By Bernard Hickey
The 'new normal' is beginning to dawn on consumers and borrowers before it dawns on policymakers and the media. Figures out this week show New Zealanders have begun the long and painful process of changing their ways and restructuring the economy.
Treasury and Reserve Bank statistics show New Zealanders are now 'injecting' equity into their homes at a rate of around NZ$3 billion a year, which is a massive turnaround from equity 'withdrawal' of more than NZ$4 billion a year from 2004 to 2008.
Finance Minister Bill English trumpeted this move as a sign New Zealanders were saving more and the economy had begun the long-awaited and hoped-for restructuring away from consumption and importing to saving and exporting. But have New Zealanders really started saving and investing rather than spending and borrowing? And what might it mean for the economy if it really had started?
Firstly the figures are worth a closer look because they don't actually show increased saving. All they show is that people have stopped using their houses as ATMs to go on holiday or buy a new car or a really big flat screen television.
What is portrayed as increased saving is actually the difference between the amount that is being spent on new housing and renovations and the amount raised in new debt. As a nation we continue to spend more than we earn because we have a current account deficit.
Until that is reversed we are nowhere near saving again. A closer look at what is happening with saving and borrowing show that New Zealanders may have stopped borrowing more to spend on cars, holidays and flat screen televisions. But they have yet to really start repaying debt and then saving.
Bank lending to housing has actually risen NZ$8 billion to NZ$181.3 billion in the last two years. Lending to business has actually fallen NZ$5 billion to NZ$72.3 billion over the same period while lending to farmers has risen more than NZ$6 billion to NZ$47.8 billion.
What this shows is that New Zealanders borrowed another NZ$14 billion against the value of their land and property in the last two years. This doesn't show up as an equity withdrawal because the money was put into more land and property rather than cars and boats. But it still doesn't lessen our reliance on property investing. We need to be lending more and investing more in businesses, particularly exporting businesses, to really drive the transformation.
That's not happening yet. In fact the only part of the economy that is really saving more and repaying debt is business. But this is only the beginning. Household debt as a percentage of disposable income, which is a better measure of whether consumers are really deleveraging, shows an improvement to 154% from 158% over the last two years. But New Zealand needs to get back to closer to the 100% seen in 2000 to be anywhere near normal.
Retailers and bankers are beginning to sense the scale of what this coming and what real deleveraging might mean. The housing market has gone deathly quiet this Spring as first home buyers and investors refuse to add to their debts. Retail sales in August were flat, despite expectations of a pick-up before the GST hike. Retailers are being forced into permanent sales mode or are just plain being forced out of business.
Bankers, including KiwiBank, have even started pleading for people to borrow more.
'A lot further to go'
Once New Zealanders really start saving our bloated retail, consumption and importing sectors will feel much more pain. But this deleveraging is inevitable and can't be stopped. We are best off trying to embrace this new age of austerity and the drive for balance in budgets, current account deficits and international trade flows.
That means reducing spending, switching from consuming to exporting, and learning to live without debt. It means living simpler lives focused more on helping each other rather than trying to outspend each other. It won't be easy, but we'll be better off in the end.
Our government should help us do this by balancing its own budget and encouraging production, exporting and saving.
A tax break on bank savings, increased capital requirements for bank lending on land, a higher Core Funding Ratio to discourage foreign borrowing by our banks, local content requirements for government procurement, a land tax and a capital gains tax would be a good start.
42 Comments
I agree with Gummy Bear Hero – Jeez Louise.
Tonight someone in Papakura (NI) won 28 million NZ playing Lotto. Our country has only about 5 million people. For some reasons so many Kiwis having financial problems, why not be social and share that money between us all. Every one of us could be more then a millionaire. 28 million NZ divided by 5 = 5.6 million NZ for each of us. I think the government should really look into that enormous potential (playing lotto every day). Bernhard, I’m sure when we are smart enough we don’t need austerity.
Sorry Kunst, I'm not sure if I'm reading you correctly. You cannot divide $28 million dollars amongst 5 million people and make everybody a millionaire. If you did that, everybody would end up with $5.60.
Far better if everybody stopped playing the Lotto entirely and kept the money in the first place. I remember my old Probability Lecturer at London University. "The National Lottery," she explained quite clearly, "is a tax on people who can't do maths."
Love it! Never bought a Lotto ticket in my life, never will.
