Breakfast briefing: The Fed upgrades growth, but holds settings

Fed upgrades growth forecasts sharply, but sees inflation bump short-lived; US data soft; China facing food threats, importing much more; UST 10yr at 1.65%; oil and gold dip; NZ$1 = 72.1 USc; TWI-5 = 74

18th Mar 21, 7:22am by David Chaston

Here's our summary of key economic events overnight that affect New Zealand, with news markets have been waiting all week for - the Fed to speak.

They has been meeting and today sharply upgraded their forecasts for American economic growth in 2020-2021 (pg 2). Elsewhere they left their pandemic setting for monetary policy unchanged in what is essentially a cautious review. But that growth upgrade reinforces market moves to raise long term benchmark interest rates on the basis that this growth will be inflationary at some point, and relatively soon. The Fed however thinks the inflationary bump will be short-lived.

The US Treasury is quickly disbursing stimulus payments. So far US$242 bln has been paid out to 90 mln people. This is less than halfway, so the amount of direct juice straight to households is very large. Even larger are other program support payments, taking the eventual total to US$1.9 tln or +9% of US GDP. Most professional analysts see Q1-2021 growth running at close to +5% in the US. The AtlantaFed's GDPNow forecast has it running at almost +6%. For an economy as large as the US, this is very large, and don't forget, most of the Biden stimulus plan won't have much impact in Q1-2021. It's effect will be felt in the rest of 2021.

It could result in the largest American economic expansion in a generation.

In advance of that, US housing starts tumbled in February when no change was expected. It was an unwelcome surprise and is -9% lower than for the same month in 2020. "The weather" is getting the blame, but building permit levels have stayed elevated, and housing completions are running +5% higher than year-ago levels.

American mortgage applications fell slightly last week and mortgage rates inched higher. Their benchmark 30yr fixed is now at 3.05% plus points, and that is a nine month high.

In Canada, they are watching their core consumer inflation rate fall. It was down to 1.2% in the year to February, a drop from 1.6% in January.

In China, food security is important to them and they are facing real threats to key crops from fungal diseases and insects. Their response has been to pour on the chemicals. And they are importing increasing amounts of grains to make up for their domestic shortfalls. They don't seem to be making progress on food security.

In Europe, their core inflation rate came in at just +1.1% but that was expected even if it was lower than they recorded in January.

Locally, keep an eye out for the NZ Q4 GDP which is coming up at 10:45am; expect a +0.5% annual rise.

In New York, Wall Street is hesitant today with the S&P500 up +0.1% in early afternoon trade and basically ahead of the Fed announcement. Overnight European markets were mixed; London was down -0.6% but Frankfurt was higher on the day. Yesterday, all the main Asian markets were very little changed. The ASX200 ended yesterday down -0.5%, and that was mirrored by the NZX50 Capital Index.

The latest global compilation of COVID-19 data is here. The global tally is still rising and at a fast pace, now at 120,918,000 and up +528,000 in one day. Global deaths reported now exceed 2,674,000 and +10,000 in one day, and much of that from the raging situation in Brazil. Vaccinations in the first world are rising however and in the US nearly a third (109.8 mln) have now had this protection. That is quelling the US daily death rate which was up less than +1000 again yesterday. However, the number of active cases there rose yesterday to 7,323,000 (+19,000 more in a day), a bump in the reducing trend.

The UST 10yr yield is up +3 bps from yesterday at just over 1.65%. The US 2-10 rate curve is rising, steeper at 151 bps. Their 1-5 curve is also steeper at +77 bps, while their 3m-10 year curve is up to +166 bps. The Australian Govt 10 year yield is up +8 bps at 1.79%. The China Govt 10 year yield remains unchanged at 3.28%. And the New Zealand Govt 10 year yield is also little-changed at 1.78%.

The price of gold starts today down -US$4 in New York at US$1728/oz.

Oil prices have dipped again and are now just over US$64/bbl in the US, while the international price is now just over US$67/bbl.

