RT @bernardchickey: Real question for RBNZ is why isn't it cutting rates? Core inflation below 2% target for 6 years. Jobs growing strongly…
9/02/2018 8:34 AM
RT @MkBlyth: Thought for the day: Let's say rising wages cause inflation panic cause equity crash. So we have built a system where stabilit…
9/02/2018 8:23 AM
RT @MkBlyth: Oic of the day. HT to @DougHenwood for nailing this. Not only is a 2.4% annual growth in wages unlikely to start an inflationa…
9/02/2018 8:22 AM
RT @Adherium: CEO @arik_anderson featured in @beckershr - Rule No. 1 for medical technology: Stay out of the doctor’s way https://t.co/d5FP…
1/02/2018 5:10 PM
RT @MkBlyth: Picture of the day from Llewellyn Consulting. Gross World Product went from 18 to 77 trillion since 1980. Massive Growth. Wher…
1/02/2018 5:10 PM
RT @Adherium: In Australia, nearly 40 per cent of #asthma sufferers rely on reliever medications to tackle regular flare ups, instead of us…
1/02/2018 5:10 PM
RT @Adherium: In the latest @atscommunity report, #asthma costs the US economy more than $80bn annually in medical expenses, missed work an…
17/01/2018 8:06 PM
RT @MkBlyth: Interview on WBUR (Boston) with Chris Lydon @radioopensource last night. Chris is the guy that gave me my radio voice a decade…
7/01/2018 12:45 PM
RT @Valuetrap13: There is a simple reason corporations are not investing as much. It's the right hand scale. Macroprudential policy based…
7/01/2018 12:32 PM
RT @Adherium: Sharp rise in #mHealth app usage - health condition management apps now account for 40% of all health-related apps https://t…
7/01/2018 12:32 PM
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20
MAY 11

Slip Sliding Away




Increasing foreign ownership and offshore debt sets up a flow of interest and profits out of NZ.   Given that: we either earn more with what is left or spend less, otherwise foreign ownership will continue to expand making surpluses ever harder to attain – asset sales are not material in this regard (they equal around 0.5% of the GDP in the budget projections).

Any current account deficit effectively demonstrates we are likely on a trend to greater pain and more cuts as history shows us unable to increase earnings.  This will not change until the policy framework changes and we effectively control domestic inflation and the value of the New Zealand dollar via capital controls or some form of foreign exchange transaction taxation.

Start thinking in terms of our National debt not Government debt and get real.  Currently our cost of funds is being tolerated, but if current trends continue the cost of offshore funds will begin to increase as will the cost of domestic lending (regardless of the OCR) compounding the debt problem (as more of whatever funds are available are soaked up in debt servicing) exacerbating the difficulty of investing and earning more.

We are on a slippery slope and it is getting steeper. 
 


tags: debt, current account deficit, investment
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