Sorry Kunst, I'm not sure if I'm reading you correctly. You cannot divide $28 million dollars amongst 5 million people and make everybody a millionaire. If you did that, everybody would end up with $5.60.
Far better if everybody stopped playing the Lotto entirely and kept the money in the first place. I remember my old Probability Lecturer at London University. "The National Lottery," she explained quite clearly, "is a tax on people who can't do maths."
Love it! Never bought a Lotto ticket in my life, never will.
Someone less kindly quipped that LOTTO was nothing more than a tax on morons , as the odds of a win are much less than the odds of you being struck by a lightning bolt . And as the government take a whopping slice of the pool , you'd have to be utterly daft to hand over any more of your dosh to those clowns .
One sad thing it proves , is that people equate wealth with luck , not with hard work !
Is austerity and other painful measures really needed for free self- responsible and sensible societies or are we stupid enough for financial self- destruction ?
When economics become increasingly philosophical issues.
The cuts will come anyway. We must work with what we have got. And make the best of it.’ Baroness Warnock, philosopher
Austerity could be a short term measure, but we need more then that - a change to philosophical ideas.
A few months ago I wrote article below.
The world is on a tipping point. The risk of destroying civilization within the next 20 years is fast growing. It is clear to me that unsustainable business practices are increasingly happening. Dominated by greed and megalomania the worldwide traditional economic pattern is driving us for so called progress and growth with the only aspiration for money, consumption and higher standards of living.
As a consequence the world pollution on our environment, nature and us is unacceptable. This period of time has to come to an end. Although there isn’t enough prove “Climate change” is caused by humans, signs of nature hitting back already causes enormous damage on economies and societies worldwide.
The younger generation has to spend in the billions in order to clean up the mess in many sectors our, the BB generation has caused in the last 30 and upcoming years. The younger generation may also bear the costs for massive natural events, which are prohibitively expensive.
Sometimes I even think we are already in that pattern, spending billions in repair what we destroyed earlier - a vicious cycle. We do need a clear sustainable economic strategy in New Zealand, which is based on less imports, quality, more self- sufficiency and modesty.
Economically sustainable growth?
um..........
There is no such thing.......
Sustainable.........
growth......
You are suggesting a self feeding / perpetuating machine........
You are leaving out the one big word............or elephant in the room......
Energy
oh and actually another, population.........
More people will take more energy and more materials just to "tread water"...
Oil is around $80USD a barrel about the tipping point for a recession....ie the energy input cost to the global economy is too high to leave spare/excess to allow "growth/profit"
Paying down debt in this period of calm is very sensible....if you dont believe in the energy problem we face, well....
For myself my aim is to reduce my debt by 10% per year minimum....20% if I can....Im doing this because I think we have at most 8 years maybe a decade before it gets really tough...but we may have only 2....
regards.........
Couldn't agree more Bernard, however the banks will fight this thooth and nail from happening. Deleveraging and repaying dept means asset prices can go down. They don't want that. We have a (former) banker at the head of our government and via the government would be the only way to get us free from the banks, in some orderly way. Doesn't look good, does it.
Which is why the ppl have to take this action themselves.....the very action the Govn doesnt want because the more money chruns around the system the more opportunties to take a cut at each transaction.....if you save they onlt get one take....bad news for them.....cant justify the tax cuts for the rich they so want.....
Funny but reducing the tax on the rich has if anything been a negative effect on economies and not a good one....trickle down never did.
regards
A poor person is never going to employ you. Let them keep their money. But the "natural" rate of interest should be zero. "Money" shouldn't earn interest, and it doesn't have an opportunity cost, like the textbooks say, only equity does, and that equity should be truly at risk. Then your "rich" person is forced to create wealth through investment.
The point is neither necessarily is a rich person....and in fact in the last decade it looks like rich ppl actually are destroying economies and jobs.....when someone? describes Goldman Sachs as a vampire squid, there is good and justifiable reason.
Classic examples are the banksters and similar in Wall street right now, indeed they have not only cost jobs they have destroyed hopes and dreams by damaging or destroyed pension funds for the workers/middle class.
So you are either confusing or obfuscating the fact that rich ppl are the ones that are productive and employ ppl. If we take the "middle classes" on the other hand as an over-used term for a productive group then yes these ppl who are by and large small employers and professionals in the real economy produce a real benefit....
Interest is a payment for using others capital and covers a profit on that capital and a risk % for possibly losing that capital, so Interest is totally justified IMHO.
