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A debt jubilee, universal basic income and regionalism rather than globalisation, are among Steve Keen's key solutions to the COVID-19 pandemic and resulting steep economic downturn

A debt jubilee, universal basic income and regionalism rather than globalisation, are among Steve Keen's key solutions to the COVID-19 pandemic and resulting steep economic downturn

A debt jubilee, universal basic income and the reversal of globalisation are three things Steve Keen wants to see in response to the COVID-19 pandemic and resulting economic downturn.

Keen, a professor of economics, describes himself as a staunch critic of the mainstream. He hit the headlines back in 2010 after losing a bet with Macquarie Group interest rate strategist Rory Robertson that house prices would sink by 40%. As a result he had to walk more than 200km from Canberra to the top of Australia's highest mountain, Mount Kosciuszko, and used the walk to raise money for a charity that helps homeless people.

Keen is currently hunkering down in southern Thailand during the COVID-19 pandemic. With the economic fallout resulting from the pandemic already becoming enormous, has the time come for unconventional economic ideas and out of the box thinking?

Speaking to, Keen outlined some ideas he believes governments and policy makers should be adopting.

Firstly, Keen says, they should be implementing a modern debt jubilee now.

"It's quite feasible to do it [but] I never thought it would happen. People asked me what chance I thought this had of happening. I said it's less than a snowflake's chance in hell. We are in hell now and the only way out of hell, as well as getting a vaccine for the virus, is to reduce this burden of private debt otherwise we'll have a financial collapse after the coronavirus," says Keen.

The alternative, he argues, is mass loan defaults.

"You simply have to accept that debt can't be repaid when too much debt has been issued. So we have to reduce private debt and we have to do it now. [We] should do a debt jubilee now, not once we get through this crisis. Otherwise there'll be many people who can't pay their rent, as well as people who can't pay their mortgages," says Keen.

"If we do it now we'll enable the payments system to continue functioning. If we don't do it now then it's quite possible the payments system will collapse. Small businesses won't get any cash income, households won't get wages. Everybody will end up having no money in their bank accounts because that money will be used to pay off debt."

What Keen's advocating for is governments' capacity to create fiat money being utilised to distribute an equal amount of money per person across entire countries. 

"And people who were in debt would get their debts reduced, either by an offset account or by actually paying their debts down. People who are not in debt get a cash injection. And that cash injection can also be used to buy newly issued corporate shares which are used to pay down private debt. So as well as reducing household debt, you reduce corporate debt and you also democratise the ownership of corporations," says Keen.

There's more about a debt jubilee in Keen's blog here.

With unemployment surging Keen's also keen on universal basic income, or a guaranteed minimum income for all citizens.

"To have a functioning economy you have to have people spending money and most people get their money to spend from their wages. And that therefore means they're dependent on having a wage income. That's fine most of the time. But this is not most of the time. The only way we're going to defeat this virus is by an effective lockdown process. It could take, if it was done sensibly, as little as five weeks of lockdown to terminate this virus," says Keen.

"But possibly 70% of the population can't afford not to work for five weeks. Now, in that situation the only way to remedy it is to say let's use the government's money creation capability so that all the payments that are necessary, including rents and mortgages, can be made over that five week period and then we can get through this."

"What effectively happens is the economy's in a coma and we're expecting the cells within that body to continue functioning while the body itself is in a coma. It doesn't work that way," adds Keen.

A critic of globalisation, Keen's hopeful the post-pandemic world will be more regionally focused.

"Globalisation, thank god, will go into reverse because it was always a bad idea in the first place," says Keen.

Whilst pro-globalisation economists argue it's about efficiency and countries exploiting their comparative advantages, Keen disagrees. He argues that whilst workers can be retrained to switch industries, capital is not mobile between industries. Furthermore globalisation exploits low wages in third world countries even if this has benefited some countries, notably China.

"We've de-industrialised the West and now of course what do we need? Industrial capacity to produce, for example, ventilators which even America can't do sufficiently itself. So we have to go to a localised production system," says Keen.

He advocates for regions of the world that are big enough to produce most of what they need themselves, meaning less need for imports and exports with potentially a growth instead in the exchange of ideas.

"There's far less pollution from international trade, and there's also far less mobility for a virus to spread," says Keen.

Asked whether he was worried such a scenario could ratchet up competition between the world's major powers, potentially leading to war in a 1930s type scenario, Keen argues austerity not protectionism led to World War 2, beginning with the harsh repayments forced on Germany after World War 1.

"Go back to having a regional system, do it deliberately to enable one region not to infect another, in terms of diseases like the coronavirus, then it's done for a positive reason rather than a negative one of autarky which is how it's normally portrayed by conventional economists," says Keen.

New Zealand, he suggests, can be largely self sufficient and do well in such a scenario. He talks more about this, and other issues, in the video.

*This is the first interview in a series looking at reactions to and potential policy responses to the coronavirus pandemic and evolving economic downturn.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.



"we have to reduce private debt and we have to do it now"
Spot on. This may or may not be the way to do it, but it has to be done. And extending MORE debt to the Private Sector without strict scrutiny is not part of any plan other than lunacy. Any existing debt will need to be repaid - as its scheduled to be - and NOT replaced with new or rollover debt unless it fits the criteria of productive investment. (See below)


The money being spent by the .... government is not going to create inflation in the short term. And by short term I mean 3 to 4 years. It will take longer than that to get through all of this.
What will landlords do when their banks want payment and their renters can’t pay? Think they will easily be able to find renters who can pay? How much bank capital will be destroyed in write-offs?
Yes, that is going to blow the budget out. It is going to mean even deeper deficits and even then many will be without a job. We may actually need a real infrastructure program to create jobs, spread out over several years, to fix our ailing water systems, electrical grids, roads and bridges, etc. Now that would be honest-to-God stimulus, as opposed to the mere replacement of lost income. At least we would get something real from that money.

Something is going to have to be done if we are to avoid a recession spiralling into something much worse, eg bank failures and depression. It needs to be politically acceptable and worldwide. I can see QE + helicopter money to the masses, and just enough inflation to melt away the huge debts over time. And tough regulation of new borrowing to prevent a new debt bubble.
Would that work? I dunno, but would welcome any other thoughts on what is going to be the plan.

I think that assumes that there is some magic central bank or government that knows and can implement the perfect intervention.

Every economic intervention ever made has unintended consequences. Did post GFC-QE save the worlds economy or did it compound all the flaws in late-stage-capitalism? Depends who you ask. But clearly, we are all still living with the consequences.

Something will be done. But we might not know if it was more poison than cure for 40 years.

Ideally we would see the crisis as an opportunity for change. Sit down with a blank piece of paper and write up the way we want things to be in the new economy.
But in democracies it has to be politically acceptable or the government of the day is turfed out. Turkeys don't vote for an early Xmas. Maybe if the voters stare into the abyss for a while they would be ready. But until that point is reached, the government will try and kick the can the most popular way.


If the majority get shafted or end up carrying the burden for the rich/elite - watch out for a revolution.

Ask John Key and his mates what they think of the trickle up theory

I think that’s extemely likely to happen, especially in the USA. Lots of support for the big corporates but not flowing through to Small and medium sized businesses. We must keep the big corporates out of New Zealand. They are not here to help us but rather to take us over so they can call the shots.

Inflation will result in higher interest rates, it will only make matters worse. I suspect the best response is even lower interest rates and no principle payment for a few years. Kick that can even further. Mind you I also suspect the long term COVID economic problems will be much less than Keen and Moulden do. They have been incorrectly predicting economic apocalypse for decades now.

They would be in good company with the majority of the economics profession, who constantly predict a financial Nirvana the next near.

Maybe. By my reckoning predicting 3% growth and only getting 1.5% is not as wrong as predicting a 40% drop and instead getting growth year after year.

How is this sustainable long term. Ever since the GFC, interest rates have continued to be lowered, even though we have experienced huge growth and good times. I can't understand why we kept reducing interest rates during these good times, except to control the NZ dollars value, to protect exporters. But the downside is NZers have taken on more an more debt, using houses as the vehicle. But now we have nowhere to go.

Agree it’s not, but I do see COVID as a one off event worthy of very low interest rates. It’s a pity we didn’t have higher rates to start with so we could have an big drop right now. I like interest rate targeting to try and stamp out inflation like we had most other decades - but it doesn’t seem to work to create inflation.

That's because it wasn't so much the high rates that stamped out inflation it was the abandonment of full employment, fiscal austerity, and shattered collective bargaining. Oh and the end of the oil shock.

So, either way, effectively transfer wealth from hard working savers to those who over leveraged. Just more folk asking to be protected from their own risk taking.


Yes totally agree, that NZ has been forced to take on more debt due to National stoking the FIRE economy (Finance, Insurance, and Real Estate), by allowing foreign buyers to asset strip our property for many many years when they were in power. Forcing the rest of us to fork out for even more bloated mortgages and rent.

There is a very fitting solution to help raise much needed Government revenue; "Tax Empty Homes"!!!!!
Potentially an Empty Homes Tax in Auckland city could generate yearly revenue of: $405,747,900.

This tax on empty homes has worked very successful in other major cities that were also had they property prices massively increased by Foreign Buyers, Speculative Investors and Money Launders. Take Vancouver for example they managed to rake in $30 million from empty homes tax in first year and their number of empty homes has reduced by 14.6% since 2018, making them available for rent/sale. Auckland 39,393 unoccupied dwellings, that's fifteen times more vacant homes then Vancouver had before they introduced their Empty Homes Tax.

So knowing that most of these empty homes are in the multi million bracket even if you taxed them at 1% year based on their 2017 CV (Council Value), they could generate an average yearly revenue of $405,747,900.

This calculation based on Auckland City December 2019 median house price of $1,030,000. Evidence here:
Auckland median house price $1,030,000 - 1% yearly tax = $10,300 per empty home. x 39,393 Auckland officially unoccupied dwellings (Based off recent census results) = $405,747,900‬ potential in revenue fist year of Auckland's empty homes tax!! A Win! Win! for NZ residents since this can help to build new homes.

