US deficit surges; Canada jobs jump; China's service sector rises; India contracts sharply; Japan struggles; RBA issues warnings; UST 10y at 0.78%; oil down and gold up sharply; NZ$1 = 66.7 USc; TWI-5 = 69.7

US deficit surges; Canada jobs jump; China's service sector rises; India contracts sharply; Japan struggles; RBA issues warnings; UST 10y at 0.78%; oil down and gold up sharply; NZ$1 = 66.7 USc; TWI-5 = 69.7
Albatross in Fiordland. Photo by Roger Harris

Here's our summary of key economic events overnight that affect New Zealand, with news China is extending its economic lead in the pandemic recovery race.

In the US, their budget deficit tripled in the fiscal year ended September. It widened to -US$3.1 tln from just under -US$1 tln a year earlier. Four years ago this Administration inherited an annual deficit of -$585 bln. This is the largest and fastest deterioration ever. As a share of GDP, the annual 2020 deficit reached -15.2%, the largest since World War II.

The latest USDA WASDE report indicates that despite rising output they expect dairy prices to rise from here on good international demand. Also their beef import forecast has been raised for this year and next, despite noting that their beef exports are likely to fall. That is because their local prices are higher and less competitive internationally.

Canada released its September jobs data overnight and it came in much better than expected. They reported a gain of +378,000 jobs, +344,000 of them full-time positions. Their jobless rate fell but only to +9.0%. Their participation rate eased up.

The Chinese services sector reported another solid increase in business activity in September, cementing in a fifth straight month of expansion. They seem well past the pandemic struggle. This growth was backed up by a good rise in new orders, though new export work continued to decline. Still, payrolls rose for the second month in a row amid increased capacity pressures. It is a trend many other countries will envy at this time. (Their factory sector earlier reported an good expansion too, but exports there were stronger than for services.)

The buoyant Chinese economic mood has seen their currency appreciate its most in 15 years. It is all driven by an expanding domestic economy.

In India, official forecasts are that the Indian economy will contract -9.5% in the current fiscal year through March 2021 as the fallout from the coronavirus pandemic severely curtails economic activity there.

In Japan, household spending fell for an 11th straight month in August and real wages have fallen for six straight months as consumers struggled to return to their pre-pandemic consumption levels.

The latest household data out of Sweden indicates that their households are in a tough spot with consumption down -3.7% year-on-year. That is similar to Norway and to Denmark. There is no evidence yet that the Swedish tolerance for its high pandemic death toll (583/million) gives it some sort of economic advantage. (Norway = 51/mln, Denmark = 115/mln.)

In Australia, the RBA's latest financial stability review is somber reading. Business failures and household financial stress will rise significantly over the coming months when loan repayment deferrals and government income supports end, they say.

And in the same report, the central bank warns trading banks about 'culture' issues when they come to "the challenging task of dealing with customers' loan repayment deferrals". (p44)

The UN World Food Program was awarded the Nobel Peace Prize for its efforts to combat hunger and prevent it from being used as a weapon of war.

Wall Street is up today by +0.9% in afternoon trade for the S&P500 and heading for a +3.9% rise for the week. Expectations of new stimulus is driving this rise, one that has taken the capitalisation of this index up +US$1 tln in just one week and half its gain since the start of 2020. European markets were up about +0.6% last night. Yesterday Hong Kong was down -0.3% and Tokyo closed down -0.1%. Shanghai's resumed trading saw it gain +1.7%. Yesterday the ASX200 ended flat but that locked in a strong +5.4% rise for the week. The NZX50 Capital Index was up +0.4% and cementing in a weekly rise of +3.9%.

The latest global compilation of COVID-19 data is here. The global tally is 36,686,000 and up at the new faster pace of +405,000 per day which is near the sharpest increase ever recorded in this pandemic. It is being driven higher by sharp rises in the UK, Russia, Argentina and Iran. Global deaths reported now exceed 1,064,000 (+7000) but clearly many are going unreported.

