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US retail sales impress, industrial production not so much; US extreme weather a threat; Canada CPI rises; Japan factories busier; rate curves steepen; UST 10yr at 1.28%; oil up and gold down; NZ$1 = 71.7 USc; TWI-5 = 73.4

US retail sales impress, industrial production not so much; US extreme weather a threat; Canada CPI rises; Japan factories busier; rate curves steepen; UST 10yr at 1.28%; oil up and gold down; NZ$1 = 71.7 USc; TWI-5 = 73.4

Here's our summary of key economic events overnight that affect New Zealand, with news we are seeing sharply higher benchmark interest rates and steeper rate curves.

Improving economic growth prospects, ramped up vaccine rollouts, and impending new major stimulus in the US are all combining to juice up "the reflation trade". Markets see all this combining to generate inflation at a level we haven't experience in more than a decade and they are sensing central banks will be caught blind-sided. This new mood is generating some sharp rises in benchmark bond yields, especially at the long end.

And current US retail sales are doing ok, after taking account of the holidays and weather. Last week, on a same-week-a-year-ago basis they are up +4%.

And that is confirmed by the official data for January for retail sales, which was up an impressive +5.8% from the same month a year ago. It was a surprisingly large gain, the best in seven months when pandemic rebounds affected results. This time, the January stimulus payments have generated the gains.

Unfortunately, the same cannot be said for industrial production which was down -1.8% in January from a year ago. Factories involved in consumer goods are making gains, those for business equipment and construction not. And "mining" (coal and oil) are down considerably, more than -10% year-on-year.

The US Fed will released the minutes of their January meeting at about 8am NZ time, and they are staying committed to very loose monetary conditions.

We should also note that the current freezing weather in the US is now expected to have a sizable impact on their February economic data, little of it positive. There are widespread blackouts, and Texas and adjacent states are where the impact is worse.

And one of the world's largest insurers, AIG, is hiking premium rates aggressively for all kinds of coverage.

Canada released its January CPI data overnight and that surprised on the upside, not that the rise was much, gaining +1.6% in the year for the closely-watched core components that exclude food and petrol.

Japanese machinery orders bounced back very strongly in December which makes the surprise Q4 Japanese GDP release of a few days ago more understandable. What is interesting about this latest data is that it isn't being driven by export orders, which is something of a surprise and good for them.

In Europe, Ford has announced that it will be "all electric" by 2030, partly following GM which is transitioning everywhere.

And we should note that red meat production is falling in Australia, down for cattle and lamb, up marginally for sheep.

New York equity markets are lower with the S&P500 down -0.5% in early afternoon trade. Overnight European markets were generally lower, down -0.7% on average. Yesterday, Hong Kong posted a +1.1% gain and up nearly +3% in two days. Tokyo was down -0.6%. Shanghai will be back open later today after their week-long holiday. The ASX200 fell -0.5% yesterday while the NZX50 Capital Index was up +0.5% on good earnings reports.

The latest global compilation of COVID-19 data is here. The global tally is still rising but at a slower pace, now at 109,659,000 and up +374,000 in one day. The pandemic seems to be easing in some notable places in the first world. Global deaths reported now exceed 2,423,000 and +11,000 since yesterday.

More countries (93) have started their vaccination programs. About 178.1 mln doses have been given so far (no update overnight). There is clear evidence the vaccines are working to reduce or even eliminate deaths for those who have taken it.

The largest number of reported cases globally are still in the US, which rose +61,000 over the past day for their tally to reach 28,386,000. The US remains the global epicentre of the virus although there is clearly some easing. The number of active cases fell sharply overnight and is now just on 9,404,000 and -50,000 fewer overnight, so less new infections again than recoveries. Their death total is up at 500,000 (+2000) in one day. The US now has a COVID death rate of 1505/mln, and that compares to the disastrous UK level (1746) where deaths are also still rising (119,000 and +1000) but a bit more slowly now their vaccinations are rolling out.

In Australia, their community control remains impressive. Victoria has eased its lockdown. Their all-time cases reported is now 28,911 and only +6 more cases overnight, zero new cases in the community and the rest new arrivals and all in managed isolation. 42 of these cases are 'active' (-1). Reported deaths are unchanged at 909.

The UST 10yr yield is little-changed at 1.28% today. But their 2-10 rate curve is steeper at 117 bps, their 1-5 curve is unchanged at +48 bps, while their 3m-10 year curve is holding at +124 bps. The Australian Govt 10 year yield is up another +2 bps at 1.40%. The China Govt 10 year yield is still unchanged at 3.26%, while the New Zealand Govt 10 year yield is up another +9 bps at 1.53%.

The price of gold will start today down another -US$17 at US$1778/oz.

Oil prices are up about +US$1 and are now at just over US$60.50/bbl in the US, while the international price is just on US$63/bbl.

And the Kiwi dollar opens today -½c softer at 71.7 USc. Against the Australian dollar we are softer at 92.7 AUc. Against the euro we are at 59.6 euro cents and unchanged. That means our TWI-5 is lower and just below 73.4.

The bitcoin price is now well over US$50,000 and is currently sitting at US$51,367 with a gain of over +5%. The new record high is US$51,735 reached at about 11pm last night. In New Zealand dollars, it is now well above NZ$70,000 at NZ$71,157. Volatility remains high at +/- 4.0%. 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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Who wants a discussion on the size of a good population for NZ? We could use the Climate Commission Advice Report to prompt that.
The recommendations are based on a population of 6.16 million in 2050. (Table 7.44, Evidence Report. Chapter 7). That is a 20% increase over the next 30 years or about 1 million. There has been a 40% increase over the last 30 years from 3.5 million to 5 million. A 1.5 million increase. (Rough numbers).
Would you rather have the 6.16 or 5 million population when trying to meet the 2050 targets? What policies will be in place to manage the population to hold it to either number?
Who would like to see the Climate Commission consider the pathway of holding Aotearoas population at current levels? A thumbs up please if you would like to see that analysed as a possible pathway. Better still make a submission.


As i have mentioned quite a number of times in the past, population size is a topic studiously avoided in political circles. This seems in part as John Key's Government demonstrated, because of a continuing belief that population growth is a requirement for economic success. And indeed was used as a basis to demonstrate some success, while actually concealing an ongoing decline in living standards. So far the economic whizzs' that advise or are in Government have not viable alternative plan on how to sustain NZ's economy any other way. Our Government fails, and refuses to support the revitalisation of manufacturing, has not learnt the lessons of COVID in demanding national resilience, and persists in printing money to counter the economic impacts of COVID with out a support plan that will ultimately ensure that this money printing does not ultimately undermine the value of our dollar.

This is in my view, a form of corruption where highly educated 'experts' ( (ex - the unknown quantity, and Spert - a drip under pressure) are so wrapped in their own egos, and pay packet size that they are unable to see, acknowledge and turn their accumulated wisdom to address what is obvious to the masses. The lack of accountability is saddening and will be reinforced when they are awarded honours by their colleagues at the end of their careers.