Sure there will be some money grubbing Aucklander's out there who will object to this tax, But that's probably because they're living overseas and leaving their property empty for over six months a year. What I say is, if they can afford to leave a property empty in a major city for long periods of time then they can afford to pay tax on it!

Grinch Goff would agree with you one hundred percent.

I love this guy Dr Steve Keen, for his off the wall ideas. It sounds like he has 3 vacant houses himself so is he actually advocating for his own desperate mortgage relief hahah. Free money on the double to those who found themselves in trouble only encourages financial mismgmt because why save when the govt will be there to save YOU. Forgive debt and issue UBI with 100 billion funny money. And for a bit of perspective the 6.6 billion wage subsidy handed out so far over last 4 weeks is already twice the amount of the PGF fund which is for 3 years. Ps I dont really love him or his quirky message


Over two and half years and Jacinda despite all her promises hasn't delivered on houses.
You take on debt, you pay it back, that is how the world works. The handouts need to stop.


To have a functioning economy you have to have people spending money. Insisting on debt repayment no matter what forgets that this will bring the whole show down. The old system is on a ventilator....


I think the system will survive in some form - the over indebted will lose houses etc, and the cashed up will benefit from reduced asset prices. Bad loans will cripple the banks, and I expect they'll need government support. So long as that is done on commercial terms, I don't see the problem.

Then going forward, people will hopefully have learned to live within their means (potentially with increased regulation over debt levels to prevent a similar debt bubble occurring in the future).

I'd rather see this sort of correction, than the bailing out of the over indebted.

More of the same after the correction? The system is broken ....need new system.

You would think that Kiwi's would be understanding the Boom / Bust system by now. The system was overdue for a correction but they still kept jumping in and now have been burnt.
Whatever the new system is there will be boom / bust cycles that will be played and there will be winners and losers. We just let natural selection do it's job.

Yes but this could be the meeting of both the short and long term debt cycles. Not just the usually boom/bust I don't think. Have a look at what Dalio is talking about.

We were due for a good correction, the 2/10 had dipped below that indicated a recession within two years. It was coming and it was going to be finishing off what 2008 started.

True - almost forgot about that after everything that's happened. I started de-risking when that started unfolding hoping the indicator would hold true.

Yeah that was the 'tell' and everyone knew it happened and then said it hadn't come true this time. They forgot the 'within two years' after it dips below.

What do you define as living within your means? I don’t think we have a problem with that, the problem is that the means are gonna disappear. Are you saying you have never had debt and at every stage of your life you could lose your job and still live within your means? You sound very lucky.

Yes, the means are likely to disappear for a while for many. With an appropriate level of debt, you would have headroom to accommodate this sort of situation without the bank having to call on its collateral. Sadly, a lot of people have determined an 'appropriate level of debt' to be the maximum that a bank will lend you, and keeping up with the lifestyle of the Jones' to be more important than establishing a rainy day fund.


Agree with you cj on an empty home tax.
I think it is a fairer tax than a cgt or land tax.
How about a two property limit in nz?
We would have to have a 5 year timeframe so people could sell their excess properties.
There needs to be changes and it's great to hear everyones different opinions on the subject.


Yes agreed that an Empty Homes Tax is fairer then CGT or Land Tax, the nice thing about it is helps to unravel the damage done by Speculative Investors who just wanted to use NZ as a Swiss bank account, so this tax would be largely targeting them. Also good to look at the experiences of other countries/cities that have introduced it such Vancouver and Paris, they've had good success stories especial Vancouver's EHT model.

And you're right there needs to be change, we can't just keep stoking the FIRE economy and home for the best.

I like it. Have you written to any politicians?

Yes and I know it's under review, also heard on the grape vine that some of our politicians have already been out to Vancouver to further investigate how a similar scheme could be implemented here (At least for Auckland). Though I'm sure if you and others who like the Vancouver style Empty Homes Tax idea got in touch to lend your support, we could get things moving a help our Government collect some very much needed tax revenue that could be used in our hospitals and building new homes. One thing the Vancouver Government found is that most of those paying the EH Tax were Overseas Investors who couldn't vote in Canada. I think we would find a similar empty homes profile for AKL.

Who have you been in touch with? I can follow up

NZ does not have 39x the vacant houses Vancouver does.

I have previously pointed this out to CJ099 that his numbers are wrong but he obviously hates empty houses with such fervour that it is clouding his judgment and still is repeating it.

But it’s just simple maths, so here is the question, comparing apples with apples, ie Auckland to Vancouver, how many vacant houses on a net basis does Auckland have?

The Gross vacancy rate (which are what the NZ figures are) of Vancouver is 4.2%. The Gross Auckland figure is 7.3% and NZ lowest figure is Nelson at 5.8% which is still 28% higher than Vancouver so for starters, a higher Gross vacancy rate would seem to be a NZ thing.

But of course what is included in the Gross figure. According to the census, Gross vacancy rates include dwellings like: baches, holiday homes, ordinary homes from which the usual residents are away, investment properties in which nobody lives at all, and homes that are being renovated where nobody is living.

Thus to estimate the net vacancy rate is not easy because no hard data is collected (but it doesn't stop them implementing policy because of it).

This is my estimate:

Vancouver figures: Out of the total 186,043 homes that issued a declaration (99 percent of all Vancouver homes), 178,120 were occupied (owner-occupied or tenanted), 5,385 were exempt and 2,538 were vacant. So all that money comes from just 2,538 properties.'

This means after taking in Gross exemptions to give a net vacancy figure approx 1 in 73 houses in Vancouver is vacant.

Auckland has 540,000 dwellings and the 39,000 vacancy rate quoted figure is Gross. If you assume that its Gross exemption rate would be similar to Vancouver this would leave a net figure of 12,480 vacant houses, ie a net vacancy rate figure of 1 in 43 houses in Auckland is vacant.

At best it could be said that Auckland has twice the vacancy rate as Vancouver, not 39x.

And it would seem we have nearly twice the vacancy rate also at the national level so it is more a 'NZ thing,’ ie not due to foreign purchasers.'

And of course, the Councillors have been on a publicly funded junket to Vancouver to ‘check this out.’

All the councilors see is another revenue stream.

And the Vancouver revenue grab is a low Gross (before council deducted revenue costs) of $38 million, hardly making up for the billions of over-inflated land value due to restrictions.

An empty home tax is a very blunt instrument and a poor financial substitute for fixing the underlying cause.

The quickest way to see off all non-value-added rentier speculators, foreign or domestic, is to enable policies that make housing more affordable and take away speculative capital growth gains. But there would be no money in this for council. I'm not sure why CJ099 agenda is to continue to promote Gross numbers instead of Net?

But if anyone can show different math, then please do.

LOL Dale Smith I very nearly included you in my post as the selfish empty home owner that cares only about himself, since you're the only one that objects to this tax. Bottom line is Dale if you can afford to have an empty home in a major city, you can afford to pay extra tax on it! :)

You have tried so desperately do to disprove the figures in the article links that I've provided with the very straight forward calculations that everyone can clearly see, and you have proven yourself to be wrong many times trying to smoke screen with NO evidence as usual, with figures you've seemed to have made up and you're clearly trying to disprove the Government s own figures that are based on our recent census, which clearly shows: 39,393 unoccupied dwellings for Auckland local boards (Link provided below). Your trying to smoke screen by using a very laughable and clumsy attempt to disprove the 2018 census data, which is very sad on you part.

The only thing you have proven Dale, is that you are a very selfish and self centered individual. So I'm not going to wast any of my time going through your incoherent rambles, so you can try to protect your own interest in such times challenging as these, were we're in the middle of the pandemic and our country needs this vital extra revenue!

Auckland Empty Homes link evidence here:

You're a bore and a tiresome one at that CJ099

LOL Hw, How about you grow up and come up with some useful ideas to generating lots of revenue to get us through this pandemic. :)

Why should I bother mate... raising tax revenues will not be a thing. Just look at aus for an example they have reduced NOT increased their land tax rates

"raising tax revenues will not be a thing". This is for after the pandemic naturally governments will not increase taxes during a pandemic. Try harder.

Go back to gardening ... I will look up the report for you

Ah here we go HW starting to get abusive again. Sad.

Abusive how ridiculous. You have your blinkers on to the constant lies and fakenews of the doom and gloom team including yourself. You were given facts by Dale Smith above and just dismissed that, you should be reported. Enjoy your night comrade

All I did was point out the figures you have been quoting are the Gross figures and the Vancouver are Net. Fact.

Here is the evidence:

Yes, the Govt stats. clearly shows Auckland 39,393 unoccupied dwellings and the same Stats depart gives this definition of an unoccupied house:

'Unoccupied dwelling
A dwelling is defined for census use as unoccupied if it is: unoccupied at midnight and at all times during the 12 hours following midnight on the night of the data collection.'

An unoccupied dwelling is defined if it 'clearly has no current occupants and new occupants are not expected to move in on or before census night,' or 'dwellings that are being repaired or renovated,' or 'baches or holiday homes,' or 'where occupants of a dwelling are known to be temporarily away and are not expected to return on or before census night.'

IE a Gross figure.

The original Vancouver article you quoted shows a Net figure and then ends with this, to quote:

'But the initial aim set out by former Mayor Robertson, to encourage owners of those supposed 10,800 vacant homes to put them into the long-term rental pool, doesn’t seem to have worked. The City of Vancouver’s vacancy rate has shrunk again, to 0.8 per cent, despite this tax and despite the short-term rental restrictions that Robertson also put in place during his tenure. As I (the author of the article) predict will happen with the B.C. speculation and vacancy tax, it’s ultimately all about a revenue grab, despite the noble long-term rental intentions attached.'

While you are too obtuse to see that. I know others that are reading these comments are not.