The largest number of reported cases globally are still in the US, which is up +70,000 in one day to 7,863,000 which is a new rising pace. The number of active cases is at 2,603,000 (+25,000) so many more new cases that recoveries and going backwards on that front. Their death total is over 218,000 and still rising at about +1000 per day.

In Australia, there have now been 27,229 COVID-19 cases reported, and that is +23 more cases than yesterday with the spike in NSW persisting. Deaths are unchanged at 897.

The UST 10yr yield is up +1 bp to 0.78%. Their 2-10 rate curve is firm at +63 bps, their 1-5 curve is also firm at +21 bps, while their 3m-10 year curve is little-changed at +69 bps. The Australian Govt 10 year yield is down -1 bp to 0.86%. The China Govt 10 year yield is up +5 bps at 3.21%. The New Zealand Govt 10 year yield is unchanged at 0.55%.

The price of gold is up by a sharp +US$43 this morning at US$1925/oz in New York trade. That is an overnight rise of +2.3% which is a lot for the yellow metal. And silver has jumped too, and proportionately more with a +4.7% rise.

Oil prices start today down by about -US$0.50, now just on US$40.50/bbl in the US, while the international price is down a bit more to just over US$42.50/bbl. There was another modest weekly rise in US rigs put into production, an odd turnaround at such low prices.

The Kiwi dollar starts today sharply higher, up by nearly +1c to 66.7 USc and a three-week high. Against the Australian dollar we are firmish at 92.2 AUc. Against the euro we are up to 56.4 euro cents. And that means our TWI-5 has risen back to 69.7 and where it was at the start of this past week.

The bitcoin price is higher yet again today, now at US$11,064 and +1.3% higher than this time yesterday and a full +5.0% higher than a week ago. The bitcoin rate is charted in the exchange rate set below.

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

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66 Comments

Here is a good read.
Style over Substance.

Sydney Morning Herald, Weekend.
A look at the PM.

https://www.smh.com.au/world/oceania/the-leader-s-not-for-turning-is-jac...

It boils down to All hat No cattle.
The back story does her no favours.

The always issue, over promise under, failure to delivery.
https://www.theguardian.com/world/2019/dec/31/new-zealands-year-of-style...

Like from yesterday, the affected mind group on one hand and the critical thinking science methods group on the other.

Over promise, under deliver will be magnified as the get-us-out heavy lifting needs be conducted.
Opportunity lost is a bitter pill.

10
up

Not so much to do with anything above but important none the less.

The cannabis vote is going to be decided by the 'older generation'.

I knew very well my parents would vote against it even though it has absolutely zero affect on them whichever way it goes.

I asked them what they'd think if the referendum got voted out and in a few years time one of thier grandkids came home in the back of a police car and ended up with a conviction around thier necks for the rest of their days, then and only then did they actually stop to think that their 'No' vote would 'stop the erosion of society'.

Fortunately I think the've now seen the light and will be voting yes, that's not certain but it's 1000% more likely than it was before the conversation.

So get out there and talk to your parents, and tell your friends to do the same.

10
up

Parents want to vote against as are thinking of their grand children but do not realize that we are in new world as even their thinking and advise of saving is no more relevant as emphasis now is to borrow more and more to grow with government and reserve bank support.

New era. Yes to Drugs and Yes to Debt...more changes on the way.

11
up

More people addicted to debt than drugs.

muzzled and richard
What's with the older generation being anti-marijuana and this new world?
Those now well in to their seventies first popularised marijuana . . . and that was in the mid 1960's - nearly 60 years ago.
So no new era, no new world . . . . you currently on a high or something? :)

P8, that's exactly my parents age bracket, we grew up in the thick of it in Coromandel which I'm sure you're aware was fairly well reknown for growing weed but they never smoked it as weren't into that 'scene'. Dad had quite a lot to do with the police raids on the stuff and many people he worked with were into it.

Yet until the conversation I had yesterday he would never have considered voting yes. Call that too set in their ways or too much time listening farking 1zb but whichever way you slice it and dice it the older generation are against drugs and esp legalising them. And from what I can tell it comes back to that 'degredation of society' bollox of an argument.