World population is expected to peak by 2050 and then start shrinking rapidly thereafter. China's population, for instance, is expected to halve by 2100.
Obviously, this a giant long term problem for governments and their unfunded pensions. This must surely be one of the motivations for luring immigrants to turn the demographic tide of fertility rates?

GDP is inextricably linked to population growth, when population growth actually stops the current global economic model falls over. Is there are plan for post-growth economy?

Who looks after the elderly? Who affords the wages for the ever decreasing working population? With lesser tax revenue, how do governments fund pensions and healthcare costs of the much larger ageing population.

I actually think that the population rate will decline faster than they think, unless something changes culturally. Increasing numbers of younger people are choosing not to have children at all, some of that is because they can't afford children. They can't afford homes, they are paying of university debt, they will be paying off the whopping pandemic debt hangover but some of it is because many don't want to have children for ethical/ecological reasons.

Gingerninja. Don't assume there is a problem to be solved wih old peoples care with population. It's quite managable.
On the other hand our big problem right now is affording population growth. New Zealand is not managing to keep up with infrastructure. Auckland has gone backwards since the 70s.

KH how is it manageable? We don't have good records in history for periods of global population decline. The Black Death is maybe the best recorded one but so many other factors were different then, so it would be hard to extrapolate forward based on the Middle Ages.

Totally agree about infrastructure but these issues are not mutually exclusive. We can have a short to medium term population boom crisis and a longer term population collapse. Both of those are huge issues that need thinking about.

One way Ginger is the costs of supporting humans aged 0 to 20 reduces. (has already in parts) Another is there are more older people because we are healther, and healthier goes with less care requirement.
But yes it is different, but just not a biggie.

The peak always had to happen. Only nutters thing growth goes on forever within a bounded system.

But it'll peak earlier than 2050; this is the latest Thesis I can find, which verifies that World3 is/was the closest longitudinal-fit of all graphs, ever.

Note population (p6) inflecting much earlier than 2050. The whole thing is worth reading

What are you seeing? Figures 9 - 13 at best show the BAU guess on initial resources was low by 5 - 10 times than what was actually observed and at worse completely discredit the model. There is no rollover on any of the plots except maybe population but that's hardly definitive.
The comparisons after that are too messy to separate from other factors that complicate the observed figures. Causation can't be proven from the data.
They don't supply the observed data from before the models calculations but I think a simple exponential regression fit from the first 10 years of supplied data would be competitive with the model calculations.

? Figures 9-13 don't show resources? Figure 16 is about resources.
Where do you get the 5-10 times out figure?

It's a very kind guess as to how the model could be so far out and still somewhat valid and I would think it's far more likely that there are multiple inaccuracies in modelling the real world in the model as well.
If you take BAU vs BAU2 on the plots and look at what data was actually observed you would need about an order of magnitude more resources to keep the model in its exponential growth stage to fit the observed data, thus the LTG roll over will still happen as per the model, it will just be many decades late.
LTG is more than an estimate of when peak oil will occur, resources are only important if there it can be linked though the model to food and population. The concept of estimating peak oil is perfectly fine it's the stuff the LTG tacks on.
All the data compared compare will significant momentum (for obvious reasons) you have do better than go in the same direction.

""Japan's population began to decline in 2011. In 2014, Japan's population was estimated at 127 million; this figure is expected to shrink to 107 million (16%) by 2040 and to 97 million (24%) by 2050 should the current demographic trend continue."" Although Japan has economic problems its GDP growth remains positive and I suspect better than New Zealands.
So GDP is linked to population growth but not inextricably.

I don't think you can look at individual countries when referring to a global economy and a global demography. One country could have a shrinking population and a growing GDP sure, but the deflationary effect of a rapidly shrinking population will pull down global GDP regardless. Some countries may find an individual fix in the short to medium term (by luring migrants or via exporting), but that won't change the demographic impact on GDP over the long term. How could it?

Gross domestic product, the sum total of product generated by each person on the globe. When the global population shrinks by some billions in the latter half of this century, there will be less people to create the product. Whilst we could somehow become more productive still, the sheer size of the demographic decline would require an increase in productivity never seen in human history. Possible maybe, but unlikely.

Every market is going to shrink.

With respect I just can't see the productivity problem you do gingerninja.

Certainly I can when you use the word inextricably. You then move on to global GDP and global population. The subject ought to be GDP per capita.
If my great descendants are living in a world with say under 1 billion people then they could be enjoying a quality of life that at least matches mine but without the guilt that they are stealing from the future.
The most I will give you is that managing decline is far harder than managing growth - I know this because I come from a large family all of whom worked for British Railways - I believe they were the largest employer in Europe when I was born.

Okay let me clarify, i am referring to global GDP and global population growth as inextricably linked to each other and to the global financial system as it currently exists. The only system we know. What comes after is unknown. Global population decline will be deflationary as it occurs not necessarily forever but certainly for several decades. The current global financial system isn't based on per-capita GDP. It probably should but it isn't, it's based on debt. Either way, the huge demographic shift will be a monumental change to the existing financial system, which is the point I am making. The era where that change occurs is likely to be very unpredictable and turbulent for the global financial system.

For instance, just try to imagine the time period between 2050 and 2100. The world is currently borrowing hand over fist on the basis that there will be future growth to sustain current prices and consumption. The entire financial system is based on debt and all debt is a claim on future productivity. Let's look at mortgages and housing debt. As population shrinks, there will be many more houses than people. Demand for housing will plummet. What happens to all the housing debt? What happens to all the economies, industries and people who rely on an ever growing housing market? How do banks and the global financial systems function without housing collateral? How do the younger tax paying population, fund the pensions of a much larger elderly population whose housing wealth is disappearing? What if this kind of deflationary pressure happens to many other markets? A shrinking population require less and less. And ageing population is itself deflationary because older people spend and consume less.

I am NOT saying that a huge, every growing population is necessary for individual human thriving. I am saying that the existing financial system is predicated on population growth as a factor in global GDP growth and when that collapses, it's going to be a thing. Not forever, but as we transition from a our current debt based financial system (which is inexplicably linked to population growth) and a declining population.

great post

Strongly agree on the madness of private debt bubbles - when things got this bad hundreds of years ago, a new lord would take over and cancel the debts owed to the previous one! Mind you, progress in those days was at least measured in human terms - quality of life, health and wellbeing, survival of your kids, etc.

It has all been foretold

Around 1980 a science-fiction book about the future was published with the title FOXCROFT. The story of a single corporation that became so powerful it came to dominate the world and world governemts who then became dependent on, or, subject to the dictates of the uncontrollable organisation called FOXCROFT.

Population was controlled. On their 18 birthday citizens were required to present themselves at a Foxcroft Centre where they were tested and screened. A strict 10% were deemed breeders and were provided with full rights to establish a family unit and breed. Partners were chosen for them. The remaining 90% were deemed not to meet the DNA requirements, became wards of the state, were allocated a living pod (ala Jucy hotel pods), were given regular weekly supplies of a psychotropic hallucinogenic drug that kept them sedated and docile (Ice, Methampetamine, facebook, instagram, twitter) and lived their lives out that way. Chemical reproduction controls.

