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Duncan Greive profiles Jarrod Kerr, Kiwibank's chief economist who is curious why low interest rates don't induce businesses and governments to invest to catch up our long-term infrastructure deficits

Duncan Greive profiles Jarrod Kerr, Kiwibank's chief economist who is curious why low interest rates don't induce businesses and governments to invest to catch up our long-term infrastructure deficits

He was the prototypical high school nerd, hanging on Don Brash’s every word. Then the financial world turned upside down. This is the story of how Kiwibank’s Jarrod Kerr became a most unconventional economist.

In 2008, Jarrod Kerr was working at the Commonwealth Bank of Australia when the global financial crisis hit like a financial meteorite. Bankers around the world had loaned money to people with patchy incomes to buy houses they couldn’t afford. Then they’d packaged up those loans and on-sold them to unsuspecting pension funds and university endowments. Then they’d all placed side bets on how all these shiny new assets would perform. Then the whole thing blew up.

The only thing was, no one knew who was holding the worst mortgages, or had placed the riskiest bets. The entire financial system stopped working, and no one would trade with anyone else. In the midst of this fiscal carnage, very strange things started happening. 

“We had a guy come into the bank, rip out $15m in cash and bury it in his backyard. He physically withdrew it from Brisbane,” says Kerr. “He had it in his head that there was no guarantee, certainly for the amount of money that he had. He put it into the trucks and for all we can assume he literally buried it somewhere.”

Kerr was a classically trained economist, and all around the world people like him were watching unbelievably strange events become routine. He had spent years learning about how a system responds to signals, an orderly and logical way of understanding markets that worked very well. Until it didn’t.

“I was throwing all my textbooks out the window,” he says. “Because what I saw in 2008 was not in any textbook. Markets that couldn’t freeze, froze. Participants that were supposed to act rationally were not acting rationally. I’m not saying these things happened for one or two days, these things happened for months, and we couldn’t explain it. We couldn’t buy a bond at a price, we couldn’t buy a currency at a price. 

The market broke

For the next ten years, everything he knew stopped making any sense, and he had to wrap his head around a new world order. Now he’s the chief economist for Kiwibank, the fifth-largest bank in New Zealand, one which both through its state control and scale you would expect to be a model of insipid, measured communication. 


“We knew we were witnessing history, but at the same time, we were haemorrhaging,” he wrote in a piece for The Spinoff marking the crash’s 10th anniversary. “I vividly remember traders screaming, ‘The market’s broken! I can’t get a price, any price!’… The fear of contagion crippled financial markets, and each bank was asking the same question of the other: ‘what dodgy exposure do you have?’”

JP Morgan acquired the carcass of Bear Stearns, but when the far larger Lehman Brothers fell too, all the investment banks suddenly looked imperiled. Kerr started casting around for other, safer opportunities, landing at the CBA (parent company to ASB) late in 2008. There, and at Credit Suisse in Singapore, where he worked from 2010-2013, he watched as the world went into a funk, one which defied all his textbooks and forced him to re-evaluate all the orthodoxies which had been carved into his cerebellum from years of watching the markets. 

Interest rates crashed in an attempt to stimulate economic activity, heading to low single digits, then to zero, then, unfathomably, to negatives – wherein you give someone a million dollars, and years later they give you $990,000 back. Bankers all around the world were flummoxed as their time-tested tools stopped working.

Kerr still marvels at this today. “Normally when interest rates drop like this you see a huge response in investment,” he says. “Government investment firstly, but also private investment. You make use of those low rates to build the future. What we’ve done is the reverse, we’ve focused on those low interest rates to pay off debt faster.”

This is unimaginably strange territory for economists. Not just in our lifetime – but in any lifetime. On a chilly morning in early September, Kerr stood on a low stage in front of a crowd of business people at Team New Zealand’s waterfront headquarters. Clients of Kiwibank were the majority of the audience, and they were typically in charge of small-to-medium sized businesses – people who don’t often get invited to this kind of event when put on by the big Australian-owned banks, who tend to target larger corporates.