Dale it's already been proven and everyone can see just how selfish you are. The Vancouver Empty Homes Tax has been proven several times over that's why they've been able to: 1) Reduce the amount of empty homes. and 2) Vancover has recently increased the EHT to 1.25%

And your extremely pathetic attempt to disprove our Government census data is just absurd which everyone can see. So you're basically saying that people were not home on repeated census calls and don't forget they also had the opportunity to fill out their census details online as well. Give me a break, you're just being sad and extremely selfish. Our Government knows how many empty homes there are and it's certaily enought to bring in heaps of much needed revenue for hospitals and new homes.

I'm quoting directly from their site.

Dale you're digging a hole and you're still being selfish, grasping at straws. I'm sticking to the facts, We all know that there has been considerable time and expense in getting the figures for the 2018 census. 1) People had online access to filling out their census data. 2) There was considerable effort in following up the unfilled censuses hence the delay in officially releasing the data until late 2019. In Auckland it increased from 6.6% in the 2013 Census to 7.3% in the 2018 Census for unoccupied homes. The official figure stands at a total of 39,393 unoccupied dwellings for Auckland local boards.

Here is some more rope for you. What about the words Gross vs Net, do you not understand?

Dale you're just smoke screening because you have empty property and you're trying to avoid having to pay tax on it in the future. Like I said the Vancouver model has already been proven for many years now. A fact which you can't escape.

I don't have any empty property.

And you are obviously beyond being able to read data with even a basic understanding, but others can.

That's who I am commenting to. They now have both sides of the argument and I'll leave it to them to go whichever way they think.

Hi Fritz, Yes please feel free to get in touch regarding the Empty Homes Tax. I think we could all agree that NZ really needs the extra revenue with this pandemic and the its resulting aftermath. I've been in touch with everyone I could find through out the Labour party related to; Finance, Housing and Development. All their contact details are here:
Here's some more details on Auckland's empty homes:

Good idea - I'm keen to add support.

Maybe a thought.
Vacant house tax. They rent it out, no tax generated. It has now cost by far more to implement than it brings in.
By adding these houses and all the other houses to the market drops the rentals, which drops the house values in a time where house prices are going to take a large hit anyway. The construction industry also takes a hit as the amount of houses now available is enough and there is no immigration so we do not need many houses anymore. More people out of work to exasperate an already faltering economy.

Yeah that's what they said about the Foreign Buyers Ban, Did the Auckland market crash then, no it didn't. This tax is more to do with collecting lots of revenue for NZ. I can however tell you that the Vancouver Empty Homes Tax reviled just how much Overseas Investors (mostly from China) wanted to hold on to their bolt holes and were ok about paying the extra 1% tax. The revenue it generated far exceeded any implementation cost which surprised them, so much so they were able to increase the tax to 1.25% this year.

I will rent my empty house to my dog for a dollar a week. I have a rental agreement. No tax.

I agree, the only fair solution is a comprehensive unloopholed land value tax.

Also keen to add support to this.

Cool and please feel free to get in touch if you want to give your support. I think we could all agree that NZ really needs the extra revenue with this pandemic and the its resulting aftermath. I've been in touch with everyone I could find through out the Labour party related to; Finance, Housing and Development. All their contact details are here:
Here's some more details on Auckland's empty homes:

Like empty homes tax. Except the one property I have is an apartment in the city and I hear the tenants are having problems - quite likely they along with thousands more will return to their countries of origin. I could end up with an apartment with a mortgage an fixed costs ($7k pa) and no tenants - would you then hit me with an extra empty homes tax? It would work if you allowed it to be empty but available for rent at say 50% of past rent.

Hi Lapun, In that situation you would not need to pay an Empty Homes Tax, it's aimed at people who just don't want to let out their property which is typical of Overseas Investors. If we were to follow the Vancouver Empty Homes Tax model the property would have need to have been left empty for over six months with no realistic attempts to let it out or sell it. Or if they were doing lots of construction work but even then people with unoccupied homes would need to show evidence of that construction work so they couldn't dodge the 1% tax.


CGT isn't going to be a problem - CG = Loss? $zero tax. Any loss? The owner bears all 100% of it - that's how it's supposed to be.
Two Houses each? Nope. ONE. Anyone who wants more than one is free to have as many as they like - as long as they use THEIR OWN CAPITAL to buy it. Second+ property = LVR = 0%
Land Tax? Could be a goer. But as an appeasement to those who might otherwise be impacted 'unfairly', make it exempt for that ONE home; farm or income producing business ( IRD can police that) After that - make it that suggested 1% from above, and INCREASE it as necessary.
"5 years grace to sell down" Pointless! On Day One of those 5 years, any 'recalibration' of property price will take place.

Be, No benefits for people that do not work?
Welfare system wiped?
Let people stand on their own two feet instead of demanding money for their lifestyle?
Sounds fair doesn’t BW, if you want to bring in all these things against landlords?

Landlords have already been given welfare in the form of accommodation supplements, working for families (both bolstering rents) and a central government and bank doing everything to push up or at least maintain house prices. The interest rate has been dropped to emergency levels and beyond to keep house prices inflated.

At some point, that has to be enough welfare for property investment.

Where is the standing on one's own two feet in all that?

Bw, No benefits for people that do not work?
Welfare system wiped?
Let people stand on their own two feet instead of demanding money for their lifestyle?
Sounds fair doesn’t BW, if you want to bring in all these things against landlords?


Landlords...the ultimate beneficiaries!

Yip - sounds good TM2. Bring all of those factors in and watch the value of property plummet. Remember that fiscal and monetary policy are currently propping asset values up. If they take away those supports, watch the value of everything crash and burn - including your entire property portfolio.

All stand on their own 2 feet: including pensioners, the disabled, the mentally ill, people under 16? That is about 65% of the population for starters.
Of course landlords get NO subsidy at all from paying no tax on their capital gains and the rich get no subsidy from paying no Inheritance tax, and GST is not regressive and tax evasion is not less prosecuted than benefit fraud. And the corporates do not evade billions in tax while taking the benefits of all the services that tax pays for (roads, legal system, NHS, education)
Yes, let's all be equal in getting nil from the State.
And let governments wither away as neo-liberals want and have been trying to do for 45 years.
And when you've done that, who is going to pick up the tab for stupidity , venality and over leveraged balls ups to the tune of trillions via Fed reserve payments funded by tax payer leveraged amounts recently? Who is going to be looked to for "policies" in a pandemic. Yes lets just have eugenics and war against all.

North Korea, Bolivia, Venezuela - they're all out there, what are you waiting for???

What % of GDP do you think finance and real estate contributes to NZ's GDP?

Taxing empty homes won't work, dumb idea.

By far the easiest tax to get around if you wanted. It would be a total waste of time.

The old "because Venezuela!" as soon as someone suggests something different... no thought to how completely different we are

If you suggest socialism, expect to be compared to socialist countries, duh. Pray tell, where is the model you advocate successfully operating?

No Te Kooti you're only allowed to use the scandanavian examples of socialism because they fit the narrative

There is quite a big difference between sensible democratic socialism and idiot dictator socialism. Not that I am advocating for either...

I have no issues with taxing empty houses. Tax them. But do not expect it to raise that much income in long term. And not because people would sell them. No in time, you will get new services like someone who "occupy" a property for a fee less than the tax. or other tricks to avoid paying tax. Also the amount of money raises is a drop in a bucket and it would probably cost IRD quite a lot of money to enforce it.

There are always way to go after tax dodgers. That's a character issue, and folk with that sort of character will exist either way. Just people of poor character.

I’m not a fan either - to me the loss of income is already a big disincentive there is a need for a tax.
But I guess if people were occupying the property they probably won’t need to occupy another so it might work.

I agree and it should be implemented .

In NZ if implemented , it will be interesting to see how many properties would be released for rental or off loaded into the market to be sold ,this could quite possibly reduce the rental stream for investors or the values of homes.
In Australia on forums when this topic was in discussion they believe the reason it wasn't rolled out nationally was because politicians had a large portion of their assets in property and were fearful that their property assets would reduce in value,they had a vested interest in not implementing this policy and some of their property asset portfolios were substantial.

The coronavirus adds another whammy to the equation ;but,with tax revenue streams being hammered right now ,the government need to consider this.

So no different to our own politicians then.

Politics of envy. Such a tax is probably justified, but small beer. We need some radical, rational thinking and a competent government focused on real world issues, rather than one led by statists with no real skin in the game. Let’s just note that the housing issue referred to isn’t solely a New Zealand problem, but one common to most desirable countries. We don’t need ideology at the moment, but rapid, put-out-the-fire economic policy response. Here’s my idea for a starter: restart the international education sector by allowing students in who pass a health check, then agree to 14 days quarantine on a subsidised cost basis. After all, there will be plenty of hotel rooms free for the foreseeable future. The international education sector is huge, and helps fund the education for New Zealand children, university research and the rather generous salaries in that sector. And accept that Covid is predominantly a fatal disease for the elderly and infirm. Help those people self isolate, and let the younger, fitter sector get back to work. Daily temperature checks, wear masks, wash hands, random police checks etc. Total eradication is probably impossible with the likely amount of asymptomatic cases. Can the health system cope if the elderly are protected? The international figures re the hospitalisation rates of under 50s seem to suggest that it could.
The government could also fund redundancy payment for over 60s, freeing up jobs for younger people, reintroduce the penal super tax for people on substantial full time salaries also drawing super - no, not a means test but a sensible policy.

Sounds tough on the elderly. But would work if cities were segregated by age - say Hamilton & Nelson reserved for over 50s only with border posts on the outskirts.

So...your solution is more taking money from young people and giving it to old people to protect their wealth position.

That right there is your politics of envy. For goodness sake.

"politics of envy"?
Oh so the poor are all responsible for their lot and the rich all earned theirs. Pathetic over-simplification as usual

The reason NZ had asset sales is because we have chosen to run current account deficits for over 50 years - ie we invest more than we save.