The Kiwi dollar opens today at under 72.1 USc and taking a big jump post the US Fed announcement. Against the Australian dollar we are also little-changed at 92.8 AUc. Against the euro we soft at 60.3 euro cents. That means our TWI-5 opens today at over 74.

The bitcoin price will start today at US$55,382 and very little changed from this time yesterday. In between, volatility in the past 24 hours has been +/- 2.7%. 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 ».

Daily exchange rates

Select chart tabs

Source: RBNZ

Source: CoinDesk

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

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

72 Comments

by MortgageBelt | 18th Mar 21, 7:53am 1616007186

And the US faces a southern border crisis as the White House has signaled a soft stance on illegal immigration
https://edition.cnn.com/2021/03/16/politics/joe-biden-immigration-borde…

by theglc | 18th Mar 21, 8:19am 1616008777

The Dems continue to effected by TDS

The see everything trump does as bad and must be reversed and this is essentially a self inflicted wound

by Hummy | 18th Mar 21, 7:55am 1616007347

Unbelievable how they twist the numbers.https://www.rt.com/shows/keiser-report/517912-soaring-home-prices-inequ…

by MortgageBelt | 18th Mar 21, 8:02am 1616007730

Interesting how RT never reveals any news or economic information on Russia itself.

by frazz | 18th Mar 21, 8:35am 1616009727

Yes I was wondering that as well - but hey they gave us the Kieser report when no-one else would so big kudos to them.

by Hummy | 18th Mar 21, 10:29am 1616016595

Max is just a time filler, but his opinion is closer to truth than what you hear on any TV station. We all would had liked to have bought bitcoin when it was 10 bucks. Or so many things he tells you about.

by Palmtree08 | 18th Mar 21, 9:47am 1616014046

Can't expect the Kremlin mouthpiece to be introspective. That's not their mandate. Criticism of the Russian state is of course an offence in the motherland, so can't expect quite the same examination of shortcomings at home, gangster state, or not. ;-)

by mikekirk29 | 18th Mar 21, 7:56am 1616007409

World infection low was 363k in 2021
Now 524k and rising
Although Brazil most of reason, this is 3rd wave coming in and more virulent strain

by frazz | 18th Mar 21, 8:36am 1616009770

Shhhhh..you will stir up profile.

by Pacman_46 | 18th Mar 21, 7:58am 1616007510

Pretty bullish news for BTC
https://www.cnbc.com/2021/03/17/bitcoin-morgan-stanley-is-the-first-big…

by bw | 18th Mar 21, 8:47am 1616010457

"The US Treasury is quickly disbursing stimulus payments"

And what do we think the recipients are going to do with those payments? Perhaps, try to 'get rich' like those before them by piling into illiquid asset speculation? Of course!
And who will they buy them from? Those who already have them......

You couldn't write a work of fiction any better this. The ultimate "sell them the rope to hang themselves with"

by linklater01 | 18th Mar 21, 9:24am 1616012660

bw,

Well perhaps, but they might just spend it on food, rent and medicine. I think you need to calm down.

by bw | 18th Mar 21, 9:32am 1616013157

They might. But I don't think that's what markets expectation is telling us? You'd have to say Bitcoin is?

by Independent_Observer | 18th Mar 21, 9:42am 1616013732

This guy was obviously so desperate to buy some BTC with his stimulus payment that he shot 4 family members!

https://www.washingtonpost.com/nation/2021/03/16/stimulus-check-shootin…

by Zachary Smith | 18th Mar 21, 9:43am 1616013783

A rare occasion where I agree with you linklater01, bw needs to calm down.

by Pacman_46 | 18th Mar 21, 9:44am 1616013858

Or trying to preserve purchasing power. The original $1200 stimulus cheque would now be worth $11k+ (9x)

https://twitter.com/bitcoinstimulus/status/1372279581827342337?s=21

by the Joneses | 18th Mar 21, 10:42am 1616017337

'Invested' at the casino and on a winning streak at the moment. It means nothing till they cash in their chips though.