They were treated to a different kind of show. I’ve seen Kerr put on variants of this presentation more than once, and it’s a very unconventional performance. He has a disarmingly relaxed style, pacing the stage and allowing his speech to jag from a recent data point to an obscure historical episode, to an enormous longitudinal trend. He’s in command, supremely comfortable, but it’s quite a stretch for the audience. The presentation is made up of reams of data, with a particular fondness for centuries or millennia long datasets. It’s essentially Jarrod Kerr’s grand unified theory of society, a lo-fi series of charts from different sources which collectively explain where we are today, and how we got here. 


That said, it’s absolutely not a ramble. Kerr has a point, a big one. Put simply, it’s that those in positions of influence need to be spending far, far more than they are. Not foolishly, but on making things, investing in the future. 

“Countries like ourselves have too little debt to start with,” says Kerr, echoing a persistent critique from Keynesian types that Labour and the Greens’ budget responsibility rules (BRR) are an unnecessary stifling of a once-in-a-lifetime moment. “Why aren’t we making use of it? It is baffling. And it is disappointing. Because we all know we are sitting here in a country where we’ve got a massive infrastructure deficit. And the way to build a better housing market is not just building more homes, but building public transport and utilities and roading and everything that goes with new homes.


Kerr is a deeply unconventional bank economist, both in style and in message. The story of his life, his work, and his experience helps explain how this key man became a banking iconoclast.

His was a normal New Zealand childhood. Born in Hamilton but moved to Auckland at an early age. He took his first economics class at Rosmini high school and something clicked within him. The numbers sang a sweet song, and at 14 he started behaving very strangely, sending letters to the Reserve Bank asking to receive its quarterly monetary policy statements.

“They were 60-70 pages,” says Kerr. “Similar to what we get today. I’d read them cover to cover and try and understand as much as I could.”

This was 1991, and these weren’t like other monetary policy statements. The young self-described nerd was phenomenally lucky. Famed economists all over the world had their eyes on New Zealand’s Reserve Bank at that precise moment. Years before he became famous for obtuse free speech arguments and racist election campaigns, then-reserve bank governor Don Brash was a celebrity central banker, one who spoke to a hallowed conference in Jackson Hole, Wyoming. There he told an enraptured crowd about his pioneering work deploying central bank interest rates to target a specific rate of inflation. 

New Zealand was at the tail-end of the spasm of bleeding edge reform unleashed by David Lange’s Labour government, with the idea of controlling price rises with the government’s money supply one of the last radical ideas out of the gate, soon to become accepted orthodoxy worldwide.

The young Kerr was only dimly aware of his proximity to this revolution – “ I knew they were ahead of the curve” – but he devoured the policy statements, and became obsessed with economics, getting As while the rest of his school subjects drifted by in Bs and Cs. He didn’t know it yet, but he had found his life’s work.

“For me, that’s the lever,” he says of interest rates. “That’s the one thing that explains everything… a lot of what happens in financial markets pretty much pivots off these numbers.”

After school he went to Massey University to complete first a bachelors, then honours, then a masters, all in applied economics. “I still didn’t know what to do with myself,” he says. On the verge of sliding into a PhD, a professor set him up with a job at a think tank in Sydney. 

Energised by the application of his learning, Kerr applied for a job with the most establishment investment bank of them all: JP Morgan. He was hired, and started work as an economist on the trading floor, in their expansive offices near Circular Quay in downtown Sydney’s financial district.

His job was to look for major economic trends and describe how those would play out throughout industries, commodities and businesses. After that, the traders took over. The big bets, with concomitant major wins and losses, was a bridge too far for Kerr.

“I never thought I’d have the stomach. It’s easy to say you think the price of gold is going to go from here to there, but then to actually put money on, hold it and decide when to sell – there is another level of stress and responsibility that I think goes beyond my capability.”

