Why is my KiwiSaver losing money, and what should I do?
Investors checking the returns of their KiwiSaver fund in the last month may have done so with a wince of pain.
The combination of global interest rate hikes, the Russian invasion of Ukraine, and supply chain disruptions mean the global financial markets have had a volatile start to the year.
Back home this caused the NZX sharemarket to drop to its lowest level in two years on Monday, dropping to 11,381.70, the lowest level since June 2020.
All of this has not been good reading for anyone checking the balance of their KiwiSaver fund. So we asked the experts to explain what is going on, and what investors can do about it.
It seems some in the mainstream media are realising that economic carnage is looming.
It is.
With 60% of NZers with a mortgage refinancing this year coming off historically low interest rates to rapidly rising ones with the gravity of debt we now have is reaching the event horizon of a debt black hole.
Most commentators didn’t understand the magnitude of Grant Robertson lifting the debt ceiling earlier this month.
By taking Crown assets like the NZ Super Fund, and liabilities like the debt held by Kainga Ora, Grant has managed to leverage our debt ceiling up.
By simply allowing our debt ceiling to grow, Grant manages to continue Government spending without raising taxes while keeping the rainy day money at the ready.
And that is what most commentators are missing.
Robertson is one of the most cautious Minister’s of Finance Labour have ever had, who is always shooting left wing ideas to stop populist left economics from ever spooking Treasury.
His pact with the Wellington Bureaucracy is that he is the trusted pair of hands who won’t ever allow neoliberalism to be challenged beyond the most broad of measurements (the well being budget).
Grant’s solemn promise to the Nazgul in Treasury is that no Bernie Sander’s Left wing populism will ever be allowed to bubble up from the angry people.
Grant looks like he’s loosening up the purse strings but has zero intention of spending that purse and this is what should be making everyone nervous.
Grant is prepping a higher debt ceiling because he is smart enough to see the looming dangers on the horizon.
Putin is just starting.
The recession in America and Europe is just beginning.
China is becoming more unstable by the passing week.
Geopolitical crisis + economic implosion + catastrophic climate change = looming meltdown.
Grant is raising the debt ceiling not to spend more, he is raising it because he knows what’s coming next.
When a politicians as cautious as Grant is opening the cheque book, we should all be very concerned.
As TDB has been pointing out from the beginning, the 3 Tsunami waves of Covid are:
1 – The immediate cost in human life and sickness from the virus.
2 – The economic carnage from the virus.
3 – The psychological impact of a unique universal event and the isolation and alienation and mental stress that has created.
We have passed the first peak with global deaths and sickness, we have just started the second wave of economic carnage and the psychological impact of all of this is barely beginning to be recognised.
To date Grant Robertson and Labour have told everyone listening that the inflation spike is but a blip and life will return to normal in the 3rd or 4th quarter of this year.
Really?
Inflation is but a spike and the economy will get back up on its feet with hyper tourism, exploitation of migrant labour and more international student language school scams.
That’s what will save us hu?
Y-e-a-h.
Bout that.
Nearly 400 million people across 45 cities in China are now under full or partial lockdown as part of China’s strict zero-Covid policy. Together they represent 40%, or $7.2 trillion, of annual gross domestic product for the world’s second-largest economy
…add the Ukrainian war and the instability to wheat and base line manufacturing in metals prices alongside the impact on developing economies…
Smaller countries are also struggling. Many borrowed heavily over the past decade to deal with the effects of the 2008 financial crisis and the pandemic. Now, interest rates are starting to rise, just as the prices of essentials like food and fuel leap.
…and you have geopolitical shockwave after geopolitical shockwave hitting us and snapping neoliberal free market global supply chains.
Don’t believe me? Well ask the World Bank and IMF then...
The World Bank has slashed its forecast for global growth in 2022 to 3.2% from 4.1%, anticipating a sharp deceleration from estimated growth of 5.5% in 2021. The IMF’s latest outlook arrives later Tuesday.
