There is carnage on the high street with huge numbers of retailers and restaurants closing. Many in business are doing it tough right now. New Zealanders up and down the country are struggling with high interest rates on their mortgages. How did it all come to this?
The story starts with the Reserve Bank Governor getting over-excited & printing $50 billion cash, flooding the country with liquidity & slashing rates close to zero in 2020-21. That magnitude of monetary expansion was never needed when the government was con-currently engaged in a fiscal expansion (financed by debt) of unprecedented scale. This Blog said so at the time, without the benefit of hindsight. High inflation inevitably ensured. In a panicked reaction, our Reserve Bank Governor promised to "engineer a recession" to flatten demand to bring the inflation he created back down again.
According to news out yesterday, reported world-wide on Bloomberg, NZ now faces "a triple-dip recession as high interest rates curb spending & investment, according to Westpac Banking Corp. Gross domestic product likely shrank 0.6% in the second quarter & will shrink 0.2% in the third, the bank’s economics team said .. that would be the third instance of two consecutive quarterly contractions since the end of 2022". Yes, sirs & madams. Turns out our incompetent Central Bank never did "engineer a recession" to kill inflation. It engineered three - and killed three birds - jobs, the economy, and cost-of-living - with one stone, the OCR, instead.
Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.
2 comments:
it seems absurd that the main control on the govt and economy is more or less independendtly engineered hardship. The NZ economy rocked in the 50s and 60s but there were almost none of the voluntary spend outlets such as retaurants and expensive bars.
As Inflation is a monetary policy issue and not an overall economic one, it is therefore implemented by central banks and not by governments. (This tells you where the real power resides).
All central banks (60) are in collusion with each other and all take their orders from the central bank of central banks, the Bank of International Settlements (BIS).
All central banks around the world will also use puppet leaders, puppet presidents, and a dumbed down public, to carry out their grand plan… which is to own it all, to be the lenders and buyers of last resort. Central banks will solidify their collective position as the one world government by using their product, DEBT, to buy it all.
A key component to the central banker’s plan is to continue to dismantle the current world economy only to issue in a completely new system, a tokenized completely digital cross border universal system.
Collectively they control the world economy, the financial markets, and therefore the entire financial system. Moreover, they control the narrative, therefore the flow of information.
They have a plan but don’t want us to know their plan so will create all sorts of distraction/deflection/misinformation tactics to keep our attention away from them and to keep us all in their debt slavery system.
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