by Pacman_46 | 18th Mar 21, 10:58am 1616018281

Like housing stock?

by ham n eggs | 18th Mar 21, 11:13am 1616019201

yes and no
housing is likely to be useful into the future
Bitcoin?

by LASSET | 18th Mar 21, 8:42am 1616010170

Big spike to over 58k USD this morning.

by Galloleous | 18th Mar 21, 8:47am 1616010422

And were up at $58k already today on the fed news.

by Ezy | 18th Mar 21, 8:50am 1616010628

The FED are unwittingly pumping BTC with all this stimulus. There's talk across online channels of people buying their first Bitcoin with the FED money. The r/Bitcoin thread on reddit has gone from 1.8M subscribers in January, to 2.6M as of today's date. Glassnode data shows, that as soon as Chairman Powell started talking, approving the stimulus, spot buys started going crazy, so institutions were essentially waiting for confirmation and a green light to buy more. On top of that, there's been huge outflows from exchanges to cold storage in the last 4 weeks, and the amount of BTC available is at it's lowest point in exchange history. All very bullish, and would be surprised if BTC didn't go past 70k for this next 2 week pump cycle.

by Galloleous | 18th Mar 21, 8:55am 1616010934

Dont you love how the bank decides you must have at least $2mil before they will let you do what you want with your money lol
Short the bankers with their primitive policies and corrupt bullshit.

by VeryInterested | 18th Mar 21, 9:58am 1616014734

Ha! Chamath Palihapitia in a conversation recently said the same thing recently. Don’t short bitcoin, short the banks! They are totally screwed.

by ham n eggs | 18th Mar 21, 11:26am 1616019993

if the banks are screwed, then supply chains/wealth / debt / money as you know it are all screwed
Bitcoin may be used as a greater fool hedge as fiat continues to head towards imploding ... but a (digital) hedge is of no use if Fiat has imploded

by frazz | 18th Mar 21, 1:53pm 1616028796

Can you expand why that is Ham? I can trade with thousands of people around the world just using Bitcoin ..no Fiat involved.

by ham n eggs | 18th Mar 21, 2:21pm 1616030472

do you honestly think all those cogs (people/machinery/parts etc) in the supply chain will still be turning up to work (to enable your seemless trading) around the world if their fiat income supply line doesnt exist?

by Foxglove. | 18th Mar 21, 8:02am 1616007745

China food shortages. Simplistically the vast urbanisation of peasants has created China’s own industrial revolution with swathes of peasants now crammed into high rise urban density. Rurally, though primary food production has not modernised or improved in quality, sufficiently apace. Remember studying similar scenarios about the formative years of the USSR. Guess 1.8 billion mouths to feed not a small challenge though. Hungry people are not usually happy people. Unhappy people in those sort of numbers are the biggest worry the CCP has I would suggest.

by MortgageBelt | 18th Mar 21, 8:43am 1616010198

Sad situation for many Chinese families. And under totalitarian rule getting tougher.

by Zachary Smith | 18th Mar 21, 8:48am 1616010482

Actually I hear obesity is becoming quite a problem in China.

by middleman1 | 18th Mar 21, 8:55am 1616010937

FG.Not sure there are too many people in China these days who are actually hungry. While there have been recent shortages of specific staples such as pork (and now it seems some grains) due to swine fever and other pestilence, I suggest the cited 'food security' is more about the country's ability to source enough of the higher quality type of food now demanded by its burgeoning middle class and not a repeat of the famines of earlier decades due to shortages of staples caused by CCP mismanagement. The USSR famines following farm collectivisation in the 1930's were a product of misguided ideology rather than naturally occurring phenomena, with the notorious 'Holdomor' that killed up to 10 million Ukrainians purposefully used as a weapon of genocidal suppression by Stalin.