World Bank President David Malpass told journalists that “severe overlapping crises” are weighing on the recovery.
“There’s Covid-19, inflation and Russia’s invasion of Ukraine,” he said on Monday.
Developing countries, many of which are facing high levels of debt and a plunge in the value of their currencies, as well as soaring food prices, are of particular concern, he added.
Breaking it down: Around the world, engines of growth are sputtering as prices rise and the war in Ukraine wreaks havoc on strained supply chains.
…the ramifications of this can’t be overestimated…
Europe, which relies heavily on Russia to meet its energy needs, is especially exposed. There, much could depend on Russian President Vladimir Putin’s next move. If supplies of Russian natural gas to Germany were suddenly cut off, Europe’s biggest economy would lose a shocking $238 billion in economic output over the next two years, the country’s forecasters have said.
…these pressures are impacting America as well…
In the United States, inflation has hit a level not seen in four decades. That’s forced the Federal Reserve to consider an aggressive pullback of its pandemic-era support for the economy, boosting fears that it could hike interest rates so much that it causes a recession.
…all of this is screaming inflation and economic stagnation and recession, so Grant’s optimism that Treasury are right and that inflation is just a temporary spike that will be fixed by hyper tourism, migrant worker exploitation and international student language school scams seems less glass half full and more shards of glass half in your mouth.
I don’t think we are ready for this jelly.
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We have already a better mechanism to spread the ownership of the means of production across multiple owners without having to break down large companies into small ones. It’s called a public company limited by shares. Most large corporations don’t have a single tycoon who owns them, but their ownership is distributed across large numbers of individuals who each only own a fraction of the corporation. This is even more so if you consider indirect ownership, ie institutional investors like super funds who are themselves “owned” by huge numbers of individuals.
It is neither ownership that the left wants to distribute, it is power. The left is not against large corporations because stocks are held by a few, powerful organisations. The left is against large corporations because they, by their very nature, dominate the economy, and concentrate power into the hands of a very few CEOs and executives. It opposes Amazon not purely because it is a massive, abusive corporation that provides enormous wealth to a single man, but also because by its very nature it is exceedingly powerful and dominates the market in a way that forces out niche companies.
Amazon is winning games it is not even playing.
And before you ask, yes, Grant Robertson would be fully aware that this may lead to less efficiency and prosperity in some senses. Yet they hold that their system would provide everyone with a safe and secure means of subsistence, remove excessive concentrations of power, and overall provide a more moral and just society. Thus the benefits far outweigh the costs.
(And the left are also very sceptical of excessively powerful government organs like the police and the military, even if the latter may be necessary.)
Farmers? Now’s the time to strike.
Keep your produce on your farms or don’t produce perishable goods. Ie. Keep the rams and bulls to themselves, keep your grain in the silos and keep your wool in the shed. Now, go to the house, make a cup of tea and wait and see what happens. Trust me, you won’t be waiting long.
Here are some demands you can make of the now hungry yet well dressed sliding into the drive way in their BMW’s in a state of blind panic.
A public and full disclosure royal commission of inquiry into primary industry earned foreign funds and cash ‘redistributions’ spanning the last one hundred years. ( That’s correct. 100 years. )
Act accordingly on the findings in a full disclosure and public manner.
A ban on all foreign owned banker activities here. Any foreign investments here, whether it’s in land , property or money lending institutions should be forfeited to the reserve bank AFTER the RBNZ itself been subjected to the same rigorous and public audit, inquiries and investigations for the appraisal and re distribution of those funds where necessary or applicable.
Now. Pop the kettle on and break out the Ginger Nuts. You’ll have polite company in about 3 days.
I was part of an organisation that saw 3000 farmers cram into the Christchurch Town Hall in protest at being slammed by the media, ripped off by the banking and money lending institutions and sold out to big urban industry. No one set fire to anything, no one occupied anywhere, no one so much has dropped a cigarette butt. Ask Jimbo Bolger? He was there, as were the confederate liars hidden within the Federated Farmers.
