Sharp factory PMI contraction in the US; recessions expected in nine US states; China plans huge liquidity injection; dairy supplies hit hard by Aussie bush fires; UST 10yr yield at 1.79%; oil and gold jump; NZ$1 = 66.7 USc; TWI-5 = 71.5

Sharp factory PMI contraction in the US; recessions expected in nine US states; China plans huge liquidity injection; dairy supplies hit hard by Aussie bush fires; UST 10yr yield at 1.79%; oil and gold jump; NZ$1 = 66.7 USc; TWI-5 = 71.5

Good morning, wherever you are. Here's our summary of key economic events over the weekend that affect New Zealand, with news of a sudden elevation in risk, with events in the Middle East adding to economic, climate and political risks around the world.

The downer comes at a bad time for the US. The widely-watched ISM factory PMI fell sharply to its steepest drop in ten years in December and much worse than expected. That is the fifth straight month on decline. New orders fell faster. The data suggests their GDP grew at only +1.3% pa in Q4, 2019, accentuating the economic decline. Given that China's factory PMI is expanding, it is clear that the US is not winning the tariff wars.

And a 50-state analysis in the US shows that nine of them are expected to contract into recession in 2020, the most since the GFC. The most 'interesting' thing about those nine is that they are mostly in the Trump heartland.

American 2019 vehicle sales look like they will be well under 17 mln and that will be the lowest level since 2014.

Meanwhile, the US Fed indicated it is ready to hold its policy settings unchanged for a long time yet.

In Canada, factories are slowing there too, but at least they are still expanding.

In China, not only are they contending with the ASF virus in their pig herd, a new SARS-like virus is spreading in humans and causing widespread unease.

And as the Chinese 'Spring Festival' approaches (starting January 24), monetary authorities are readying a huge cash injection to ensure there are no liquidity issues - up to four times as much as they released last week with their -50 bps reserve ratio cut. That could see another +NZ$650 bln flooding their banking system on top of the NZ$175 bln last week. All up, that is approaching a +NZ$1 tln addition in January alone.

China is about to claim that is nominal gross national income per capital exceeded US$10,000 in 2019. a rise of about +6%. For comparison, New Zealand recorded US$40,640 in 2018, Australia recorded US$53,230, and the US recorded US$63,080.

In Hong Kong, protests continue, the latest by teachers pushing back at removal threats for participating in the demonstrations. All this is having a severe impact on the City's retail trade which was down by an eye-watering -23% in November year-on-year and similar to the sharp October decline.

In Australia, the extreme temperatures and fires are affecting food supplies in Victoria and NSW. The areas of greatest stress are the centres of dairying for both states. Not only are livestock is a bad way on many farms, those that have fodder and water can't get supplies out of the area. Milking cows are under extreme stress. And production factories in the area don't have staff to operate - they are all at home fighting fires or protecting their properties.

Perversely, when this fire season crisis is over, there is likely to be a significant rebuilding of much lost infrastructure, and when that occurs it could be positive for Australian economic activity. Until then, the data will be very negative.

All the while, global markets are trading at 'extreme greed' levels. Volatility is moderate.

The UST 10yr yield will start this week at 1.79% and a -9 bps drop since Friday. Their 2-10 curve has tightened up, now at +26 bps. Their 1-5 curve is much flatter at just +5 bps. And their 3m-10yr curve is moved the most, much narrower at +27 bps. The Aussie Govt 10yr is down -8 bps at 1.22%. The China Govt 10yr is unchanged at 3.19% holding its notable stability. And the NZ Govt 10 yr is also down, -7 bps lower at 1.59%.

And as you would expect, gold is much firmer today, up +US$27 from Friday, now at US$1,552/oz, a reflection of the sudden risks in the Middle East.

US oil prices are more than +US$2 higher at just over US$63/bbl and the Brent benchmark is also sharply higher at just over US$68.50/bbl. Not helping is that US crude oil stocks have dropped sharply.

The Kiwi dollar will start the week very little changed at 66.7 USc. On the cross rates we are also unchanged at 95.8 AUc. Against the euro we are holding at 59.7 euro cents. That puts our TWI-5 at 71.5 and the same level as just before the holiday break started.

But bitcoin is up +1.6% to US$7,450 from where we left it on Saturday. The bitcoin rate is charted in the exchange rate set below.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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Trump says Make America Great and "the stock market has risen by more than at anytime under any president". Trump lies. The facts tell a different story but this being election year the office of POTUS will be working full spin.