by Foxglove. | 18th Mar 21, 9:17am 1616012257

Fair enough, but then again you need to ask why then is there so much consumption of feral/wild meat and the resultant risks. For instance bubonic cases emerging recently from the consumption of marmots. Appreciate there are cuisine heritages there, that are alien to western diet, which might even be viewed as delicacies, but selections such as large rats and bats would seem to be born out of necessity and of course it is the consumption of the latter that is largely viewed as the genesis of the CV19 outbreak. To my mind that is much more than an implication that too many are finding sound safe protein too hard to source.

by middleman1 | 18th Mar 21, 9:54am 1616014491

Originally born out of necessity no doubt but as you concede these 'delicacies' are today just as likely to be related to 'heritage' food status. I suggest your suspicion that bat eating Wuhanians do so through necessity rather than culture may be more informed by the backward looking view of china (as per audaxes posting) rather than the comparatively prosperous and well fed society that most of china has today become.The cowed dogs in asian restaurant cages waiting to be killed and eaten seem to our sentimental western eyes to be aware of their impending fate are one step too far for this otherwise adventurous cuisine traveler. I was intrigued at the response of a highly educated guide on one of our trips there to me saying I hunted feral pigs for sport. He sincerely believed that the strength of the pig transferred to the eater of said animal. Didn't get to try endangered rhino horn powder but did have some snake wine once - viscous looking fluid from a bottle which contained a large dead snake. Apparently it was going to stimulate me to an exceptional extent he informed my alarmed wife.

by Foxglove. | 18th Mar 21, 10:40am 1616017255

Match that and raise. Recovering from one of the unavoidable gastro calamities, and having been lucky not to be hit by a window cleaner falling to his death on the pavement before me, was given the honour at lunch shortly thereafter, of the utmost delicacy of monkey brain soup, don’t know how else to describe it. I am older now, but no wiser.

oh & ps. Stand easy. Imagine Mrs Middleman able to detect the different level of peril, between that of a trouser snake and king cobra!

by Audaxes | 18th Mar 21, 8:57am 1616011070

From the first millennia until the 19th century, China was one of the world’s foremost economic powers. Today, the People’s Republic has largely recaptured that position and by the end of the decade is expected to overtake the U.S. as the world’s largest economy, a gain that may be expedited by the post-pandemic U.S. recession compared with China’s rapid recovery. Unfortunately, the Western attitude toward China remains stuck in the ‘century of humiliation’ where from the mid-19th century until the Chinese Revolution in 1949, it was successively raped and plundered by the Western, Japanese, and Russian imperial powers. The reason the English-speaking world clings to this backwards view is because apart from that centennial period, the West has always been second place to China as the world’s most distinguished country providing the global standard in infrastructure, technology, governance, agriculture, and economic development. Even at the peak of the Roman Empire, the Han dynasty where the ancient Silk Road began was vastly larger in territory and population. Link

Unsubstantiated nonsense from Biden does not help the US downward plight.

It might be useful to ponder this statement from Iran two days ago to bring a level of perspective to these matters.

March 16 is the 33rd anniversary of the chemical carnage in #Halabja.

Some care not to remember—those in the west who provided Saddam with the deadly chemicals.

Over 5,000 innocent civilians were gassed to death.

Still want to talk about "malign regional behavior"?

Shameless. Link

by middleman1 | 18th Mar 21, 9:07am 1616011665

The CCP 'providing the global standard in governance'. That's , like, um a novel proposition.

by bw | 18th Mar 21, 9:42am 1616013779

"Oddly enough, it was reportedly none other than Henry Kissinger who encouraged Trump to ease the strained relations with Russia as a strategy to contain China,"
(from link)

by middleman1 | 18th Mar 21, 10:02am 1616014924

The same Henry Kissinger who could have earlier extracted the US from the Vietnam quagmire on the same terms as it eventually did leave, but declined to do so and in the meantime an additional 20K American and untold numbers of Viet lives were lost.