This can only be financed by more borrowing, printing money or assets sales.

As we have debt up to our eyeballs - assets sales are the natural consequence of free markets and external deficits.

Nothing whatsoever to do wth a National Government.
Has been an ongoing issue for over 50 years.


Dumbest idea I've ever read, we need a reset from debt fueled economy, not jubilee, people who knowingly took on debt, particularly those who were sucked ln by the property ponzi leverage scheme know the consequences and deserve to get them, that's what out right greed and stupidity gets you folks.


No bail outs and let the market sort it. Privatising profits and socialising losses must not happen.


Let it crumble. Natural selection winners and losers.

Quite right. Except that we don't live in a free market. We live in a crony capitalism fake free market. Even our current government bows to the cronies. We will do what benefits them.


Agreed most of these people will survive but will have to give up some cash for exiting the ponzi scheme.
Kiwis are like like a bunch of sheep and now they will follow each other selling up and it may be a race to the bottom to get out after all these years of buying in to this madness.
The government needs to keep an eye on everyone selling now for tax on short term flipping.
Its going to be interesting watching all these so called investors moaning that the game is over
It makes me sick that they think property is risk free


Agree - having lived in the US through the GFC and a few years after that, then to return to NZ and witness the sheeples repeating what the US did wrt to property 10 years earlier - very painful to watch.

Independent_Observer - just a quick question, as you were in the USA during the GFC, do you think the NZ residential property market could get as bad as that ? I always remember November 2011, standing on the steps of the Phoenix, AZ Town Hall, while they "auctioned off" properties that were worth $450,000 for $50,000 couldn't see these properties and what people would do is what for "auction list" to come out very late the day before - then they would jump into the Silverado at 2am with torches and go and have a look through the windows etc !


Yes absolutely - I've been very pessimistic on NZ housing from about 2013 when I realised as a society we were starting to have an irrational relationship with it and the debt associated to it. It only got worse from there as you know. The property bulls will argue that I'm wrong and I've missed out on a lot of capital gains in the property market - sure that's fine. I made plenty from share investments over that time - many giving 200-300% return - some in foreign currency so the exchange rate if I chose to bring that back now helps. And it was easy to take profit the last 12 -18 months as things looked like they were getting a bit too frothy.

Living in a country after a housing market crash resets your understanding of what something is worth. Houses were dirt cheap in many areas in the US post GFC. Then you come back to NZ and terrible quality homes in marginal suburbs were selling for rediculous prices. The same amount in America would have purchased you a mansion in a beautiful area.

My feeling back in 2013 was that we could see a 50% drop in house prices - I still think that is the case - perhaps more. If something is to be valued based on a discounted cash flow of future earnings, and those earnings are now marginal (i.e. renters will be unemployed and all taking paycuts, the you factor in a higher discount rate if/when inflation shows up), then how do you value a house in NZ? Average house could actually only be worth $200,000? A third of the current value? Who knows. High risk to buy anything the next few years until we know that people can generate earnings - otherwise housing could become quite worthless - might require a complete change in paradigm for almost all of our society.

Everyone wants to live in Sth Pacific paradise, the land of milk and honey... more so now. I wont bother to diss you for giving blind advice with a failed track record.

You’re probably right, there will be demand to come and settle here, given what’s going to happen in Europe, US, etc, in the coming years. As our economy tanks, whichever govt gets in next will likely open the gates again to keep the economy afloat. Whether it’s Labour or National won’t make a difference.

However will the citizens here allow that?
I don't think so, in fact they all want to know when the people here on work visas are going.

Thanks for the reply Independent_Observer - through very good friends of mine, who were in NZ, now living in the States since 2012, I managed (not in Phoenix) but in Maryland, to buy/sell townhomes, only around 8 miles from the White House , so great for commuting to DC and the area is full of steady government jobs, so I have always had fantastic tenants (and an excellent property manager)

Funny how you mentioned even in 2013 you thought that Auckland prices were high - they were !!! (and only got higher) well, I can remember seeing in Phoenix for USD 200,000 these beautiful brand new homes with all the trimmings - granite countertops, internal access garaging, 2 levels with atrium type lounges with balconies etc etc etc - then back to Auckland seeing a damp, old "falling down around your ears" property, miles out of town for 3 x the price !! .....and all and sundry including the media, bank economists and RE Agents etc justifying these prices ! So absolutely agree with your post.

Dumbest idea I've ever read, we need..

You didn't get what he said. Everyone gets the cash injection. Those with debt have their debt paid down, and those without debt get convertible corporate bonds to reduces corporate debt and democratises stock ownership. You could test the waters with 10K for every IRD number in the country. What would that cost? probably less than 20 billion dollars.


Ah, I think he did get it. It would cause all sorts of moral hazard - and punish those with cash (as assets wouldn't be allowed to naturally devalue).

People need to take their losses on the chin, learn from it, and start living within their means (incl. a rainy day fund).

Most of the people who will suffer will be people that lose their jobs. It isn’t really possible to budget for that (and have a rainy day fund) unless you have no debt. Most people that have debt aren’t stupid or greedy; they just wanted to own a house. You can’t really plan your life around job loses. The stupid people are the ones that lent them the money!

The issue is that Keen created a pretty convincing mathematical model to show that a rising level of private debt explains both the growing financial sector (rising inequality low productivity), and ever more extreme boom bust cycles. I agree that you mustn't reward borrowers & punish savers ie. repeat the last decade

The current system already provides those people with three ways out of debt: 1) paying it back (taking responsibility), 2) not paying it back and going bankrupt, and 3) keeping up minimum payments for decades until inflation naturally eats it. And there are typically assets behind these debts so these can be used to reduce the debt if needed.

For folk to argue that wealth should be taken from those who haven't taken too much risk on and given to those who have, to pay their debts off, well, it's just reprehensible. Absolutely immoral, basic run of the mill theft.

These folk have been wont to rant against beneficiaries despite receiving them themselves, and now only have their hands out for more welfare instead of being prepared to take personal responsibility for their own decisions.

It's not like that. If everyone had debts written down by say 20K, then that change should come with a change in lending standards then you'd have debt deflation and falling asset prices. Savers would win - big time. Bear in mind the savers get exactly the same amount of cash injection in a different form.

Consider the whole system dynamics. Banks issue loans out of thin air. They create the asset (the bank loan) and a liability (money paid to debtor) at the same time. Its just an accounting entry Equity=Assets-Liabilities. Yeah I know reserves blah blah... but as Richard Werner would say "they issue loans then go looking for the reserves afterwards".

The debtor uses the newly minted money to speculate on rising house prices, but the interest paid on the debt is real! Interest gets sucked of the real economy and flows to the banking sector. You're saying debtors should default but that means banking sector wins, because they take the real asset (the house). How is that fair? Heads the banking sector wins, tails the banking sector wins

"mustn't reward borrowers" What do you think the Fed reserve has been doing for last 5 weeks, giving $1.7 trillion to corporates and share holders to stop their leveraged bets from going to shit? Meanwhile the rest of USA pop got $1200 each at a cost of $250 billion ??

If everyone is $10k better off then no one is better off. Just more digits chasing the same products.

Try a variation then; only debt on the family home is forgiven to a value, not a percentage. People get to nominate one home only with a registered mortgage over it. This is only available to NZ residents, currently residing in NZ. Individuals with no debt get a bank credit to the value forgiven. Question is the banks? How are they placed or managed if this happens? Where does all this debt/credit come from? Does it just become QE printed money?

Take your free time and browse through Dr Michael Hudson's work. This is where Keen got the idea.

Hudson has an interesting background, and has spent time working out Balance of Payments as a thing. His historical perspective and upbringing will surely surprise you.


Debt Jubilee is at least 5000 years old.

The concept of freedom comes directly from the history of debt. In ancient Mesopotamia, if you could not pay your debt in commodities then you had to send your child or family member into debt bondage slavery. And then every now and again, there would be a debt jubilee and the debt slave was allowed to return home. The Sumerian word for freedom or manumission Ama-gi is believed to originally derive from "return to Mother".


The problem is that the people with the debt have been behaving like they're kings (landlords) and not slaves. The tenants are the slaves to the landlords, but it will be the landlords who need a debt jubilee? Doesn't make any sense compared to giving 'slaves' relief from their debts from a historical perspective. Unless of course our 'slaves' (the landlords) have misunderstood their place in society and need to be reminded it is they that are slaves to the banks? Yet they are slaves but they don't appear to actually do anything in terms of work! Our society is a shambles.

I think within the context of debt bondage and history, it relates to workers. It does not relate to rentiers. The debt forgiveness historically is given from those with capital and wealth as a relief to those who have essentially been enslaved in body.

It is a shambles because it wasn't allowed to have a clean out after the GFC. Periodic crashes have separated the wheat from the chaff. Everything is cycles from the planets to nutrients - and by not allowing the cycle to complete you distort the whole ecosystem - in this case the financial ecosystem.

I'm not for any intervention in the market, apart from having a backstop to provide the basics of life to those at the bottom. And if we as a society deem accommodation to be the basics of life then we need to regulate around that. Maybe we bring all basics of life under strict government regulations and allow luxury goods and services to fight it out in a completely free market.

Yes and as a result is is probably degrading our efficiency and quality - in multiple respects. Business, society etc. Giving carrots to fools only encourages them.

Yes, but the landlords are slaves to the bank.


No they aren't. Landlords are delighted to boast how very clever on they are to use bank leverage to amplify their gains and profits in a rising market. They suck up those capital gains, have a tenant pay their mortgage, dodge taxes wherever possible, they vote to sustain negative gearing and against capital gains tax. And that is all well and good. But they can't then complain when that same leverage turns against them in a falling market and claim to be slaves. Being a rentier is not being a worker.

Killing the Host - by Professor Michael Hudson Phd

Thanks so much for that first video Henry - the best you have done for some time
When I first read Steve Keen in 2000 he was a breath of fresh air who said it as it really was - until he was ridiculed and run out of town.