When I asked him what he thought of Portugal legalising all drugs nearly 20 years ago he had no idea they'd even done it let alone the fact the sky hadn't caved in.

So to answer your question, I'm not on a high. Must say I did just drink a really good Belgian Trippel though, that along with a mtn bike ride today are my highs taken care of. ;)

mulzed
. . . ahhh . . . Coromandel Gold then. Premium weed.
Smoked a little socially while at uni. Back then it was seen as the soft drug compared to the likes of acid which I never tried. Nothing for a couple of decades or so now.
Lots of pluses and minuses; will see how I feel voting day.
Great to see an activist like yourself and great to see you into a Belgian Tripel - vast range of great craft beers.
Will be interested to see which way it goes next Saturday - possibly not the way you want but it will be close so keep lobbying.
Keeping to the economics of this site . . a positive is a new government income stream.
Cheers

Interesting you mention LSD printer, not something I've tried but it's right down there at the bottom of the harm scale beside mushies (never tried them either) and apparently very good at helping the brain deal with trauma which I find extremely interesting.

And yes, craft beer, why did it take so long? An upside of the lockdown was the little breweries started delivering directly to the door, one might say it was a 'hazy' lockdown. But it's hard to go past a good Belgian beer. Shout out to Craftwork in Oamaru, they're probably going to end up costing me quite a bit of money...

Like you I'm interested to see what happens next week and it might not pass but oh well, such is life, hopefully it'll happen this time though.

You two are not the types that worry me, it's the young and vulnerable. I don't think teenagers should get anywhere near drugs and we know it is happening now. It's in the poor suburbs mostly polynesian where the damage is being done, not a couple of rich boys with expensive mountain bikes who can afford to drink Belgium beer.

Exactly why we should legalize and regulate Andrew. As a teen my friends and I could access cannabis far easier than alcohol (Hawkes Bay). More often than not we'd get it from a 'tinny house' run by the Mongrel Mob and not once did they care that they were selling to teens.

Those days have long since past and I haven't touched the stuff in years. I have however kept up with the latest views in Addiction Medicine and all fingers point towards legalization being the best option by far. In countries that have legalized overseas, you'll be reassured to know that teen use has actually decreased post-legalization.

Professor Doug Sellman's has run the National Addiction service for years and supports legalization. I know the world is becoming more and more anti-intellectual (read stupid), but we should actually for once listen to the experts on this.

Drugs, including alcohol, are here to stay - our job is to get better at managing them as a society. Declaring war is a failed strategy, which needs to be replaced by scientifically based harm-reduction approaches.

https://www.nzherald.co.nz/nz/doug-sellman-control-of-legalised-cannabis...

Totally agree Andrew, especially on the teenager part. Plutocracy summed it up much better than I ever could, the issue isn't going away because it's illegal.

To me it's like the Brexit vote where Britain voted to leave mainly because of the older generation. I read a stat ages ago now that said something like 10% of those older 'leave' voters were dead within a year. So that worked out well for the younger generation didn't it...

(just as an fyi though, my mtn bike was $750 ;)

Looks like you'll get some more rain this week yeah? We're due another farm report btw... :)

just talked to my 20 something daughter, she said all her friends are voting for legalizing. All think it needs to be out in the open, I just missed all that when I was young, although many of my friends got into it. My children's attitude to drugs is so different to my generations.

Its a big nothing in terms of supply & availability.

Here is a tip. Go to Mitre 10 & buy some hormone rooting compound - for cuttings, graftings, multiplying things up.

Its not on the shelf, its only sold at customer service desk - because in store shelf stocks are stolen quicker than shelves restocked!.

The acquirers run a lean & zero cost business model.
Regulated distribution is no match for this existing supply chain - run by "motivated" types.

So, you would be happy for surgeons, construction workers, operators of heavy machinery, bus drivers, airline pilots, police, and long-haul truck-drivers to partake while on the job?

Yea cause that's what will happen.
That's like saying it will be more available to kids. My kids grew up o Te Puke 15 years ago. The takeaways across the road from the high school was selling over the counter.
Open your eyes, it's freely available now, just 3500 get prosecuted with personal implications and costs.