I don't think the truth or facts matter anymore - only the perception that "we" are winning or getting one over on "them".

Trump deserves credit for uniting the Islamic world and ensuring that American troops will all leave Iraq though. Truly a 4D chess master.

But he is sending even more troops to the area and there are calls for Iraq to expel the troops based there. The assassination was a tactical victory - but a strategic mistake.

Iran has reacted by abandoning the nuclear deal

EDIT added update re nuclear deal.

"As cunning as a fox who's just been appointed Professor of Cunning at Oxford University?"

So true Zac. This is going to get ugly.

George W created the mess, Trump has stirred it up. The US will get kicked out, the Shia's will unite and ultimately the Sunnis who rule Saudi will get toppled too.

Many Muslim fundamentalists want a war with the non-Islamic world. We could be looking at the start of WW3. But it will not be clear cut. They know they have neither the technology or numbers to take on the west openly, so they will use asymmetric tactics. This will mean a huge increase of 'terrorist' attacks.

The Muslims will just implode. If USA leaves Iraq ISIS will reestablish the caliphate. Iran will try and support Iraq in fighting ISIS but the Sunni's have too much money and numbers and will support the Wahhabis and Iraq will end up another Yemen (proxy war). Yanks don't want this as it will impact world oil supplies. However, if Iraq wants them out then they will have to leave and let Iraq turn to shit.

Iraq turned to shit when it was invaded by George W..

That's history... If you think the USA leaving Iraq will return it to pre-USA invasion stability you're dreaming. If/when the yanks leave Iraq will disintegrate.

Who said anything about it returning to stability? Weather the yanks leave or go its its toast..

OP stated after Yanks leave a Shia world power will prevail that will lead muslims as a force into WW3. I merely pointed out that Iraq without USA air power will disintegrate a lot faster than with USA air power e.g. ISIS would still own half of Iraq if the USA hadn't bombed them into the dust.

I agree Iraq is in the shit but at least the genocide and slaughter carried out by ISIS has been stopped and the caliphate destroyed. If the Yanks leave Iraq will turn into a charnel house again. Basically, things can always be shittier and they will be for Iraq if they boot the Yanks out.

According to the Russians the US just bombed empty desert.

Frazz ..................Iraq has not been stable in your or my lifetime !

Sadam Hussein came to power through a coup , murdered the King , liquidated all his enemies , including members of his Baath party.

During the first annual Baath party conference he read out peoples names and they were escorted out and shot on the spot

He then wreaked havoc in the middle east , went to war with Iran , invaded Kuwait in the South and murdered 60,000 Kurds in the north .

He hung Jewish academics in public , and the Jews fled in terror

The oil wealth was wasted , squandered and stolen leaving Iraqis poor and vulnerable .

.... Iran has hated America for half a century or so .. so , nothing changed there ....

Iran and Iraq have hated each other for as long ... so nothing changed there....

... a terrorist thug was assassinated .... another one will step into his still warm sandals ... so , nothing's changed there . . Same old , same old ...

Is it?

In one of the series of blatant lies the USA has told to justify the assassination of Soleimani, Mike Pompeo said that Soleimani was killed because he was planning “Imminent attacks” on US citizens. It is a careful choice of word. Pompeo is specifically referring to the Bethlehem Doctrine of Pre-Emptive Self Defence.

I am not inventing the Bethlehem Doctrine. It has been the formal legal justification for drone strikes and targeted assassinations by the Israeli, US and UK governments for a decade. Here it is in academic paper form, published by Bethlehem after he left government service (the form in which it is adopted by the US, UK and Israeli Governments is classified information). Link

A bit simplistic, that.

The 'national' boundaries in the ME, were largely drawn in the carve-up by the Brits, French etc. Read Adventures in Oil, Seven Pillars of Wisdom and Daughter of the Desert, for the historical background.

More pertinent is the sect differences, as someone alluded to above. That includes the used/discarded Kurds. And in the back of it all, China needs oil (there is no alternative to energy) and Russia has played a surprisingly intelligent game thus far (perhaps Putin learned from Afghanistan).

But this is all about oil - was in the Shah days, still is. The last reserve on the planet not in superpower control is hoping to defend itself via nuclear deterrence (well, it can't do it conventionally, can it?). And it can't be allowed to do so, by an outfit which has been threatened with expulsion from next door. Throw in that the US-inclined House of Saud won't last forever. Add the fact that Ghawar is down to 3 mbpd and that fracking has peaked (and never turned a buck) and we're in Sarajevo territory.