Hudson restores Steve Keen's credibility

Hudson features regulary on the UNZ website:Our Neo-Feudal System Is on the Verge of Collapse
"CtrlF Hudson" returns 5 instances

Steve Keen has no credibility.
Just look at his publishing record:

He never told it how it was. He told it how he wanted you to think it was, and often riddled with schoolboy errors.

ad hominem! So mainstream economists don't cite his work. What a surprise.
A good watch if you want to know about debt cycles especially the 85 year one. Coming off the gold standard in 1971 has lead to massive financialisation of our money system and wealth inequality. Central banks are a major cause as well. Gold standard kept a balance. Blaming govts is way to simplistic. Coronavirus is the pin not the cause of this coming credit reduction. Savings was always the way to a strong economy for everyone not debt. MMT will lead to inflation in the end many examples of this. There is nothing Modern about MMT.

Reading a little more and I'm really liking the idea. Good way to achieve a reset maybe.
Explained elsewhere as handing over $100,000 to everyone over 18. Im thinking many would hate the huge spending disparity of someone paying $100k off a $500k mortgage compared to someone on $20k income getting 5 years income in one go.
So the rich but indebted would HATE it.

I don't see why the rich would hate it, they would end up getting most of that money eventually.

......because it would give people choices they didn't have before.


My grandfather, a rich man, said if you gave everyone in the room ten pounds by the end of the day one person would have it all.

An early observer of Game Theory then ;-)

Obviously I wasn't in the room. I'd happily walk out with my ten pounds.

While some would fritter it away , others might just invest in something like a house or education.

That's why you have a debt reset.


My uncle said put all the money in a pot and then share it equally. And when he had spent his share they could do it again.

Too right. If responsibility for risk is removed like this, money will simply flow up to the rentiers again. It's nothing but exempting them from taking personal responsibility for their own decisions and lives and protecting their wealth.


Heavy taxes on multiple property owners. Make them have to sell. Drop prices to affordable values. Give kiwis a chance to own a home. Stop the selfish greed.

It's not a trade-off between renters and serial landlords. Plenty of people who own one home (their family home) would be pushed into negative equity and unable to refinance loans if values dropped massively. Unsure how you can morally justify them taking the same hit as investors when many (including recent FHBs) were just buying a family home.


Recent buyers were warned over and over again. If they decided to listen to the immoral spruikers that is their problem, not ours.

Yes they were warned a house price collapse was "just around the corner" ...for ten years. Eventually they got too old to wait anymore and just bought.
Sadly the ones that did wait the longest are going to get burned the most.

Yup, I bought into a farm. Had a drought, coronavirus and been made redundant all within a year. Happy days. Ironically, before that I had $200k in cash in a safety dep box and about 20 ounces of gold there too which I used towards the deposit. Hard to time the market but just couldn’t wait anymore and certain opportunities only appear once.

There will always be value in land. Cycles go round and round but people still need food

I think you'll find that most of us actually needed somewhere to live. Novel idea about what houses are for, I know, and I'm not sure it will catch on. But you're deluded if you think people can just put off things like buying houses and starting families forever.

E: Our fault for not being born earlier I guess? Behold, the compassion and wisdom of our elders.

I think you will see a lot of FHB demand evaporate once the capital gains are gone. Many FHB would have just wanted to get in on the action - and why not they have every right too.

I think this because when we was buying properties in 2012 we were going to mortgagee auctions, putting in tenders etc and we were the only ones interested and could basically name our price. A few of our places we actually rented back to the people we bought it off.

I think the only difference between now and 2012 is that the housing market was flat (outside Auckland) so nobody was interested. We based our purchases on the fact that the rent would pay them off over 30 years in time for retirement- even we didnt predict the market doing what it has done. We thought capital gains were a thing of the past - if anything we were counting on inflation to shrink our debt.

If rents reduce substantially and capital gains disappear I think a lot of these FHB will lose interest.


We wouldn't be in this mess if it wasn't for money creation and interest.
Being Easter.. I remember Jesus had particular scorne for this, 2000 years ago.

The banks are largely to blame. Debt levels need to be more heavily regulated (e.g. DTIs) as banks are clearly not responsible to manage this.

I can't buy a money making farm with 20% but I can buy a house. Never made sense to me.

That highlights the fault of government too. E.g. Bill English refusing to give the Reserve Bank a DTI rule to prevent more bubble inflation, whilst knowing they'd be driven to drop rates.

All powerful and 2000 years to do something about it and still nothing. That's worse than both National and Labour put together & breaching on as bad as the Greens.

We should clean up our own mess.


Everyone is just using the virus to push their ideological barrows.


Quite right.
Something had to come along to wake us up. And, hopefully, this is it. Because if it isn't, I shudder to think what disaster will be needed to change society. Usually it's a War, of course. But none of us would survive a next one. So, let it be this!

When have people ever not looked to ideology in times of crisis?

We need to be cautious, some people want a plague, others a collapse of the economy, some people only think about themselves. All have personal motivations that can be more than a little dodgy and not in the best interest of the nation.

Sure but when has that ever not been the case? Who are we advising to be cautious and what can be done with that caution? We convince ourselves that we are rational and objective but we rarely are. There is always an ideology lurking, some are self interested, some are well intended (but often delusional and unrealistic or impractical)... all will carry unintended consequences.

Take Kiwibuild.... if we can trust that it was well intentioned rather than a cynical vote grab... it has still been unrealistic and impractical. No one person is to blame for that, but it's a good example of where ideology meets reality.

The reality is that the world is drowning in debt. How that is worked out will have an ideological bent because we are an ideological species. We built temples before we even invented money. And now there is more debt than temples.

No, people have an ideology and they see the virus and they're like, yippee!
BW and PDK are the worst offenders...


Just like people who voted for National so there would be no capital gains tax, lower income taxes, foreigner buyers for their over priced homes, adding to the debt bubble? So that one day this could happen? If people want to live by an idelogy - high house prices - they must deal with the consequences of those decisions. Which is the mess we will now have to start sorting out.

Yes, quite how that was all in the best interest of the country and not just their personal ideology is a mystery...

Bollocks Zachary Smith.

I have long pointed out that we would be where we are now. That doesn't make me go yippee. That makes me go damn, I tried hard to make people listen, but I didn;t do a good enough job.

learly with you, I did no job at all. It matters not a jot whether you're an optimist or a pessimist - if something is goint to happen you are better addressing it. In my case, I gor debt free a decade ago. Drive a 25 year old corolla, sparingly. Got self-sufficient in food and in energy. I saw those moves as creating resilience, call it capacitance.

But you? Did you know better than me? Caught with your pants down? Don't blame me. Blame yourself. You were given every chance to learn...


We have cycles and the last one was the biggest and longest ever. It was going to end, anyone who didn't understand that got burnt. Hard to understand how our boom / bust system is still a mystery after sp many cycles.

See Dalio thinks this is the end of the long term cycle? Usually around 75 years. What everyone who is alive (or isn't dribbling into their PJ's at the summerset village) has experienced, or think they know how the economic system works, might be in for a new experience. I'm looking forward to it.

Meanwhile property promoters were using historical property price increases for the last 50 years and extrapolating those returns into the future.

What they didn't know that they didn't know was, the long term debt cycle is anywhere from 80-100 years.

So the property price promoters were only using upward part of the long term debt cycle to determine their future property price return expectations...

"Hard to understand how our boom / bust system is still a mystery after sp many cycles."

That is because each new generation entering the workforce has to learn the same lessons learned by previous generations. Most do not study financial history and learn the lessons. Most learn life's lessons via first hand experience.

Those who fail to learn the lessons of history are doomed to repeat them.

Oddly the same thing happens with farmers and rabbits.
You work for the oldman and get it looking good....then the boy takes over the farm, to cut costs the rabbiter is the first to go.
The oldman just shakes his head.
Sure enough three or four years later the boy has to hire two rabbiters to try and clean up the mess and it takes them years at a huge cost.

It always makes my day! Hahahahahah

Socialism seems very popular here, which is curious as it's a business website.

It seems rather popular across the whole country right now as its paying people rents, mortgages, toilet paper and wine. And f you haven't noticed, NZ is closed for business for the most part. Did you miss the news?

Not by choice though is it? The vast majority are looking forward to getting on with our lives

Ok then - zero socialism then. I'm fine with that. No further payments at all from government to any NZ citizen. You ok with that? Every man, women and child is to look after themselves - no support.

It isn't like the right doesn't look after the left in NZ.
Zero socialism is a bit sensationalist.
The socialists on here fall into two groups.
1. The champagne version.
2. The trolls to try and change everyone's minds.

Yes just attempting to make a point. It seems those against socialism are secretly benefiting from it (property investors). We need to find the right balance and make sure the right group/s pick up the tab.

Socialism is always popular if you want roads to travel on, beaches that are shared, equal opportunities for the best to succeed, libraries, prisons for criminals, police to arrest criminals, soldiers to defend everyone, etc. Capitalism works best for things of individual choice - food, music, cars, kitchen equipment, furniture, clothes, etc. It is the gray area between them that is interesting - such as public transport. Being very much in the capitalist camp with supply and demand ruling purchases and investments I just have one problem with this business website - why can we buy and sell land if we cannot make it? So crazy prices for physical houses in Auckland doesn't bother me - is it any different to those people willing to pay over $10k for a fashionable handbag? But why do we let anyone own land? May as well let people buy the air we breathe.

A capitalist model for private housing is a disaster.

Commercial property - yes ok.

In my wife's melanesian village they are competitve people but the competition is to provide bigger better feasts than others. Having a bigger house than other villagers is thought to bring 'bad luck'.

Bigger house means more cleaning, more maintenance, more debt to service

TK ....this "socialism" has been going on well before this virus - for landlords, in the form of the "accommodation supplement" so tenants can "actually" pay their rent. While for corporates and businesses with "Working for families" because they literally can't pay a decent living wage for a family - even with both working !

