Black Monday

[nztx]

Make no mistake - inflation is with us & many other nations right now ..

Money printing machines turning over frantically .. lots of additional loose Govt money injected
into economies..

Basically the same quantity or less real goods

Upwards spiral in values & prices for housing, shares & other assets - don't we &
others already have that - for those who can see & recognise it?

More Readies in Circulation to Same amount of Goods - What is the likely result ?

The beady eyed bureaucrats may not be exactly reporting it as "Inflation" but in reality it is
the sneaky sort of inflation you have - when you have little or no reported Official Inflation ;
and conveniently still allows the fumbling Politicians to continue feeding feel-good BS to the
very gullable & not so bright quotients of Society (many of whom can't read or understand anyway) .

The Stats counters probably only get away with it, because their narrow vision misses the wood for the trees,
as per usual ..

How many billions of Imaginary Funny Money* did NZ Treasury "create out of nowhere" for Govt
under guise of more Huge Govt Debt to RBNZ (if you like with RBNZ owned by the Govt borrowed
from Govt effectively or itself), to then inject into the economy in just 2020 alone ?

* should the billions of these instead be called "Robertson's Government Debt Penny creations" instead ?

[GTM 3442]

So why haven't the board of governors of the Reserve Bank fired the management team?

They haven't met the inflation target for G*d knows how long, and their QE olicies have unleashed a house price bubble-cum-disaster and a series of speculative bubbles in various other asset classes.

Faced with the consequences of their actions, the party line is "Its not our fault, it's not our problem" as they continue with the same failed policies.

Why do New Zealanders put up with it?

[Balance]

Real inflation is rampaging out there when one looks at asset prices - houses, properties, shares, art works.

Because the majority of hard working NZers are house owners however and they are ok and happy with the double digit increase in house prices, they do not have a problem with the RBNZ’s easy monetary policies :

‘Rents are included in the CPI, because they are expenditures that are "consumed" in current period of time. But house prices are not, because they are expenditures on an asset to be consumed over many years. If you own a house, you will benefit from the rising prices--if and when you sell it.’

[ralph]

Because they think she is Robin Hood ,& a lady, debatable this one
But what is more important is when will the bubble implode with huge inflationary pressures & how many cannot say its inevitability .

[Tomtom]

Quick question I'm pondering, why isn't the inflation in assets showing up in CPI number yet? I might reasonably expect that if it costs twice as much to buy an acre of land to grow a crop that would be passed forwards in the price of the crop which would push up CPI. Instead we are seeing a great divergence between CPI and asset inflation.

[clearasmud]

Well it's the cost of the food that counts.
Cpi does understate inflation by not including house price.
All efficiency gains appear to end in the land price so it would be better to use the wage index as the messure of inflation

[Mr Slothbear]

Quick question I'm pondering, why isn't the inflation in assets showing up in CPI number yet? I might reasonably expect that if it costs twice as much to buy an acre of land to grow a crop that would be passed forwards in the price of the crop which would push up CPI. Instead we are seeing a great divergence between CPI and asset inflation.

food production continues to get more efficient and on average requires less human labour.

also as interest rates drop land prices can double but lower interest rates can result in same or lower cost to finance.

inflation has been huge since 2008 but somehow goes under the radar due to completely wrongly weighted cpi and measuring tools recording the wrong things.

[dobby41]

Quick question I'm pondering, why isn't the inflation in assets showing up in CPI number yet? I might reasonably expect that if it costs twice as much to buy an acre of land to grow a crop that would be passed forwards in the price of the crop which would push up CPI. Instead we are seeing a great divergence between CPI and asset inflation.

As the value of the land goes up the crop price doesn't because the farmer is happy with the lower return since it is still better that comparable assets.
That's also why commercial property values have inflated but rents haven't - they are happy with a lower return as it is still better than an even lower return elsewhere.

[Ggcc]

As the value of the land goes up the crop price doesn't because the farmer is happy with the lower return since it is still better that comparable assets.
That's also why commercial property values have inflated but rents haven't - they are happy with a lower return as it is still better than an even lower return elsewhere.

Or they don't have an alternative. I a friend who has a few rental properties and only buys for 10% return. She is finding it impossible at todays rates and is not happy to buy another house even at 5% return?? Her theory is it is not worth the hassle. She is looking to invest elsewhere, although I doubt she will find anything.

[dobby41]

Or they don't have an alternative. I a friend who has a few rental properties and only buys for 10% return. She is finding it impossible at todays rates and is not happy to buy another house even at 5% return?? Her theory is it is not worth the hassle. She is looking to invest elsewhere, although I doubt she will find anything.

10% - very old school, and not really looking at the numbers.
You need the rent to cover funding and expenses - used to be 10% as a 'rule-of-thumb'.