Another point in the real world, low interest rates over the last two decades have encouraged mad specualation in lots of un-profitable areas let along things like the carry trade....ditto it allows businesses with poor efficencies or business models to survive, this should not be the case.
The rich person might be forced to create wealth but I doubt it, but ppl such as I or say pensioners have no way to create wealth as effectively we have in-sufficient funds to invest and lack knowledge, capability and experience is hard one. Our only way around that without bank deposits is to join some dort of fund which from observation are run by in-competents who do poorly of even lose money...and Ive certianly lost money on occasion (I find I do better by myself). Now giving me access to deposit type accounts gives me a small risk free rate of return and still puts money into the system to be lent out...its the base if you will....sure it shouldnt be "high'....anything over say 5% seems unrealistic for a no risk investment....but less than 2% um no...
regards
Agreed. Either this week's or last week's commentary from Tony Alexander was BEMOANING the fact that people weren't borrowing
Shock, horror, such a terrible thing Tony that people aren't getting into debt as much
People like Alexander are yesterday's men, people like Bernard are today and tomorrow's men
Austerity is a wonderful thing to aspire to. I am far from austere but am trying my best!
I only buy clothes that have at least 40% reductions. you can always get this if you are patient. Same for most other things. I know quite a few others who only do this too. Makes you wonder how the likes of clothes retailers are making a go of it, when so many people wait for sales these days
Plus my wife and I use trademe an awful lot
"Someone has to earn enough to pay the interest? Those that cannot pay wont pay."
If the banks can't expand their balance sheets they will fail. In the meantime the interest payment is due (181 + 72 + 47) * 0.08 (say) = $24 bn extracted from the economy. That's $24 bn straight to the equity line of the banks' shareholders, that's 1/2 of what the government takes in taxes, and what? 20% of GDP. The $300bn of loans outstanding was written into existence at the stroke of the borrowers' pen. Money is printed into exisitence when it is loaned, and the banks charge for the privilege. The banks do not risk a cent. Bernard you've talked about the banks "return on assets" in the past, but you must know that for a bank this is meaningless. The only assets a bank has are the signatures on the loans of it's customers, and this is what backs most of the money into circulation (the rest being export receipts and government deficits).
The government runs a deficit of 6bn, this is a straight injection into the deposits (liabilities) of the banks, via payments to govt servants, beneficiaries and cycleway builders etc. This contributes to the 24bn interest bill (the rest must be coming from imports, new lending, and reduction of deposit balances) and keeps the banks afloat for longer.
Iain. AMI are wrong, same as the monetary reform lot in Great Britain, just wrongheadedly wrong, for example "where all new money would be created by government as money, not interest-bearing debt Second, halt the bank’s privilege to create money by ending the fractional reserve system in a gentle and elegant way", and on and on. Give up on them. there's no such thing as debt free money, or if there is we have it now, it's called a zero coupon note, which is interest free to the Government, printed for next to nothing and the seignorage goes straight to the Government. Otherwise known as a banknote. If you want it we can do it now. All the Government needs to do is monetise it's debt, and take the bankers on. Sure I'll pay you, here it is, it's a bunch of freshly printed notes.
100% reserve lending. There's no such thing and never will be. All loans "print" money into existence, it cannot be avoided (but there is an exception see below). And the money that's printed into existence is backed by the borrowers determination to repay it.
None of this is reform, these ideas are simply different policy settings within the system we have now. They can see the problem but they still haven't actually grasped the nettle of what the problem actually is.
If you want to avoid the "fraudulent printing" then you have to eliminate the "corporation" the "fictional legal person" that's doing the lending. Think about it, when the loan contract is between a real person and a fictional person, a fictional person is always going to hand over fictional money because that fictional person does not exist. The only way to stop this is to outlaw lending by "banks/fictional people" and enforce all mortgage contracts to be limited to those between real people, with a real consideration changing hands. This is the issue at the heart of the mortgage securitisation thing in the US at the moment, all securitisation is a fiction on top of a fiction (and few seem to see it, it can't be defended, but then it can because the rules of the game allow it). The only thing that fixes it is the outlawing of trusts, corporations, limited liability companies, all fictional legal persons (including a Government/sovereign - whatever that is). Is that ever going to happen? No.
