RT @JoshBBornstein: 65 year study confirms my research: Tax cuts don't lead to economic growth. Ping @Nick_Xenophon , @BCAcomau https://t.…
19/08/2017 9:13 PM
RT @attn: .@Schwarzenegger has a blunt message for Nazis. https://t.co/HAbnejahtl
18/08/2017 9:38 PM
RT @PositiveMoneyUK: Make Monetary Policy Fair: It's time to explore alternatives to 'conventional' QE. https://t.co/m6CFVojm7w #QEforPeopl…
18/08/2017 9:35 PM
@deirdrekent To be expected when income is taxed and capital gain not...
16/08/2017 9:22 PM
@bernardchickey @YourHomeLoanNZ Add ring fencing loses / deal to negative gearing and we might see some balance develop in the economy.
16/08/2017 7:36 PM
@bernardchickey Or take the job and do the right thing anyway - the RBNZ is "independent" after all...
16/08/2017 7:34 PM
@bernardchickey Not take the job because you would know you would be on a hiding to nothing. The link between earn… https://t.co/nxPRuAaT6t
16/08/2017 7:31 PM
RT @theyearofelan: Sure, the cancer was aggressive. But the chemotherapy was also very aggressive. There was aggression on both sides
16/08/2017 7:27 PM
@bernardchickey DTI+LVR+OCR all needed for financial stability & inflation.RBNZ can then push back on dumb policy f… https://t.co/CqXISZUHGq
16/08/2017 7:27 PM
@SelwynPellett Farming capital gains makes it hard to pay current expenses hence the need to externalise costs. Th… https://t.co/J1yevZAHft
14/08/2017 5:46 PM
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16
FEB 17

On the Land February 2017




Fair bit has happened since my last visit, a change of Prime Minister, an election date, and we can look forward to a change in Reserve Bank Governor. A the end of all certainties with the inauguration of Donald Trump, it's a pretty heady mix for us all.

No certainties but a few guesses the we are likely to see a resurgence of bilateral trade agreements rather than more multilateral deals like the Trans Pacific Partnership or Transatlantic Trade and Investment Partnership, or even a walk back from North American Trade Agreement.  Heroic deal making is better bilateral - we will see.  

The Reserve Bank continue to look for inflation and talk of the "new" Debt to Income tool in their toolbox.  These have been around elsewhere in the past, they cropped up almost everywhere in the post war period and only started to fade with the adoption of the neo-liberal economic model.  Debt to income gearing really keeps a brake on house prices particularly if you are of the view that debt drives prices as opposed to the mainstream view the prices drive debt.  Without this gearing house prices soar to many times income with all the house shortage, housing, first time buyer problems that follow.  

For more on this aspect take a look at:

https://youtu.be/bTEBEjwKnVI   

My view is that inflation will remain subdued due to the level of private debt, something discussed in the link, and government will continue to hope things will reset without too much pain.  I think that will not happen and house prices must correct.

We seen the NZ$ increase of late, hurting exporters, we have seen trade thrown into disarray by the new American Executive, Europe is far from sable with Greece facing another set milestones: strangely at Davos China was the steading global influence - strange times.

The year has opened with firmer markets than a year ago, dairy payout in prospect has improved, the currency a little worse for exporters, trade a little shakier - policy responses will be important.

Housing, wage stagnation, automation, levels of private debt are major issues in the developed world - New Zealand has its own mix of these, they will not be addressed with more kicking the can down the road some long term strategic changes are becoming ever more pressing.

 

 

 


tags: debt, currency, housing, keen, trump, whitehouse
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