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

[Hoop]

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 fastest when people paid no particular attention to it(Bill clinton, eisenhower, clark and eventually obama)..


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

First part true..make hay while the sun shines
Second part Hmmm ..pour petrol on the fire to stop it from going out..Old axiom I grew up believing..short term gain long term pain..it's a hard for me to stop believing that and therefore find it hard to think it is a balance,,,

Anyway we are in the second of the 4 R's Run Rescue Recession Recovery....Rescue which suggests we have to stop the loss of money otherwise it turns from recession to depression..Tho stop the loss of money (evaporation) is to replace what is lost..if that equals out there is no inflation...undershoot is deflation overshoot is inflation. the KISS version

[Panda-NZ-]

First part true..make hay while the sun shines
Second part Hmmm ..pour petrol on the fire to stop it from going out..Old axiom I grew up believing..short term gain long term pain..it's a hard for me to stop believing that and therefore find it hard to think it is a balance,,,

Where's the pain though? we own the debt domestically. there's not going to be pain unless we choose it.

World events though, I can see those being bad for us.

[Biscuit]

Where's the pain? we own the debt domestically. there's not going to be pain unless we choose it.

....

Unless we live in unicorn country, the debt is real and has to be serviced and/or paid back, otherwise you are just "printing" money. That means either more tax or less money for the Government to spend over time.

[Panda-NZ-]

Unless we live in unicorn country, the debt is real and has to be serviced and/or paid back, otherwise you are just "printing" money. That means either more tax or less money for the Government to spend over time.

Or ;

c) cancelled at a later date given the reserve bank owns it.

If you account for inflation there is no cost. It is free money with an opportunity cost NOT to take it. Our competiton will be loading themselves up and locking in the low rates then using it to compete against NZ inc.

So, we should take on more to compete against them effectively.

[Biscuit]

Or c/ cancelled at a later date given the reserve bank owns it.

If you account for inflation there is no cost. It is free money with an opportunity cost NOT to take it. Our competiton will be loading themselves up and locking in the temporarily low rates.

How do you cancel money you have already spent? - you can cancel the debt if you cancel the money, if you cancel the debt and don't cancel the money, you are just printing money and that cannot be "free".

[Panda-NZ-]

The bond 'assets' can be written off on the reserve banks balance sheet.. I don't know what you mean by spending.

Hmmm do bonds from the reserve bank count as assets on the part of the government? Interesting if they are. So as well as lending to themselves, they can expand their assets by simply adding zeros onto a screen. winning formula.

[Biscuit]

The bond "assets" can be written off on the reserve banks balance sheet in theory. I don't know what you mean by spending.

And if the reserve bank writes off the debt, without cancelling the money created to buy the debt, then it has "printed" money. There is no way that is free, the cost will be spread around as loss of purchase power of your and my money.

[blackcap]

And if the reserve bank writes off the debt, without cancelling the money created to buy the debt, then it has "printed" money. There is no way that is free, the cost will be spread around as loss of purchase power of your and my money.

And as it happens that will help the rich get richer and make the poor poorer. Be careful what you wish for.

[Biscuit]

And as it happens that will help the rich get richer and make the poor poorer. Be careful what you wish for.

I don't wish for anything particularly. The whole QE thing gives me the willies though. A little bit of loose money in a crisis is probably inevitable. But, the USA, Japan etc went for QE in the last crisis (ten years or more ago), and when that crisis was over, did they reduce the money supply again? No, they "couldn't", in fact they found they had little choice but to carry on with more QE. The ever-expanding money supply. Now you cannot find decent yield anywhere - are those things not connected? People who have saved money and put it into the bank, or bonds or equities are taking reduced return and/or increased risk to pay for all the clever money tricks. I'm not an economist but I've lived long enough to know that you don't get nothing for nothing.

[blackcap]

I'm not an economist but I've lived long enough to know that you don't get nothing for nothing.

Totally agree, somewhere, sometime along the line someone is going to pay for this. Like I said before it will be the general populace, with increased costs and lower incomes that are the poorer for it. Not quite sure how it will play out but there is nothing like a free lunch.

When students for example got the $50 a week extra earlier on, no way that they get that and keep it. Rents went up as did other costs. They might have had a bit extra but not much. The market is pretty quick and sorts any excess like that quickly. Helicopter money to help stimulate the economy will be a short term boost and they might feel better off, but long term the people receiving this will be worse off.