(By the way, I think "social credit" is a variation on this. It sees the fictional creation of money process and says we will remove it from the bank and comes up with the solution; "We will only allow credit to be created by one fictional person = the Government", all loan contracts are to be limted to a real person and the "crown" and that way the Government will control the supply of money. The issue with this is that it takes away the right of two real people to contract between them to make a loan and create real money. It removes the fictional person "the bank" and replaces it with another fictional person that we can trust = the Government. This will never work either.)
The best plan for a sensible Government in the face of QEII? It should just monetise it's debt, drive our $ lower, and the Reserve Bank should be buying gold (with every bit of paper that it buys) in preparation for the day the $US loses it's "reserve" status. Long term reform? make the banks post real reserves as collateral (this removes some of the fiction).
"A tax break on bank savings, increased capital requirements for bank lending on land, a higher Core Funding Ratio to discourage foreign borrowing by our banks, local content requirements for government procurement, a land tax and a capital gains tax would be a good start"
Good luck Bernard....these ideas will be part of the govt spin effort but don't expect real policy.
We have a savings working group working well doing a spin the BS as long as possible ...also known as the Waltz of the Wombles.
Govt policy is to inflate away 30 to 40% of the value of the dollar by 2020....to protect the bank balance sheets at all cost.....to obfuscate like buggery and hope the peasants don't stop splurging on property.
Noddyland's economy will always be a property ponzi scheme...the only adjustment will be to who is running the scheme and the amount of speed involved.
I expect govt to return to selling the idea that a larger population is good for everyone!
On that theme I bet the govt will enter 2011 with another 'working group' announcement.....this one will focus on the population and be tasked to study the potential for greater immigration....in essence to discover a reward waiting for all Noddy if only the peasants will accept a need to rapidly grow the population by one million working age migrants....this 2011 revelation will be accompanied by a media blitz backed up by all the banks...all the RE mob....every business....it will be sold.... dressed and stuffed ready for the oven come the election....and then in early 2012 we will have us another round of splurging excess on property...in fact it will start early as the National party rumpers jump the Q and snap up property ready for the off......
The outcome will be 'extend and pretend' on the back of another round of property ponzi stupidity...and promise the govt another 6 years at the pig trough.....just like Labour....
Gone will be the huff and fluff and bumph about an export recovery...back we go to the good old ponzi scheme...
I dont think you can do this overnight, but over say a decade I'm hard pushed to see why this would not be an improvement.
Please explain your reasoning....
The recent changes by National seem a start....but should be done piecemeal every year you cant chnage things overnight. However Im pretty sure that we should not go totally, to some degree, yes....anything that addresses speculation on asset appreciation without work/effort/improvement seems on the face of it a good idea.
For instance a small land tax, seems sensible overall...if anyone can write a good logical reason why not I'd love to read it. By that I dont mean "my business / lifestyle model would be ruined if you do that".
Gold would be hard to tax...and Im not sure it should be, its a form of protection/saving....
Foreign exchange transactions can be profitable ie real goods. The speculation and gambling aspect should be curtailed by say a tobin tax or something with the aim to reduce the volitility and speculation. The nano second transaction brigade forcing up the costs of the real exporters is just crap IMHO....these ppl produce no benefit.
Depletion and Polution should indeed be taxed to encourage efficent use or stop it happening.....again Im hard pushed to come up with a reason why putting a real cost on this so its seen as a bottom line in a company's books is bad...it then gets addressed.
regards
Sadly Kate, the pointy heads in wgtn are ready for just such a change and every one of them will be needed to work out the details and run the beaurocracy they will create the need for, to manage any new system to steal from the peasants.
Consider the army of beaurocrats needed to calculate and determine what amounts to "undeveloped land"...."unproductive wealth"......the mind boggles!
"when the UK Chancellor makes his statement next week on the outcome of this contentious spending review, all hell will break over his head. The reason for that is simple: Britons will at last discover the seriousness of their country's current plight."
http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=10680899
Unfortunately in Noddy the govt insists on keeping the socialist system of benefit deals for votes "rolling along....singing a song...we want moarrrrrrrrrrrr"
So he slashes and burns....Oh dear! more cash removed from the system...more spiral down. More people desperate...more crime more prison inmates...Yeh make the poor suffer!Really great idea?....These goons haven't a hope in hell.Fifty percent will be Crims and the other Fifty percent Police...where's the wisdom in that.?
Want to see just how sick Noddyland has become....read this....mind you don't smash the keyboard to bits in the process!
