$37 Million a week

[Logen Ninefingers]

Maybe buy a house if enough people do it the govt will probably provide some sort of handout to property owners in the event of a crash

Yes, that's how responsible citizens should look to loot their own country: everyone do it so that the government is given no option but to bail us all out.

Except there is no 'maybe' about it, as it is already happening. The evidence is right there. Just look at the interest rate setting, money printing, and grants & subsidies.

[Aaron]

Maybe buy a house if enough people do it the govt will probably provide some sort of handout to property owners in the event of a crash

Yes, that's how responsible citizens should look to loot their own country: everyone do it so that the government is given no option but to bail us all out.

Except there is no 'maybe' about it, as it is already happening. The evidence is right there. Just look at the interest rate setting, money printing, and grants & subsidies.

Targeted inflation and monetary policy are designed to destroy savers and help borrowers and owners of assets. I am coming to a personal view that it is unlikely to change in the near to mid term, although it is unlikely long term as it doesn't seem sustainable and each crisis requires larger amounts of debt (think March 2020). Negative interest rates would not exist in a sane world.

I think it is unfair and that the bottom rungs are being kicked out from the ladder of financial success. It is possible that people are starting to feel that the chance for upward mobility is being taken away (it is) and that may be what is partly driving the housing market frenzy (that and low interest rates). I could get upset about it as I have done for too long now or I can invest so it doesn't upset me as much.

Imagine saving money and having runaway inflation decrease your purchasing power while interest rates stay low and house prices rocket up?(it doesn’t take much imagination does it) What about a debt jubilee, you won't benefit as a saver. What about if there is a big crash in the financial system, further debt will be harder to come by just when you want to borrow and just when asset prices are falling and it is time to invest, your savings will be frozen through the Open Bank Resolution as savers help the banks get out of trouble.
https://www.rbnz.govt.nz/regulation-...ank-resolution

I don't think it is right or fair but it is hard to see saving cash as a sensible investment option with insane central bankers forgetting their primary mandate of managing monetary policy to maintain price stability and promote the maintenance of a sound and efficient financial system.

I could be wrong as I have been most of my life but at least getting ulcers worrying about my mortgage is preferable to the ones created by being angry at the way things are.

Monetary policy ensures my house price rises (at least in nominal terms) and my debt becomes manageable over time. As traditionally wages don’t rise as quickly as asset prices the nz taxpayer can pay my tenants rent through an accommodation allowance ensuring my mortgage is paid and my house price stays up.

Thanks for starting the thread Logen you have helped me solidify my thinking and my next investing steps, although I appreciate that may not have been the intention of the thread.

[Logen Ninefingers]

Targeted inflation and monetary policy are designed to destroy savers and help borrowers and owners of assets. I am coming to a personal view that it is unlikely to change in the near to mid term, although it is unlikely long term as it doesn't seem sustainable and each crisis requires larger amounts of debt (think March 2020). Negative interest rates would not exist in a sane world.

I think it is unfair and that the bottom rungs are being kicked out from the ladder of financial success. It is possible that people are starting to feel that the chance for upward mobility is being taken away (it is) and that may be what is partly driving the housing market frenzy (that and low interest rates). I could get upset about it as I have done for too long now or I can invest so it doesn't upset me as much.

Imagine saving money and having runaway inflation decrease your purchasing power while interest rates stay low and house prices rocket up?(it doesn’t take much imagination does it) What about a debt jubilee, you won't benefit as a saver. What about if there is a big crash in the financial system, further debt will be harder to come by just when you want to borrow and just when asset prices are falling and it is time to invest, your savings will be frozen through the Open Bank Resolution as savers help the banks get out of trouble.
https://www.rbnz.govt.nz/regulation-...ank-resolution

I don't think it is right or fair but it is hard to see saving cash as a sensible investment option with insane central bankers forgetting their primary mandate of managing monetary policy to maintain price stability and promote the maintenance of a sound and efficient financial system.

I could be wrong as I have been most of my life but at least getting ulcers worrying about my mortgage is preferable to the ones created by being angry at the way things are.

Monetary policy ensures my house price rises (at least in nominal terms) and my debt becomes manageable over time. As traditionally wages don’t rise as quickly as asset prices the nz taxpayer can pay my tenants rent through an accommodation allowance ensuring my mortgage is paid and my house price stays up.

Thanks for starting the thread Logen you have helped me solidify my thinking and my next investing steps, although I appreciate that may not have been the intention of the thread.

You go for it. No problem whatsoever with that.

You are going in with your eyes open, assessing the risk, and with an expectation of continued government and central bank assistance.

And if it all falls apart, if the bubble does burst in spectacular fashion, then those who get badly burnt have to accept that they have no-one to blame but themselves. The only people I will be feeling sorry for will be the young people buying at the top of the market who have been goaded into by their elders and encouraged to do it by the government.

[Aaron]

You go for it. No problem whatsoever with that.

You are going in with your eyes open, assessing the risk, and with an expectation of continued government and central bank assistance.

And if it all falls apart, if the bubble does burst in spectacular fashion, then those who get badly burnt have to accept that they have no-one to blame but themselves. The only people I will be feeling sorry for will be the young people buying at the top of the market who have been goaded into by their elders and encouraged to do it by the government.