At that time Google and Facebook were unheard of

Interestingly there is a new book out called the GODS of FOXCROFT
Published in 2000 it paints a similar future. A time when time is meaningless, when human life is created outside the uterus, and death is a dispensation from The Gods of Foxcroft, not a natural result or individual right

Still pre-Google and pre-Facebook and pre-Apple. Organisations that don't manufacture anything but are on the cusp of determining the mind-numbed state of the global populace and are so financially dominant they reminded me of the next step being FOXCROFT

It's starting - the Facebook-Apple-iPhone-Google effect - meets all your daily needs

Free your mind!

Its possible for standards of living to increase in a - GDP environment.

Once population decreases and resources dry up so does pollution and waste, it is extremely possible that the disposable world we have now will return to high quality, low output and maintenance.

There is a lot of wealth in those that will die over the next 20 years that will be passed on. So even in a deflationary environment, its a different ball game all together

I'll repeat this again then the glc, i'm not commenting on the longer term or quality of life after the transition from population growth to decline has occurred. I'm referring to the transition period, when our current economic model and system will come under a pressure it has never known and will have to be completely overhauled to adjust to the new paradigm.

There are always winners and losers. But there will be a few generations that get royally shafted i reckon. And there is never any predicting what kinds of political, religious and social movements are born of that kind of change. It could be orderly and civilised, or it could be horrific and bloody.

As a person in tech, I think the productivity increase you are talking about is VERY likely, will be needed and will result in huge improvements in automation, robotics and AI. Yes, the number of consumers will decrease, but at a rate slow enough that technology can adapt. The beauty of the next phase of productivity improvement is the systems will be integrated and re-usable - software paired with high tech hardware will repeat manual processes and self improve to the highest order of efficiency. And that efficiency will not need to be retrained and will virtually never degrade (minor mechanical losses over time for physical systems, with occasional replacements, but no need for training, upskilling, superannuation, sick leave etc). Put this right throughout the economy and we won't need the people, but we should be able to achieve the same quality of life, if not better. Self drive electric vehicles are just the tip of this iceberg that are seen to be "disruptors", but are just the start of a significant change. Yes, economies, societies and people will need to adapt, but that is most certainly a good thing as all indicators point out, we are currently unsustainable.

The way to think about this is by looking at a computer with a high end graphics processor - requires lots of stuff to build it, but once it's in place and running, it can be turned to any number of tasks to accomplish things people would never have thought possible 50 years ago. Want to set up an algorithm to search the stars for extraterrestrial signals? You can use that machine. Want to control a robot taxi as it navigates a complex environment? Same machine. Want to run economic forecasting algorithms? Same machine. This is another advantage of cloud computing which is just getting started - I would suggest our robotics and AI video recognition is in it's infancy, huge advances in this over the next couple of decades to catch up with our advanced computing power will happen and that will be when we really start to see a new revolution occur. Beyond this will be self replicating machines which we will likely send outside our system, tasked with establishing new bases on other planets. This is very close to being a reality IMO.

We will likely never have the energy required for enough of us to escape our bounded system to make a dent on extra terrestrial expansion, that will be left to those who settle in space. For us stuck within the boundaries of the planet, we will have to do what I have suggested or we will die under the weight of our own population. We live in interesting times.

I agree. And all of these systems are going to run on micro-transactions as a shift from the centralised internet, to de-centralised blockchains occurs. Increasingly the processing power will be centralised too, as has already happened with the likes of AWS and Azure.

Want to set up an algorithm to search the stars for extraterrestrial signals? Pay seamlessly with no lag per petabyte using a small amount of crypto. Want to control a robot taxi as it navigates a complex environment? Same crypto. Want to run economic forecasting algorithms? Same crypto.

I really wish that all of you IT people, so readily pronouncing the future not needing a tradesperson to learn anything the old fashioned way, to spend just a few months in any factory trying to produce a high quality product. Try manage the staff and resources and after you have successfully done that for say 6 months, go off on your career... and change the world :)

You're right. Best people I've worked with are people who retrained into IT and have experience in other industries. Not many factories around these days though. And makes much more sense to produce and ship software from NZ than stuffing hard product in a container to ship from the backside of the world. You should try managing the complexities of building and shipping a large piece of software. Same staff and resource complexities there bud. This isn't the future, it's the present.

Also in tech. Have strong concerns about the energy required to sustain current tech development velocity. Google global energy consumption over the last 100 years. Its scary...

Japan's GDP per capita growth has been much better than NZ's.

Achieving a stable population is not difficult at all. It's about there now already with birth rates.
But we do get folk who think it's hard, but really it's just an idea they have not encountered before.

A stable population is not a sustainable population - we need to be very careful with the throwaway words.

Have a read of that Thesis, KH.

But yes, we can adapt easily - just perhaps need to return to kindness and giving, rather than selfishness and taking.

Not sure what you are saying PDK. Perhaps you could describe your preferred population path.


The world's current population cannot be sustained. In my lifetime the mass of domesticated animals as a fraction of all animals has gone from 50% to 99% ~ that is a limit reached. One of many limits. The only way our population can grow and be sustained is to have humans living in hives and the steps towards that have begun: living in ever smaller apartments, a few drones and queen bees with the majority workers.
Failure to discuss our NZ population is a tragic national disgrace - our politicians are boasting of setting an example for the world with climate change but without population planning it is all meaningless.
PDK - NZ should be planning for population reduction; hopefully before your predicted apocalypse arrives.

KH - have a read of the Thesis I linked. Lapun get it. The problem is resource depletion, which marches on downward (see the scenarios at the end of the thesis). Thus a static-in-numbers population, if overshot resource/depletion-wise, is unsustainable as in: it cannot be maintained at that level. Worse, until a sustainable level is reached, draw-down is in deficit territory.

So a distinction must be drawn between a numerical plateau, and a number which can be maintained long-term at X consumption per head.

Agree PDK. I see it desirable (essential) to have a population that is sustainable. And it may be much fewer (much fewer) than currently.
There are those who somehow see population growth as inevitable and we should always seek to grow to to the maximum doable. I would see it better we undershoot the maximum sustainable level.
At times here I have encouraged the dear readers of with lines such as "I would accept a maximum of 5 million, as a politically achievable settlement, but I would prefer it to be two million." and "New Zealand would be a better place with two million"
Neither figure seeks to be the right one, but it's more just a way of introducing the idea to those who find it new.
Remarkably over the last year it's gone from a new idea on these pages to a mainstream one. The likes on the first post here show that.
So not perfect in the discussion, but moving in the right direction.

Given we don’t know the appropriate population number the first goal should be not to increase the existing figure. What NZ has done over the last 20 years is reckless and driven by the wrong metrics to judge and reward success.


Do I detect a softening of your tone? "We can adapt easily". To what? A reducing population? I find this hard to square with you previous and unremittingly downbeat posts. Is financial and indeed societal collapse not now imminent?

I find no trouble reconciling that - but then, I've been anticipating what that Thesis (up-thread, self to GN) addresses, limits-wise, for most of my lifetime.