Still, he enjoyed the high pressure environment, and stayed at JP Morgan for the frothiest years of the ‘00s, while one of the biggest bubbles in financial history was inflating quietly in the background. Kerr watched, jaw agape, as it popped.


Ten years later he’s in shock again as a government with a $7.5bn surplus and record low interest rates continues to avoid big spending projects. 

This is not one government versus another, it’s 20 years of underinvestment.

Countries tend to be judged by their debt as a percentage of GDP, essentially a way of seeing how much money a country’s government owes, measured against its ability to pay it back. For context the USA’s is 106%, Singapore’s is 112% and Japan’s is a headspinning 238%. New Zealand’s is 20%, one of the lowest in the world. 

Kerr sees this as a result not of prudent financial management, as the likes of John Key and Michael Cullen would posit it, but of failing to build out and renew infrastructure to deal with our growing and ageing population. 

“If you go to the rating agencies, the ones that look at us, most of them tell you we could go to 35% in a heartbeat. And we’ve still got low debt compared to most developed nations.

“I’d argue we could go to 40% in a heartbeat. We could double our net debt.”

That would unleash tens of billions in spending. Enough to relocate ports, fix leaky hospitals, upgrade dangerous roads, build enough homes to deal with a chronic shortage. Everything New Zealand anguishes over could be dealt with. The only thing standing in its way are the budget responsibility rules, a self-imposed straitjacket the government put on before it was even elected, essentially because it perceived economic management as the single area which represented its greatest vulnerability to National party attacks. And while they have announced a relaxation of the rules, to a band of between 20%-25%, even that is far too timid for the ambitions of Kerr.

Lest it appear that he’s solely a debt dove for the government, it’s important to note that Kerr is as disappointed in the private sector’s cautiousness. He’s an admirer of new Reserve Bank governor Adrian Orr’s interventionist stance. When Orr cut interest rates to 1% in August, it was a blaring signal that he would act ahead of signs of real trouble to keep the economy buoyant. A message that the ten years of low interest rates aren’t going anywhere. So business might as well take advantage. 

“That has a big impact on businesses,” says Kerr. “So if you come out and say I’m going to cut to 50 basis points and I’m going to keep it there for five years… every business knows that interest rates are not a problem.”

The infrastructure debt exists in industry as much as government. New Zealand’s famously terrible productivity (Denmark works far fewer hours and earns nearly 40% more per capita, for example) is in part because we remain in part a technologically backward country. Fear of making bad decisions holds back government and the private sector alike, but recent years have provided more clarity about where investment could be effectively deployed. What we need is to shake off the collective PTSD that the ‘87 and ‘08 crashes imposed, and start acting decisively. 

Until then, Kerr will continue to bang his drum. After spending the first half of his career absorbing all he could about a particular generation’s rational monetary policy, he has spent the last decade unlearning it. Now he spends his days soaking in the new reality, occasionally removing himself from his spreadsheets to preach this lesson to audiences around the country. 

All he needs now is for those in the crowd, from central government to small businesses, to make like his former colleagues at JP Morgan and start making some big bets. Only then, according to Kerr, will this strange spell that has bewitched the world lose its power, and all the coiled energy of our economy really spring forth.

Duncan Greive is The Spoinoff's managing editor. This article was first published here as "partner content" in paid partnership with Kiwibank by The Spoinoff. It is here with permission but without any part of The Spinoff's commercial relationship with Kiwibank - just because we think it is a useful profile.

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“I never thought I’d have the stomach. It’s easy to say you think the price going to go from here to there, but then to actually put ( big) money on, hold it and decide when to sell – there is another level of stress and responsibility that I think goes beyond my capability.”
Yes. Body and soul-destroying isn't it, Jarrod! and then when you get a moment of...
"‘The market’s broken! I can’t get a price, any price!’… "
It's either frightening or exhilarating, depending on which side of the action you are on. Everything is only worth what someone else is willing to and CAN pay. And what's coming (again) to the New Zealand marketplaces.

