Adrian Orr and Treasury are certain NZ has passed its inflation peak and good times will return because tourists will flock here and save our economy.
So far the winter tourists can’t turn up because the Ski fields are too warm…
Warm winter forces Mt Ruapehu ski fields to ‘rationalise’ operations, lose a third of staff
Operations are being significantly limited at Mt Ruapehu ski fields at Whakapapa and Tūroa following “record” warm weather, with more than half the ski season to go.
…consumers have gone into hiding…
Tough time for retailers as sales slump
Retail sales volumes in the June quarter declined at their fastest pace since the global financial crisis, economists say.
For the June quarter the total volume of seasonally adjusted retail sales was $26 billion, down 2.3% compared with the March quarter, according to Stats NZ’s latest retail trade survey.
Motor vehicle and parts retailing was down 5.8%, electrical and electronic goods was down 6.1%, supermarket and grocery stores was down 2.9%, hardware, building, and garden supplies was down 5.3%, while food and beverage services was 3.3%.
…globally China is being impacted by the heat wave to the point it’s damaging the economy…
China’s heatwave could have a knock-on effect on its economy, says economist
China is caught in the grip of a devastating heatwave that could have a serious impact on its economy, according to a chief economist at Hang Seng Bank China.
The heatwave “is a quite dire situation,” Dan Wang told CNBC’s “Squawk Box Asia” on Thursday, adding it probably could last for the next “two to three months easily.”
“It will affect those big energy intensive industries and it will have[a] knock-on effect throughout the economy and even to the global supply chain,” she said.
…the impact of never ending war in the Ukraine against Putin simply isn’t being factored in to the current economic equation…
The invasion has devastated Ukraine’s economy across the board. The World Bank estimated in April that the Ukrainian economy could shrink by 45% this year. Last week, Ukraine’s economy minister said the country’s gross domestic product of $200.9 billion in 2021 is likely to contract between 35% and 40% by the end of the year.
The conflict has cost Ukraine over $113.5 billion in damage, the Kyiv School of Economics says, with housing and transportation infrastructure hit particularly hard. KSE says the country will need upwards of $200 billion to recover.
Meanwhile, Reuters reports that Ukraine’s Agriculture Ministry says grain exports are down 46% from last year due to a five-month blockade of the country’s Black Sea ports. And despite a U.N.-brokered deal reached in July to allow food shipments to depart Ukraine, the agriculture sector is still expected to take a huge hit. The country’s steel industry has also taken a beating.
…Fed Boss Powell just pushed the US economy into Jackson Hole with his doubling down on higher interest rate increases and the Dow shat itself…
…how far could NZ inflation rates jump? Check the global rankings…
…if the Fed comes out with 100 point raises rise, the pressure will be on Orr to follow with 75 points.
What Treasury are wanting to claim is inflation is dropping because demand is dropping, but this is a supply chain and scarcity problem as well, as Consumers retreat, the natural scarcity of products also compounds issues by driving prices up even as people can’t afford them.
The super rich and super wealthy will benefit, middle classes and below however will suffer.
Post 2008, to stave off a global economic recession, central banks pumped $25Trillion into markets which when into stocks and property.
This has artificially created the lowest interest rates in 5000 years of history as global supply chains ruthlessly exploited the most de-unionised parts of China and stopped inflation from exploding for the last 20 years.
With supply chains broken, with geopolitical tensions bringing supply chains back to friendly territories and the inflationary pressures of bringing those supply chains home, the day of reckoning here suggests a spectacular 1929 stock market crash.
Orr’s confidence that we are somehow safe from the geopolitical maelstrom seems terribly misplaced.
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“Consultation” AKA NIMBYism is a major cause of so many issues in regards to transportation infrastructure and housing. I live in Australia but our issues are pretty much the same. In my area the developers in the early stages of planning were gonna build a whole new subdivision of almost purely mid density housing. One public outcry at city hall later it became like 10% townhouses, 90% low density single family homes. Smug NIMBY bastards genuinely thought they did the right thing. Every time we get a new high density building built people go on about how it looks “ugly,” “does not fit the neighbourhood character,” “it will make traffic worse,” “gentrification,” or some variation of. And people wonder why we have a housing crises.
Why shouldn’t there be NIMBYISM?