Finance I've only contemplated for perhaps 15 years - but it's a crock, is my takeaway. GN rightly points out the future Musical Chairs problem with debt, finance's problem was that it was too removed from 'real', and it failed to move on (still talks about labour productivity, still lauds growth) from an 18th Century bible.

Yes, NZ can adapt easily to a reducing population - I was referring to the 'care for an aging cohort' bit. Some of just do that as part of our lives, no $, figuring that what goes around might come around when it's our turn. That's easily done; those who se it as a problem are those who see care as a commodity, to be profited from, traded, taxed, tabulated. It doesn't have to be any of those.

Have a morning's read of that thesis - it's eminently readable. See what you think by the end.....

Care for an aging population. What is elderly today (eg myself) is very different from what was elderly 50 years ago. Manual workers work harder than ever for a reducing slice of the economic pie - basically they are past it by 50. But most workers are not manual workers - a driver of a forklift is not a manual worker. So the solution is simple - a later retirement age. The interesting part is our physical and mental decline that sets in about the age of 50 ~ this was barely noticed when we retired at 65 but is rather obvious when we are working into our late seventies. Society (meaning our govt) needs to plan for letting us slow down before we finally retire; they need to concentrate on manual workers - plumbers to become foremen, drain-layers to become flagmen, etc.

Cheers Murray, I like the way you think.

Latest population projections have NZ population at ~6.25m in 2050 (50th percentile projection). However, for the past 20 years the majority of stats nz projections have seriously underprojected growth and growth has been tracking at 75th - 95th percentile projections. Therefore, unless significant policy changes are made NZ population will be closer to 7m in 2050. Not something I am in favour of.

$50,000 has fallen, and a 1T market cap is less than 3% away. If you've been paying attention this was inevitable. I made this comment a whole 37 days ago after 'Bitcoin died again'. I try to be conservative with predictions.

by LASSET | 12th Jan 21, 10:09am

"Literally the only people who have lost money in the last 12 years buying and holding BTC is anyone who brought for the first time in the last 4 days. If you can't recognise the long term trend by now you're simply ignoring the new reality. A 20%+ daily movement used to happen a few times a year, it's just the numbers are bigger now. If you can't handle seeing those sort of swings, this is not the asset for you. Though things have been a little less volatile of late as the market cap increases, and will continue to do so. The rise was starting to get a bit heated, so this drop is welcome to establish some support, and no surprise to anyone who's been in the market for more than a cycle. It's remarkable just how much massive buying interest there is right now on any drops though. What I would be surprised about, is if we're not above $50,000 by mid year."

Who cares about bitcoin. Pure hype. Its just electric 0s and 1s created out of thin air (much like all money really) It provides no yeild, and unless I'm buy weed online is useless as a transaction account.

Unless it becomes a mainstream method of payment its a tulip. But Why would we replace nzd with bitcoin? Why would regulators do that? Even If it got to the point were we needed to get rid of the current nzd money system, and publicly mined supply something mysterious was the answer, we'd probably make our own?

Bitcoin itself is just 1 brand representing an idea.

And lots of social media hype.

Keep puffing that green stuff fluffy

Pointless slander for sake of a better argument.

Nice choice of words but you have little or no research so your comments are as one might say - fluffy.


Sorry are you suggesting that owining bitcoin then starts to provide me dividend as a % of that bitcoin.

Or are you saying that the nz govt will someday replace the nzd with a crypto?

Siri, show me posts from 2012.

I know heaps of people (including myself) who have a yield from their bitcoin from the various lending products or even defi. Very good yield too

OK. I'm genuinely interested. Yeilds from bitcoin? How?

Like yeilds as in I buy shares and those shares provide dividend? Or are we talking various forms of capital gains (speculation)

From selling it. Lol. It’s a speculative commodity disguised as a currency. And having zero real-world value, it’s the ultimate best vehicle for speculation, because it can’t be tethered to any rational means of valuation. You can value it on the assumption that every transaction on Earth will be done via Bitcoin for the next hundred years if you want, no one can *dis*prove it after all.

OK but seriously, do people buy it not understanding that difference?

The basic difference between bitcoin and the nzd is that the total supply of bitcoin is finite. Just like gold, once the total supply is mined, there is no more.

It's actually truer for bitcoin than gold, because we can never know exactly how much gold exists in the world. We may find a mother load of gold randomly under some drained lake in 20 years and queue another gold rush. With bitcoin it's a mathematical certainty. The calculations are all there for anyone to see. The only unknown is whether some of the "missing" bitcoin will ever appear, which could continue to cause volatility for a long time to come but ultimately, we still know exactly how much there is and will ever be.

Like that guy who has millions in BTC on his cold wallet and can't remember his passwords lol

But there are other cryptocurrencies - there is absolutely no limit to cryptocurrencies. Another cryptocurrency may be found to be more favourable/fashionable in 20 years . . . or even six months.

If I had a dollar every time I heard that line, I'd be able to buy half a bitcoin

Sure. And that is one of the problems with currency! We change our mind about store of value. If you read my comment below, i go into that a bit more.

Correct. Plenty of blockchains underpinning real-world data management solutions. Some functioning as networks for rapid P2P payments with no fees. Some managing as memes. There are good choices out there, many are better than bitcoin. BTC is high-profile but is not the only evolution of crypto.

Exactly - and they will do well once their practical uses are understood and utilized -- but Bitcoin will still be the "gold" standard for cyrpto - and therefore is not going anywhere -- to compare - how many day to day transactions are made using Gold - the odd pawn shop deal maybe -

They had to create Bitcoin with a limited supply or it would be worthless. All digital currency needs is a limited supply or someone limiting it. In my mind Bitcoin is still worthless and still has the potential to go to zero value overnight.

Sorry. If all it takes to create a crypto currency is development time. and I could quite literally make a new one up in my garage using the collective IP of my current project team... ITS NOT BLOODY FINITE

Even that rationale doesn't stack up for me. Why would the largest superpower, give up supply and regulation control of its main bartering system, in favour of something that is unregulated, produced and stored in another country?

Don't get me wrong, a store of value can be anything society deems of value, so go ahead and sink the house on it. but fundamentally its still a tulip.

Unless the US military can destroy all the blockchain technology, intimidate every country in the world and execute all the software experts, then they have have no control over BTC. Regulation is built into the system, it doesn't need bureaucrats in suits to "regulate".

"Why would the largest superpower, give up supply and regulation control of its main bartering system, in favour of something that is unregulated, produced and stored in another country?"
Its not their choice...the cat is out of the bag...please read the BITCOIN STANDARD by Saifedean Ammous .you might learn something

I think Bitcoin users live in hope that it will become the global reserve currency. Its pure speculation based currency. If it was adopted it would go up in the multiples in the thousands, if it doesn't get adopted it could simply die. Its pretty obvious to me that another digital currency will get adopted and it will not be Bitcoin. Bitcoin will then just be tied to the new digital the same as it is to fiat. I guess users want it to be as big as possible so it is to big to fail, it will be a confidence game as to whether or not it survives. If everyone rushes to the exits at the same time it will get ugly.

I think Bitcoin users live in hope that it will become the global reserve currency.