Risk/reward in capital markets is mostly broken. Until central banks and governments stop trying to goose markets in the direction of political need they will stay broken. Let the markets do their job of matching risk and reward. Until then the only rational investment is an investment in your own business. There is no risk incentive to invest in productive public assets whilst the value of unproductive assets is being propped up. Governments are hoist by their own petard.

Problem is a lack of businesses investing in their own (core) business. Instead, the world has been seeing a massive amount of investment only in the likes of stock buybacks, investment in efficiency, and "investment" in outsourcing and other cutting of the asset side of the equation to improve RONA. Not enough investment in R&D and innovation that is actually going to show return over the longer term (not so much initially), and this at a time of record low interest rates and huge availability of capital.

As in the Boeing 737MAX story, but playing out similarly if less catastrophically across various industries.

So - obviously intelligent enough - didn't have the skill-set to ascertain what happened.

And still appears not to understand. We need to dispense with debt - there isn't the planetary underwrite for it any more, not even for the debt already extant (the combined forward bets cannot all be assuaged).

And he's still stuck with the economists definition of productivity - which hasn't advanced in 200 years. And the last sentence is almost spin - 'coiled energy' my backside. It's energy we are lacking and will be more and more.

"And he's still stick with the economists definition of productivity - which hasn't advanced in 200 years."
Interesting. Has the equation of mechanical efficiency changed over the previous 200 years?
Productivity (efficiency) is the ratio of output to input. So I fail to see what your point is.

If your point is in fact that the way productivity is measured hasn't changed in 200 years, a simple google search on your part will highlight how categorically incorrect that assumption is.

The laws of thermodynamics certainly updated Newtonian science, in the interim.

My point is that it's still labour productivity, as counted, and that it should be energy efficiencies. That's why productivity is trending towards a flat-line - it's running up against the Second Law.

That wasn't my point. You always try to scoot around a point.
Mechanical efficiency was not updated by a transition to non Newtonian physics - it has and always will be the ratio of output to input.

Labour productivity also implies an inverse energy efficiency. i.e. high labour productivity implies low energy intensity.
And no the entropic law is not why labour productivity growth (in New Zealand) has been declining over a period of the last 5 years.

Human labour can output 75watts of energy doing work. Where is the rest of the energy coming from and is it sustainable? A clue might be that petrol contains 9700 watts of energy in a liter. Do you drive to work Nymad? If so then where is your productivity when you burn more energy getting to and from work than you do working? Do you do produce something with your labour, do you actually output 75kw to do something truly useful to society? If not then you don't really work, you just exist (to nitpick PDK with flawed thinking).

See. You to misunderstand what productivity is at the margin.
Making the argument about all peripheral aspects of existence highlights this.

I don't know what you mean by energy sustainablity. You are referring to fossil fuels?
Why do fossil fuels ever need to be 'sustainable'? Technology allows us to convert the state of energy. It doesn't matter if it costs us 1kw or 10kw to extract 11kw of usable energy provided we have an energy source that is capable of providing a near infinite supply - of which we should all be able to agree we do.

Also. It's not nitpicking when PDK makes outrageous claims. As he is oft prone to doing.

So now it is productivity at the margin, typical of you to move the argument when you get caught out.

Assuming you are doing real work (which I doubt you do) and we reduce your calorific input below the 75w/hr required to maintain that work rate, your productivity is going to go down. This might be because the energy source used to grow and ship the foot takes up an every increasing portion of the calories that were once getting to you. Sure you can keep working infinitely on a reduced caloried intake, but you will get less productive more and more energy is gobbled up in the process of getting it to you. Only way to fix that problem is that you use your 75w/hr directly to produce the calories you need.