People spend a lot of money on their homes and build a lifestyle there.
Why shouldn’t they get a say if the Government wants to severely negatively impact that lifestyle?
I suspect in the same situation you would scream blue murder.
Nimbyism is unhelpful because if every property owner was a nimby then higher density housing would never be built. Land is in limited supply so nimbys occupying valuable land are simply preventing more people enjoying the benefits that make that land valuable in the first place.
THEY BUY THEIR PLOT NOT THE STREET or the nation.
First of all the surveys New Zealand land plots are based on was drawn up by people with barely even a primary school education using tools shipped 10,000 kilometres by sail. They’re just unreliable. Still to this day people are selling land only to find out that there parcel is ten metres somewhere else!
The entire landscape of New Zealand needs to be better diffined than that with areas of development for the natural well diffined along side areas for urdan development, rural development and productivity defined into unproductive land so that state funds can be redirected into maintaining the vista and slender that we have all come to enjoy. Then foreigners will pay shit tons of money visiting New Zealand and no one ought to be mad about it.
Matee, consultation for 40 to 200 years and y’all are still bumb arses.
He/they can LIE all they like, because they are NEVER held accountable for their inaccuracies and POOR runing (from the 90% of NZ’ers point of view) of our economy.
Basically they do NOT work in our best interests, but the media et al do a great job of CONNING the 90% into believing that they do.
It’s a con artist job and we the 90% fall for it every time.
Wake the hell up people.
Fool me once, shame on me,
fool me twice, shame on you,
fool me 100’s and 100’s of time, over and over again, Oh well I DESERVE it.
A fool and their money are easily parted.
I assume you are talking about Robbo and Adern?
Because they are the main culprits.
If Orr’s confidence is misplaced so are recent comments from the likes of some celebrity economists blaming the Reserve Bank for people taking out large loans and now being exposed to increasing interest rates! Not the retail banks that ram advertising down your throat about buying houses, the Reserve Bank. You have to be f*ing kidding me. Apparently money was so cheap people would have been ‘mad not to take it’……rather than being insane to think things had no chance of going the wrong way. As you are heading into a global pandemic…..what could possibly go wrong? FFS
Yes, shit has hit the fan and now splatters are everywhere but some people want to pretend that no its not shit on the wall and no it doesn’t stink up the room. Buckle in, bumpy ride ahead.
Orr’s useless, haven’t we got anyone better? NZD is now sub 62 cents, hardly an attractive consideration for tourist dollars (good). No snow lol. Who’s short-sighted idea was it to promote tourism as our #2 export? Oh yeah, sir traitor. Inflation has NOT peaked. We are in for an interesting 12 months ahead. Time for NZ to shift it’s economic thinking and quit kicking the can down the generational road. There’s gonna be pain. Pain atop current pain. It’s just the beginning
NZ includes a big area below Ruapehu & there is lots of snow at the SI ski fields.
I tend to agree with Martyn that a big crash is coming though.
Interesting times. Hard not to be pessimistic aye. Also hard not to think the worst l will happen. It’s gonna get hard in NZ, but Europe is going to crap itself. Maybe they could put the inflation rate up for 2 weeks just to flatten the curve.
“This has artificially created the lowest interest rates in 5000 years of history as global supply chains ruthlessly exploited the most de-unionised parts of China and stopped inflation from exploding for the last 20 years.”
If our technocatic overlords can get Globalism back on the tracks again then the cheap credit and low low low low low low interest rate environment can continue. But if not then it is definitely the end of an era.
“The super rich and super wealthy will benefit, middle classes and below however will suffer.”
And too atomised and deculturised for any true popular political movement to emerge and reverse the suffering.
Lots of great information to read and comprehend.
Add to it some thoughtful comments on the gigeconomy which would mingle with the info above and give even greater comprehension I should think.
The Gig Economy was always a Scam 21.17m 2022
https://www.youtube.com/watch?v=rXWuz4wjdZA
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also a TedxTalk Manchester 15.46 2020 ?
https://www.youtube.com/watch?v=xImchItd52w
Why The Gig Economy Is A Scam | James Bloodworth
Do the entrepreneurial myths surrounding the so-called gig economy stack up? Journalist and author James Bloodworth doesn’t think so. In his talk he relays some of his own experiences working undercover in the gig economy and debunks some of the glamour surrounding the increasingly popular idea of ‘being your own boss’.”
