@NewsroomNZ @bernardchickey Good comments today on radio today @bernardchickey RBNZ soft on pushing back on asset p… https://t.co/m0Sh7fohHG
7/12/2017 6:07 PM
@NewsroomNZ @bernardchickey Hard to lead with thinking based on incomplete model of the economy: inflation targetin… https://t.co/kDCAMJM1HV
7/12/2017 8:27 AM
RT @TheMinskys: Watch @StephanieKelton brilliantly explain why we should stop talking about the #deficit as a problem and start talking abo…
5/12/2017 8:08 PM
RT @TheMinskys: "Public-private partnerships conflate public and private interests, and in conflicts between them, the private interests wi…
26/11/2017 12:02 PM
RT @PolicyObsAUT: Is the NZ public service restructured too much? New Briefing Paper by Julienne Molineaux from @autuni https://t.co/BUISP…
26/11/2017 12:02 PM
RT @Ozlandscapes: #Lateline story on demise of Darling River, at hands of irrigated cotton, is yet another example of how money determines…
26/11/2017 11:58 AM
@mrmedina @Tat_Loo At best redundant. ..
25/11/2017 5:46 PM
@liamdann 2006 again?
22/11/2017 8:18 PM
RT @PolicyObsAUT: And now a report from Australia, saying high house prices are not linked to under-supply. Could policies supporting specu…
22/11/2017 8:46 AM
RT @FT: 'This really is the first time we see the news organisations coming together like this in order to address this crisis of trust in…
20/11/2017 12:20 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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