I told Sir Peter Elworthy of Federated farmers that he was fucking useless and that he was wasting our valuable time and I got a standing ovation. Yes, I did. There was a lot of whoopin’ and a hollerin’ .
Collis Blake? Remember him? It was thanks to his interventions that I learned the words ‘confederate’ and ‘Machiavellian’.
Farmers? Strike. You can achieve all and everything for yourselves and your country and all you have to do is to do nothing. Doesn’t that sound easier than arsing about in tractors while having their all bought and paid for MSM make you look like red neck fools?
How is it we can watch kiwisaver accounts remain static at best or going backwards at a fair clip but the bank itself continues to make profits in the hundreds of millions in dollars?
Piss poor financial management,planning, insight and outlook I would suggest through fritted teeth maybe a consideration. And I doubt they’ll be any reduction in fees they’ll be charging us for their skills and nounce. Seriously, at this stage I am better of leaving my money in an old jam jar under my bed.
the public/private model was always going to end in disaster, the 2 are mutually exclusive public pension schemes need to be safe, private investment funds want profit (that’s where their end comes from) putting public pensions into the latter system was stupid in the extreme.
It will be interesting to hear what half the commentators on this site make of the fact that covid hospitalisation and death rates are up sharply in Australia. All these people who wank on about simple measures of wearing a mask as if it’s some enormous imposition on their freedom when it really just highlights the overall real problem. There are just way too may self centered, selfish pricks, in this world. “Getting on with it” , “learning to live with it,” and simple precautions, are not contradictions.
Seriously wheely – masks do jack shit all. The only evidence is yes, a fucking Bangladeshi study and a debatable manipulated guardian article and of course those expert views – you know that same that claimed 80,000 deaths……There is more compelling evidence of Bigfoot than there is that masks stop the transmission of later versions of covid.
Our rate is stratospheric with mask usage – can’t be worse than without. And did you ever think to distinguish between with or by when it comes to covid mortality?
The cult is dead – the majority of the population are over the covid narrative (even Stuff admits it). High time you moved on as well.
So what do you base your claim of “jack shit all” on? Did you do a study? Is it in a clinical setting or real world evidence? Australia is probably a great RWE example. “no one wears masks here mate we are living with it……..ah shit”. Our rate is not stratospheric but if you think it can’t be worse you are dreaming. Based on your logic the rate of infection in healthcare workers would be no higher if they ditched PPE. Go and run that by them and see if you have any takers
Waterford University (Ireland) did a study on masks and it’s effectiveness on stopping the delta variant. It findings outside of KN95 and N95 masks – everything else was useless. Funnily enough after that study no University did a follow up assessment…….wonder why…..
Of course it was buried because it didn’t fit the narrative of the day.
But keep strapping on that surgical mask designed to stop bodily fluids getting into surgeon’s mouths and airways. I’m sure it will work stopping an airborne pathogen. Honest.
JUST SO LONG AS YOU DON’T BREATH YOUR FOUL VIRUS INFESTED BREATH ON ME, SON.
All you all happy Poor Man’s Gordon Brown spent 100B on corporate welfare, social marketing and jobs for the boys in the bureaucracy. We pissed 100B against the wall and didn’t even get fucking magic beans to entertain BMW Jimmy.
By the time this is all over you’ll be all demanding Rimmer put every single government department out of it’s misery; Labour will be lucky to have 25% of the popular vote and downtown Rotovegas will be less safe than Tombstone, Arizona in the 1880s.
Welcome to New Zimbabwe where bread is $10 a loaf, the mob run law and order and yes, face nappies are still required if you want to go to Bunnings.
And let’s get this straight Grunter like all leftwing politicians ain’t a spendthrift – heck we just threw down $200k on a move on Chloe FFS – a second term MP.
We’re fucked. Big time.
Frank where does the 100 billion figure come from, and what does it matter if you have to wear a mask at Bunnings? That’s right, your big fear is tourists won’t want to come here because they won’t be able to hang out in the supermarket or Bunnings without wearing a mask.