by Lapun | 18th Mar 21, 3:33pm 1616034795

From your link: ""The former Chinese Empire underwent its ‘hundred years of humiliation’ after suffering a series of military defeats in the Opium Wars which funded Western industrialization"". The indefensible 1st Opium war 1839–1842 resulted in 3,100 Chinese killed and 4,000 wounded and the 2nd Opium war resulted in 2100-2801 Chinese killed and wounded. Compare that to the civil war Taiping Rebellion where radical political and religious upheaval lasted for some 14 years (1850–64), ravaged 17 provinces, took an estimated 20 million lives.
Religion is far more dangerous than opium.

by Audaxes | 18th Mar 21, 9:25am 1616012757

The Fed however thinks the inflationary bump will be short-lived.
Indeed - US 5year TIPS moved down to minus 1.93% yield. Real negative yields this low point to economic contraction.

US Treasury 3 month bills print 0.0% yield.

by stuart786786 | 18th Mar 21, 8:42am 1616010150

What Fed think and does is all under pressure with an eye on stock market.

This will continue for many many years as the moment fed even think about reducing the measures or raising interest will be blackmailed by their own doing with STRICT NO to avoid bloodbath.

Whenever Fed decides to remove the EXTRA measures atleast once, their will be bloodbath, which cannot be avoided and the only way is to delay till eternity by continuing support.

by theglc | 18th Mar 21, 12:38pm 1616024286

they are indeed backed into a corner

all they have left is pumping the ponzi and jawboning

by bw | 18th Mar 21, 8:46am 1616010412

Central Banks all over the world have an aspirational goal of 2% inflation.
If you are age 30–40, that means every dollar you save today will lose half its value by the time you need it for retirement. And that’s what passes for planning by a committee. They literally plan on destroying the value of your dollar. The only real debate is over how fast to destroy it.

https://www.mauldineconomics.com/frontlinethoughts/inflation-is-broken

by Zachary Smith | 18th Mar 21, 9:40am 1616013654

That's why it is sensible to buy property or other assets.
However money that has been "saved" has always been subject to inflationary erosion. Where is the news here? Honestly bw you grow more shrill by the day.

by Audaxes | 18th Mar 21, 9:10am 1616011852

A luxury permitted by division of wealth for one third of already wealthy households.

by bw | 18th Mar 21, 9:25am 1616012759

The 'news' is in the rest of the article. We all know about Inflation Targeting, and have since New Zealand 'lead the way' 25 odd years ago.
When something is broken (the article) it either gets fixed or destroys the mechanism it is powering. I've lived and worked in a country that had ~30% p.a. inflation; where dealers would sell you a new car, and guarantee to buy it back from you at the same price in a year's time. I know what the end result of that is. (You end up with the junior on $25k pa buying a $250k Benz 500SL because he"can't lose".)
Either way, the current broken system is going to get fixed. Either by us, or for us.
I'll suggest that those who think the busted system can keep going as it is, and 'protect' their livelihoods using the tools that broke the machine in the first place (asset speculation spawned by non-productive debt) might be disappointed.

by Independent_Observer | 18th Mar 21, 9:10am 1616011836

Yes I'm almost convinced (>80%) that central banks, particularly in the anglosphere, are losing control now. Its only a matter of time before the debt burden becomes too much and the current financial system as we know it (including currencies) will be kaput.

by GV 27 | 18th Mar 21, 9:48am 1616014100

1) NZ Govt mandates targeted inflation in agreement with RBNZ
2) Inflation is measured in a way that under-weights major expenses like housing, 'real' number likely terrifying.
3) Govt rules out adjusting tax brackets for inflation so nominal wage increases are not captured with additional tax.

This is unconscionable and no leader who dared speak of fairness should allow these three things to go on - at least knowingly allow it - without a huge media uproar about the government booking additional revenue from taxpayers at the expense of real wage growth.