19
up

Hilarious. You think all these people will turn into idiots just because cannabis got legalised. Are surgeons regularly sculling 12 beers before operations because the drug alcohol is legal?

Machine & equipment operators, leading hands and labours more so.
Anecdotal example one industrial field service group has 20% drug test fail rate in some locations.
Fortunately they see it as health & safety and employee welfare issue.

my mate in gisborne was with a forestry company, they did a random drug test and got a %75 strike rate, mostly alcohol.

Are thee that many people arrested for cannabis use these days? I thought the cops had a healthy attitude towards it and were most likely to let people with cannabis go with a warning. Grandkids coming home in the back of a police car and ending up with a conviction seems a bit alarmist, from what little I know about it.

I had thought that but yes it appears prosections have remained about the same, but of course mostly Maori, lower socio.....etc
Usual story.

I do wonder how much of that is people just charged with personal use amounts of cannabis type offences, and how much of that is the cops busting somebody for something else (eg burglary, car theft, other drug charges etc) and just throwing the book at them in the hope something sticks?

Weed laws are racist she shouts
This blog-post-publication might be a bit red-necked but sums it up fairly well
https://asianinvasion2019.blogspot.com/2020/10/convicted-maori-meth-deal...
She's been jailed 4 times - but never for possession of weed

I'm not going to vote on the cannabis referendum. I know nothing about the drug, I have friends who are regular uses but they are middle class folks dreaming of their Uni times.
I don't know how much damage it is doing in low socio economic groups, I simply don't have the contacts, I know it is widely available. I do have a friend who is with the DEA and he thinks it's going to a disaster in USA.

Without knowledge, I would rather not make uninformed decisions. I think Helen Clark is off her rocker on this issue.

I watched this and thought the guy at the end was the only one who new what he was talking about, Ronji Tanielu
https://www.newshub.co.nz/home/new-zealand/2020/10/helen-clark-clashes-w...

Health experts lay out the case for voting 'yes'

https://www.newshub.co.nz/home/politics/2020/10/cannabis-referendum-heal...

Four of the country's top medical experts are urging voters to tick 'yes' in the cannabis referendum, saying it's not a vote for the drug, but against a status quo that is failing to protect vulnerable Kiwis.

Or you could vote 'No' and support the gangs, criminalise regular New Zealanders, prevent regulation / control of supply, and reap none of the financial gain for the good of the country. Those voting no include; every gang, religious fundamentalists, Scientologists, and various groups backed by conservative US lobby groups.

And guess what, if 'no' wins cannabis will still be widely available just like it is now. Except then we'd get none of the benefits and all of the downsides. What to do...

"Without knowledge, I would rather not make uninformed decisions. I think Helen Clark is off her rocker on this issue."

How is Helen off her rocker if youve stated you don't know enough to have an opinion?

She is trying to make an economic case for reform, watch the video I linked to.

That's because there is an economic case for reform. It's potentially a new multi-million dollar industry (at a time when we desperately need jobs), reduces money going to the black-market, generates tax for NZ, reduces legal / police / prison costs... etc

Take Colorado for example:

Colorado has now generated more than $1 billion in total state revenue from the legal marijuana industry, another milestone for the state that legalized cannabis in 2014.

really, we need another multi million dollar industry recycling welfare payments? That link I posted the bloke from Sth Auckland was adamant you will not stop the black market. If you tax it then the black market will be cheaper, I don't know what related health costs will be. I'm not voting because I am ignorant on these issues.

I'm not sure if you are just 'taking the piss'

Any reduction in black-market share will be better than what we have now (where currently the black-market controls 100% of the market!). If you look at available international evidence, the percentage of users barely changed post-legalization, so I doubt the health cost will be much different to what we pay now. Legal and law enforcement costs will definitely be reduced.

I'm quite serious about this, if you want to reduce cost and harm, the current evidence (and also anecdotal evidence from other places who have recently legalized) indicate that legalization is the best way of doing this.

