First I warned that numerous economic and financial indicators were heading in the wrong direction: it’s come true. Then I warned that in Australia (and elsewhere) nobody is investing in New Zealand because they are mystified by all the Māori stuff and worried about property rights. Right on cue the Māori Party leaders have shown foreign (and domestic) investors their money is most definitely not safe in New Zealand any longer.
A truly shocking letter posted by Winston Peters on social media makes chilling reading.
Click to view
Last year also I predicted that if Nicola Willis cut $10 billion in spending in December 2023 and interest rates were raised to 10 per cent to flush out the marginal businesses and other rubbish from the economy, after a short period of time things would come right and 2025 onwards would be prosperous on a sound footing.
With the influence of Winston on the one hand, and Luxon not wanting to be unpopular on the other (dithering and hand wringing rather than making action the order of the day), this didn’t happen. Predictably, the economy is flat on its back and instead of having the bad news behind us and blue skies ahead, we are just at the start of the difficulties which – sooner or later – will have to be dealt with.
Rather than large spending cuts in December last year, it will be December next year.
There is a street in Mosgiel with a house for sale and, despite its low price, it hasn’t sold. An almost identical house a few doors down sold in a week back in June for a similar price, yet this one still sits. There are other houses around Mosgiel also sitting unsold several months later. When you cannot sell some of the cheapest houses in the safest streets in the country, it indicates to me everyone’s house is actually worth about 60 sixty per cent of what they think it is. Once again, sooner or later those chickens are coming home to roost.
Another point of concern is that interest rates are rising despite the con game run by the Reserve Bank. The financial markets are simply ignoring the governor – the 10-year bond rate never actually hit 4.25 per cent OCR – and is rising and rising. What this means (and I warned about this two-and-a-half years ago) is you can buy government bonds, get 4.25 per cent without taking any risk and ‘set and forget’. So why would you take a ‘risk’ with any other investment? A fund manager will get you eight per cent, if you’re lucky (and you won’t be), so why take huge risks for a piddling 3.5 per cent? – it simply makes no sense.
Something has to ‘give’; it’s inevitable. As it stands there are actually several things that could give way causing huge amounts of havoc to a large number of people.
Capitalist is a simple country boy from the deep south who seeks nothing less than the destruction of socialism and collectivism in New Zealand. This article was first published HERE
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