Follow James on @J_Bloodworth James Bloodworth is a freelance writer and the author of the critically acclaimed book Hired: Six Months Undercover in Low-Wage Britain, which was recognised by The Times as its Current Affairs Book of the Year for 2018. Guardian columnist Nick Cohen reviewed the book as “vital reading for all”.
His first book was The Myth of Meritocracy: Why Working-Class Kids Still Get Working-Class Jobs published in 2016. Previously James has written for The Guardian, The Independent, The Wall Street Journal, The Spectator and International Business Times. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at https://www.ted.com/tedx
Out inflation will be made extraordinarily worse than it would otherwise have been because neither Robbo nor Adern have the intelligence nor restraint to show fiscal responsibility.
I guess austerity is more to your taste.
What does that mean Jay? If you are implying that government spending is impacting food prices I would love to hear why. People make general statements about the CPI without actually clarifying what the link is. Government spending in construction driving up price of building materials and thereby impacting CPI I get, but food?
The Treasury is full of it…in 2008 advice for the Crash no worries we produce food, NZ is fine…in 2009 Auckland House Prices will drop, and fast…
except we export the food and overcharge kiwis for the leftovers
don’t belive for 1 minute it’s peaked and as the perception (even if it is only perception) of NZ becomes unsafe polluted and 3rd world will the tourists still want to come?
For the most part, foreign tourists won’t come here because air fares have gone through the roof and because their basic living costs are skyrocketing.
A recession is on the way: a really bad one
May be Orrs thinking is higher US interest rates, weaker NZ dollar, more milk sold, better deal for tourists. Plus higher local mortgage rates, lowers spending on imports. Oil prices are down because the market has rejigged itself around the ukraine situation. But prices at The Warehouse will be up.
Yep and productivity is on a downward spiral due to a combination of events, but the main factor is the supply of quality labour, good example of this is the quality and supply issues affecting Zespri, with consumers burring up over the product not meeting expectations.
Me seems to think that the gloss has gone, or is going from NZ Inc.
We’re in for a period of head winds due to a don’t give a rats arse attitude afflicting our fair country at the moment.
” The super rich and super wealthy will benefit, middle classes and below however will suffer ”
That is what you call a CLASS WAR that the U.K unions and Bernie Sanders in the U.S are fighting against.
indeed mosa those who decry ‘class warfare’ are the very ones waging it on the people
” The super rich and super wealthy will benefit, middle classes and below however will suffer ”
That is what you call a CLASS WAR that the U.K unions and Bernie Sanders in the U.S are fighting against.
https://www.thecanary.co/trending/2022/08/22/the-posties-union-is-making-it-clear-that-bosses-cant-treat-their-workers-like-dirt/
” The super rich and super wealthy will benefit, middle classes and below however will suffer ”
That is what you call a CLASS WAR that the U.K unions and Bernie Sanders in the U.S are fighting against.
https://www.thecanary.co/trending/2022/08/22/the-posties-union-is-making-it-clear-that-bosses-cant-treat-their-workers-like-dirt/
A lot of people are going to be wiped out because of this.
I think we should give the economists a play station each, a bag of chips and a nice cushion to sit on while we draw the curtains, bring in the washing, check the mail box and keep our fucking heads down until the scary people move on down the street.
The Governor is one of the last of the social democrats so a general approval. And we so much rely on these old social democrats haranguing and harassing neoliberal Labour. It’s their day. Why Labour wants to do away with the Children’s Commissioner. We have ideals, they have focus groups.
That’s a good quote to stick in the brain sumsuch.
We have ideals, they have focus groups. That’s Labour.
They look out at our shining faces and say ‘Lookee here, that’s
Our Lab, and try their failed 3rd way neoliberal experiment on us again.
Adrian Orr. I have some well intended advice for you:
Quite your job immediately then disappear and don’t come back until the ruins have stopped smouldering.
AO/NZ’ers. Life, is about to get fruity. I can see huge numbers of homeless people filling the streets while houses remain empty because no one can afford to live in them.
You seen a documentary on China’s property investment madness? They build massive high rises but because of the structure of the nature of investing in them they remain uninhabited.
