Economic and property outlook for NZ

[McDuck]

As I wrote before: "McDuck, what exactly is "shameful" about the writing? What exactly is "insulting" about it? Which arguments are "weak"? You are being vague and using emotional language rather than giving evidence."

I was hoping you might back up your argument with some evidence, rather than using an ad hominem argument.

I have only given my opinion on your use of language, I haven't given my opinion on the article or made any claims about it, therefore I don't have any claims to defend.

Never mind, let's forget the article, I can't remember what was in it anyway.

Well,.... I can give you a generic answer, without referring to any specific piece of writing.
I guess, appropriateness and intention, as well as accuracy and effectiveness are the main virtues of any piece of writing.
If the writing is a piece of comedy, for example, those values would adjust relative to one another, compared to piece in a scientific journal say.
Once you get into very specific forms, like poetry, or deconstruction, I suppose you have to measure in terms of emotion, and invention.

Thanks to a very good High School English teacher, I will only use ad hominem arguments to give a person who delights in their use, a taste of their own medicine. Some people need a practical demonstration.

A rugby mate said it best, play the ball, not the man.
So, let's see if we can find the ball, ..

Didn't you say you agreed with something?

...Perry is completely right, and posted what I was about to..

What idea was it that you agreed with?
That might be interesting to understand.

[propertyfinder]

As far as I can recall,
because a lot has happened since,
we were talking about post #75 in this thread.

Best you read the link (in that post) and say what you think about it is, honorable, respectful and strong.
We can go from there, as that is the original claim.

As I wrote before: "McDuck, what exactly is "shameful" about the writing? What exactly is "insulting" about it? Which arguments are "weak"? You are being vague and using emotional language rather than giving evidence."

I was hoping you might back up your argument with some evidence, rather than using an ad hominem argument.

I have only given my opinion on your use of language, I haven't given my opinion on the article or made any claims about it, therefore I don't have any claims to defend.

Never mind, let's forget the article, I can't remember what was in it anyway.

[McDuck]

I was asking you to explain what you think is "shameful", "insulting" and "weak" and why, then when I understand what you are saying, I can decide if I agree or not

As far as I can recall,
because a lot has happened since,
we were talking about post #75 in this thread.

Best you read the link (in that post) and say what you think about it is, honorable, respectful and strong.
We can go from there, as that is the original claim.

[propertyfinder]

If you point me to the exact idea or statement that you do agree with, I'll give you my take on it. We might be talking about different things.

I was asking you to explain what you think is "shameful", "insulting" and "weak" and why, then when I understand what you are saying, I can decide if I agree or not

[McDuck]

McDuck, what exactly is "shameful" about the writing? What exactly is "insulting" about it? Which arguments are "weak"? You are being vague and using emotional language rather than giving evidence.

If you point me to the exact idea or statement that you do agree with, I'll give you my take on it. We might be talking about different things.

[propertyfinder]

I posted this to my Facebook group 24 hours ago (before the huge rally)

If you listen to the financial "experts" at the moment you will unanimously hear:
1. Stocks are about to crash
2. Deflation is imminent
3. Pay off all debt
4. Sell property
5. Buy precious metals
6. Hold cash

Here's why every one of them is an imbecile and wrong on all 6 counts.

1. Stocks already crashed, as I predicted. The fed has signaled that it will provide UNLIMITED liquidity into the market. This removes all downside risk, and anyone with brains will take that bet. Companies have been handed trillions of dollars in bailouts, and the fed stands ready to loan them unlimited amounts if required. These companies might be dog crap, but for now they are swimming in cash, and you literally can't lose money betting on stocks, so anyone with brains will buy this dog crap.

2. What is currently happening is money printing, and a plunge in consumer spending. Do you disagree with either statement? Here's the textbook definition of deflation "a decrease in the money supply, relative to the goods and services available to be purchased with that money supply". The money supply is INCREASING, and the goods and services are not being produced. It is therefore impossible to have deflation, and we have just identified inflation. Most people think inflation is rising prices. It is not. Rising prices are a symptom of an increasing money supply.

3. We are currently in a hyperinflation environment. We have not yet seen massive price inflation, because that takes a while to distort supply and demand, causing price rises. We have record low interest rates, and they will probably go negative. There has never been a better time to have debt. During hyperinflation, debt stays the same while everything else increases in price 10x. So if you have a house worth 100k and you borrowed 90k, after hyperinflation your house is worth 1m but you still only owe 90k. To think of it another way, your house didn't go up, but your debt fell to 9k. Are you going to say no to either deal?

4. Why would anyone NOT buy property with record low interest rates and the price of everything going up? Rents will not hit record lows, so it's much cheaper to buy than rent. People can borrow larger amounts with lower rates. You are nuts if you think property is going to crash.