For most its probably more of a hedge against fiat and the banks actually. To be able to choose the exit at one's leisure without prejudice, rather than being locked out from the inside as per Gamestop and r/wallStreetBets.

For me it's entirely about preserving the purchasing power of my savings throughout the course of MMT and QE. Any gains are icing.

Genuine question...what happens if the Internet/power grid goes down?

All the traditional financial systems go down and are stuffed. Bitcoin continues BAU

Thanks. But how would you communicate with the satellite without power?

Wait... You're asking that question seriously? The power grids are down for good, and you're worried how BTC is going to communicate with a satellite???

I'll tell you exactly what I'd do - get my gun out of the locker and form a militia with my neighbours to barricade the street.


Sorry, I wasn't suggesting an apocalypse type situation. I was just thinking maybe a few days/weeks after some event. Just curious that's all. I realise that that also causes problems for "normal" banking.

So you're suggesting a grid down, apocalyptic scenario and your biggest concern is that you can't trade BTC?

Hey Fluffy, if you are really interested in how to make yield from crypto, this interview with the head of Blockfi will explain everything.

Basically you lend your crypto to Blockfi and they pay you interest on that holding. Currently up to 6% on BTC. You can see the rates here.

They lend your crypto at higher rates to large institutions who need it (But don't want to purchase), generally so they can short it.

OK. Thanks.

So the bitcoin itself is just transfered to other investment vehicles, that then re-invest in other actually productive assets?

So like a normal hedge fund, just one thats domiciled in bitcoin rather than currency?

So not a house, or a business generating productivity?

So it's just a store of value?


Yes, a classic Ponzi scheme.

You keep saying that Printer? Can you give us a end date as all Ponzi's end surely much like your belovered house prices?

Can I give you an end date?
Yes, certainly, and with accuracy: I will let you know the day after. :)

From the grave?

Just remember when the housing ponzi scheme collapses one is left with a house. When the bitcoin ponzi scheme collapses you are left with . . . . um? :)

I actually wish those with Bitcoin all the best. Those in it for a long period - such as Lonewolf - seem to have done well. Its just that I have memories of the NZ sharemarket in the 1980s. Lots of hype and exactly the same feverishness money for nothing . . . until.
I know I'm a conservative investor . . . and I didn't get involve in shares in the 1980s as I was too busy paying down the mortgage.

No you're no left with a house after a property bubble bursts? 2008 USA ring any bells?

There is a thing called being prudent regarding property . . . something I have posted about numerous times and each time getting a backlash.

By the way, those that quote the 2008 USA (and Irish) property crash negate to mention that NZ survived the GFC as unlike the USA our mortgages were not based on the subprime fiasco. At the time lending in the USA was extremely reckless and virtually uncontrolled . . . that wasn't the case in NZ.

A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors named after Charles Ponzi, who duped investors in the 1920s with a postage stamp speculation scheme. Ponzi schemes typically offer: High returns with little or no risk; Overly consistent returns; Unregistered investments; Unlicensed sellers; Secretive, complex strategies; Issues with paperwork; Difficulty receiving payments. Bitcoin is the opposite of all of these things.

Liquidity is going to be the biggest problem for any investors with property if/when that pops. There's a reason why Mortgage is translated from the French "Death Grip".

That's not what I asked. I said how do you have a house after a property bubble bursts and you go into negative equity and can't pay your bills? The bank just going to let you off are they?

That's assuming you've borrowed for the house.

Someone has $500k to invest. They buy a house for $500k. Property prices drop by 99%. They still own a house.

They invest in Bitcoin, the price drops 99% and everyone loses confidence? The price then drops to $0 and all you have is a ZIP file filled with 1's and 0's.

You don't have to go to the USA 13 years ago - just ride the Otago Rail Trail. Plenty of empty houses - even empty towns and villages.

Hmmm banks and mortgage sales comes to mind Printer?

Just remember when the housing ponzi scheme collapses one is left with a house. When the bitcoin ponzi scheme collapses you are left with . . . . um? :)

You may be left with a house (+negative equity and substantial debt, and if you can't service the debt where do you go from there?)

I think it’s a Ponzi, but wouldn’t dare guess an end date. If I could, I’d go all in and bail at the right time, wouldn’t I? There’s no limit to how much wealth it can suck in, I don’t think another 300% in two weeks or something is impossible. But there will be an unwinding in the medium term, and it will be in the order of 99%.

The thing that really concerns me at the moment is that the Bitcoin market seems to be manipulated.
I keep hearing reports of Musk promoting Bitcoin and banks and the like putting in considerable sums . . . so pumping up the price. Fairly obvious tactic . . put money in, start a feeding frenzy and quietly pull ones money out with considerable profit. Not rocket science.
I recollect Bob Jones promoting his shares about thirty years ago . . . I gave it some thought . . didn't . . . and learnt not long after he had reduced his shareholding. Go figure.

Musk definitely spruiked Doge. But it was almost worth it for the memes.

He's trolling people at a whole other level

There is nothing special about crytos aside from some developers time. It's no different to me creating a word doc with the number 1 in it. Emailing it too you, saying "this is has value as I'm only going to make 100"and you listing it for sale for the highest bidder.

Serious now -> give me a full time developer (basically any language) and a data analyst/arch and I'll create you a new currency every month.

The difference is just layers of development/Intergration. And marketing.

Now... If I can create currencies in my garage as a weekend project.. then an individual brand is nothing special...

Fill your boots if you can, but good luck finding a blockchain dev here in NZ fluffy. There are 80 solidity (ethereum) devs in the world. And probably less than a few thousand developers worldwide in the entire space right now.

Calling BS on you being in tech btw. You lack understanding of some of the most basic fundamentals.

I think tulip is the better term. No one is being purposefully deceitful. But either which way. Pure speculation. At least with nz housing stock I make money on my rentals.

It's nothing like tulips.

Bitcoin was invented as a hypothetical solution to a perceived problem. The perceived problem is that the current fiat currency model is screwed, the system is rigged against the average person with a deflating currency, bank bail outs and an ugly shadow banking sector. People liked the percieved solutions and over time, more and more people have adopted it.

Gold was also a flawed system (but perceived as better than fiat). Money has been imperfect ever since its creation and so Bitcoin was an attempt to resolve that issue with an eye to history, human behaviour and modern technology. It's actually an incredibly elegant solution, but that doesn't mean it is the solution that will be adopted by everyone.

It might be that governments copy the Bitcoin model with their own currencies and maybe that will solve currency problems, but most coiners suspect that governments and central banks are not on their side, so using cryptos is a vote of no confidence in the current global financial system. Tulip mania was not a vote of no-confidence in the banking system, tulips were not a hypothetical solution (using tech) to solve currency issues. Tulips were not political or a social movement.

Of course, it has also become highly speculative, and for a dinosaur coiner like me, I see almost a cult like vibe now, which is always dangerous. But that is probably predictable too, human beings love to hype the shit out of whatever they believe in. Religion, fashion, music, TV shows, stocks, politics. We pick up the meme and spread it.