Here’s a sampling…
https://youtu.be/Ie6zd3Rwu4c
Yes it is bad, and it would be much badder for the working class with Natzo & Actoids in office.
My question is as always…whatcha gunna do abowd it?
TDB has run articles by marxists calling for revolutionary class action, which I agree with. The NZ post colonial reality however is those with the most “say” are capitalists, or aspirational capitalists, not the 50% who have approx 2.5% of the wealth and rent overpriced dumps paying off smug bastards mortgages.
TDB has also run Fortress NZ pieces which I substantially agree with.
So what to do?
-Rebuild a strong union movement including a fighting class central organisation
-Rebuild the Marxist left
-Community organise and take direct action including Climate Strikes & occupying ghost houses
-Build a political campaign to boot Rogernomics and institute a Basic Income & a raft of nationalisations
The class enemy, and their supporters, will never give in unless confronted and taken on. The 1%ers seem quite happy for the destruction of the planet as long as they keep their cash flow coming, and have a Falcon Heavy or similar to escape on!
Economists claim that inflation is just a monetary matter and adjusting interest rates is a solution. Some of the damage is a matter of money production but other reasons have no correcting policy.
Apart from the gift of free sunlight energy, all inputs to our economy are extracted from our environment. Some is ancient stored solar energy in the form of gas, coal, and petroleum as fossil fuels. In addition we extract minerals for building and refining into metals. Most biological extraction produces waste which is recycled for reuse. This is known in the water, carbon, and nitrogen cycles.
In the extraction process the most convenient and easiest to extract resources are used first. As more difficult, remote, and dilute resources have to be used, the real cost can only go up. This process of increasing real cost has been concealed by technology improvements which reach efficiency limits so real costs increase.
Another cause of inflating costs is the process of commerce increasing prices to increase profits because they can. Where there is a degree of monopoly or there is low price elasticity prices can be increased. It can be observed by anyone who investigates that many enterprises have had increases in profits significantly greater than the rate of inflation. This is happening while most salaries and wages have lost value.
More difficult to quantify is the increase in non productive costs. These costs such as the costs of operating a government and its bureaucrats, police, justice and prison system, defence, and social services which do not earn an income to offsets the costs. Businesses have their own increasing administration costs to adsorb but increase there will cause inflation. Social support in heath and education aid people without being a monetary transaction but not offset against cost inflation.
Being poor does not help keep inflation away. They have social, health, and general problems that add institutional costs that are unproductive. The worst cases of these are forced to turn to crime in order to survive thus extracting wealth while doing some destroying. That is inflationary.
Finance, insurance, and real estate are also a wasteful burden on society which is released as inflation. At the worst financiers take commission as intermediaries which produce no added value to production. Real Estate agents take money without actually producing anything. Insurance policies use premiums to payout victims at the same time extract enormous profits without material production. These are monetary parasites that contribute little to producing consumer items. Their increasing proportion of GDP can be seen in the statistics.
Lower wages for the majority of workers leads to some declining consumption. Loss of sales for distributors of good leads those shops and department stores to having to spread their fixed costs over a smaller turnover thus needing higher prices to maintain profits.
People have expected that political leaders would have an answer and should solve the inflation so shopping for lots of stuff can continue. Things are accepted to get worse before they get better. How do we know that things will get better? They will not. We were warned back in 1972 that there are limits to growth but there was a way to adapt to a better future. But no, we have continued on the business as usual option and current results confirm the original modelling. In addition we have long been warned that the form of pollution created by increasing greenhouse gasses will change the climate into a damaging state of climate chaos.
The climate chaos will present us with more extreme and damaging floods. This is already producing homelessness, crop losses, and business losses. At the other extreme we get more droughts that cause business losses as well as crop failures. Storms can be more violent, crops damaged, businesses trashed, and homes destroyed. Tornados in some areas have been regular destroyers in those areas with a known risk, but they have become more violent and destructive of homes and business property and also moved to new places which had been free of them. Fires assisted by drought conditions have become larger and more frequent causing more loss of homes and business property. As well as that, more localised rainfall has caused landslides which interrupted communications adding more damage to business activities. Repairing climate damage is a cost that does not produce any advance but is indirect inflation. All this adds to a price spiral. A good roof is not the universal protector as some economists see it. All this adds up to produce increasing inflationary effects. Do not bet on things getting better. War comes along and more people are made homeless and commerce destroyed. While fixing all the damage contributes to GDP, the real benefits to people measured as GDP decline. ‘Bads’ increase while ‘goods’ decrease.