The Covid Wage protection scheme was 12.1 billion (to 30/06/20). Is that all corporate welfare? Is your spend figure all Crown expenditure? Are you suggesting opex should be zero (as apparently it has all been “pissed against a wall)?
Yep. Frank the empty tank is an obvious right-wing troll, and not a very good one.
It’s brilliant leadership I was told once…by Bert.
Put simply. He’s setting up a ‘Ram-Raid’ for the government’s cupboards.
The GFC will be here, in place by December this year if not sooner. All the online billionaires have had to writedown hundreds of billions of dollars in the last month. All the services and sales online for the lockdown period globally has come to an end and all that excess QE/MMT/Money printing over the last 10 years has hit the limit.
No growth, high ‘real’ unemployment, inflation at its highest domestically and supply chains maxed out. And not many countries in the west make anything anymore other that online service industry jobs, its all made in China or around that hub.
The west is on its knees and so is Robo!
When the billionaires stop investing in their own businesses, lay-offs happen and the supply chains wind down.
It is happening now and the effects are too. The War just exacerbate all of this.
25,700 people still living in motels at a cost of $365m a year.
@Denny, agreed much of this GFC part 2, (the crunch in finance, demographics, trade, supply chains) was baked into the system before covid and the invasion of Ukraine. Although the latter adds immediate energy, food and fertiliser and other supply chain material shortages into the mix along with the spectre of nuclear war.
“Grant is raising the debt ceiling not to spend more, he is raising it because he knows what’s coming next.”
Wut? That is literally (and I’m using that word literally) the only purpose for doing it (i.e. to spend more). He knows he can’t balance the budget so is going to “spend more”. Thus more inflation is coming and, if the central bank actually does their job (which they don’t tbh), interest rates will keep going up as a consequence. Rinse and repeat. Remember, interest rates should as a bare minimum match inflation to keep it under control. In New Zealand rates should be >7% already! Buckle up people.
There has been a long period of low inflation due to global supply chain efficiency and now a one of high inflation because of global supply chain disruption – this regardless of domestic government spending behaviour and related debt finance.
Parroting neo-liberalism is sort of quaint but irrelevant to economic reality and always has been.
I stopped reading when the text changed to centred. If a journalist has written anything decent worth reading, then keep the text left aligned at the very least. God awful reading otherwise.
We can rely on Kiwisaver instead of a state pension….. yeah right!
No wonder the high needs, crims and foreign pensioners are flocking to NZ to live. I don’t have a huge problem with retired pensioners for example coming to NZ, but make them support themselves with their own pensions and health care and aged care. BTW that costs millions per person and thus such an incentive for the world to retire in NZ.
Instead, the neoliberals encourage more takers into partaking more NZ welfare from working people’s NZ taxes.
NZ’s neoliberal global policy have self created, the looming debt and poverty crisis that we didn’t need to have, while the woke have created division between everyone based their identity, as the NZ social welfare and health gets split further and further based on the most vocal.
Not sure how the woke expects NZ to support more of the worlds poor (on paper) – sell more of the country off perhaps? – Well that’s where they agree with the neoliberals.
At least we can watch Chloe (ok Boomer) and Beven Chung’s (Mayoral Mistress) doco’s paid for with millions of tax payers $$$ – don’t worry aboutNZ women in Science or humanities who help others, or docs on why many bright people in NZ are leaving due to the alarming echo chambers of what excites the neoliberal funding purse strings.
Shock doctrine meets social division and a country where the IQ is trending downwards because stupid consumption is the last stage of capitalism.
If you care about the environment, delete yourself bro, like the school nazi strikers told the other kids, you are not good enough to protest, cancel yourself.
Wonder who influenced that nice little movement.
The wealthy got a massive government stimulus to there portfolios – you can now raise benifits rate, morons.
Welcome to collapse.
5 years of Covid is just the beginning.