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  1. #51
    Join Date
    Apr 2005
    Posts
    2,943

    Default

    Quote Originally Posted by Frezzinghot View Post
    Is there really a middle class anymore, more like the 1%ers & the rest of the plebs! Looks like the elites are going to grab it all this time.
    One of the daughters of a leading industrialist once told me she was embarrassed to be driven to school by her chauffeur
    in a luxury car.
    She would have the driver stop a block away so she could walk the last part.

    Now you have people from working areas like Linwood, lucking into a cushy govt supported career, just blabbing and showing off their flash cars.
    It's a crisis of integrity and humility.

    People often seem to overrate their contribution to their financial advantage and underrate the role of the supporting infrastructure and skill sets.

  2. #52

    Default

    Quote Originally Posted by crashy View Post
    Remember, this is the damage likely in a country that will be covid free. How can other countries fare any better?
    A misconception, instead of being corona-free people have to learn to live with the corona flu virus that is known since 2011. Covid-19 is a mutation - how can you prevent further sprouts in coming years?

    Indeed an isolated island has the best chances to be infection free but ask yourself - why did covid-19 arrived here in the first place?

    True, corana has been a trigger point but the real economic and financial problems look differently if you look the shift of power and who absorbs the wealth of the losing middle class. Is that not the end of the post WII world order?

  3. #53
    Join Date
    Oct 2016
    Posts
    228

    Default

    does this Aussie article appply to NZ? https://www.abc.net.au/news/2020-05-...-line/12259322

  4. #54
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    15,487

    Default Hi-Ho Shafter

    It may be. But the most worrying thing is the lack of 'connecting the dots.'

    E.g. If LL's reduce the rent, will all the LL's opex suppliers commensurately reduce their charges?

    Rates?
    Insurance?
    Body Corp fees? (if applicable)
    Mortgage fees?
    Etc., etc.

    Council seems to be very reluctant, so far, going by the Hastings DC example.

    Insurance coys - the same.

    Banks - creaming it, big time, just later, rather than now.

    Will comrade socialist Cindy come riding over the hill - cavalry-like - to the rescue?

    Probably not.
    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  5. #55
    Join Date
    Apr 2018
    Posts
    260

    Default

    Quote Originally Posted by Perry View Post
    Covid-19-Saver

    Anyone know what sort of roller coaster ride the various kiwisaver groups are having?
    Have had?
    Will have?
    Going on my Aussie Super, post GFC it was horrid for 1 year, but bounced back with 15% 3 years in a row and most years have been similar since in my managed fund.

    However being a Self Managed Super Fund, I can do what I want which is going Gold for a few years.

    Post Apocalyptic economic crisis, I will then borrow 70% on my SMSF and cash in for 10 more years before I give up and spend my days sailing and freediving :-).

    You wouldn't have any Kiwisaver would you mate?

  6. #56
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    15,487

    Default

    Quote Originally Posted by OnTheMove View Post
    You wouldn't have any Kiwisaver would you mate?
    No. Never had any time for someone else managing my assets in shaky things like shares. (For a fee - win-or-lose - of course. I.e. They always get paid; I don't.)

    But I do have a young friend who is quite worried, which is why I asked hereabouts. Said friend had a kiwisaver plan for a first home soon-ish, but now sees that option fading into the future, after kiwisaver became virally infected.
    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  7. #57
    Join Date
    Apr 2018
    Posts
    260

    Default

    Quote Originally Posted by Perry View Post
    No. Never had any time for someone else managing my assets in shaky things like shares. (For a fee - win-or-lose - of course. I.e. They always get paid; I don't.)

    But I do have a young friend who is quite worried, which is why I asked hereabouts. Said friend had a kiwisaver plan for a first home soon-ish, but now sees that option fading into the future, after kiwisaver became virally infected.
    Gotcha Pez.

    Are we allowed to manage our own funds in Kiwisaver?

    It is a worry as you know they are going to at least one year lose, where at least the bank covers some inflation, totally sucks if you are locked into being forced to lose money.

    Another example of how far we have to go to be close to the level of Aussie Super.

    Im sorry for your friend if there is no way out of managed fund into something more solid for a few years.

    Don't get me wrong, Im still a fan of managed funds, if you know what you are doing and secondly its not your super annuation locked into some crappy fund with no choice over where the money goes outside of Low/Med/High risk.

    Total shite sandwich.

  8. #58
    Join Date
    Jan 2005
    Location
    Auckland Central
    Posts
    169

    Default

    Quote Originally Posted by Perry View Post
    No. Never had any time for someone else managing my assets in shaky things like shares. (For a fee - win-or-lose - of course. I.e. They always get paid; I don't.)

    But I do have a young friend who is quite worried, which is why I asked hereabouts. Said friend had a kiwisaver plan for a first home soon-ish, but now sees that option fading into the future, after kiwisaver became virally infected.
    Which is why most people need some good financial advice, particularly for Kiwisaver. If they knew they needed the money within the next 1-2 years then it should have been in a low risk fund well before the crisis hit. The higher risk funds have come back quite a bit since the initial drops, but if they get their money out now they're locking in their losses. Most providers have many different fund options and many with management fees lower than 0.5%.

  9. #59
    Join Date
    Jan 2009
    Posts
    210

    Default

    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...

  10. #60
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    15,487

    Default Where was it?

    I missed something.

    Quote Originally Posted by crashy View Post
    2. . . . It is therefore impossible to have deflation, and we have just identified inflation.
    ". . . we have just identified inflation."

    Where? I could not see that in your post.
    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!


 

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