Had to happen. Not enough planet left (particularly not enough fossil energy left, and to be last man standing you have to be using the most energy) and far too many inhabitants. It's always let to a fight. Because our social narrative (including our take on history) is false, we fail to grasp this link; both world wars were merely such resource-scraps. WW3 is inevitable, ex financial collapse.

In the 50's the West made a promise to Iran that it would help it to develop a nuclear electricity network to lift millions of its people out of poverty.
The problem with democracy is we change government every 3-4 or 5 years and so does policy. Iran has a lot of poor people but also some big cities with a more modern outlook. The Mullahs are dependent on those militant less educated people for support, birth rates have collapsed in the cities but still high in the country.

When Mossadegh was elected the Mullahs controlled less than %20 of the electorate but Mossadegh wanted to nationalise the oil industry and that was unacceptable to the oil companies/ barrons that had a lot of political clout, also the cold war was getting into gear and the West wanted certainty of supply, although Venezuela could have done a lot of that, as it had in the past.

Western growth was very dependent on cheap oil and the US was growing fast and building new cities and enjoying unprecedented middle class growth, Europe was in recovery from WW2 but things were looking the better than they had for decades. Iran oil was part of British Petroleums field of interest, the Yanks got Saudi in a gentlemen's agreement.

Iran is not an Arab country, it's Persian or mostly Persian. They were not complicit in the Twin towers bombing, they do not support Wahhabism and the extreme Sunni sects. The Kurds are a nomadic tribe from northern Iran and were nomadic in Sykes Picot times. There will never be a unified middle east force because they are such different cultures, Iran has a very rich and interesting past, Saudi has a dark foreboding past and perhaps future.
Iran was against ISIS because ISIS was created by the West as a tool to further interests, political and corporate, in the middle east and had close links to and funding via Saudi. Kuwait and Qatar are very wealthy family controlled countries with no interest in fighting anyone.

All the oil producing world is up against the cost of extraction vs the ceiling that western consumers can afford to pay. They all need oil up over $100 and that includes Saudi.

Just my thoughts please feel free to correct errors.

Just as Iraq begins to find peace, it once again becomes the battleground for an American proxy war

no one is ever going to unite the Islamic world.

@Zachary; "Trump a 4D chess master" You've got to be kidding! Trumps only move is a very clumsy one to try to start a war, so he can distract the US voters away from his impeachment trial.

Yes I agree CJ. The US economy is not performing well and worse than average so what better way to unite and distract viters than put the country's focus on one of its enemies. Not on topic but Ardern and crew will also be studying the political playbook and talk up the economy when it's not performing.

Yes I have seen that angle put out there before. To me it's like the retort used against those who criticize arderns performance ... they hate female leaders. Iran is run by war-mongering radical Islam intent on destroying other countries. Muslims try to portray Islam as a peaceful religion which it is not

It's not that I hate Adern or Women it's just that I feel this Labour party is more interested in staying in power than meaningful change. They are worried if they do something it could antagonise %5 of the electorate and next election they get turfed out. So they do nothing while pretending to lead and create a positive images.

Worked for National for 9 years?

I've been following a debate about people trying to get into the Wellington housing market.

'So went to an open 2pm - 3pm flat viewing and by the time we arrived at 2.08pm the flat had been rented. Last place we went to had a queue out the door. Several we've RSVPd to the open day have been rented without people even viewing them. The rental market is beyond broken.

Not to mention we are a married couple with no kids or pets and have well paying jobs... I really feel for low income families right now.

The email we received after being greeted by a note on the door:
This flat rented very quickly.
I received over 80 applications (CVs and references many with photocopied IDs etc) before last night with the first viewing scheduled today at 2pm.
I reference checked 20 groups yesterday and there were 6 of those groups waiting from 1.15pm today.
As my office is at the front of the same building I showed those groups through the property and most wanted it. Good luck with your flat hunt.

Correct re Wellington - although they always copy and paste the rental horror stories at this time of year (students retuning). We left Auckland as price of housing nutty - we will be doing the same this year as Wellington now equals this nuttyness. East Cape looks cheap at the moment?

That was a senior RNZ staff member. My daughter is returning to London Uk, better pay cheaper housing she tells me.

Right - then I forsee some Students living in tents this year in Welly.