I agree entirely people should take responsibility for their investing decisions, you take the risk you deal with the results good or bad. What burns my britches is that doesn't apply to capital markets either real estate or global share indexes. As soon as they fall they are propped up with low interest rates and easy money, it is sickening. It is a 30 year trend but I don't know if it is coming to an end or not. I do know central banks and politicians will keep it going as long as they can but am unsure how long that will be. The younger generation and those not benefiting from trickle down economics need to wake up and force political change. National or Labour makes no difference.
It sounded like one politician was starting to work out what is behind the rising inequality and house price rises in the herald this morning.

https://www.nzherald.co.nz/nz/politi...EOII6G7PTFBLY/

Unfortunately I have traditionally viewed her party as a bunch of communists in green camouflage telling us how to live our lives. Maybe if Chloe were leader the greens might be a more palatable option.

Stopping targeted inflation would be politically easy to do, it wouldn't even take any guts to implement. Maybe then central banks could go back to providing price stability and a sound efficient financial system instead of protecting investors from bad decisions and over leverage. If it all craps out I will feel sorry for myself first and foremost and the young people almost forced/coerced into taking a large mortgage also the older less well off people forced to go out the risk curve to generate some income from their hard earned capital.

[Logen Ninefingers]

I agree entirely people should take responsibility for their investing decisions, you take the risk you deal with the results good or bad. What burns my britches is that doesn't apply to capital markets either real estate or global share indexes. As soon as they fall they are propped up with low interest rates and easy money, it is sickening. It is a 30 year trend but I don't know if it is coming to an end or not. I do know central banks and politicians will keep it going as long as they can but am unsure how long that will be. The younger generation and those not benefiting from trickle down economics need to wake up and force political change. National or Labour makes no difference.
It sounded like one politician was starting to work out what is behind the rising inequality and house price rises in the herald this morning.

https://www.nzherald.co.nz/nz/politi...EOII6G7PTFBLY/

Unfortunately I have traditionally viewed her party as a bunch of communists in green camouflage telling us how to live our lives. Maybe if Chloe were leader the greens might be a more palatable option.

Stopping targeted inflation would be politically easy to do, it wouldn't even take any guts to implement. Maybe then central banks could go back to providing price stability and a sound efficient financial system instead of protecting investors from bad decisions and over leverage. If it all craps out I will feel sorry for myself first and foremost and the young people almost forced/coerced into taking a large mortgage also the older less well off people forced to go out the risk curve to generate some income from their hard earned capital.

If you have a painful toothache, do you do something about it, or are so afraid of a visit to the dentist that you just keep yourself dosed up on panadol and ibuprofen - and you keep increasing the number of pills you are popping as the pain intensifies? If you opt not to face up to the problem, where will that ‘strategy’ lead you to?

Welcome to our Idiocracy, where the hapless voters, mad scientist central bankers, and spineless politicians keep kicking the can down the road rather than facing up to the issue. Much more money printing, taxpayer subsidies, and negative interest rates on the horizon.

[Aaron]

Another person who can see the problem with monetary policy, inflation targeting and trickle down economics.
https://www.nzherald.co.nz/business/...67A2RQ75MV7DU/

I think Nick Mowbray helped NZ secure some PPE at the height of the covid panic. Might just be confirmation bias but he seems like a smart guy. Maybe he should talk to Chloe Swarbrick and approach the issue from either side of the political spectrum as although a nice guy I assume he would lean right as he is an entrepreneur.

The younger generation need to get together to give themselves a chance. Boomers definitely won't help and GenXers won't want to be the last ones in on the ponzi scheme so will be inclined to keep things going. This is sort of becoming obvious with Labours weak response to the housing crisis and a stated desire to keep house prices rising.

[Aaron]

Another area Labour could address if it were serious about housing. I can't really call it a crisis if my own representatives in parliament don't feel that way. Immigration is not a driver for housing demand??? I call bulls**t on that statement.

An article discussing immigration running the risk of being called racist or a xenophobe.
https://www.interest.co.nz/property/...arts-reopening

Labour may have touched on immigration but basically just the same open slather that National had.

[macduffy]

Labour may have touched on immigration but basically just the same open slather that National had.

In my innocence I had assumed that all immigration these days was to work in skilled positions that couldn't be filled from the NZ workforce. I should have known better, of course.

[artemis]

Back in 2017 Labour pledged to reduce net immigration by 20,000 to 30,000, mainly by cutting back student and work visas. Didn't happen. Student visas allow up to 20 hours work a week, and of course there are well publicised scams and rorts with some edu establishments and some employers.

Trouble with cutting back on student visas is teachers losing their jobs, tertiary mainly and restructuring to survive is under way. That's a key Labour demographic. And immigration already changed by events anyway.

[Aaron]

In my innocence I had assumed that all immigration these days was to work in skilled positions that couldn't be filled from the NZ workforce. I should have known better, of course.

Skilled occupations such as farm labourer or deckhand or wait staff.

Not sure but Adrian Orr says the monetary largess and low interest rates are to ensure he meets his employment target, unusual that we need 50,000 extra workers imported each year if the reserve bank is concerned about unemployment. Do none of our training organisations provide training for the unemployed? Very confusing.