Caught out?
When were we ever not talking about productivity at the margin?
It's just ridiculous to make the argument that you need to normalise output by any number of peripheral unrelated inputs.
But based on this rambling argument, I'm not surprised.

Btw Nymad. I've made predictions on here in 2013, there for the record. Based on my revision of the quantity theory of money I said that interest rates would trend down, the money supply would keep growing, and the velocity of money will drop. Three related predictions that are all playing out as expected. Look to the Martensen piece below where he talks about these things happening.

Then tell us any economic theory you have devised that is original and proven predictive. Until you have predictive value you actually need to shut up and go away.

Your revision of the quantity theory of money? Ahh. Yes. I remember the one - it's the one that doesn't make any sense to anyone who understands the theory.
If you could please respond to Withay and my questions regarding it..

Stick to the predictive value Nymad, nothing else has any merit. Your understanding, or lack thereof, doesn't alter the success of my predictions or the validity of the new equation. Don't wander off to safe, familiar, but intellectually lacking, ground that your formal education gave you. You don't understand because no one told you. Which is my point really, you can't do anything new only parrot what you learned. Total lack of intuition, which is why I strongly suspect you are a "Sensing type" in Jungian theory. Another theory you probably don't understand.

So I've made successful predictions, right here on record in this public forum. Where is is your innovative or novel theory with proven predictive value?

Oh please, do butcher some Jungian theory for us too.
Make my Saturday even more entertaining.

The think about Jungian theory, and the addition of Myers-Briggs, is it predictive of behavior. That prediction thing again, something wholly lacking in you, your work, or that which education awards you. At least the club of Rome made predictions that are proving accurate about resources, all without an economist, which you seem to conveniently overlook. Prediction is you won't be able to help yourself to keep sniping at PDK because you think you know better.

Edit. No comment then on my correct predictions, and any prediction you have correctly made based on your own economic theory?

A blind monkey could also predict a binary outcome with a 50% expectation of success.
Explain your quantity theory of money, as requested numerous times, would ever need an identity for interest rate added to it, given that it is captured already in the demand for money (i.e. velocity of money).

Once you can do that, we'll talk more.

"of which we should all be able to agree we do".

Uh, no.

I run my house entirely on solar and solar derivatives - but the EROEI of that is not enough to run your current society on. Why do you think there's all the physical depreciation going on? Too many balls in the air, too many jugglers running out of energy.

So you don't agree that the sun represents a near infinite energy source?

As for your second point - likewise if you were dependent on exclusively extracting your own fossil fuels or smelting your own ores, it would not be enough for the entire society. Luckily however, we have something called economic scale which addresses these issues - These allow EROI to fall in scale. Not that EROI specifically matters, as I highlight above.

Just because one PDK cannot foresee how he could scale his energy conversion to society, it does not mean that it is neither theoretically nor technologically impossible.

"9700 watts of energy in a liter."

Science fail. Watts is a rate of energy release/transfer (Joules per second). Watt-seconds (aka Joules) is a measure of contained energy. And a litre of petrol is more like 34,500,000 J of energy.

he only had to add time - he's right at about 9 kw/h per litre.

And his relative energy point is well made.

Omitting time is pretty important, I would have thought.
It's a pretty important concept in mechanics. Without it acceleration becomes velocity, and velocity is likewise undefined.

Good to hear you would have though.

I'm still laughing at your infinite energy comment.

Look, in simple terms, we use X resources to build refineries, power lines, tanks and tankers, pipelines etc. We spend a bit more energy fighting to folk who made the mistake of living on top of our oil. And we spend an increasing amount keeping entropy at bay, for a never-bigger collection of infrastructure. We do that NOW, and we're in pollutive, draw-down, depletive, overshot trouble. And the finance system is bewildered at the lack of 'growth'and 'productivity'.

Yet you seriously suggest we can multiply that resource-dedication and energy-use by 3 or 10, and still live as we are? Who is going to build that 3-10 times our current energy infrastructure, maintain it?