I know a little of the Colorado industry. A family nursery got picked up on the IRS computer for unusual activity. Apanently the fourth generation nursery business had been taken over by an enterprising son. He converted to marijuana with lots of different varieties. Gross income went from 400k to 7 million in one year. No one knows where he got his seeds from, probably Humboldt, which would have been illegal at the time.

If there’s one reason to vote yes (regardless of the other benefits) do it for the people that rely on CBD for their medical condition. My son has epilepsy and requires CBD to control his seizures. We pay $1800/month for the particular strain he needs. We can afford that (just) but for many it’s not an option. Regulating cannabis will allow for increased access and reduced costs for the many people that require it to treat their medical conditions.

I support medicinal marijuana, do we have to legalise it to allow people access to medicinal marijuana? Because that would be ridiculous. I have a friend who used marijuana during chemo and said it was a savior.

We don’t have to but it’s just another advantage of legalization. The current laws regarding pharmaceutical grade cbd are just far too restrictive which defeats the purpose of the law to increase access to those that need it. One could argue why not just change the medicinal law to make it more accessible but it took years to get to where we are today and will likely take many more years to amend it to help those already locked out of the market. The status quo regarding prohibition has failed and all evidence to date supports the legalization of cannabis from a health based approach.

That's outrageous A20, nothing like being screwed by big pharma hey.

Dad was saying last night one of his mates is on some derivative that is $1200/month.

Absolutely ridiculous.

Funny I talked to my parents about it too, to tell them the police don’t convict for personal use, especially first time use so frankly your argument is just scaremongering. I also told them about witnessing the significant and scary mental deterioration of fellow school mates who were using marijuana too.

Like Oz the average age of death with Covid in the UK is higher than average life expectancy. “The average age of people who died from Covid-19 in England and Wales since the pandemic began is 82.4.
That figure – computed from Office of National Statistics data by experts at Oxford University – is significantly higher than the average age reached by people recorded as dying from all other causes, which is 81.5.
The study by Oxford’s Centre for Evidence Based Medicine also suggests that fewer than six people per thousand who get coronavirus now are likely to die from it.
The death rate – known as the infection fatality ratio, or IFR – has plummeted since June, even allowing for a big increase in testing.
….The new figures appear to provide support for the ‘Great Barrington Declaration’, which has now been signed by nearly 15,000 leading scientists and doctors.
The declaration urges governments to switch from blanket, lockdown-style measures to ‘focused protection’ for the most vulnerable.
It criticises lockdown policies and represents a splintering of the scientific consensus over the coronavirus response.
According to the declaration, younger people who are most unlikely to die ‘should immediately be allowed to resume life as normal’.”
https://www.dailymail.co.uk/debate/article-8821113/The-average-age-death...

What is it about our covid response that provokes a flurry of naysayers, trying to denigrate our efforts, and promote the dubious agenda of "plan B"? Read about the "Great Barrington Declaration" here:
https://www.theguardian.com/world/2020/oct/09/herd-immunity-letter-signe...

Cheer up oldbloke. "The death rate – known as the infection fatality ratio, or IFR – has plummeted since June, even allowing for a big increase in testing."

It is Labours shocking handleing of the situation that cost the country.
Labours, Hard and early was not early or hard enough, allowing it to establish the first time and then letting it in again.... Shocking that the press isn't calling it the way it actually happened.
They did their best... No they did not!
Not that you will be able to see past your vision that Labour can do no wrong OB1.

We could always do what National is proposing and leave it to the private sector to run, yeah cause that’s all we need, a profit driven health response.

'In Australia, the RBA's latest financial stability review is somber reading. Business failures and household financial stress will rise significantly over the coming months when loan repayment deferrals and government income supports end, they say.'

In above article can replace Australia with NZ or USA or any developed country UNLESS when the current second or third round ends government announce another extension...do they have choice as by their fear are tightening the noise on themselves.

Its almost UBI by stealth

Queenstown. A huge amount of work going on, construction sites everywhere. 1900 pre sold sections in one subdivision... Town seems flat, no lines for anything except Ferg Burger at lunchtime and the daily in and out traffic jam.
It would seam that it is as a friend who lives here told me. Houses needed to house the workers and more workers needed to build them creating a need for more houses snowball.... Contracts to stick to, if it slows down it falls apart. Keep on building.