Frazz, you fool.
JK and Wild Bill told us that this is a good problem to have.
Stop being so gloomy.

"at the moment"
Those three words tell you what might happen in future. Rent-vesting is how some handle home ownership.

Reminds me of renting in Christchurch just post the earthquakes.

Meanwhile, the US Fed indicated it is ready to hold its policy settings unchanged for a long time yet.
The Decade Ends In the Same Place As It Began
2019: The Year of Repo

Interesting times indeed. My sources think there is something bigger behind the Repo crisis, but are unable to be specific. The Euro banking system in a critical state seems most likely.

Crises usually strike from left field unless you have inside information, which I do not. It seems the repo crisis is coming from Euroland. US banks are refusing to lend overnight except at 10% plus, even with good collateral. Maybe the Euro splinters, maybe a group of Euro banks are stuffed and need a bailout. This is just speculation, but crises start slowly and then blow up unexpectedly...

Some are also suggesting Japanese Banks are in trouble suffering from a prolonged period of zero interest rates

Correct. Some of have suggested that a global financial crisis could start from Japanese regional banks (not the Japanese bank brands you might be familiar with) as they get squeezed on their foreign investments as the Western world charges towards ZIR / NIR.

These banks are so large -- with over $3 trillion of assets, or more than twice the size of Australia's gross domestic product -- that if they were to collapse in greater numbers, the effects could be felt globally.

Even if these regional banks do not blow up, they are still a problem for the BOJ, which has been throwing liquidity into them. The less they lend as demand falls, the lower the odds the BOJ will alter what Kuroda calls Japan's "deflationary mindset."

Thanks for that. Three lost decades for Japan and one lost decade for Euroland, due to a crisis response becoming policy? The function of interest rates is to encourage capital to flow to where it is most productive. Low interest rates subvert this. Where did these dopey ideas come from?

On another sad note, I noticed that the conviction rate for criminal offences in Japan is 99%, a sure sign of a police state where accusation equals guilt. An independent legal system is a cornerstone of a modern economy, or so I thought.

Thanks for that. Three lost decades for Japan and one lost decade for Euroland, due to a crisis response becoming policy? The function of interest rates is to encourage capital to flow to where it is most productive. Low interest rates subvert this. Where did these dopey ideas come from?

A couple of points. Japanese regional banks are sitting on mountains of private savings. Think of how conservative Japanese farmers are with money and their attitude to savings, but their banks have been paying little interest. Furthermore, the banks are so risk averse because of culture but also still the fear of what happened after their humungous bubble. It's a far cry from NZ and Australia where our leaders, institutions, and populace believe in things like housing bubbles as a key pillar of the economy.

Kind of ironic really as NZD and AUD have been easy vehicles for the Japanese banks.

For the curious.
Maybe critical thinking is a skill, a skill that needs be learnt. Learnt & used.
Comments about insular thinking in bureaucracy, and groups in society.

It appears that scientific bush fire experts have been warning for several years that a catastrophe would be coming and yet these warnings have not been headed by government or their bureaucratic officials.

See links to
Royal commission
State parliament
Channel 9 news
2 GB news

Australia's political landscape is incredibly captured. Furthermore, cronyism is rife. You don't have to scratch far below the surface to understand this. Incompetence throughout seems to be order of the day, which is quite discomforting.

Life imitating art!

Wellington as we speak

This is all the fault of climate emergency crisis, yet some people are still in denial. If people deny gravity, that is fine, I just laugh at them but if they deny climate change they are litrally Hitlar.

Yep, it's a skill.

Not many have it, and it's a laugh to see a spinner doing the old switch routine.

The scientists have indeed foretold that this would happen.

Just some of you chose not to listen, then chose to actively obfuscate. The question, as ever is: Why?

A possible pandemic starting, as it usually does, in China is good news for those warning us of the disasters of man-made climate-change. Like David Attenborough, I am of the opinion that the underlying cause of climate change is over-population. A recent opinion by a well-known climate-change believer ( whose name eludes me) says that it's probable that mankind's (womankind's?) current population of 7.5 billion could be reduced to 1 billion by the 21st century through all the disasters that spring from over-population. Viruses, in common with the cells of all life, took 4 million years to evolve before any higher organisms could start evolving. So they can just as efficiently compete with humans...and win! A good example is the Black Death:

The Black Death wiped out 1/3 to 1/2 of Europe's population at the time.