Until someone corrects this glaringly basic agency issue, the state has no authority to lecture people for seeking out tax-free gains (gains that remain tax-free at their pleasure, I might add).

by Independent_Observer | 18th Mar 21, 10:05am 1616015128

Historical measure/s of inflation were based upon money supply. So if you use that as a measure, you're looking somewhere around 8-10% on average over the last 20 years. But we've convinced ourselves that inflation is near 0 via the CPI measurement. In reality we really needed the OCR to be much higher. You can also see the correlation between share market and house price index with respect to money supply. We're heading to a very bad place with our current inflation targeting philosphy because money supply is expanding exponentially and uncontrollably - but if we do try to control it now "properly", it will likely decimate asset prices and there will be mass defaults on debt, deleveraging and business failure. But if we don't do that and continue the path we're walking, hyperinflation is a possibility. If people realise the value of the money they have is worthless, or becoming more worthless each month, they'll try and buy whatever assets they have and get rid of any currency they own (which perhaps in part is why we're seeing the massive inflation in housing). Its a sign that the system/currency is breaking and if left to continue, will spiral out of control. See 1920's germany...

https://www.interest.co.nz/charts/credit/money-supply

https://tradingeconomics.com/new-zealand/money-supply-m3

by Galloleous | 18th Mar 21, 10:32am 1616016776

You two have nailed it.
Everyone thinks they are making bank with the stock market and house prices going up, until shit really hits the fan.

by VictimOfOCR | 18th Mar 21, 10:19am 1616015942

I feel like the whole housing situation could be fixed with one simple change. A fair measurement of inflation.

In an ideal world taxes would be adjusted too to benefit salaries and disincentivise property investment but that is clearly to complex for this government.

by Independent_Observer | 18th Mar 21, 9:44am 1616013893

Problem is we seem to have hyperinflation in assets, but more or less no change in consumer inflation. That isn't a sustainable model long term and at some point one or the other is going to give.

by keithwoodford | 18th Mar 21, 10:05am 1616015119

Zachary,
The 'news' lies is in the reality that at least in the NZ context it is now not possible to fight that inflation by earning a real albeit modest return on savings. And the ongoing search for a safe haven, together with the leverage returns, is why property investment behaviours have changed.
KethW

by Galloleous | 18th Mar 21, 8:50am 1616010644

Hmm, well what is one scarce asset that no one can print more of and devalue you portion of the network? Save in Bitcoin, leave what ever you are willing to loose in a bank account. Remember the Cypress bail-ins everyone.

by iconoclast | 18th Mar 21, 9:17am 1616012237

Are you giving Financial Advice? Looks like it

by Galloleous | 18th Mar 21, 9:46am 1616014003

Yes.

by CrispyKahawai | 18th Mar 21, 9:59am 1616014790

Pretty sure people are constantly doing that on this website.

Oh, but of course, "this is not financial advice" - yes, that'll do it.

by the Joneses | 18th Mar 21, 10:48am 1616017732

What if Bitcoin goes out of popularity tomorrow because something else comes along? What is it's intrinsic worth?

by ham n eggs | 18th Mar 21, 11:57am 1616021842

Bitcoins ultimate worth is Zero.
The future is local and vastly less complex
But it could easily go to $100,000 + worth of imploding fiat before it gets there

Its all in the timing
How long can fiat hold?
Supply chains are really creaking
Id be surprised if we get through 2022

by Ezy | 18th Mar 21, 4:10pm 1616037053

Bitcoin's intrinsic worth is, that it's the first ledger in history that provides consensus without the need for custody. It is decentralised and immutable by it's very nature. The market capitalization of the global banking sector was 5.2 trillion euros in the third quarter of 2020. In essence all banks do is provide custody of financial assets, so you could start at 5.2T euros as a baseline for BTCs ultimate worth if you like.

by Independent_Observer | 18th Mar 21, 9:08am 1616011696

I can't help but think that central banks (especially of the anglosphere) are losing control.

by valueformoney | 18th Mar 21, 9:10am 1616011811

yum, i love a bit of pesticide in my grains

by Palmtree08 | 18th Mar 21, 9:54am 1616014444

I'm sure foodstuffs originating from China will be given special attention, to ensure no residues exceeding limits, or restricted chemicals, appear on our shop shelves. LOL

by Mannering | 18th Mar 21, 9:26am 1616012765

"Yes I was wondering that as well - but hey they gave us the Kieser report when no-one else would so big kudos to them."