Not to worry as reserve bank and Government has more to worry than the builder so the builder can chill as come what, will be supported by banks and government.

In fact this is the best time to start anything and everything with minimum risk as most is covered by government and banks - just form a truxst or limited company to minimize your risk.

That is exactally what I'm seeing from being in Q'town for a week. Time to smack up a few new builds for me. Labour was intending to bring house prices down, now they can't let them. I was about to say that they were lucky that Kiwi Build was a dismal failure but in reality it was always going to fail under Jincinda's leadership.

Looks like a new phase of COVID increases in the West with Trumps telling his people "not to be afraid of the virus" when he should be saying the exact opposite. Not sure if people know but it's a hilarious (but not) joke going around in IT circles at the moment regarding the sharp rise in cases in the UK. Some numbskull in their IT departments decided to use the old version of Excel as a file format to transfer test data. Sounds good until you realise its limited to 65K rows, which meant that a sender sent say 100k rows, the receiver got 65k rows and apparently there was no error detection in between. Boom, you lose the test results of thousands of people and you have a whole lot of people not getting test results.

https://edition.cnn.com/politics/live-news/us-election-news-10-09-2020/h...

Which House Party would you attend this weekend...Glad I am not invited.!!??..duh.

Blobbes have you been paying attention to state and condition of MoH IT infrastructure & systems here?

It was a big day when the NHI was figured out!
NHI tagged details, ID details you give to your GP (cellphone, address, family etc), GPs pass data to MoH once a month.
Once a month, provided folk keep GP informed of every move, all the time.

https://i.stuff.co.nz/national/health/coronavirus/300043095/coronavirus-...

You'd think it would be simple, but on Monday Bloomfield let slip why the innocuous statistic has so evaded Ministry of Health staff: It was an IT oversight.

There are two databases, one containing information about people in managed isolation, such as their date of arrival, the country they came from and when they departed or are scheduled to depart. The other database contains medical information, the most important points of which are whether people were tested and what the test results were.

The problem? The two databases can't talk to each other.

When people were tested for Covid-19, Bloomfield said, their National Health Index (NHI) number wasn't collected. That number, which is used to coordinate different medical databases and is a unique health identifier for every New Zealander, would have been crucial to aligning the two databases.

https://www.bbc.com/news/science-environment-54268038

A simpler life...maybe better than continuous expansion.?

56% Americans feeling better off than four years ago. A higher % compared prior to any election since Reagan first asked the question in1984.
https://content.gallup.com/origin/gallupinc/GallupSpaces/Production/Cms/...

So your saying Trump will win then profile?

Perhaps. With ANTIFA and BLM violence could be a case of the silenced majority. More interested that the poll went against the MSM world view.

The silent majority always determines the US elections. Which way that goes, I cannot say with certainty.

I get the feeling however October isn't going to be too crash hot for Hillary or Barrack.

Maybe you should read this article that you are commenting on where it shows how much they are borrowing to keep that feeling alive. Wonder how they will feel when it comes time to pay that bill?

Going by this comment thread borrowing off your kids to fund your retirement is fine. https://www.interest.co.nz/news/107453/paul-goldsmith-why-using-borrowed...

Or is a case of Cindy borrows = good and Trump borrows = bad?

I dislike the current NZ government probably as much as you. I bet if you did the same survey in NZ at the moment, you would get similar results.

It should be clear to anyone that doing such a survey during times when governments are collectively borrowing like drunken sailors to prop up their people's day to day living is going to end with pretty unreliable results. Kind of like if your neighbour goes out and borrows against their house to buy a new Merc and a whole bunch of holidays. They might feel richer, but when it comes to paying the bills...

In the US, the government is literally giving people money in their hands, it shouldn't be surprising that they are feeling richer. Of course you still have unemployment at almost double what it was 4 years ago, but hey, let's just ignore that huh?

Based on the data coming from the WHO, looks like India has overtaken the USA for daily covid case number increases, might be time to update the template for the Daily/Weekend Briefing?