Not to mention the influenza pandemic of 1918 which wiped out more people than were killed in WW1.

A possible pandemic starting, as it usually does, in China is good news for those warning us of the disasters of man-made climate-change. Like David Attenborough, I am of the opinion that the underlying cause of climate change is over-population. A recent opinion by a well-known climate-change believer ( whose name eludes me) says that it's probable that mankind's (womankind's?) current population of 7.5 billion could be reduced to 1 billion by the 21st century through all the disasters that spring from over-population. Viruses, in common with the cells of all life, took 4 million years to evolve before any higher organisms could start evolving. So they can just as efficiently compete with humans...and win! A good example is the Black Death:

The Black Death wiped out 1/3 to 1/2 of Europe's population at the time.

Not to mention the influenza pandemic of 1918 which wiped out more people than were killed in WW1.

Looks like Micoplasma Bovis may be back. This will be a disaster as so much time/energy/$ was used to'eradicate' it.

Could well be. Don't forget that MBovis started on National's watch. Nathan Guy was the Minister of Agriculture at the time, but of course he couldn't devote too much time to it as his priority would have been his residential rental portfolio... when all parliamentarians had to disclose their assets it was revealed that Nathan Guy had 21 properties which was the most of any other parliamentarian. This is fact.
So, not much time to devote to ministerial duties I should think.
The other thing was the the industrial cow concentration farm where the outbreak first occurred happened to be owned by a farmer with a Dutch surname as did the farmer which owned the Southland farm where the second outbreak occurred. Maybe it was just a coincidence and I have no evidence to back this up, but the rumour that I heard (and I stress its only a rumour) was that these farmers from Holland used their accumulated EU subsides to buy up NZ farms and industrialise them. It was rumoured that they imported tainted semen which contained the MBovis virus. So, what was Nathan Guy doing at the time...empire-building his residential rental portfolio?

Well I do 't think Guy needs to be the one swallowing the dodgy semen to test it. MPI's job I would have thought. Good to see Guy doing his bit to put roofs over peoples heads.

Back? it never left..

And it wont leave. How can you get rid of something that hides so well amongst a population that is quite vast and moves from one end of the country to the other in a couple of days. Meanwhile the guys chasing it are in slowmo.

Jakarta news, flood not fire

Monsoon rains and rising rivers submerged a dozen districts in the greater Jakarta area from Wednesday after extreme torrential rains hit on New Year's Eve, causing landslides in hilly areas on the outskirts of the capital that buried scores of people.

At least 60 people have been killed while hundreds of thousands of people have been displaced.

More than a thousand soldiers and health workers sprayed disinfectant in hard-hit areas on Sunday to anticipate possible diseases spread by flooding, such as dengue and leptospirosis, a potentially fatal disease spread by rat's urine, said Ridwan Carman, who is in charge of emergency response and recovery for the Indonesian Red Cross.

More climate emergency crisis.

What makes you say this.
It's more a sinking feeling
Extreme weather

It's taken a bit of planning.
Jakarta is also especially vulnerable to flooding because it is the fastest sinking city in the world: a combination of sea level rise and land sinking caused by the drilling of groundwater wells and the weight of its buildings means much of North Jakarta could be underwater by 2050. Because of this, Indonesian President Joko Widodo announced plans to relocate the capital last year.

The geographical location of Jakarta is a key factor in its flood risk- it lies on a deltaic floodplain and has 13 rivers flowing into the metropolitan area. The headwaters of these rivers are the southern highlands of western Java.
Likewise, the coastal regions in Jakarta are highly susceptible to flooding due to land subsidence. The northern Jakarta region is estimated to be sinking at approximately 15-25cm every year (The World Bank 2016).
Between 1974–2010, northern Jakarta subsided by approximately 4.1m, while eastern and western regions of the city subsided by approximately 1.4m and 2.1m respectively (Global Facility for Disaster Reduction and Recovery 2013).
This is predominantly due to rapid removal of freshwater from the aquifers beneath the city as inhabitants create illegal wells to access the water.
Although Jakarta experiences high annual rainfall totals (~1855mm), the aquifers are not fully recharged, a problem exacerbated by the urban land cover ( 2018; Kimmelman 2017; Lyons 2015).

That a powerful need to deny, to obfuscate, really.

Mind telling us what you represent? Fed Farmers or something equally dinosaurish?

Half of the city is located below sea level - plans have been in for a sea wall for the long time - but sponsoring Formula E is more of a priority for the elites. Virtue signal is far more important in Australia and Indonesia than the plebs.