5. Only idiots buy precious metals. Yeah, they go up during hyperinflation. So what? Everything does. Why would you buy something that doesn't produce an income? You could instead invest in stocks for dividends or property for rental income. Most of the idiots buying precious metals argue that you need it because you won't be able to afford food during hyperinflation. So why don't you just buy food while it's cheap? Precious metals often crash in price. Food never does. The idiots that buy precious metals sit on their losses for years, even decades. There has never been a long term period in history where gold made more money than stocks or property.

6. Let's say you have 100k cash. You can currently buy a house with that. But after a few years of hyperinflation, a house costs 1m, so you can only buy 1/10 of a house. To think of it another way, your 100k erodes to 10k. If interest rates go negative, the bank will charge you to keep your money with them, so you will lose even more. So who do you want to be? The guy who rents for $200 a week while you watch your 100k shrink to 10k and pay interest to the bank, or the guy who buys a house with only 10k, pays $100 a week mortgage and ends up with 910k equity?

Debt is money. It's every bit as real as cash. And right now, it's just digits on a screen. It used to be a reflection of someones hard work. Now it's just a number that means very little. It's printed out of thin air. Nobody had to work hard to produce a product or service to back those digits up. We have so much debt now that it's IMPOSSIBLE to ever repay it in today's dollars. The only possible way that debt can be repaid is if it shrinks dramatically, becoming insignificant. And the only way to do that is with hyperinflation. That's why it's going to happen. Because that's the only way out.

The other thing about unsecured debt, is you have a choice about whether you repay it or not. Think about what I just said. How long would it take you to save up that amount? And how long does bankruptcy last? Did you squirrel cash away in the back yard that you will spend over the next few years?

Want to tell me I'm a bad person for suggesting people not paying the banks back? Cry me a river of bailouts...

You may have made some good points with examples and clear reasoning, but the fact that you insult those who have different views by calling them "idiots" or "nuts" thus directing part of your argument against the person and appealing to emotion, this massively detracts from your argument.

[propertyfinder]

Perry is completely right, and posted what I was about to. If you make a massive claim that is vague, you need to back it up by explaining just exactly what you disagree with and why, giving your sources tim360 and McDuck.

McDuck, what exactly is "shameful" about the writing? What exactly is "insulting" about it? Which arguments are "weak"? You are being vague and using emotional language rather than giving evidence.

[McDuck]

Thanks McDuck that's what I was intending to convey, you said it better than I did. I wasn't arguing the facts, it was the narrative of the article that I thought was rubbish. I did say that but Perry was too busy Googling condescending quotes from famous people to notice.

You're welcome.

It was a pretty shameful bit of writing.
I find it a bit insulting that the author thinks that we, the readers, are so stupid as to be fooled by her weak arguments.

The main issue is cause and effect.
E.g.
I sneeze all winter and there's lots of rain in winter . Therefore I cause the rain when I sneeze.

And Perry's equally flawed retort.
Eg.
Do you deny hat you sneezed, do yo deny that rained, they are facts!, so the conclusion must be true,

Ahh...yea,,but nah.

.

[Perry]

Wasn't arguing the facts?

When you assert, 'Wow, do you seriously read that stuff and believe it?" you are indeed arguing the facts.

No one seems to want to contradict the claims made, (excerpt quoted) providing reputable sources. So, using KISS:

True or False?

* New Zealand Steel, in spite of strong demand, now forced to limit production as gas supply shrinks, and electricity prices rise.

* Tasman Pulp and Paper mill, running at about 40 to 60 per cent of capacity in March, now shutting down for several days at a time.

* Whakatane Mill will close its doors in June.

Oh, that's right. They're now facts. It's only the narrative containing the facts that is in question. Whatever that bit of narrative fudge means.

[tim360]

yup I agree with you.

It's basically a poorly constructed piece of propaganda, woven weakly together by a nice but dim old lady.

There is a mild ring of truth to some of it.

But the conclusions are not supported by the nonsense beforehand.

2 + 2 = 55, sort of logic.

Thanks McDuck that's what I was intending to convey, you said it better than I did. I wasn't arguing the facts, it was the narrative of the article that I thought was rubbish. I did say that but Perry was too busy Googling condescending quotes from famous people to notice.

[Thinkingbutnotdoing]

To which you responded:


You were then asked if you had sources you can refer to here, which repudiate the claims in the referenced article and which supported your contention that the article was not believable.

Nothing to support your assertions, yet.

Subsequently, I was sleuthing through news items for something else when I came across this:
Manufacturing companies question hike in power prices
9 April 2021


That article was by a reputable NZ author and there appears to be no doubt that some of the factors she mentioned can be substantiated. Certainly moreso than your criticism.