"We should never be forced to take a job. If you're forced to take a job it's a punishment. If a job's a punishment then society must be a prison."
http://www.odt.co.nz/news/national/131986/artist-promotes-dole-taxpayers-expense
There should be much stricter rules on credit cards and on lending in general, especially unsecured lending.
People need to go back to the old ways of saving before buying things, rather than the other way around as it has now become.
Increased consumer lending has made this country a much poorer place.
"...So I remember with pleasure and longing those days when a shilling (10c) would buy a feed of oysters and chips sufficient to satisfy the lunch needs of a voracious teenage boy." odt
And I recall buying a large icecream for 3 pennies...those were the days when the coins had some value...now anything less than $1 is rubbish...not worth bending over to pick up...for this we have our govts to thank...and the current policy is to ensure the dollar loses 30% plus over the next ten years.
So don't put your money in the mattress...don't even put it in the bank...invest it in a chookhouse and some good laying hens...buy a Predator with some mates and start catching fish..throw the rod away....grow your own Tobbaco if you are addicted to the filthy muck...grow your veg...feed the waste to the chooks...stock up on dunny paper by buying ten dozen on special....get you clothes at the Sally Army...they have great clobber....do jobs for cash...stop giving money to political parties because none of them give a rat's arse about you...if you can, make and sell jam for a few extra bob...do the same with firewood....
The next twenty years will see the dollar drop to be worth just 30cents in today's cash!....Labour will buy back the pig trough with cheap promises and put Noddyland back on course for endless failure and certain low wages....WINZ will thrive....you need to start thinking!
There is a problem with language, Bernard. "Auserity measures" refer not to individuals running their own households more prudently - rather they refer to the wider population accepting that their labour is worth less - at the same time as they are being encouraged to borrow more. Again, I refer to David Harvey;
http://socialistaotearoa.blogspot.com/2010/09/david-harvey-explaining-crisis.html
AS YOU have mentioned, here in the United States and in Europe austerity measures are being introduced. Do you think that the austerity measures are going to resolve the crisis?
THE AUSTERITY measures could help resolve the fiscal crisis of the state, but in the same way that that crisis arose out of resolving the [crisis of the] banks. So the big question is what kind of crisis will that promote? And of course this creates a crisis of unemployment. If states start introducing austerity—like Cameron in Britain is talking about major cuts and that’s going to cause major unemployment. Here in New York State there’s talk of massive budget cuts and massive unemployment in the public sector. So what that launches then is a huge struggle between the state and the public sector unions in particular. So we are likely to see, as we have seen in Greece and Spain, is a widespread struggle because the crisis is being displaced and this again comes back to my thesis that crises don’t get resolved, they simply get displaced from one sphere to another.
Everybody talks about the ''good old days'' but they weren't that great financially. Basically everything is cheaper these days as a cost ratio to income, be it cars, household goods etc (except price of housing, which now reflects the reality that many households have dual earners, rather than previously with the one income family, and plus that the average house is twice the size of that back in the 70's, goodness know why). We are about to put in a new kitchen which costs almost what we paid for our current one 20 years ago. Those who say everything is now beyond the reach of the young generation seem to ignore this.
Just because things are cheaper it doesn't mean we are better off, the problem is because it's cheaper people seem be buy twice as much as they used to. Often because consumer credit is so easy to get.
Or it's so easy to put it consumer items on your endlessly revolving credit mortgage, you don't even need to pay your mortgage off anymore, just keep it ticking over with the revolving credit.
All your worries are over....Labour are developing their pickpocketing skills...
"The remit suggested there should be public input on the possibility of a fairer tax system "where we tax all forms of income equally no matter how that income is earned"....yeah right.
It's the private sector wage rates that are the problem. On the one hand the Government says we need to catch up with Australia on pay parity - yet, when the actors, for example, take action on workers rights ... well, that doesn't somehow apply to them? This Governmment is hypocracy at its worst.
I'd rather see the Government downsize the number of quangos we have. They are just stocked full of zombie jobs for political cronies. Let the cronies try surviving on our private sector wage rates, I say.... that's if anyone in the private sector would hire them in the first place.
