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  1. #451
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    Probably just confirmation bias but found this interesting. Not actually inflation deflation but wealth inequality.

    https://www.bloomberg.com/news/featu...the-super-rich


    It is a longer read.

  2. #452
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    I wonder if this is fake news.
    https://www.zerohedge.com/news/2019-...t-borrow-money

    If true it confirms I need to buy anything and get rid of cash. In theory there is no upper limit to the price of assets at negative interest rates in fact the only restriction is how much the banks will lend to you and that is limitless (at least limited by how fast you can punch numbers on a keyboard.)

    Also reading the front page of the business herald this morning 450,000 taxpayers with the wrong PIR rate. Surprise surprise. Some big long article about financial literacy in NZ that seems irrelevant.

    To me if asked would you like to pay tax at 10.5% 17.5% or 28% I would choose 10.5% every time as did quite a few others it appears. It is only because the IRD is now checking this out that it is an issue. People aren't honest and they don't like paying tax end of story. They are lucky IRD is not going back a couple of years but will moan anyway and no doubt we will see some sob story about a genuine retard who is surprised and upset they have to pay tax this year.

  3. #453
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    Not that I agree with his idea but in the current financialization of the economy this has worked well over the last few decades since the 1970s anyway. If people are waking up to how the game is played maybe we need a rule change like market based interest rates and less government intervention to save reckless lenders and borrowers and the destruction of savers.
    https://www.oneroof.co.nz/news/36379?ref=nzhhome

  4. #454
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    Probably not the best thread heading for my ramblings. If I read it right it is basically saying we will continue to have inflation until the system changes or breaks.

    https://www.nzherald.co.nz/business/...ectid=12268327

    Confirmation bias at work. I agree with what he is saying in this article.

    Although one of the solutions of our world leaders appears to be going to war rather than addressing the imbalances being created within our own countries.

  5. #455
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    Interest rates not allowed to rise. Centralised planning. Total bulls**it. Let the free market decide if you believe in capitalism.
    https://thebull.com.au/new-york-fed-...nterest-rates/

    The climate changers should be piling into the retarded thinking that really drives a lot of what goes on in the world. Constant growth and increased consumption run counter to climate change concerns.

  6. #456
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    Interesting article on inflation

    https://www.newsroom.co.nz/@business...t-is-inflation

    Although I would still question if inflation targeting is a good idea and when they say there is no inflation is it healthy that we have massive asset price inflation even if our cellphones are cheaper.

  7. #457
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    Exactly how they think including air travel over insurance costs for example is bloody stupid when making up monetary policy...

  8. #458
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    Not the only thing bloody stupid thing with monetary policy. Ray Dalio proposes no solutions but suggests current monetary policy is not sensible.

    https://www.zerohedge.com/markets/da...-system-broken

    Sadly if the "intelligent" people in charge have no solution, it will eventually have to be someone less intelligent who will do something.
    Quite an admission for Ray in the last paragraph apparently he doesn't think trickle down economics is working. What a huge surprise that is.

  9. #459
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    Another presumably intelligent person suggesting QE is just trickle down economics and suggesting this does not work the way it is explained to us by usually well off individuals.

    https://www.zerohedge.com/markets/wo...orks-one-chart

    Still no suggestion that markets should set interest rates rather than central planners possibly an example of how central planning doesn't always work. Debate amongst economists seem to be about how low interest rates should go and how quickly or slowly they should get there and how negative they should be if there is a recession and how much money should be printed. There doesn't appear to be any debate regarding reversing course or doing something different. I guess Japan is doing OK so I shouldn't worry but I am concerned that arts students(economists) have such a big influence over society.

    To quote Grant Williams
    There will be no smooth transition back to sustained economic growth, he warns.

    Instead, the distortion of today’s excessive asset prices will require a systemic reset to fix. Either by a deflationary event that destroys the malinvestment, or by an inflationary event that destroys the currency.

    I have been waiting for the deflationary event but with the current policies it would seem that destroying currencies might be the more likely outcome.
    Last edited by Aaron; 08-11-2019 at 11:09 AM.

  10. #460
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    Another view on inflation, although American.
    https://www.mauldineconomics.com/con...ess-youre-poor

  11. #461
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    Not really about inflation or deflation but a side effect of central banks quest for inflation.
    https://www.nzherald.co.nz/business/...ectid=12286416
    Probably not that relevant for NZ as boomers have largely invested in their own homes and rentals with the next generation funding national superannuation (as they did for the generation before them) they probably are not too worried.
    Last edited by Aaron; 20-11-2019 at 09:45 AM. Reason: to sound less divisive

  12. #462
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    Quote Originally Posted by Aaron View Post
    Not really about inflation or deflation but a side effect of central banks quest for inflation.
    https://www.nzherald.co.nz/business/...ectid=12286416
    Probably not that relevant for NZ as boomers have largely invested in their own homes and rentals with the next generation funding national superannuation they probably are not too worried.
    Behind a paywall so I havn't read the article. But it's not news that many salary/wage-related pension funds are massively underfunded around the world. Has been a major concern for many years with several US municipal funds, for example, having to already reduce the benefits originally promised.

  13. #463
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    Sorry about that macduffy. The article mostly talks about the Netherlands, possibly because this is where negative rate stupidity is at its most extreme. (currently).

    It is good that people start to see there are some negative effects to more and more credit and lower and lower interest rates. The US pension funds are probably a bit like NZ Super promising a lot but not asking for enough money from the beneficiaries to cover the promises. Low interest rates only exacerbate an already existing problem.

    Maybe it will force funds to look at the third world and invest where there is need for investment rather than paying higher and higher prices for assets that are already well established, although I guess that is a push further along the risk curve, not what you want for your retirement savings if your about to retire.
    Last edited by Aaron; 20-11-2019 at 10:52 AM.

  14. #464
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    Yes, there's plenty of good reasons why "low and lower" interest rates have their negative effects. Benefit promise funds are funded on sets of assumptions which include expected returns, salary/wage rate increases, life expectancy, etc. When interest rates drop substantially, let alone go negative, funding rates have to compensate, initially by increasing the employer's rate of contribution - which many can't afford, and may go out of business. A vicious circle of cost and failure follows. Self funded retirees have a similar problem, a lower income to spend, retailers feel the pinch, reduce staff...……..

  15. #465
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    Quote Originally Posted by macduffy View Post
    Yes, there's plenty of good reasons why "low and lower" interest rates have their negative effects. Benefit promise funds are funded on sets of assumptions which include expected returns, salary/wage rate increases, life expectancy, etc. When interest rates drop substantially, let alone go negative, funding rates have to compensate, initially by increasing the employer's rate of contribution - which many can't afford, and may go out of business. A vicious circle of cost and failure follows. Self funded retirees have a similar problem, a lower income to spend, retailers feel the pinch, reduce staff...……..
    Raising interest rates and/or reducing debt will supposedly cause a self reinforcing deflationary spiral (and the end of the world if economists are to be believed) but more debt and lower interest rates have been the long term solution and unfortunately there is no way back so I guess we will eventually find out where this leads. My parents and grandparents were scared of debt sadly they instilled this in me as well but we might come back round to a time where debt is treated more carefully and investment is made based on cashflow rather than capital gain and inflation taking care of the debt. If they destroy the value of a dollar through inflation savers are losers and borrowers winners on a large scale.
    Last edited by Aaron; 21-11-2019 at 07:51 AM.

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