Further corroboration from this item:

Electricity Spot Prices may indeed by 7 x what they were last year. But almost no businesses are exposed to spot prices or only to a very small proportion. Unfortunately AFAIK no data is available on the prices in the contracts market as these are private contracts between two parties, but any increase between last year and this will be minimal, and primarily caused by long term structural changes such as the changes to oil and gas exploration.

As someone who worked directly in the electricity market for more than a decade, feel free to direct any questions my way instead of believing anything the media tells you. I spent many years trying to educate various lobbyists on how the market worked, why certain things happened, and so on, but found that most of them lacked the brains to understand it, and if they did, they generally pretended they didn't because it didn't fit their preconceived notions.

[McDuck]

Wow, do you seriously read that stuff and believe it?

yup I agree with you.

It's basically a poorly constructed piece of propaganda, woven weakly together by a nice but dim old lady.

There is a mild ring of truth to some of it.

But the conclusions are not supported by the nonsense beforehand.

2 + 2 = 55, sort of logic.

[Perry]

Here's one part from the referenced item:

For things are getting worse. As Steve Rotherham reports, some industrial plants are reportedly restricting output as electricity and gas prices surge. Commercial customers seeking new contracts face 75 per cent price hikes. The current rise in prices has New Zealand Steel, in spite of strong demand, now forced to limit production as gas supply shrinks, and electricity prices rise. New Zealand Steel Energy Manager, Alan Eyes, says today’s energy prices are unsustainable, as does the Tasman Pulp and Paper mill, running at about 40 to 60 per cent of capacity in March, now shutting down for several days at a time. Power prices are unsustainable, not just for these companies, but for the wider New Zealand economy. Others affected by tight gas supply and high electricity prices have mothballed production. Whakatane Mill will close its doors in June. In all cases, jobs and export income are being lost.

To which you responded:

Wow, do you seriously read that stuff and believe it?

You were then asked if you had sources you can refer to here, which repudiate the claims in the referenced article and which supported your contention that the article was not believable.

Nothing to support your assertions, yet.

Subsequently, I was sleuthing through news items for something else when I came across this:
Manufacturing companies question hike in power prices
9 April 2021

Big manufacturing companies are questioning if they have a future in the face of high power prices. Data from energy consultancy firm Energy Link shows wholesale power prices are nearly seven times higher than they were a year ago, at $314.44 per megawatt hour (MWh) and have reached as high as $500 (MWh) in the past fortnight.
The soaring prices forced the temporary closure of the Norske Skog paper mill in Kawerau and has led New Zealand Steel to scale down its operations at its site in Glenbrook.

That article was by a reputable NZ author and there appears to be no doubt that some of the factors she mentioned can be substantiated. Certainly moreso than your criticism.

Further corroboration from this item:

It was a coincidence, but Foodstuffs North Island boss Chris Quin is feeling very good about putting solar panels on the roof of the company's giant new warehouse, ahead of a ‘’massive shock’’ in electricity prices recently.

The supermarket chain is still settling into its huge new distribution centre, including what’s thought to be the biggest warehouse in New Zealand. Quin says the decision to include just over 2900 solar panels on the roof was initially a bit of a cost-neutral, socially responsible move.

But soaring commercial power costs over the last six to nine months have made that decision look great in hindsight.

[donna]

According to the budget crown debt, as a % of GDP, appears to peak at just over 50% in 3 years. We were sitting around 20% prior to COVID-19. To give you a comparison here are some 2019 figures:

• The top 10 highest debt-to-GDP ratios feature Japan at 237% (#1), and some of Europe’s more concerning economies: Greece (183%), Italy (132%), and Portugal (121%).
• The world’s largest economy, the United States isn’t far behind at 106%, with China at 51% and other major economies such as the UK and Germany at 87% and 60% respectively.
• The average for the EU is 82%, which compares to the EU’s Stability and Growth Pact requiring debt-to-GDP below 60% – or at least declining to be within acceptable limits.
• The IMF’s “Advanced Economies” (which includes NZ) average 103% and “Emerging Market and Developing Economies” at 51%.
• Australia’s debt-to-GDP was reported at 41%.

These are all much larger economies than ours, so we should be aiming to have a more conservative debt to GDP ratio.

Was it the right thing to do? What were the other options?

Hi Tim

Perry is referencing the need to add your source link like for the information in the quote - where’s it from I.e which site etc?


You can just click on the image of a link next to the camera image and then add in the URL of your source and it will present outside of your content like this....

cheers

Donna

[Perry]

Adroit Evasion

I have no interest in gooble doing anything. Just in you backing up your assertions.

If indeed, you "have no idea how all this fits in to apparent Communism in NZ.," then perhaps have regard to Abe Lincoln's observation that it is better to risk being thought a fool than to open mouth and remove all doubt."