I would rather see my tax dollars going in R & D, new projects and industries etc - not just to keep the "Corporates" happy and the "Property Ponzi Party" (PPP) carrying on...........but in saying all that, I know that things will now change and everyone and every entity will have to start to "pay their way".......just like the vast majority have doing been anyway !

When has the business sector not sought to privatise the profits and socialise the losses?

What's in the interest of the nation? Higher asset inflation?

Let me guess, the 'best interest of the nation' involves boomers minting money from debt-fuelled property price inflation til Kingdom Come? But it's everyone else's ideology that's the problem?

But people push ideology all the time - people "create" a crisis just to push their ideology (and try and get elected).....

We should be fighting the virus.

I thought we were?

Ok - its lock down then Zach until the vaccine arrives. Sound ok to you?

That's not fighting, that's hiding. We end the lockdown and we manage it and we accept the odd casualty. I would assume a vaccine is not coming.

Haha by odd you mean thousands of people. Would likely have equal (or perhaps worse) economic carnage depending upon how many people die - can't work.

Wrong...look at the stats Zach..we are winning the war. You are starting to sound like Yvil?

He used to be a few years ago but become some what of a moderate the last few years (until recently). I think he now realising the end is near for the real estate sector and is moving into the panic paradigm. Was very pro landlord'ism.

I don't think Dr Smith ever moderated his views - Dr Smith just hid his views - they are still there just waiting for the day when he can express them.

Remember his Elysium obsession? Where he was obsessed with how Auckland was a World Class city that would always go up in price even in an apocalypse because everyone in the world wants to live there? And he and DGZ would just have a massive RE love in?

(and whilst there are some Sillicon Valley geeks who do indeed have NZ bolt holes... they're not in Auckland!)

That's right - almost forgot about Elysium. Think the borders have been closed on Elysium and no one can afford to live there? To appealing for its own good.

I support the lockdown. It just can't go on and on. It has to change to a management, mopping up, mode.

The returns for maintaining the lockdown will diminish as casualties rise in different areas. But you guys want to keep pushing your ideological barrows, I get that, you don't have much to lose, I would guess..

So you are worried about what you could lose..... ( and even manage to include a hint of condescension )

I thought being a landlord was the guaranteed road to riches - or so some claimed. How things can change.

Which it will, after it's finished.

And yes I have plenty to lose, millenial small business owner with a 70% revenue drop. I'm just not deluded enough to think the economy will magically be better with ICUs at 5x capacity. The virus killed the economy, not the lockdown. Anyone with a basic grasp of the maths can see 1) the shutdown is inevitable and 2) the sooner it's done the shorter it is and the more likely it is there will be a decent bounce back after. NZ has a chance to have bars and restaurants open again in a month. There is no country in Europe that could hope for anything remotely close to that.

It's great to hear from a millennial, and an entrepreneurial one at that. This forum is dominated by Boomers and Gen X (I am the latter).

I have recommended it before and will again; Debt: The first five thousand years David Graeber

If you don't have the time or funds to read the book there is a decent summary here;

No more expanding banks debt capacity cap it and only use exsisting debt levels to control the everything bubble.
Also when buying a house starting today everyone needs be thinking is this house overpriced and in 99.99 percent of cases it will be over priced and are you going to be the sucker who buys it next???
Many sellers will be able to take a 20-30 percent loss because they will be longterm owners who will need to sell to meet the new market.
Also you are crazy buying houses at current levels as returns will be very risky because of the problem to find yield which is now coming back to haunt people who pulled money from banks etc to get 4 percent but now face the prospect of declining house prices wiping out all gains and some.

And none of any of the above solutions is going to be good for - GOLD!
WHEN Private Debt has to be reduced; in whatever way, the store of future income in the price of gold will plunge.
Think about it. If you can't get any more debt from the bank to finance, whatever, and you have gold, what are you going to do? Forgo an opportunity to do whatever the debt was going to fiance, or sell your gold to provide said capital?
Extrapolate that onto a massive global scale and see what happens.

First deflation, then inflation.

Debt wasn't such an issue when inflation rates where higher. Still, it's not as if the reserve bank can just send a cheque to every person so they can drive up inflation, sell the bonds they hold and then normalise rates. Oh wait, yes they can!

RBNZ has been it's own worst enemy in that the the go-to approaches to creating inflation (OCR, QE etc.) are also those that distort most the very system they are ostensibly trying to manage.

Yes we seem to have come unstuck since we've gone with 2% inflation targeting in my opinion. It's like trying to keep a broken car running instead of taking it in for a service.

Have we even considered that the instruction manual (economic theory) itself is a false guide?

New EXCLUSIVE estate on Waiheke. Multiple sections put up for sale two days ago. Ouch!

Why do you find this amusing?

The starting prices made me chuckle..

Are they expensive per sq/m? Or you could by a place in Coromandel, a decent Helicopter and still have change.

Why would you list all of those now?

$4.5 million for a 1.29 hectare block
The bank is circling
A development like that doesn't happen overnight - takes a couple of years to bring to market

They need to literally divide the price by 10 to get people interested. Crazy, crazy prices.


Crazy idea - like settling everyone’s tab at the casino when they can’t pay their losses! A lot of property speculators gambled big with monstrous debt - nobody made them do it!

Perhaps debt jubilee for landlords would result in a fixed number off public service hours a week - proportional to the debt paid off. Perhaps same term at the mortgage? Cleaning public toilets and gardening etc?

They could never do enough real work to pay down the debts they hold. Remember their business model is to buy up as much as possible and make other pay their mortgages while they spend to much time on internet blogs.

Wishful thinking, I know.

Surely the prudent ones can simply hold their portfolio for another 20-30 years and be okay.

In the interest of keeping up the F.I.RE economy afloat, this debt shall be Nationalised by future loan/borrowing. NZ next future generation shall be benefited - The debt shall gradually recede, as soon as the border opening again - more import migrants workers, tourist, student, restaurant worker.. they can assist with the payment. Will be insane for PM, Ministers, Majors, local councils, govt bureaucrats, Banks, Banks economist, Boutique economist, RBNZ, Orr's team, Private+Commercial Landlords - to cut their properties valuation, just not going to happen. RE/property is the new backbone for NZ economy.


"RE/property is the new backbone for NZ economy" Wrong tense:
"RE/property is WAS the new backbone for NZ economy"

Those you mention ( the RBNZ employees; politicians etc) are going to be overwhelmed by the lack of demand for property in the future, and the sell-down by those who just plain can't afford it any longer.
What's any property worth? What someone else CAN pay for it....

You're starting to sound unhinged.

NZ's back has just been broken. Time to get back to a more equal, less polarized NZ. Make first property tax free. Second 50% taxed, third 75%, and so on...

Do you see the irony in telling me you want NZ to be fairer? Priceless.

All good mate, I edited fairer to more equal. I will add this word to my list of words I can't use anymore.

I can wear two hats depending on my mood!

That you, John Key?

Pre covid, what a bank will lend on it.

I'm glad you buy into my terminally ill sarcs with regards to FIRE economy, to the points? I just want it to die sooner by advising RBNZ to cut the OCR by 75 basis point, and more soon.. read this link, from another economic professor. Which I don't think willing to interview:

I gave you 'the perfect' solutions out of this to both of you Red & Blue team, close to election: Both of you need to race each other on giving nationwide price offer for the sudden surge in RE market stocks for AirBnb, Landlords that need bail out etc.: Tax payers won't know this, put offer at 'the market price' that those owner willing to cast the vote for you, 'for the sake' of housing the homeless, do PR of think big ala 50's, instead of build? - recycle the current overpriced old stocks using tax payers money, to put as the welfare back into NZ society, charity in disguise, nationwide caring slogan - for at least? 3-6years - then release back to the market in the name of 'rationalisation', 'Do Everything' to keep the F.I.RE economy in NZ favour, grab those property ponzi wealth voters!, socialised those old stocks temporarily back to the Nation as 'good will' plan, put in contractual, then release it again at a good price - for the property ponzi believer economy - WinWin to ALL! (except? - never mention this to overall tax payers) - Off course they all will Covids spit me on giving you the solution, BUT honestly? how many economic professor in this little NZ willing to be dare like me on giving real solution? - Money? did I hear anyone said that? - here's the clue - The money will come easy, thick and fast - when you give red carpet welcome from residents that wanted to move out from.. Wuhan...Sir JK already have that comms life line opening to CCP no.1 - Don't wait for too long, as my input on this entry is also being read in OZ, Canada, UK & USA.

Meanwhile there is still a housing shortage as the property promoters have been reminding us.

Some people are going to learn the difference between underlying demand vs underlying supply and effective demand vs effective supply in a very painful way.

Here comes some effective supply to some property markets and likely to cause an imbalance. (note financial market participants, have seen this recently with the large sell offs).

For non financial market participants who want to understand effective supply vs effective demand - go and investigate the reason why the share price for Metlife Care dropped 25% in a single day - it was due to the effective supply increasing dramatically in the market (while underlying supply was unchanged - as no new shares were issued).

From the article referenced by BW:

David Pearse, managing director of Pukeko Rental Managers, predicted a "mass sell-off" of rental properties in the coming weeks.

"I'm already hearing reports of some wanting to sell but having to wait until the end of the lockdown.

"Not only have some seen their rental income drop with no chance of government relief, but there's a huge concern that the government won't reverse the lockdown policy of making no-cause terminations illegal.

"It's like the perfect storm for mum and dad landlords, who are the vast majority, and they can't see an end in sight."


I've followed Steve Keen and Michael Hudson for years.

However i do not believe change will come. The govt and financial elites will just double down and complete a global central bank takeover.

I find it disturbing that our esteemed leader was the president of the union of socialist youth based in London for many years. Despite her talk it seems she is happy with the status quo with rapid credit creation and mass asset inflation, Total destruction of what's left of our export sector and in debt families and communities with private debt till our eyes bleed.