"Jakartans, many of whom are still reeling from the effects of massive floods on New Year's Day that have so far killed 43 people and forced more than 400,000 people to evacuate, were angered that the city administration has allocated more than $100 million for the race, higher than its flood mitigation budget. "

Chuckle, There goes the other dinosaur.

Divert attention from Climate, on behalf of the fossil (quite appropriate, really) industry.

I prefer Russel Crowe:

Golden Globe winner Russell Crowe. "Make no mistake," his speech ran, "the tragedy unfolding in Australia is climate change-based. "We need to act based on science, move our global workforce to renewable energy, and respect our planet for the unique and amazing place it is. That way, we all have a future."

And that's the truth. Dinosaurs, stand aside - and expect growing ridicule from a growing cohort. The game has changed.

Yes, of course you would prefer Russell Crowe. From 2015": "Forest fuel levels have worsened over the past 30 years because of "misguided green ideology", vested interests, political failure and mismanagement, creating a massive bushfire threat, a former CSIRO bushfire scientist has warned.
Victoria's "failed fire management policy" is an increasing threat to human life, water supplies, property and the forest environment, David Packham said in a submission to the state's Inspector-General for Emergency Management.
And he argued that unless the annual fuel reduction burning target, currently at a minimum of 5 per cent of public land, "is doubled or preferably tripled, a massive bushfire disaster will occur. The forest and alpine environment will decay and be damaged possibly beyond repair and homes and people [will be] incinerated."
He said forest fuel levels had climbed to their most dangerous level in thousands of years."

Profile, there is something else too.
A hysterical ring.
A derangement syndrome.
People lose comprehension skills

Where a number of different issues and issues of different importance/risk are conflated into one. Everything becomes one, and that conflated one is code red.

Climate Change and its Impact on Human Health

Climate Disruptions

Nationally known and community-focused psychiatrist David Pollack, MD, provides insight as to how climate change impacts human health in his article in the Psychiatric Times journal called "Climate Change and Its Impacts on Mental Health." Pollack refers to specific instances of climate disruption including excessive CO2 levels, rising sea levels and global temperatures, droughts, and other extreme weather events that merge to threaten the worldwide stability of individuals, communities, and nations.[13] Pollack emphasizes how mental heath consequences of climate disruption typically last longer and require close attention and understanding of psychiatry to effectively identify and treat. Pollack continues to further define the term eco-anxiety with a cluster of related terms such as “eco-paralysis,” “climate anxiety,” and “climate grief,” which all could be considered psychoterratic syndromes. "Psychoterratic" has developed as the term that covers all forms of earth-related mental health issues.


I would refer you to How to understand natural disasters in a climate change age. "When I look at any of these events and see the headlines, it's almost always a situation where the disaster is caused by natural variability and the climate change part is making it worse". That was said by Lisa Goddard, director of the International research Institute for Climate and Society at Columbia University.
I agree. we are just not able to pin any single event to anthropogenic climate change, but we are increasingly able to say with authority that climate change is amplifying the effects.

@SKUDIV ................BOLLOCKS not climate change of Jakarata are just a few cms about the high tide mark AND this is happening because Indoneasians have been drawing water from under the city for decades , and its sinking ........the sea is not rising ................if the sea was rising it would rise everywhere


"the sea is not rising....if the sea was rising it would rise everywhere". That would be news to the National Oceanic and Atmospheric Administration(NOAA). You might want to read their article headed; Is Sea Level Rising? yes, at an increasing rate. This also addresses the point that it does not rise everywhere for a variety of reasons. For example, in areas still rebounding from the last ice age.

Sea levels are measured using tide stations and satellite laser altimeters and these show unequivocally that sea levels are indeed rising. There are 2 factors at play; thermal expansion as the oceans warm and the melting of land based ice.

Really, are Kiwi Mum n Dad paying high premium specially now when the stakes are so high ?

I just had a WTF moment .

I see Gareth Kiernan is banging on about the need for a wealth tax (in Stuff )

Thankfully these fringe lunatic ideas never really get traction because most sensible people can see through the ruse and know its nothing but a complicated and unworkable RESENTMENT TAX .

Lets get something clear here ............Not even the Chinese Communist party does this this to their people , so why would we elect a Government that does this to us ?