Others are culling the quangos;
We need to do the same - just look at the size of that list in the end of this article;
http://www.nzcpr.com/Weekly203.pdf
Many of us started this years ago. We didn't falll for the ponzi schemes or follow the sheeple into debt. We saved, be bought only what we needed and we lived simple and within our means. In some cases 'less' than our means, YET government and many economists would call us "unproductive". We don't live on debt so we don't 'grow' the economy. Well, lets see who wins the race to REAL 'prosperity' and 'security' eh?
Having NO debt reduces your stress levels, reduces your desperation of employment and keeps your relationships intact. Try it and feel the freedom
The govt fools and 'economists' you refer to were dumb enough to fail to understand their opinions were being manipulated by the bank bosses. It is and always will be, only the banks that benefit from moving a culture away from a frugal growth path where saving the needed capital is seen as most important...to one that believes borrowing money is best.
Noddyland is now a tenant to the banks. Most work to feed the monster that sold them on cheap easy credit. This stupidity is being encouraged by Bollard with the securitised mortgage garbage scheme. The banks just point at him and say "jump"..Bolly asks.."how high?"
Dumb and dumber sit on the 9th floor of the Beehive and think they run the place...doh. They have Bolly's plan in front of them for the covered bond garbage...and they haven't the brains to realise the scheme has been cooked up by the banks. It is all about running the ponzi scheme to keep the banks in fat profits. It has utterly nothing to do with making Noddyland a better place for Kiwi.
Expect the game as Spencer at the RBNZ refers to it, to continue...until Kiwi peasants wake up to the rort...wake up and say enough of this...we are no longer going to borrow a bloody cent of you swine...feck off.
Wally, this on copper, I agree with your comment above, but how do we stimulate industry to expand when the turkeys running the show think more spending debt will 'do the job'.
http://www.telegraph.co.uk/finance/markets/marketreport/8071736/Market-…
I want to know why you think 'we' need to expand!
The wise move is being made by more Kiwi every day...they are giving the banks the finger and opting to save what they need. Surprise surprise they are discovering their combined behaviour has the banks in a spot of bother...fewer people are borrowing and a growing number are realising the gains come from falling prices for property.
As for copper...good luck to those who can pick the top...the massive Mongolian deposit will soon see prices back below $3us a pound.......... and any day they want, the Wall st bastards can cause the whole heap of poo to slump. I agree with the call in the report.
'Placing Business Over Property'
"It adds weight to Bernard Hickey's argument for land tax or a Hong Kong style stamp duty on transactions to raise funds in property boom times and redistribute it to the productive sector. The problem in New Zealand is that the very small in numbers, but powerful Farmers Union, Federated Farmers wouldn't have a bar of it. They want all their capital gains to themselves and all their tax deductions from interest on their excessive borrowing,
If however New Zealand is going to be more that a country that sells land to itself and foreigners, SME's with all the entrepreneurs and productive talent there are going to have to be either given a hand up or have obstacles to their success removed to level the playing field up against business and individuals who merely buy and sell up chunks of land."
http://asianinvasion2006.blogspot.com/2010/10/placing-business-over-pro…">http://asianinvasion2006.blogspot.com/2010/10/placing-business-over-pro…
Well said Cactus Kate.
Cheers, Les.
www.mea.org.nz
Wolly, i was thinking about J keys comment on spending. I have offshore investments I could repatriate, its Is illogical for me to spent my capital on business that is marginal. I could buy another farm but the farm exists and produces now,if anything I would probably reduce production, decrease costs, not lift production, even a dairy conversion would be of little benefit to the country due to costs. The farmer Im buying off would be spending almost all the money on paying off his debt and of little value to the economy. Thats the problem with overseas investment in Ag, it really doesn't make any difference to exports who owns it and most decisions about buying are more around safeguarding wealth. As long as there is talk of wealth tax and profits are slim, land values will continue to fall, putting pressure on banks and putting off my decision to buy.
As long as there is any doubt in my mind about inflation Im going to invest in assets not risky productive industry, which would be high risk in an inflationary environment. The Govt has to kill my thinking and to do this it has to reduce the size of Govt and cut costs to business, as long as the Govt is borrowing and trying to encourage spending, Im thinking inflation and investing in assets for safety,or staying in cash. This is why the USA is Languishing, who would invest in production when you could be witnessing an inflationary nightmare. Our Govt lacks discipline and a willingness to tell it as it is and take action to correct imbalances in our economy, were many are over paid and undeserving.
WE need debt destruction, not everyone rushing to pay off debt and destroying our economy, We can never pay the debt off anyway.
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