I thought she was a socialist looking for political and economic change? What has changed??zero but people adore her because she is awww so sweet.

I think it's all ego and recognition like all modern day liberals. Say the right things and have the tv personality partner. Hang out with media celebs and drink wine on ponsonby rd. All while the unsung heroes of nz work hard to support their families or struggle to get their business growing.

Ardern is worshipped yet made a political promise called kiwibuild. The biggest policy platform in nz history that never ever got started. What is her agenda? And why are kiwis fawning over her like a mae west poster on a young lads wall?

Happy Easter

Power corrupts.......


She is one of the greatest chardonnay socialists ever.
No policy or intellectual substance.

And what is it, exactly , that Right wing has to offer at present?
Any big policy announcements? Except for out-racist ing NZF as a political tactic?
45 years of neo-liberal descaling the State and under investment plus heaps of debt to private sector which will now default, what a record, brilliant alternative to the record of 1945-74

They are just as intellectually bereft. With a poorer moral compass.

Both wings are attached to the same bird called bureaucracy

Mae West was over 40 before she made a film and posters were produced. Early example of touching up photos to make them look sexier. How old do you have to be to refer to Mae West?

Jesus come on it takes away from the purpose of the post. It's a quote from q movie bob.

I upvoted your comment on the last sentence alone.

what is a 'q movie'?

Truth hurts. Good comment.

She's all about perception and unfortunately the soccer moms and beneficiaries out there swallowed her spin hook, line and sinker. All because she had a baby, continues to post pics of her in her comfy clothes, feeding the baby... all very relatable. Never mind actually delivering. There's only one thing she's delivered on so far.

Her next big delivery will be abject poverty, misery and more broken promises all with more govt control, less personal freedom and an overall decreasing quality of life for all thanks to taxing the living hell of actual businesses. You know, the ones who pay tax to fund everything!

Right wing, misogynistic rants rising in popularity on here I see. V predictable

Why do you say that? My comment about her being a chardonnay socialist was coming from a leftist perspective. Ie. She hasn't done nearly enough of the transformative stuff she said she would.

Was not just referring to your remarks.
And she has not done enough Left wing stuff because she is reliant on Winston and Labour was only on 36.9% of vote at election.
labour ALWAYS disappoints due to having to tack to centre, and rarely gets re-elected.
Especially not when economy goes down

Despite her talk it seems she is happy with the status quo with rapid credit creation and mass asset inflation, Total destruction of what's left of our export sector and in debt families and communities with private debt till our eyes bleed.

This has become the accepted wisdom of the last 30 years, unfortunately, to the extent that even those who might traditionally not be expected to align with it (e.g. the left) seem not to question it at all.

Our last government even sold it as a great problem to have, after initially campaigning on fixing it. And the opposition still talks about foreign ownership as an ideal to be chased (which will continue to undermine our farming communities as well as our local base for export creation).


While we are at it, perhaps would could also have a criminal jubilee and a divorce debt jubilee, and pedophile, jubilee...most ridiculous presentation I have ever heard in my life. And this economist is shaping the minds of our future. Perhaps walk another 1000km to clear your mind. WOW...cant make this **** up.

And yet we could call the current monetary system normal. I'm not sure that from scratch anyone would make that $&_t up either.

Wow..Patrick really need to do some critical thinking on that 1000km walk.

NZ cannot survive without China. Fullstop.

Thise who do not believe just wait for things to calm down a little and see how national party and biased vested experts and media go full strength in favour of China.


Perhaps Ximon will get the meeting with Xie he dreams of?

Phil Goff's book with a Xi Jinping signature sold for $150,000 so a personal meeting would cost more than our GDP. Maybe Ximon can join the crowd in Tiananmen Square similar to Catholics at St Peter's Square Rome.

NZ can easily survive without China. Sure a few banks and speclords, including the stupid over reliance on dairy (debt and pollution) will tip over as we right side. We have heaps of food and electric power, and if you use the empty house, there is more than enough shelter.

So we buy less cheap plastic crap. Restart local manufacturing. China has nothing we can buy somewhere else or remake ourselves.

NZ cannot survive without China. Why?


NZ cannot survive WITH China. That much should be very clear at this point.

And pragmatically, going full strength in favour of China would be political suicide. People are very, very angry and that is only going to build as it dawns on a larger and larger percentage of the population that 'back to normal' is not a real thing and the CCP is to blame for it - why on Earth would pro-China be an electable stance? National is going to have to walk back a lot of their rhetoric to have a snowball's chance in hell.

Do you really think people are 'very, very angry'?
From what I can see indifference seems to be widespread. A resigned 'shrug of the shoulders', if you like.


Failures must be allowed to fail. If it wasn't Coronavirus it would be some other crisis that revealed the weak hands. The world needs to be weaned off the nipple of the bailouts of the last 20 years. Within two days of lockdown some of my commercial customers were pestering me for a partial bailout (customers that have been supported by the government subsidy). I've paid my rent, my staffs full wages, my shopping bill, and all my other commitments. Those with their hands out were already my worst customers, good riddance if they go and improve themselves. My long term best customers are stoic like us. These are the businesses that will survive adverse events - owners with backbones.

I love how tone deaf the privileged are.

I've failed many, many times. The only permanent priveledge I own is the ability to learn from experience.


He's 100% right. Recessions have the same evolutionary function as viruses - culling the herd.

You wonder why global productivity growth is going to zero, it's because we never allow businesses to fail.

The truth is business failure doesn't destroy the assets built up, they just change hands to an owner who has prepared better.

Relative advantage
Keen comments
Foreign billionaires are buying New Zealand farms with landing strips


Ultimately I think the solution to this is a significant culture shift. The slides that Steve shows in the last few minutes around private debt (and ratio) and that all that debt has been pumped into housing. If we didn't have that level of debt, as he says each household would be self sufficient for months, not days or weeks as we are right now (people living pay check to pay check). We wouldn't need the government to be creating this much public debt to support the private citizen (who has debt problems) if we didn't allow the banks to issue so much debts against house (and make 'record profits' doing so) and push rents/mortgages so high. The system is nuts.

The banking ponzi and FIRE culture needs to end. We need new a new political party with some balls. People were too self interested in the past to vote for anything that might pop the housing bubble - but I think if its popping (now) and it causes significant hardship for many (which it is likely to do) then there is scope for change.

Interest rates at zero isn't the solution, nor is high debt. Buying and selling houses isn't the solution.

Government / Fed throwing Cheap and Easy money will lead to disaster though required as has been the norm for over a decade so the current recession has to be worst in living memory one way or the other.

The trouble is too many people don't vote for what they think the country needs, they vote purely on self interest.
Usually because they have completely lost faith in politicians who clearly are working in their own self interest.

That's one of the (many) things I've been considering the last few election cycles...should or do we vote from a long term utilitarian view?

Recent polling, in my opinion, would suggest the opposite. More about me and now.


There is massive moral hazard implicit in debt cancellation without seizing the asset borrowed against. Most money will end up back with the banks.

Once you cancel obligations will you do it a second time and a third?
The market would not have allowed this imbalance, its central bank manipulation of interest rates and looking after elites that got us here.

Maybe we really need to consider how do we do it without debt? And what is "it"?


There's actually nothing wrong with debt, as long as it creates a tangible product that is (significantly) more in value than it cost. (eg: Borrow $1 to produce $2 worth of goods over time)
Where we've gone wrong is believing that borrowing to buy intangible profits (Capital Gains without adding value being the classic example) is creating wealth.
Net-Net, it doesn't. Because on balance, the seller's 'profit' is the buyers debt. Worse. The buyers debt is New Debt; debt that didn't exist before. And a cycle of malinvestment develops.
As long as we ensure ANY debt, new or old is applied to productive endeavour ( which won't all succeed!) then we have a shot at rebalancing our society.
How do we do that? That's what the Government and the RBNZ is for. But both of them will have to revise their ideas of "How The System Works". Will we have the courage to (re)elect a Government that runs on such a platform? Time will tell. But if 'not now', when? Because 'things' aren't going to magically get better from here...

"There's actually nothing wrong with debt, "

Exactly. Debt is a tool. Perfectly fine and safe, if used in moderation. It can be potentially financially fatal, when used in excessive amounts.

Low levels of debt make borrowers (households, government, companies, etc) more financially resilient to unexpected shocks. Excessive levels of debt make the borrowers vulnerable to unexpected shocks.

Nope. Debt is an expectation that tomorrow will deliver.

So there is everything wrong with debt, at this point on the Limits to Growth trajectory.

There are many on here that need to learn where money comes from. 'They' don't want you to know about this:
Richard Werner provides the solutions, but if I told you the answers first, you wouldn't appreciate them without understanding how the banking system really works.

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford


I think he starts with the right premise: that debt will not be repaid...

But I keep asking myself, why have a debt jubilee when personal and corporate bankruptcy (and subsequently bank failures) will sort it out for you? In the end, as long as the arms of government do not enforce mortgagee sales, those debts will be uncollectable anyway. And the creation of money as debt becomes the responsibility of sovereigns - i.e., that function becomes nationalised (for better or worse).

He's trying to find a way for society to return to some form of BAU, which leaves all the ills of our present system of financialization and monetization in place. I think we need something that snuffs out the FIRE economy in the process of transition.

I'd rather see a form of Great Leveling (sort of likened to Schumpter's creative destruction) - a sort of getting back to basics with communities coming together to collectively address the first rung on Maslow's hierarchy of needs - and for a more enlightened society to grow from there;

The question is of course whether we could transition without anarchy prevailing. And this is where a UBI, but not accompanied by a debt jubilee could be contemplated.

I think his problem with leaving debt to sort itself out, is that he sees global conflict 'to the end of sovereignty as we know it' as being the result of BAU disruption.

The economists view of a just transition would of course be quite different to an ecologists view of it.

Form of corruption as are they trying to protect past or current MP or high profile people by hiding the new cluster in Auckland.