Quite why we give any oxygen to these ideas , let alone column space, eludes me

Besides the fact the Government is running a budget surplus , and clearly does not need to take any more of our money away from us , we all know that values of any asset rises and ebbs and so its almost impossible to tax wealth on deemed asset values in a free market economy , at least not without destructive consequences ............... and thank God for that .

A wealth tax would mean that the increased value of my practice , our home , our share portfolio , our Kiwisaver , our other investments and passive interests in a few small businesses would need to be assessed annually and a massive cost incurred in doing so .

And how would you value my yacht and fishing boat which are recreational assets, and generate no income whatsoever , when in fact these are assets that cost money to keep and maintain and store ?

And why should my assets be taxed on some arbitrary basis , with the rules set by an academic or anti-capitalist like Michael Cullen , who has never had to actually make a Dollar in his life ?

If we happen to have increased personal wealth by being frugal and careful and not wasteful and spendthrift , then I dont see why after 40 + years of work and saving and investing , it should be taken away from me .

Besides , I would have to liquidate assets to pay the tax .......... and that would be a massive incentive to many people to either hide assets or cheat.

Either that , or it would be a massive disincentive to any form of capital creation by individuals .

However you look at it , its going to be a nightmare to administer and collect and quite destructive , more so for young people who will be leveraged to the hilt

If you thought we had an issue with Aussies owning all our Banks and Insurance companies now , or the Chinese buying our houses and farms , just imagine what it would be like if our capital base was gutted by a wealth tax, so the whole country and the NZX would be bought by foreigners when we scramble to sell assets at fire-sale prices to pay a wealth tax ?

Sorry Gareth , this idea is just garbage

Boatman. How else do you propose lifting the middle and lower classes so they can be more active members in our economy? So they can feel their standard of living improve rather than decline?

Poor people can't afford to be consumers. Right now people are getting poorer as a few rich people accumulate assets, then charge a premium for people to use them. NZ is no longer the egalitarian society we knew and loved. It is becoming a class society with a landed gentry. This is bad for society and bad for the economy.

How do we solve that? Trickle down economics certainly doesn't.

My generation is being locked out of home ownership and burdened by student debt, while paying for the increasing healthcare and superannuation of an aging population. We can see climate change on the horizon (literally). We cant afford to buy our own homes, and we delay starting families. If we can't work towards those things, whats the point? This is why different narratives are getting more air. We want solutions, not more of the same. Do you have a solution for the issues of mine and future generations? We want real systemic solutions, that work for the majority, and don't just take from the poor to give to the rich.

My kids are 31 and 34. One had student debt, the other didnt. The student debt one paid hers off years ago. She is currently contracting earning $1000/day. The other offspring makes similar money per day. He did a bit of training, but wasnt into apprenticeships, at a very young age he bought the machinery required and went contracting. Both have significant debt. Both are struggling with council costs to build a home. But they are getting there with a lot of physically hard work. Boy do they hate the unemployed and the grifters. Ardern comes in for special attention. And they dont care for Bridges. The watermelons are loonies. (Their opinion)
I cant believe I reared such conservative kids. Neither stayed at school. But both are rural. I swear there is something about children seeing life and death at an early age. Seeing physical hard graft and taking part in it.
Whatever the faults of society are at the moment, many youth arent helping. From doing study that just creates debt and not a job, to just plain physically lazy. To not going looking elsewhere for opportunity. I live next to several small north island towns where a house will cost $250k. There are jobs. If that isnt opportunity I dont know what is.

I will add both were too fussy and late to getting their first home which has been to the detriment of their financials now. I could not convince the young fella in particular to buy small to start with. He had 4 kids to fit in a house and just would not entertain anything small. Even if it was short term.
I had 2 kids and us in a 60m2 cottage that would come close to blowing off the bank when the wind blew. There was no insulation of any sort. The 70 year old wallpaper moved with the wind. But the children were really healthy. Despite being in a very wet, damp and cold climate.
I know this my day stuff....but really people need to toughen up. People want so much for so little and think they are owed it. Life owes us nothing. We have a gift. And we need to look to ourselves to survive and flourish in the medium we are given.

@M-W .................. here are the solutions for Government

1) Reduce taxes on the lower income earners so they do not need to go cap in hand for help
2) Foster a savings culture for ALL New Zealanders
3) Limit student debt to tuition only , not res fees and all manner of nonsense
4) Make Usuary illegal where the interest exceeds the capital borrowed

and for individuals :-

STOP COMPLAINING and do something about your financial position

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