What I suggest is you read your way through the list of books/sites I put up Friday (it sort of vanished for a bit of the day, perhaps you missed it).

Come back when you're through. Then we might have a discussion.

You'll note I specifically said near infinite.
Given that the remaining life of the sun is counted in billions of years, for all intents and purposes, it is essentially infinite.
You talking in entropy all the time is essentially you talking in a scale you cannot comprehend and reiterates the above. Nor can you conceptually decouple 'growth' from resource dependence.

I did see your reading list. It started with "Limits to Growth" which, as I have said before, I find ironic of you to hang onto given your disdain for economic models. It seems simplified and poorly performing computational models are actually fine when they support your narrative.
Also the usual suspects were in there. A veritable army of back scratchers with little to no expertise in the subjects within which they write, conveniently omitting any empirical robustness, diversity of thought, or regard for elementary level economics.

Their lack of regard for elementary-level economics, is why they should be read.

I'm going to disengage with you - my circles use debate to become better informed; to advance the discussion. It's a waste of time talking to someone intent on filibustering, good luck to you with that. I leave you with a piece from Frederic Soddy's 'Matter and Energy':

"The laws expressing the relations between energy and matter are not solely of importance in pure science. They necessarily come first..... in the whole record of human experience, and they control, in the last resort, the rise or fall of political systems, the freedom or bondage of nations, the movements of commerce and industry, the origin of wealth and poverty and the general physical welfare of the race. If this has been imperfectly recognised in the past, there is no excuse, now that the physical laws have become into everyday habits of thought, for neglecting to consider them first in questions relating to the future".

Note "first'. He won a real Nobel Prize. Pity the Chicago School forgot to remember.

Let's just get this correct, though right... It would be fine if Kate Raworth or Steve Keen won a Nobel Memorial Prize, though. Then it would become a legitimate prize in your eyes.
Luckily for science, that won't ever happen.

"he's right at about 9 kw/h per litre."

No, you've f**ed it up too. When the units don't even make sense you need to go back and start again.

I am aware of the simplification I made. I deal with Joules & Kw/hr all the time. Right now I am working on a project that will save 10 tonnes of wood per unit built to my design, and 40,000 are expected to be built over 5 years. The barrel of oil equivalent is quite impressive. Engineering, you know that useful stuff that relates to the real world, not the theoretical world of most here.

Simplification? You ballsed it up completely, and you just did again: Kw/Hr? Kilowatts per hour? No, just no. and its kW not Kw.

The interesting - and sad - thing to note here is that it's a infomercial. Sad reflection on the difference between a fact-seeking piece of investigative journalism, and the need to remain commercially viable.

AJ - the banks work a margin, regardless of where it is on the spectrum. The problem now is that the spectum, globally, is being squashed down towards (and inevitably below) zero by the plateauing of energy supply, energy quality and energy efficiencies (combined effect). Few have any idea why, but there are more physicists who get it than economists.

This is the classic, from one such:

I see it more as borrowing from the future, which is meant to be more productive. If people stop borrowing from the future some think the Gov't should take over the role. Without consuming our futures the economy would be smaller, less resource wasted.

If %70 of emissions are from coal generators in India and China, there's not going to be much point us suffering under the misguided belief that we some how count, some kind of noble endeavour to make the world a better place thats pure illusion.

Gee velocity of money the lowest it has ever been, and heading lower, who ever would have predicted that.....

Mr Key didn't just 'drop in' to see Mr Jinping, it was planned and there will be something on offer, we will in time find out how much damage has been done, someone needs capital and China has it, at a price.

We have let Central Banks ruin our economies in the West, these low interest rates have a lot to answer for. There is no escape route , no way out without pain and suffering.

This is an excellent presentation

Kerr has a point, a big one. Put simply, it’s that those in positions of influence need to be spending far, far more than they are. Not foolishly, but on making things, investing in the future.

