Is a Bear Market starting to play out on the NZX ?

[Beagle]

No problems really when the debt is held by the NZ Government itself (RBNZ) in NZ$. They'll just keep the printers going. No worries.

The warm embrace of almost unlimited quantitative easing socialism....what could possibly go wrong, no worries, someone else will pay for it all down the track...who cares who it is... Comrades all over the country will be lining up to hug Cindy she might have to delegate some hugging duties to Grant Robertson, (I can "hardly wait").

We might get away with it because we started with such low debt but some other countries...oh dear !

[Panda-NZ-]

Yeah, a good model for that would be ...... Zimbabwe?

The US has done it harder and more agressively than anyone else. It worked but nothing is ever perfect. They have more success compared to Europe who should have done the same much earlier on if only to compensate for the US fed dumping their $$$ into international markets.

[Biscuit]

The US has done it harder and more agressively than anyone else. It worked but nothing is ever perfect. They have more success compared to Europe who should have done the same earlier on.

There is a limit to that strategy and it is insane to test the limits. Money is just paper and ultimately people will lose confidence in it if you can just print as much as you like whenever you like. Then you will have hyperinflation, see how well that worked out in the Wiemar Republic. The USA can play that game longer than most but it can't end well.

[Oberon]

The warm embrace of almost unlimited quantitative easing socialism....what could possibly go wrong, no worries, someone else will pay for it all down the track...who cares who it is... Comrades all over the country will be lining up to hug Cindy she might have to delegate some hugging duties to Grant Robertson, (I can "hardly wait").

We might get away with it because we started with such low debt but some other countries...oh dear !

Yeah, so if I'm reading things correctly: risk and fundamentals are antiquated concepts in the new order? I just... plug my money in and central banks will ensure my portfolio rises in perpetuity?

Who knew it could have been so easy?

[winner69]

We’ll be ok

[Hoop]

No problems really when the debt is held by the NZ Government itself (RBNZ) in NZ$. They'll just keep the printers going. No worries.

I'm under the impression that RBNZ (as with all Central Banks/Federal Reserves) do not have debt as they can create or destroy money..Fiscal easing by creating money to buy or fiscal tightening in selling financial market securities and related instrumental thingys.

The Government can have debt, to eliminate that debt it has to be paid back to the borrowers, the same way as private enterprises or individuals..
There's a belief that too much government debt can create a low growth economic environment due to siphoning of money (unintentional tightening effect) to service that debt...Reinhart and Rogoff wrote a book about it (This Time Is Different: Eight Centuries of Financial Folly), unfortunately in their book they stuffed up the calculations and their reputations to boot, however their overall concept remains sound. That concept is at some point debt does become a problem maybe 160+% of GDP? maybe more or maybe less? ..... Reinhart and Rogoff's 90% debt level = zero growth was proved to be definitely wrong..eh

Another interesting economic growth retard effect is the sudden rapid growth of Debt..I had to google to find where I once read about this and it was here RBNZ 2012 research publication by Michael Reddell & Dr Allan Bollard quote : ".... But even without a financial crisis, periods of rapid increases in debt tend to be followed by periods of economic stress - recessions that last longer and prove more troublesome than a "plain vanilla" recession,....."

If this scenario is true than it seems NZ and the many other country's Governments recent Covid rapid debt growth (irrespective of what% to GNP) will have a long term negative impact.

[Panda-NZ-]

I'm under the impression that RBNZ (as with all Central Banks/Federal Reserves) do not have debt as they can create or destroy money..Fiscal easing by creating money to buy or fiscal tightening in selling financial market securities and related instrumental thingys.


If this scenario is true than it seems NZ and the many other country's Governments recent Covid rapid debt growth (irrespective of what% to GNP) will have a long term negative impact.

The time it will be paid down is when we stop focusing on it as much (undermines consumer and business confidence). It was paid down the fastest when people paid no particular attention to it (Bill clinton, Eisenhower, clark and eventually obama)..

Growth is the key. more debt adds to it in the short and medium term, spending cuts and tax hikes reduce GDP and therefore worsen the debt to gdp ratio. So it's a balancing act.

[Pipi]

When our govt borrow all this money, who do we actually borrow it off?

[iceman]

When our govt borrow all this money, who do we actually borrow it off?

The Reserve Bank printers

[Panda-NZ-]

It is created by the reserve bank of NZ.