Excellent article from former Chief DGM Bernard Hickey. Sums up what is needed well, but alludes to the seeming political impossibility of the solutiins actually being implemented:

https://i.stuff.co.nz/business/opinion-analysis/300128352/were-stuck-on-...

"The Chinese services sector reported another solid increase in business activity in September"
or...

the country’s manufacturing sector index declined by a small amount while services accelerated only modestly. Combined, the manufacturing side worked out to contribute more to the composite than services, so the score for last month dropped to 54.5 from 55.1 in August. You wouldn’t know it from the press release which covered only the one part (The Services Sector)

https://alhambrapartners.com/2020/10/09/are-these-magic-beans/

Does anyone have suggestions as to what one should do with cash in term deposits these days. The returns are now miniscule so I imagine a lot of older folk are wondering what to do. Many people approaching retirement or already retired must be considering alternatives to term deposits. Indeed TDs seem a bit risky with cash being an even poorer investment than usual. Cash could even be the poorest investment one has and historically it has been for a long time. Consider a year's salary 30 years ago and what a paltry sum that would be today if you just left it buried under the house. Well that's what a TD seems like today.

A lot of advisors say that you should park money in bank deposits if thinking of investing for less than five years yet that seems a bit too conservative in this day and age surely? If you had some money you wanted to put away for three or four years and could cope with losing some of it wouldn't it be better to choose ETFs or Index funds over TDs with 1% returns?

The investment needs to be reasonably liquid and not involve borrowing any money. Available to draw from for expenses for a new car if one is needed or repairs on the house or similar.

I'm thinking something similar to a KiwiSaver growth account would be the way to go. Maybe keep six months expenses as cash but no more. If you have access to revolving credit even this may be too much to have lying around as fast depreciating cash.

Managed funds account, ETFs, maybe a little bitcoin?. Does that sound like a sensible place to park, say 10% (90% tied up in real estate), of one's wealth in today's climate?

There must be quite a few older folk wondering about this or getting the hard word from their wives to do something, anything, now that deposit interest rates have dried up.

Asset allocation becomes a bit of a bitch when central banks have created bubbles in every asset class huh..

Having 90% exposure to the property market might be a worry. If we do an Ireland, USA, Spain, Japan that’s a lot of your wealth getting wiped out by not diversifying. Not many financial planning books would recommend that strategy - but I’m sure it’s been a winner for you the 30-40 years..the joys of one generation vs another eh.

Is the 100 - age rule familiar to you wrt allocation to risky assets? Guessing you’re around 60 so could have 40% or so if your wealth allocated to shares/risky assets.

Are you more worried about inflation or deflation?

Personally I am happy with my allocations however the other half is calling into question my manly courage and seems fearful of inflation. My decision to go from almost 100% to 90% real estate is being viewed as a bad one. Perversely I'm not afraid to take a hit on property or shares because then I could point and say, "See? I told you to keep cash" and for once, for the first time, I would win. I'm thinking this attitude may be a good one to have when entering the share market.

If property tanks and you have invested money in a growth fund it is likely to be highly correlated (depending upon how much exposure there is to international equities). You’d then question if there is any point in diversifying in that manner (at all).

Gold might be an option if worried about inflation.

https://www.ccn.com/legendary-investors-are-bracing-for-high-inflation-a...

So you are saying a growth fund would be broadly the same as real estate? That kind of makes it appealing as it is a way of getting the money back in the game without needing to borrow more while retaining the liquidity of cash. It is a solution for someone who has cashed up some real estate but is now feeling uncomfortable about its zero chances of earning a profit while in this state.

If growth fund is primarily Australasian equities, there will be correlation with Australasian real estate returns. If the growth fund is more international equities, then it could well be less correlated.

Benefits of liquidity compared to property/most fixed interest investments.

Dollar cost averaging into a variety of shares (over the next few years) would be my suggested strategy to smooth the ride and buy different industries and in different currencies. Note that Buffet has been buying into Japan recently and Dalio has moved more into Gold (and China).

I’m sixty eight,still smoking every day,just legalise it.