I got involved in mining bitcoin back in 2012/2013 with no idea whatsoever that it would ever be worth $50k. I got involved as part of a movement that wanted to build a financial system, post GFC, that was outside of the existing banking system (which we all felt had massively failed us). Not that I necessarily disagree with the bail out to save the banks during peak crisis, but the lack of regulation and the massive bonuses that came after, that was what drove my commitment to cryptos.

Obviously, i have no idea how it will play out long term and, as with all investments, a lot of people might lose a lot of money. However, there is a social movement within the crypto community which should not be so easily dismissed.

Ultimately, wealth is an energy problem. No energy, no work. No work, nothing done.

Bitcoin is worse than fiat-issued debt, in energy terms. The encryption takes a s---load of server grunt; low-grade heat entrophy-ing everywhere. Fiat still requires energy, but less. Cash (print energy aside) requires none.

But all require belief, all are merely tokens, all require future energy to do future work to future resource-stocks - if belief in that future is lost, so too is the belief in every kind off token. An economic collapse, for instance, could see internet intermittency via grid-intermittency (trace bitcoin and a lot of it relies on coal-fired grid capacity). What is funny is to see arguments between believers in this or that, when both are in the same boat....

Oh i'm with you PDK, i'm not suggesting that BTC is the best solution to the currency problem, I was just laying out why BTC is not tulips!

Let's break it down even further and state that ALL LIFE is an energy problem. And also, that human beings are motivated by beliefs as much as data or rationality and whilst we are fairly canny in inventing and building tech that solves problems, these are often driven by short termism and a blindness to unintended consequences.

When I started mining BTC it was USB sticks and Raspberry Pi's, energy use was low (and we were also using solar). Looking longer term, we do have the technology chops to get off fossil fuels so in the longer term, a crypto currency might not be as flawed in terms of energy use as it currently is.

Whether or not the tech moves on and sustainable energy uptake is fast enough to get us out of our sink hole is another matter.

Bitcoin's energy consumption is more efficient than that of gold and traditional banks. By allocating significant real-world resources to BTC mining, the network guarantees settlement like no other asset. Traditional banking consumes 2.34 billion gigajoules (GJ) per year and gold mining 500 million GJ, while Bitcoin consumes 184 million GJ, less than 10% and 40% of traditional banking and gold mining. Additionally, Bitcoin mining's estimated dollar cost per GJ expended is 40 times more efficient than that of traditional banking and 10 times more efficient than that of gold mining.

Further reading for anyone interested

Completely flawed logic. Traditional banking handles massive quantity of transactions enabling a very wide range of economic activity. Bitcoin is largely just bought and sold by speculators. Banking energy use will not continue to rise exponentially, BTC will.

Bitcoin is largely just bought and sold by speculators.

Soooooo... like gold then? Compared to which it uses considerably less energy. Not to mention all the Proof of Stake solutions coming online in the crypto space that use next to no energy at all. The energy argument is "old man shouts at cloud" stuff.

As for a small shortlist of the speculators you talk of, here's a few of them:

JP Morgan, Goldman Sachs, Citigroup, PayPal, Square, Twitter, Grayscale, MicroStrategy, Tesla, Blackrock, and The Motley Fool to name just a few.

Blockchain is going to eat up every financial product and market space in the world. So many laggards are going to be angry as hell when that happens.

And just for the record, I bought more BTC today at $52k USD.

So if you got involved with it back then, I'm assuming you're a billionaire now. When are you gonna sell?


We sold out during the last peak and have no regrets because we were able to buy a house outright. We're millennials with two kids. We were so over landlords kicking us out every 18 months to sell their properties and not being able to give our kids any kind of stability. Since then, with no rent to pay, we have also been able to send our kids to an amazing school and they have never been happier. So whilst, yes, if we had HODL'd and sold out now, we would have been much wealthier, we are not interested in wealth for wealth's sake. Our kids being happy and settled over the last few years, is priceless.
We consider the BTC windfall pure luck though. We legitimately had no idea it would ever help us buy a home. We're just massive geeks.

I do remember you commenting a while back that you were selling out prior to Bitcoin bubble popping. Congrats and glad to hear you don't have FOMO looking at the current price.

Have you reinvested in crypto at any point? Bitcoin or altcoins?

We have a varied spread of coins left still but less as an investment or speculation, and more just as a hedge/diversification. Same as with gold/silver and toilet roll lolol . I am not a doomer, but I do see the financial system as extremely fragile and the fat tail of a major collapse is worth preparing for.

There have been many studies that show the diminishing return on money once you reach a certain level of wealth. Where any subsequent increases beyond a certain point have a less pronounced impact on health and happiness. Once we had our bases covered and became financially secure to a comfortable standard of living, we had no cause for FOMO. FOMO is a high stakes game and we are fairly risk averse.

This is my theory with alts. I might never be able to repay a mortgage with moon money, but wiping what is left of my student loan or being able trade my current car for something more family-friendly and safer isn't entirely out of the question - while minor, they would make a huge difference in our lives atm. I could take a bigger moonshot, but I wouldn't enjoy it as much as I enjoy what I have in alts now, and it would up the stakes considerably.

Yeah, for me at least, it's also way more fun than stock picking. I genuinely enjoy the crypto community and will belly laugh every time i'm scrolling reddit or twitter. The crypto community have mad shitposting skills ;-) . Just never take a moonshot you can't afford to lose.

"The perceived problem is that the current fiat currency model is screwed, the system is rigged against the average person with a deflating currency...."

Fiat (has) put spending power in the masses pockets!!!!
It has created & elevated (unsustainable) living standards for the masses ... and allowed us to pillage the far reaches of the globe

Restricted currency (of any sort) does the opposite
ie concentrates wealth / breaks economies to scale in supply chains / reduces FAR TOO WEAK ALREADY demand

So no it never going to solve anything
We are in overshoot
And it comes down to Physics & resources


Holy hell I can not believe people have not done any further research about the misinformation surrounding Bitcoin since 2017. All of the pointless arguments above have been debunked and researched into oblivion several times over.

Lets start with a good overview of what money is and a simple comparison with Bitcoin:

A simple article by Lyn Alden about 7 misconceptions about Bitcoin:

Why Bitcoin is not a Ponzi scheme:

Great podcast episode with Dan Held smashing all the common FUD about Bitcoin (highly recommend)

And just one example why having an independent, non government controlled money available to anyone and everyone is a necessity, real world use:

Regarding electric cars does anyone know of a good in depth brief or book for those of us interested in lithium mining? I'm interested in investing but I need to understand they mechanics, structure and dyanmics of the industry.

Hey Squishy, as far as commodities go related to EVs I'm much more interested in Uranium mining. We need much larger amounts of stable base power (see Texas right now) to power the future electric fleet. Increasing fossil fuel emissions are off the table, and it's not going to come from solar and wind... those are just icing. Uranium is just coming out of a decade long bear market following Fukushima, with very little U308 being extracted for a long time, there is going to be a massive supply shortage. COVID has contributed as well with almost all the mines worldwide being shut for a year. The big Utilities are coming off long term contracts very soon and will need security of supply at any price (The fuel although vital is only a small % of the cost of operation for a Nuclear Power station). Currently Uranium spot price is $29USD lb, cost of mining for most companies is around $50USD lb... so I expect the spot price to rocket past $100 lb in the next 2-5yrs. I've already done very well in this space and the real party hasn't started yet.

