Cam Slater: Not Saving for a Rainy Day?

The ANZ Chief Economist is a scold, ticking us off in a tone-deaf article at Stuff for not saving for a rainy day. This is called rich-splaining, when a person who has never experienced poverty gives you patronising advice on how to get yourself out of poverty.

There’s a term in economics, the precautionary savings motive, which refers to the point where consumers see enough trouble on the horizon that they start holding onto their cash for a rainy day.

ANZ chief economist Sharon Zollner said Kiwis still have not reached that point, despite repeated warnings from the Reserve Bank about a looming recession, and stance that it would manufacture a slowdown if necessary to tackle inflation.

“The Reserve Bank has been doing its best to freak people out and make them a bit nervous and make them save a bit more and spend a bit less, but so far they’ve got limited tractions,” she said.

Meanwhile, high inflation could not solve inflation, Zollner said.

Stuff

Zollner appears to be a special kind of stupid: saying high inflation can’t solve inflation. Say what?

Tell that to the Government which is the biggest spender; fuelling inflation and the consequences of that profligate spending, the cost of living crisis.

As for holding on to cash savings for a rainy day, it’s been raining heavily for the last six years, and there’s no money left now.

“All you’re going to get is higher wage inflation. If inflation solved inflation we wouldn’t have had the 1970s,” she said.

“Inflation is annoying, but it’s not a reason not to spend all your money.”

Infometrics principal economist Brad Olsen agreed Kiwis still were not changing their habits despite most knowing a cliff was coming.

He said there was a disconnect between recent consumer confidence surveys, which all showed households felt the outlook was grim, and spending data.

Stuff

Yet somehow the economic vandals inhabiting the Beehive think that they can spend their way out of the debt hole they’ve dug, thereby fuelling even more inflation.

Talk about being out of touch with reality: people just don’t have the money to save for a rainy day. Inflation is robbing people of the ability to save, but, naughty us: save more they say.

Maybe if banks stopped raising mortgage rates!

There is an economic contraction coming and it is going to hurt. Ask car dealers what is happening: they aren’t selling cars. Ask the building industry what is happening: they are going bust fast.

This idiot government simply thinks they can go on borrowing and spending, racking up mountains of debt, and then they and their handmaidens like these fools at the ANZ scold us for spending.

It’s not us doing the spending. It’s the Labour Government.

With house prices tanking, people are going to be upside down on their mortgages, squeezed by the banks for higher contributions to service higher interest rates. A contraction in the economy, huge increases in prices of commodities, stagnant wages and the ill effects of poorly conceived government policy will cause enormous unintended consequences.

Something is going to give, and the screams will be deafening.

Cam Slater is a New Zealand-based blogger, best known for his role in Dirty Politics and publishing the Whale Oil Beef Hooked blog, which operated from 2005 until it closed in 2019. This article was first published HERE