Why is the opposistion not demanding to disclose the name - maybe it is one of their own or can kiwi know, what is the criteria used for hidding the name or is it Hiding for privacy or to avoid Shame.

If opposition is not taking up the issue, why is media too silent ??

Swingers get together before the lock down?

Typical Herald trying to politicise the pandemic.

"political" meaning left wing.
Controversial, meaning anything mainstream don't approve of.
if in 1980s Western liberal democracies had not quango ised the State, then levers might work now.
Good old privatised and "non-political" technocrats (meaning, no threat to status quo)

FFS, it's not a crime to either have a party or get sick. The date was pre-lockdown.

We have become a nation of little Goebbels.

One of the observations I'm making from this whole situation is that greed, be it political, financial or other, may pay rewards in the short term, but long term it is also your downfall. Great to see principles coming to light again - even though they've been swept under the carpet for a while now so that some can get their way using a short sighted paradigm.

That's how our political system works as well.
No need to make the new road fit for 40 years of increased traffic, we won't get the credit for it. Their short term look good, costs NZ in the long game.

Time for the govt to issue some prudent lending rules to a international bank owners stripping NZ workers of most of their income. Enforce 3.5x income only on rentals, enforce decent capitalisation, offer deposit gurarentee and govt support for those that comply. Those with cash savings will move to the gurarentee coverage.

Those that pray at the god of stupid debt, seeking to enslave the average working man can be left to let nature takes its course. Aka an ever decreasing visious game of musical chairs, and bankruptcy.

I just don't see how you make this equitable or fair. There is neary 300 billion of housing debt, but most households have no or manageable debt. It's a 3rd of households and landlords that are the problem.

100k to one person with 200k household debt makes a difference but I have many farmer friends and acquaintances with over 20 mill of debt, 100k to them won't make a difference. To me 100k just disappears into my current account, may help with some of the losses from this drought, makes little or no difference to me.

I think our problems are going to be around employment, i'm thinking on that one, I think it's going to be a very hard fix.

I think that is where MMT might make a feature. Government backed work projects. Not sure that it would be palatable to the controlling narrative though, which is a failure and needs to break and be dismissed before we move on. You can't run the FIRE sector with MMT.

Yes. It's the Job Guarantee. Anyone who wants a job is given one at a living minimum wage. Employed buffer stock of labour. Works as inflation control mechanism without the misery of NAIRU. Expands in recessions. Contracts in booms. Expands when government wants to ease inflationary pressures.

No it's not Andrew. 400k work visas.

Geeez ,if there is any additional evidence to support this ,thats an act of war.

I lived in China for almost 5 years ,would they do something like this -absolutely.

If we let ourselves fall into a downward spiral of deflation due to private debt default, everyone suffers. Would you rather an ethical hazard of material suffering, or a moral hazard of being forced to recognize we're all in this together? No point in being rich if there's no one to buy from. I say bring on the jubilee and reset this whole mess.

Tony Alexander 12 April 2020

Where the cheap houses are likely to be. (note that the likely sellers are those recent property buyers he told that property prices are going up less than 30 days ago with a high level of confidence and no hint of any risks whatsoever). How many lives has he potentially ruined?

The mortgage holiday is a toe in the water so is the 80% govt backed business loans. The govt will be working out how to mitigate mass defaults which will trigger bank runs, bank failures & bank recapitalisations & bailouts.

The debt cannot be paid back, there's not enough money in circulation to pay it off so new debt is created to keep up with interest and repayments but it's a never ending cycle until its reset.

This is the sort of thinking needed in a new situation.
it has to get v bad for conventional economics and existing bunch of politicians to get message enough to do it collectively. That might not be for a few months yet. But its the only solution. Just think about it, trillions in extra government debt and Fed printing. Is bond market REALLY going to stump up??Are the banks really going to open spigots when given funds to? Not if 2008 is anything to go by

This virus is promoting NZ again as a safer place to live comparing with other countries. More money and people will move here once things settled. Thing will be tougher for a while but not going to change much.

And agree with the above comment NZ can’t survive without China.

Future world will change and many agencies and countries will be exposed.

If our property prices start falling - observe how unpopular we become. Many were only interest in NZ the last 10 years because you could make money from buying and selling houses. When that stops, why come here? Be like Japan 25+ years ago.

Not to forget TAX FREE and earlier was also heaven for money laundering as no question asked.

NZ = Rock Star economy (was as everyone was making tax free money in shirt period).

Reset button has been pressed.

"More money and people will move here once things settled."

Money? Yes, it will be a safe, rurally based economy - food - that will need capital. So, Money - In!
People? No. To do what, exactly? Those that are here will have enough trouble re-establishing their live without the added competition of new arrivals. Maybe displaced New Zealanders will return - maybe; but the numbers will be relatively small (they're pretty established where they are in The UK; Australia etc) and the alternative of working for 1/4 what they are used to will deter them.
So. Money, Yes. People, No.

Oh, and NZ will survive - and thrive - without China. China needs, and will continue to need, food. We have it; they want it. So, in a broader sense, "Can China survive without New Zealand?"
(NB: The UK will take whatever produce NZ has if the EU decide to play 'hardball' with them. A ready-made, traditional market for our goods)

China being the biggest Money Lender Shark is being exposed not only in NZ but world over so will have to pay a price in comming months/ years.

World equation to chang. Wait and Watch

The idea of NZ being the best place in the world to live has been played out and is boring.

Kev didn't say it was the best place in the world to live. And besides you thinking it is played out and boring wouldn't make it any less true. I think it still has mileage and is quite interesting. I think YOU are really boring and rather sad putting such a downer on Kev's upbeat comment. NZ has had some good reports worldwide concerning its handling of the virus and its healthy economic state. Also its natural protective features such as low population and being quite an isolated island group.

Quite a bizarre comment. You wouldn't be trolling would you J.C.?

Well said ZS. Most of us love our little country and the positives it offers as well as freedoms and opportunities. We have to be careful that it does not become spoiled and overrun with excessive immigration and dirty freedom campers (when they're allowed back). If you want to see the country or the great walks do so now while its quiet. And yes JC is trolling.

Sorry but if you borrow money then you pay it back. Failure to do this will result in NZ being like Greece where they borrowed money with no intention of paying it back and look at the mess they are in. NZ needs to get its A into G and handle this right as there is no one to bail us out.

Problem is this needed to be addressed years ago - not now that we're likely in a process of deleveraging. NZ isn't alone on this. I think those western countries where property didn't reset properly at GFC are particularly exposed (NZ, AUS, CAN).

I agree. The hegemony of bubble economics is rooted in Anglo Saxonia. We're our own worst enemy.

The FED will be very happy to lend New Zealand as much money as required. They are, afterall, rapidly becoming the world central bank

Hopefully the crazy "Protection Cap" ads will help Interest with revenue

"Protection Cap advertisements?" I thought. "Must be Lenders Mortgage Insurance of some sort" that the banks will soon be pushing on TV ads. "Have they started already!?"
But then a second read disclosed your meaning. Yes. Let's hope we all recognise the efforts that go into maintaining this outlet for us all. Cheers.

I'm calling it: NZ will be the first country on earth to implement MMT. It won't prevent Deflation. Nothing will.

MMT-fans should not expect to ever be able to leave NZ though. The value of the NZ Dollar (or new currency) won't buy you a leaf of toilet paper overseas.

Possibly to run me/us through your reasoning?

Why would the NZD have any value outside of New Zealand when it is provided to the public for free?

I believe this government is not envisioning life and the economy to go back to normal at all.


Keen, a professor of economics, hit the headlines back in 2010 after losing a bet with Macquarie Group interest rate strategist Rory Robertson that house prices would sink by 40%. As a result he had to walk more than 200km from Canberra to the top of Australia's highest mountain.

Beautiful LOL

I see on OneNews that homeless are getting put into motels. Are you one of those motels Yvil?

No, not yet but working on it

There was always something about this virus that scared the daylights out of those who studied it and why such draconian actions were firstly taken in China and then by the rest of us. Is this it?

...a team of researchers from Shanghai and New York, coincided with frontline doctors’ observation that Covid-19 could attack the human immune system and cause damages similar to that found in HIV patients....This observation was later confirmed by autopsy examinations on more than 20 patients, whose immune systems were almost completely destroyed...the damage to the internal organs was similar to a combination of Sars and Aids....viruses such as Aids and Ebola have similar sequences... the immune system overreacts and attacks healthy cells. But why and how the coronavirus triggers that remains poorly understood.

And, just for fun...

And even after patients who become severely ill have recovered and cleared the virus, physicians have begun seeing evidence of the infection's lingering effects. In those who survived mild and severe disease alike, the researchers found that many of the biological measures had “failed to return to normal.”.... test results were readings that suggested these apparently recovered patients continued to have impaired liver function. That was the case even after two tests for the live virus had come back negative and the patients were cleared to be discharged....cardiologists are contending with the immediate effects of COVID-19 on the heart, they’re asking how much of the damage could be long-lasting.

Am I the only one seeing a contradiction and problem with Keen championing the government to issue $100 billion of debt (in bonds) in order to forgive debts of private debtors?

Hey Yvil -See MINISTER HIPKINS has made an announcement about schools going back slowly on the 27th so why do we need an big top secret announcement on the 20th , this will see when Taxcinda and Winny and Green power start to flip flop

Isn't the proposal more like a helicopter drop of money to everyone (with conditions on use, must first pay off your debts), ultimately financed by public money creation?

Anything Public; be it Debt, Money Creation or Helicopter Drops is just an amalgamation of Private.
Take Private Debt away from the individual and do that from Public Debt ( however it's done) and that still leave it with private individuals as their part of the whole.
For mine, mucking about with 'where the money comes from' doesn't resolve one of Keens most long held principles "Debt doesn't go away; it just gets transfered". One way or another WE end up repaying it.
The only way debt does 'go away' is if BOTH parties to it - Public and Private, are extinguished. That's why we have Wars....