OCR just put up 0.5%. April 2022

[Jeffa]

The idea is to stop government spending for a year or so, like the general population is ATM, this lowers inflation, when inflation returns to normal you then begin to invest in infrastructure and people begin to spend , then the cycle starts again.

The government is dragging on a continuation of the last economic cycle which began in 2009.

The economy needs to be flushed out to move forward, the RBNZ understand this
So no McD, I don't think the current government know what they are doing .

A recession is good long term for economic growth, unless you want to flat line for the next 3 decades like Japan.

[McDuck]

New money can be introduced into the system through several doors.

One door is via the banks, in the form of loans.
This benefits one group of society.
It inflates the wealth of those holders of housing assets.
(At the cost of savers).

Another door is say..by funding infrastructure projects.
Giving work to road workers etc.
This inflates the wealth of everyday people.

It's just a rebalancing, that's all.

Inflation was always there, just rebranded by the media as "increasing house values".

[Jeffa]

The new money introduced devalues the old money so there is no rebalancing just a continuation of asset prices increasing.

The inflation is taking from the poor passing on to the hands of the wealthy (assets) .

Rents.

There wouldn't be many landlords here not raising rents because all there outgoings have increased with inflation.

Rates
Land rates
Building repair costs etc.

[McDuck]

I have to disagree.

I noticed you didn't mind when new money was being added to the system to boost up housing and share prices.
(For about the past two decades roughly).

It's pretty clear to me that you are selecting only the facts that support a course of action that would defend your present financial exposure.

[Jeffa]

I have to disagree.

I noticed you didn't mind when new money was being added to the system to boost up housing and share prices.
(For about the past two decades roughly).

It's pretty clear to me that you are selecting only the facts that support a course of action that would defend your present financial exposure.

I'm not selecting any time period,
The Romans manipulated there currency coins to pay their soilders to invade other countries, Nixon removed the gold standard.

What happened with my portfolio is a few minutes compared to how currencies have been debased throughout history.

This cycle was meant to end in 2018/19.
John Key knew this,He worked for one of the biggest investment banks in the world, he had all the inside information, why do you think he stood down, there was a poison pill coming.

The damage is done, the RBNZ started it, the government is continuing it by over spending.

The economy needs to die to re-grow again,it's the natural economic cycle, The Ardern /Robertson government are not allowing it to happen.

The longer they drag it out the harder the landing will be, they should have started last year and inflation would have been much lower.

[McDuck]

I don't disagree with any of that.

Yes, you're totally correct, history is dotted with instances of empires watering down their currency.

One really interesting parallel to now, is the US at the time just after the civil war.

Late 1800's.

Worthless paper money was created and used to pay for men and equipment to win the war.

They called it "the greenback dollar" I think.

Once the war was done, and the US needed a real unit of account, so they went to the gold and silver backed dollar.

The Greenbacks were still in circulation and trading for about 80% of a gold backed dollar .

After much fighting in political circles, and much pressure form those with interests not dissimilar to yours, ..
the president did the right thing, and got rid of the worthless fiat money.

In some ways, the same thing is happening now.

[McDuck]

Millennials are all in denial.

It's pretty clear what direction the Fed is heading in now.

[Jeffa]

Millennials are all in denial.

It's pretty clear what direction the Fed is heading in now.

The media hasn't picked up on it yet either.

The Nasdaq composite index is having its worst month since 2008.

The Russell 2000 index is back to November 2020 levels.

NZX50 trading at October 2020 levels.

The S&P 500 and Dow Jones industrial average will be next to go.

Wall Street is pricing in two 50bp increases by the Fed and a recession.

The market needs to flush out the excess for it to move forward, same can be said for the NZ economy.(housing market)

[chook]

The media hasn't picked up on it yet either.

The Nasdaq composite index is having its worst month since 2008.

The Russell 2000 index is back to November 2020 levels.

NZX50 trading at October 2020 levels.

The S&P 500 and Dow Jones industrial average will be next to go.

Wall Street is pricing in two 50bp increases by the Fed and a recession.

The market needs to flush out the excess for it to move forward, same can be said for the NZ economy.(housing market)

The media will only start reporting on it when its happened, and thats when the masses only realise somethings up and usually its way too late for them to react.

RECESSION will be the catch phrase in a few months, its going down and its going down big. I think it will make the GFC look like kindergarten, when you see how colossal the debt market is (derivatives) you will realise that when this implodes its gona trigger a complete meltdown. George Gammon did a video on this about 2 years ago it is mind blowing!
The few that are prepared for this will survive with their wealth intact, many will lose everything.

[chook]

Millennials are all in denial.

It's pretty clear what direction the Fed is heading in now.

Millennial's have no idea, the GFC was in 2008, that was 14 years ago so for your average 30 year old they were 16 years old! So they think money making is an easy straightforward process you buy an assett and it goes to the moon.

They have never seen a downside, many are about to experience the pain of this for the first time.

[Jeffa]

I think those in mainstream media quite often come to this forum because they have run out of ideas to write stories, then just copy what's been quoted on PT.

What I write on this forum is my own knowledge because I have skin in the game.. not these journalist.

https://www.nzherald.co.nz/business/...LCHIEXL6UJVRY/

Note: The headlines all you need to know.

"My gut says a dip into recession is the most likely result of the battle to beat inflation," says Liam Dann

Gut feeling my arse, he basically read my post from yesterday.

[JBM]

Recession was always coming only so much money the average Kiwi can tick up and didn't we see where most of it went into Homes , cribs , investment RES and after the Govt interest rules many to Commercial all went to Stupid overvalued levels... and now you have banks being extra tough on lending and rates going higher... going be a blood bath on any major reduction in value when many kiwis go to refinance and get told the bank isn't interested

[Jeffa]

NZD selling off, Exports will benefit from this /should help the NZ economy in the near term.

Although Wall Street is selling off, the strong USD is holding up my U.S portfolio 7% this month, Still down but not as bad as my U.S colleagues/ if Fed didn't raise rates I'd be burnt.

I'd say some smart Yanks should be buying the Kiwi dollar for a cheap holiday later this year, this should help out struggling tourism industry.

Arden wanting to open the tourism gates as economy teetering close to recession/ smart move, she doesn't want economy in recession going into election year 2023.

[Jeffa]

Yep OZ inflation came in at 5.1%/ There OCR will likely be going up, which means there economy will be slowing over the next 12 months, there may not be as big an exodus to Australia as some economist forecast.

https://www.abs.gov.au/statistics/ec...latest-release

OZ increase OCR 0.25 points.

[McDuck]

Reserve bank just called current house prices unsustainable.
Well duh.
How many people warned them to stop squirting money around six months ago.
Now they warn us???