyclone victim
For the already wealthy.
What I love about Interest.co is the high level of empathy from it's members.
Yeah. Lots of potentially sociopathic mindsets around here 👀
Sociopathic? or are some people are just more aware that a short term hit, can lead to more severe long term issues.
I would say some commenters display such a severe lack of empathy so as to suggest they have a pathological condition.
Agree 100%, but I don't think this particular comment is one of them.
Artificially reduced lending for a period will not fix anybody's cyclone issues or existing financial strains. It will inevitably lead to the rich taking advantage of it, and the poor subject to even more pain in 6 months when it all needs to be repaid. Just like we saw in Covid, Chch, and everywhere else.
Borrowing is never the solution to any of life's problems.
The lack of empathy a consequence of the specuvestors who pratted on relentlessly as to how smart and successful they were - at the same time rubbishing the young as they denied them the same home buying opportunities they enjoyed in their youth.
And now just look at the mess they have created form this housing ponzi.
Case in point.
I have a lack of empathy for flood victims because property investors.
I don't think many of us have a lack of empathy for the poor who are the most affected by the floods - in many cases due the decisions to build low cost housing on flood plains and swamps.
Who who benefited from these poor decisions?
Yep...the property industry.
Why can't the Government issue $10k interest free loans to the victims? At repayments that are affordable?
If their bank accounts are already linked to IRD then *ding* here's $10k, IRD applies $10k debt to their tax account.
Oh that's right it'll become an attack vector for the Government as $100 million shows up as a debt on the Gov books, rather than an asset on a bank's books.
On top of some ST monetary relief, they will need to set up a construction task force as they did for CHC earthquakes and Kaikoura. Way too much damage to try and fix with local contractors. Blueprint is already proven. Issue they will have is trying to get skilled workers now, but they have to do it otherwise the fix will be 5-8 years, instead of probably 18-24 months.
At least in the CHCH earthquakes you still had people living in their damaged homes, albeit with portaloos and tanker water.
This could be a completely different beast.
The reason = inflation.
Handing out cash does not replace the lost crops and productivity.
When there is an absence of supply, prices go even higher.
Global lesson of the covid cash rush.
So people borrowing an extra $10k from the bank is not inflationary? We are talking about the move to relax lending laws as a "privatized for profit" relief package.
Those people that need a $10k mortgage top up, could instead obtain that $10k from IRD? IRD will have their latest address on file. Log in to MYIRD, click apply for relief button. Boom done. Button greyed out for people outside flood areas e.g. Dunedin etc. Usual disclaimer on fraudulent information.
Lets make it $200k then..for everbody.
Sounds good. Let the banks lend $200k to everybody without having the need to perform affordability assessments. Because $NZD lent from the bank is not the same as $NZD lent from the Government.
For inflationary affects what would be the difference? You have extra cash chasing same diminished resources. Why would the source of the cash matter?
Emergency move to relax lending laws for flood, cyclone victim
Credit creation for non-productive purposes as an extension of the govt.
Extend and pretend, only now its linked to climate change events.
If you strip out food and energy...
And so the Amish Consumer Price Index (ACPI) was born. Most relevant to those who grow their own food and ride a horse to work.
This flies in the face of the ‘broken windows fallacy’ nonsense being spouted the other day, by one individual in particular, about disasters being good for the economy:
https://www.nzherald.co.nz/nz/politics/cyclone-gabrielle-storm-will-hav…
And its only going to get worse. As I have said repeatedly, our ability to actually grow anything economically is being eroded by climate change events. As we lurch from one climate change induced disaster to the next, we won't have any spare capacity to build anything new. Infrastructure retreat will be the only viable option, coming to a town near you.
Eventually we have to pay for ignoring this chronic issue which we have known about for 50 years and decided to ignore. Its like we have had a tumour growing on the planet for 50 years which we could have cut out or slowly got rid of by being healthy. But instead - nah, lets double down on fossil fuels and burn everything down.
There will be plenty who do benefit, lets hope we actually spend the rebuild costs with NZ companies so they can pay some of the Crowns borrowings back as tax. Issue we have is Government (NZ) is ba** deep in debt and they can ill afford this clean up bill. Don't expect the overseas insurance companies to have a speedy process with trying to resolve this quickly either.
Yes there will be plenty who benefit. But overall, the economic costs are certain to exceed the benefits.
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