Well, natch Fazz, it's a propaganda exercise, but as you say, Max and others offer different perspectives and I used to watch The Boom Bust Report with Edward Harrison who also has his own blog, Credit WriteDowns, and IMHO is worth listening to as he has a good track record in his commentary on credit markets.
.

by frazz | 18th Mar 21, 9:31am 1616013093

Its all propaganda - but at least what some predicated is currently now playing out - those are the ones to listen too natch (new word of the day)

by Mannering | 18th Mar 21, 10:07am 1616015272

"From the first millennia until the 19th century, China was one of the world’s foremost economic powers. Today, the People’s Republic has largely recaptured that position and by the end of the decade is expected to overtake the U.S. as the world’s largest economy, a gain that may be expedited by the post-pandemic U.S. recession compared with China’s rapid recovery."

So true Audaxes, as far as it goes, but there are a few non U.S./Western induced problems that might get in the way of China's inexorable rise to displace the U.S. as No.1 such as:

`- Terrible demographics. The population is already declining and their age/sex pyramid and hence dependency ratios are very bad news.
- The end of or even reversal of the rural-urban drift which, as the world's greatest internal, or any other for that matter, migration is coming to an end or is even reversing. This and the past highly productive demographic profile have been major influences on the country's incredible modern growth history. China will get old before it gets rich, especially on a per capita basis.
- The innate corruption inherent in the traditional culture and the CCP system of promotion, much of it based on false reporting and hence, bad decision making at all levels.
- Massive environmental degradation of, among other things, soils in their "rice bowls"and elsewhere.
- Mind bogglingly inefficient resource allocation in a debt and investment led economy. Try leaving your tour group and hiring a taxi to take you to have a look at the many of the concrete forests of 20 story apartment blocks in/out side cities like Shanghai. The quality of construction is worse than ours and many of such places are already crumbling while they wait for occupancy which, given a decline population, may never happen.

by Lapun | 18th Mar 21, 3:11pm 1616033515

The last 4 points I'll agree with but not the first. Wealth and power used to correlate with the number of peasants working in the fields producing stuff but that changed with the industrial revolution - that's why Queen Victoria of England (small country) became Empress of India (big country). China makes thing they sell to the rest of the world. Mainly made in factories which can and are being automated. As China's population drops it will just become wealthier and partly solve your other four points. If India's population had stablised 60 at independence then it would be at least as powerful as China. The demography argument can only make sense in the modern industrial world if China adopts New Zealand's generous superannuation.
Most countries including NZ would increase well being and long term prosperity if their populations were dropping.

by mikekirk29 | 18th Mar 21, 10:09am 1616015369

Take a look at what Margin debt is doing in USA - Martin Woolf today

by richard1965 | 18th Mar 21, 10:36am 1616016998

https://www.newshub.co.nz/home/money/2021/03/housing-crisis-share-of-ho…

Every hour news for FHB is indicating DOOM - Still the Great Jacinda Arden full with Emphaty and compassion - the image which is splashed all over the world by foreign media is IMMUNE to plight of FHB in her own backyard.

Is it because, she too knows that this is the last term for here and to now concentrate on UN job or similar.

Real Shame.

by Pusheen | 18th Mar 21, 10:56am 1616018214

Most of the educated Asians migrants, a third largest ethnicity which largely being ignored in NZ are mostly fully aware that NZ is just a stepping stone to meaningful life in OZ - If you're young professional, productive age, trained in highly specialised area of Healthcare services for example. NZ really not worth it.

by Lapun | 18th Mar 21, 3:15pm 1616033745

Might be worth staying in NZ if a decent 3 bedroom house with garden cost 3 times your annual salary and if their partner could be fully compensated for stopping work for five years to raise a child.

by Beanie | 18th Mar 21, 3:22pm 1616034141

Compensated by who?