Aussie is a significant exporter of yellowcake, as well as crims. They probably don't want this to be at the front of media discussions. They prefer the bad rep for exporting crims to having to acknowledge they are a major producer of uranium.

Bill Gates says reducing greenhouse gas emissions to zero by 2050 "will be the hardest thing humanity's ever done", but could potentially be achieved with the use of nuclear power. Link

The case against restrictive lockdowns. Not to be confused with closing borders on an island.

"The most restrictive nonpharmaceutical interventions (NPIs) for controlling the spread of COVID‐19 are mandatory stay‐at‐home and business closures. Given the consequences of these policies, it is important to assess their effects.

...Because of the potential harmful health effects of mrNPI—including hunger, opioid‐related overdoses, missed vaccinations, increase in non‐COVID diseases from missed health services, domestic abuse, mental health and suicidality, and a host of economic consequences with health implications—it is increasingly recognized that their postulated benefits deserve careful study.

...While small benefits cannot be excluded, we do not find significant benefits on case growth of more restrictive NPIs. Similar reductions in case growth may be achievable with less‐restrictive interventions."

Great link. It's a shame that they pretty much nullified all their results with this one statement. In fact, they listed more limitations than results - most of which would result in a rejection by most journals.
"Because the location and timing of policies are endogenous to perceived epidemic stage, the noise in case counts is associated with the policies, making bias possible and very difficult to eradicate."

So, essentially, "we got the results we were after using a methodology that produces bias when applied to the exact type of data we used."
To make an admission of an extremely plausible case of endogeneity in your data, that you do not control for, is an embarrassment.

Nullified all their results is a big call. You imply this possible limitation is particular to this individual paper? "This limitation also holds for all other empirical assessments of NPI effects.18"

You imply this possible limitation is particular to this individual paper? "This limitation also holds for all other empirical assessments of NPI effects.18"

That doesn't make it okay or validate the results in any way.

Is this validation? "The Office for National Statistics said gross domestic product (GDP) fell by 9.9% in 2020 as no sector of the economy was left unscathed by lockdowns and plummeting demand during the pandemic. It was the biggest fall in annual GDP since the Great Frost of 1709, when the economy shrank by 13%."

A greater fall in GDP than two world wars and the Spanish Flu. One would have thought is lockdowns were a fantastic policy the UK economy would have fared better than under the Spanish flu. Or their death rate would have fared better the countries that didn't lock down.

But, if as the paper says, the pandemic spread and lockdown timing are endogenous, how can you say lockdowns are the key culprit of the fall in GDP?
If you cannot disentangle the two, you cannot establish causality. Without causality, all you have is a spurious correlation.

You expose exactly the point I'm making - you are fitting outcomes to a narrative by not robustly analysing the data.

For the UK the centrally imposed lockdown policy is unprecedented, as is the economic impact - bar the great frost. Asian flu, Spanish flu didn't have lockdowns so these historic cases you do have a control. I don't have to wait for a paper to come out to observe that. As the authors stated, and the Journal accepted, the very nature of these studies makes definitive, Nymad grade, robustness difficult.

I don't have to wait for a paper to come out to observe that.
Well, yes you do. Your naive observations are not at all considered proof in any way or form.

Nymad, you're not going to change his mind. Profile has been a card carrying virus-denier and "alt facts" officiado since the beginning. He will grasp hold of any conceivable prop to hold up his narrative, because he has invested so much in it, emotionally and psychologically. Time has proven him wrong on almost every thing he's ever clung to since March 2020 on here. Just leave him to stew in his own embittered juices and time will just keep proving him wrong.

Virus denier - that's a new one! I did quote from a Stanford paper - not zerohedge! You are right on one thing - time will tell.

So one can only make observations from authority - but when the published paper doesn't meet Nymad standard of authority I can't make observations from that either. In the time you have spent wrangling on comments section I trust you have emailed Stanford and the European Journal of Clinical Investigation and chastised them for their embarrassing paper. For the record I did state it was an observation and wouldn't be on such a high horse to consider it a proof. It would be a boring comment section if all observations had to have definite Nymad grade proofs!
Anyways, have a great day. I guess we disagree on this one.

While the lockdown might be unprecedented, the UK running out of cheap energy is. They did it in 1913 and again in 2004, they haven't got another one. Plus economic conditions were already declining in 2018. So while easy to follow a bias and blame the lockdown, which I am personally opposed to as it political and unscientific, the analysis isn't so straight forward.

Perfectly put.

Those two are both pre-conditioned; it's a little like watching an argument about which slides faster, the blue or the red deckchairs. Sort of becomes irrelevant about the time you lose your footing....

2010 BTC $20K - Appearing at the CNBC-Institutional Investor Delivering Alpha conference, Dimon said at the time: “It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed.” He also contended, “It’s just not a real thing, eventually it will be close

2021 - BTC $50K JPMorgan also said that its analysis found that the rapid rise in bitcoin over the past five months had “taken place with relatively little institutional flows.”

“Some pickup in real money flows would likely be needed to sustain current prices in the absence of a re-acceleration of the retail flow,” the note said.

They still don't get it?

Pure speculation. The share price of everything has gone mental. Bitcoins just a sexy investment for people wanting something fun and anti establishment.

Yes, we had dinner with our Children on Saturday. They are chasing crypto because everyone else is. I don’t think this will end well but some are making good money. Good luck to them and keep on spruiking.

I expect same conversation's were had when the first motorcars hit the road - will never replace the horse!

If you're in the boomer demographic, crypto is the worst thing you can invest in. Stay right away from it. Better to hold your money in something rock solid like cash, backed by governments who really understand big things scary things such as the financial markets etc. Better yet, hold your cash in banks whose focus is to see their customers do well financially through various products and services.

If you can't see and hold it in your hand. It doesn't even exist!

So you don't believe in Air then?

Air is the worst Ponzi scheme of all. Trees only keep producing it because humans breath it. Complete scam.

Prices seem “mental” as you need more worthless paper fiat to buy the same things. BTC is the only thermometer in the room that is working. The consensus narrative is BTC is gold 2.0 and is a decentralised store of value hedging against rampant money printing. Some people choose real estate to store their wealth, others do not. Young smart people see their wealth holding more value in a digital form.

Spot on. People think BTC going up in USD is just crazy. That's not what is happening. It is the USD which is being devalued by excess supply.

"Some easing (re COVID infection and deaths) in advanced countries"
USA infections peaked at 330,000 per day. So, today is 80% lower.
UK infections peaked at 50,000 per day. Currently about 12,000.
World deaths per day were about 17,000.
About half that at present.
As 178 million vaccinations , we are told, been administered, world wide, it seems that vaccination was only a partial reason why infections recorded have dropped so precipitately from mid January when they peaked.

I know this is anti-MSM narrative but it appears to me that virus was already in retreat before vaccines roll out.