Agriculture suffers from crop losses and decreased crop levels, but the inputs such as fertilizers essential for improving yields in the past are costing more as war has decreased supply. The supply is now depending on stocks and failing to ensure that yields are maintained. Fewer people are fed adequately. Food crises are fast approaching. If anything will encourage rioting, it is a food crisis.
If a simpler understanding is needed, then just a focussing on energy is sufficient. Economists refer to labour and capital when trying to model production. Sometimes land, technology, and inventiveness are included the modelling. Economists do not understand the role of energy which does not appear in their models. Energy as a word dates back to 1802 and took time to become fully understood and the energy laws confirmed. It is better to focus on energy. All production of goods and services is based on the application of energy. No energy, no results. Even knowledge transfer requires energy. Humans use their energy to provide both brain work and physical work. Machines, transport, and material processing require energy. Both heating and cooling require energy The economist’s measure, GDP, is closely connected and correlated to the use of energy. Yet most of our energy use comes from the ancient stored solar energy in coal, petroleum, and gas. It is being used up and polluting our atmosphere at the same time leading to the reduction of future supplies, climate chaos, and the destruction of the ‘economy’. If that is to be reversed, the use of energy must be reduced. Being more efficient in the application of energy will help but will not be sufficient. The custom of shopping and consuming non essentials needs to be eliminated. With the load on the planet the overpopulation brings, we can only delay the worst of the climate catastrophe. There must be de-growth both in population and in energy consumption.
It is time to realise that we have reached a peak and a decline in all unnecessary use of energy is the only way forward. That includes stopping such wasteful uses of energy such as human space flight either for science or the pleasure of the rich. Humans are not evolved for space flight and it is so wasteful of energy. Robots can do needed observations so much better. We cannot afford the excessive waste of energy and other resources by the extravagant wealthy. Nor can we continue with motor sports that pollute unnecessarily. So much invested energy in capital plant needs to be considered lost like stranded assets. Alas, the ITER research is not near enough to producing an excess of usable fusion energy to distribute to continue investing energy there. Anybody can think of some area of wasteful use of energy. We need not lose our science knowledge so a return of a life like our ancestors can be fulfilling without being energy wasteful.
There is a lot of invested energy put into the politicians that are the front people for the phalanx of organisers and planners in the background. This is an era of amoral-money-madness. So bring down politicians salaries. Put more money out to regions but take away their general competency. Most of it should go into training and rate payer/central govt 50/50 financed..
Politicians can only be in their positions for 3×3 and step down in rotation so always newbies coming on. We would all have a chance after taking a certificate or better a diploma in working democracy. The people would vote in each area, and would encourage all to get out to vote, which would be connected to tax funds paid out there. We can’t do worse than now when Parties can glibly front with outright lies that they excuse as projected plans or something.
Those at the top will have probably different IQs, because not all coming from the high-rating schools and have more varied experience in jobs; less in aspirational and more in measures that count. Publicly advertise the jobs for civil servants – helpers and advisors. Must have certain experience and attributes. Cut out the immense magnetic draw of money and unlimited power to what is akin to a closed union choosing their compatriots..
A war govt was required from nineteen ninety. We’d be far ahead if we’d done that. But our politicians and people were on the pleasure ‘principle’. So now, brilliant talkers for reality. Egomaniacs for the Left/ reality. As per nineteen thirty-five.
Orr Dickens.
Look at the picture Bomber posted. That is the picture of someone who thinks he’s God.
Oh wasn’t that a picture of you then SK.
The nation’s floating currency, may it be buoyant till the Crimson Permanent Assurance can arrive. A bunch of pirates to save us from our everyday pirates. https://www.youtube.com/watch?v=lNlYBNTCBG8
Never let this rat Orr forget that he (and his Bascand mate) removed the LVR requirement for buyers. There was no good reason to do this but for pure asset owners enrichment. He fails to mention that fraud move.
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