The textbook Keynesian approach is government spending coupled with central bank easing. The bigger the contraction, the more government spending in order to fill in the deepening trough of “aggregate demand.” Beijing has more than enough copies of Dr. Keynes’ textbooks lying around to describe the orthodox approach.

Initially, it seemed effective. Authorities really ramped up fiscal spending via State-owned entities. Regardless of profit or waste, Fixed Asset Investment skyrocketed through this channel. The economy initially recovered; or it appeared to.

It was never accounted for how that miracle wasn’t all that miraculous; it was bought and paid for by an equally rapid advance in global eurodollars. Take away the “dollars” and the growth suddenly disappears. But that’s not in the textbooks. Link

Curious that Mr Kerr should recognise that the model is broken and then promote more of the same as a cure...

'All he needs now is for those in the crowd, from central government to small businesses, to make like his former colleagues at JP Morgan and start making some big bets. Only then, according to Kerr, will this strange spell that has bewitched the world lose its power, and all the coiled energy of our economy really spring forth.'

More debt funded infrastructural growth that further depletes our rapidly diminishing resources? runs in the face of basic physics.....time to abandon the old religion

Great clip. Possibly our most useful citizen, in light of where we have to go.

But we have to have a discussion about 'investment' in future technologies, and future infrastructure or triage. If the investors expect a 'return', then we are back to the same old same old - expecting the return to buy more, and it has to be more resources processed by more (minus efficiencies) energy.

So we need a steady-state economy, to go with the transition engineering. How we get there from here, is a question only being asked by a handful of us. I suggest using the petajoule as a gold-standard; at least money would be related to something real, which it hasn't since Nixon.

“Countries like ourselves have too little debt to start with,” says Kerr
“I’d argue we could go to 40% in a heartbeat. We could double our net debt.”
- When is more debt not the answer for these people? It’s the same answer to the original problem which didn’t fix it then and won’t fix it now.
Inflation just doesn’t work and it eats away at productivity as well. Why risk your money on a productive use when you can leverage up on a house and the gov and banks will force the returns for you.
The incentives have been all wrong from the start of this inflation targeting journey and we can’t fix the problems now because we can’t identify the cause. Rediculous.

We do indeed need to be doing things in anticipation of the future.

The goal should be sustainabilty, which we certainly aren't. Which means more of the same, has to be the wrong move. I look forward to folk like Grieve producing some serious appraisals of the Limits to Growth, where we are on the continue(not)um, and casing the various pathways society could take.

Gee fella's, the conversation is all a bit above me as well. All I know is more debt buying from central banks is probably not going to work. If the problem is debt, how can more debt be a solution? (this is my secondary school thinking here). And I just put a bundle into Kiwibank. Buggar!

Isn't it time that Central Bankers and Bank Economists go away from the scene altogether and leave the populace to carry on their job of living, without fiddling with monetary/fiscal stuff about which (they are proving again and again) they have no clue whatsoever ?

“We had a guy come into the bank, rip out $15m in cash...

I'd like to see that done today! Maybe with advance notice it's possible, but only after being grilled about the intended use of the cash, and maybe 'I'm going to bury it in the back garden' might fly as acceptable answer to the anti-money laundering questions, but from experience, just try rocking up to your friendly bank and asking for even 1/100th of that amount and see how much you leave the premises with!
So, Jarrod; tell me - Would Kiwibank allow that sort of transaction to go ahead on Monday?

Am I missing something? Capacity constraints Haven’t been mentioned. It’s easy to say let’s spend and get lots of new infrastructure, but actually doing this is very difficult as the construction sector is maxed out.

People won't stay if money is easier to come by in other places where the lifestyle is better and it's easier to get to work. What makes getting to work easier? Infrastructure to support the population that you're importing. What do yo need to build infrastructure? People with skills that in high demand in areas with better wages and lifestyles.

At some point someone has to make the call to stop the rot.

I agree with Kerr that we are infrastructure poor, but who will build these projects?

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