Now we are being told that some people "infected" have a lower viral load than others.
No such distinction was being mooted in media or by officials until this month.
Presumably this means potentially that those with lower viral loads are less at risk and less infectious?
We are not told whether that is so or not.
Vaccination is not nirvana and the experts consensus now appears to be that deaths and serious impacts of CV19 will be greatly reduced. But that new variants and lack of vaccine guarantee of non-infection and infectiousness means that Cv19 will not be eliminated in the next 18 months.
6 months ago we were being led to believe, by omission mostly, that vaccine WOULD stop infection and ability to pass it on. Not any more. Dialogue and narrative from authorities changes rapidly.

Wow that looks really bad.

And it is only getting worse;

One county said it had seen more than 300 suspected carbon monoxide cases during the cold snap. "It's turning into a mini mass casualty event," one Harris County doctor told the Houston Chronicle.

Yields are rising because markets expect inflation to be more than officialdom is admitting and the also feel that the reflation packages administered last year by developing countries have been over-cooked. When the inflation arrives (and the evidence is accumulating already especially in food and freight costs + plus see AMI mention above) will be VERY interesting to see all central banks "looking through" the inflation that they secretly want to erode debt, whilst earners get lower rises than inflation and hence consumer demand takes a hit because they DARE not raise rates. A big mess on the way. Stimulus is like a brick pulled across a table with an elastic band. For about 9 months, nothing, then it smacks you in the mouth

Yep, big mess. And another article on rent rises;


Wow in late 2017 Wellington rental rates were $450 a week, it is basically going up 10% per annum over the last 3 years. Wage growth is at about 2% & on top of that you have to give a third of that wage growth back in taxes. We might have some tent cities poping up soon at this rate. Should give somthing for local govt to do. Is a tent that someone permanently lives in classed as a structure?
Stay safe & be kind :)

The five year US TIPS is still trading at a negative 1.86% yield.

What does that mean? No recovery, no inflation. Rather, TIPS are being moved higher by expectations for the CPI to be better, on average, because of higher oil prices alone. The economy itself, which is what would produce actual inflation – sustained, broad-based increases in all consumer prices not just one or a few commodities – is being priced simultaneously as if prospects for the intermediate and longer terms have changed very little.

In other words, a woeful economic situation which would be made worse (more miserable) by rising crude. Link

With YCC About To Come Back Up, A Look At It Down Under
Check US nominal yields out to two years duration in the TIPS link above in respect of this quote:

When I hear the term “yield curve control”, I immediately think of Richard Fisher. The last thing any central banker or supporter of conventional monetary policy wants is to be so closely identified with the former Dallas Fed President. Proven time again to misunderstand what the central bank actually does, to the point of confusion over what bank reserves actually represent, yet it was this particular Texan who confounded his more plugged-in colleagues at the FOMC with his toddler-simple wit at least when it came to this bond purchasing stuff.

MR. FISHER. In summary, I want to mention that, as I said earlier, most of these variations that have been suggested are very un-Bagehot-like. And what I mean by that is, twisting [or QE and yield caps] entails purchasing assets that investors are fleeing toward, not assets that they are fleeing from. [emphasis added]

By that he meant the very basics; monetary officials tell the public all the time that bond buying (QE) is why interest rates have ended up going lower, and that lower interest rates are powerful stimulus. Put those two things together and monetary policy employing QE must be awesome.

So, here was Fisher pouring cold water all over that neat little theory by his simplistic notion of some real scientific observation; why are we buying the same assets everyone else already is?

And let's not forget RBNZ FLP setting the three year finance rate at OCR.

There is not enough energy in the world for bitcoin to ever be anything more than a minor player in transactions....sooner or later enough will realise this fact and abandon it.

BTC should be seen as a store of value like gold. For everyday transactions, BTC won't be the coin of choice. It's obvious the naysayers haven't done any research otherwise they would know that there are far more cryptocurrencies with different properties to BTC.

And in the attempt to overcome energy consumption they all strike other problems, especially with security....they are not scaleable and therefore will never be anything other than fringe.

Scalable as in quantity being fixed? That's the point

Y, D AND B - No, it is NOT a store - of anything.

It is a token, as is cash, debt-issued proxy, everything except the real purchase. You miss it the same way economists miss it.

I repeat, it's NOT a store. It's a bet; a bet on the future availability of stuff being there to 'cash it in' for. No stuff? No value.

I understand your point and I agree entirely that it is just a claim on future work/resources. However, until we reach that tipping point, it still has value i.e. you can acquire physical resources by redeeming a digital one. It wont solve any of our existential problems but it may wrestle back some of the power that has been wielded by the elite.

Wasn't it about this time last year that Bitcoin was 'valued' at US $10,000?
Just weeks later it 'halved' (Bitcoin jargon there!) not in practice - but in price. Its 'value' plunged to US$5,000 or less.
Are we going to see another similar halving at some stage? US$50,000 to US$25,000. And if so, will it stop there? Will it quarter?
Regardless. It is a fascinating, live action play on human nature.

(NB: Market Experience - If we had a huge order to sell, what did we do first? Buy it up first; get the herd charging in the 'wrong' direction before hitting them hard, fast and continually until the order was done. It's the name and reputation of the transactor that allows that sort of stuff, be it, say, Bankers Trust Company, San Fran, who were known as massive options play hitters in their day; They shocked the NZ$ into free-fall and had the RBNZ on their knees, begging for help. Andy Krieger, who engineered that went on to work for Soros, and they did the same to Sterling. Those were really established, hugely liquid markets - unlike Bitcoin today) or....Tesla?) Just a thought)

So it will be a bit player then.


New Zealand with a population of Two Million. We would be happier, wealthier and wiser. And having more fun.

Great idea. I'm dreaming of the buildings in the CBD that would be replaced by park land or forest. Actually thinking of the three or four I would keep - eg Auckland Town hall. And reducing the suburbs would be fun - replacing our subdivided blocks with full size or full acre blocks. On the whole it would be better to return our suburbs to being separate villages - take Glenfield, Northcote, Birkenhead and Beachhaven - keep the buildings within 1km of their centre and bull doze the rest. We could keep the same bus routes but knock out 80% of the bus stops between centres. Happy dreaming.

What a boring place it would be with only 2 million people.

How interesting. FB can move so quickly on this issue but seemingly couldn't solve the CHCH Call issue;

Corporate fascism - there should be law against self serving censorship.

Long term rates end of curve rising.
Are NZ banks going to ignore this when pricing their loans ?
Not for long

RBNZ FLP has set a benchmark wholesale three year finance rate at OCR.
Will unsecured bank depositors see much better in the near term to compensate for credit risk?

I don't understand cryptocurrencies and I am not at all envious of those who make money from them. Good luck to you.
I am happy to stick to what I know-the stockmarket. Yesterday, EBOS raised its dividend by 13.30% and today, Skellerup did the same, but by 18%. That's what I hold shares for-their dividend stream-and that has served me well for decades. I never sell shares to give me income, I don't need to.

"What would blackrock know about investing?" (screams the boomer with 10 rentals)

I wonder what "dabbling" means for a company with 8.7T funds under management?

Probably a lazy 1B