Last week the government announced, yes I know, a plan for a new bridge over Auckland’s harbour. This announcement should be filed in the same basket as 100,000 new Kiwibuild homes in 10 years, light rail to the airport by 2021, planting a billion trees, and a bike bridge over the same harbour. They were all grand announcements that have cost millions upon millions of dollars but delivered absolutely nothing except the enrichment of lavishly paid consultants.
This week the Reserve Bank has destroyed any remaining hope for the working poor, the self employed and indebted homeowners, by ratcheting up the OCR more than anticipated by the markets.
The Reserve Bank has increased the official cash rate (OCR) to 5.25%, noting a risk that home loan rates could have declined had it opted for a smaller hike.
The 50 basis point increase is twice what many economists had expected and takes the OCR to the highest level since 2008.
On Tuesday, the Reserve Bank of Australia opted to keep that country’s cash rate on hold.
In a statement, the Monetary Policy Committee said the rate needed to increase to bring inflation back to the 1% to 3% target range over the medium term.
They said that they were comfortable current lending rates being paid by households and businesses would help to moderate inflation but wholesale interest rates had fallen since February and that could prompt retail rates to fall further.
On that basis, a 50 basis point increase was seen as the solution to maintain the current loan rates and support an increase in retail deposit rates.
Stuff
In target shooting parlance, these fools aren’t even on the paper, much less dropping shots even remotely near the target. They couldn’t hit a target even if it were stuck to the end of the barrel.
The economic squeeze is now like that of a boa constrictor. The life is being squeezed out of the economy faster than the socialists can borrow and spend.
Get ready for the pain because it is now unavoidable. Add in OPEC shortening up supply, and the cost of living crisis is now heading us toward an uncomfortable recession, if not an economic depression.
If Christopher Luxon can’t capitalise on this then I won’t even know what to say. Sadly, I don’t think he is able to. Winston Peters is another matter entirely and he shot out of the block with a massive truth bomb:
The Reserve Bank has increased the OCR to 5.25% up 50 basis points – that means a higher cost of living, higher mortgage repayments, higher costs for basic food, petrol, energy, and more struggles for ordinary hard working kiwis.
In an astonishing admission of new economic theory they are now blaming the bad weather for increasing inflation in our country. To say the OCR will solve inflation that is being caused by bad weather is pure economic voodoo – it would be laughable if it wasn’t so serious.
The fact that the Monetary Policy Committee has stated that New Zealand is “beyond sustainable employment levels” shows they are so far out of touch with the the many hundreds of companies which are screaming out for employees – and with Australia not increasing their OCR, it should set alarm bells ringing for an increase to the mass exodus of workers from our country.
This is something our country can not afford – a deeper recession is now certain.
New Zealanders have had enough of the ‘economic theory’ and need economics that works for our country in practice and with commonsense.
Inflation should fundamentally mean that the government reins in spending. Instead, Labour is continuing their “borrow and spend” mantra and expecting hardworking Joe and Jane Blogs to tighten their belt when many are finding it simply impossible.
Winston Peters
Inflation is being driven not by weather events or a war in Ukraine, it is being driven by a profligate Labour Government addicted to borrowing and pointless and wasteful spending.
The inflation monster which was well and truly slayed for thirty-plus years has now re-awakened, and the way the government is fighting it is like putting out a fire with gasoline. It won’t work unless you are a pyromaniac, then it’s all good.
And I’m starting to think Grant Robertson really likes bonfires.
Inflation has never been slain by more government spending. The dolts in charge haven’t a clue; all their reforms are in tatters and contributing to inflation. They are addicted to debt and someone needs to take their credit cards off them and cut them up.
The economy is in a perilous position, with economic vandals adding even more fuel to the volatile mix.
Kiwi voters need to wake up pretty damn fast or you will lose your country.
Building expensive boondoggles like bridges, paid for by putting it on the never never, won’t help fix a wrecked economy.
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