Dead Cat bounce?

[Aaron]

You make some statements but with what backing or reference?

What does Bill English know? He knows how to screw the average NZ worker with Kiwi Saver as it's a proven money tree for IRD to tax year after year.. while the smarter investor looks to buying tax free real estate. Show me where assets prices are elevated? Oil? = nope, precious metals? = nope, houses? = nope. In my view, prices have deflated as the 'money supply' has vaporised. If there was no gov't printing of $, we would be in great serious state to the point of having wars.

Again, where's the proof of rampant inflation? In 2008 the US gov't did massive QE and have prices ran out of control? Nope. In recent events is the $3T in monetary printing in the US going to cause inflation? Again, look at the 'money supply'. Easily over $3T has been lost out of thin air through assets vaporisation.

https://www.thebalance.com/causes-of...prices-3306094

Above link talks of 2 key causes of inflatio - also worthy to click on the link on 'Quantity Theory of Money'.

But the average NZ investor doesn't read this kind of stuff. They coddle around, see and hear what others say and bode along agreeing (such as at any point gov'ts go on a spending spree = inflation).

The NZD currency is not going to hold value. That's because we're too small of a country and what we have to offer is 2 tricks. One = agriculture resource extractions and Two = Tourism. You can bet tourism won't come back any time soon and it would take AirNZ several years to regain what they last recently in global flights (as globally disposable incomes disappears). If you want a strong NZD, you need LESS of it's currency exported (as locals buy imported products because NZ doesn't make many things), and / or have more of NZ products exported as more currency flows into NZ than going out.


Not sure where you mean about asset valuations in a negative interest rate environment. What negative rates really mean is savers of cash are punished and those that borrow are rewarded. So the person that has more incentive to borrow funds from the bank to buy more houses will stand in a much better position than the person that has cash (a solution where the rich get richer). Banks aren't going to give $ to anyone... just those that meet the requirement and the same would apply to corporate shares that try to vie for bank loans instead of borrowing privately from the public. There is no free lunch even at negative interest rates, meaning the banks (lenders) will gain more in the spread.

I am just providing an opinion. I lack the time, resources or intelligence to provide balanced journalism backed by facts and figures, but I think the thread was asking for people’s opinions and I provided mine. I would recommend you put me on ignore.

You are really onto Bill English about Kiwisaver but as already explained it was Labour and Michael Cullen who brought it in.

You are right Oil is low, precious metals (gold) not so much, houses -really?? (where is your backing or reference for this statement) look at the reserve banks inflation calculator. 2009 to 2019 a 6% compounding increase in housing. compared to the CPI of 1.5% over the same period you are full of s**t if you don't think house prices have been rising at a rate much higher than the CPI.
When I say "inflation", I am generally referring to asset prices as this is an investment related website. You are correct CPI was only 1.5% for the last 10 years but that is irrelevant to an investor if electronics and clothing have been dropping in price while asset prices have been rising and continue to be supported by monetary policy.
I am not the only one to consider inflation.

To Quote (see post #19) “holding gov't bonds that pay insane low interest rates - what does that mean when you factor inflation? Look at the 10 year bond rates?”

I do only regurgitate what I read and lack the brain power for original thought but there are a number of valuation metrics that indicate stock prices are at historically high levels. Also, you can check for yourself whether companies are cutting or reducing dividends.

You are probably right about the NZ$ we are small fry and with large US hedge funds buying up successful NZ companies and exporting dividends the $NZ possibly won't hold up internationally.

I was thinking NZ govt debt to GDP was lower than some other countries and our central bank money printing might not be as extreme so there might be more reason to have faith in the $NZ but due to our small size that may be irrelevant.

Did you not realise your house price growth for the last 30 years is at least in part to falling interest rates?

You raise a good point (I have chopped up your sentence a little)

"What negative rates really mean is savers of cash are punished and those that borrow are rewarded. Banks aren't going to give $ to anyone, borrow funds from the bank to buy more houses will stand in a much better position than the person that has cash (a solution where the rich get richer)."

I think you have hit the nail on the head with that statement. You own houses and enjoy central banks supporting house prices. It makes you wealthy and you don’t want it to change, perfectly understandable.