What a year…
Actually, that’s not accurate. It feels like 2020 just never stopped. What a year and a half.
We should have known it was all going to shit when near the beginning of the year the #1 selling item was bogroll.
So on the topic of shit, last week we covered South Africa — the country in which I was minted. I know a little about the place.
New Zealand Sheeple
This week we cover Hobbitville, a country that famously has more sheep than people. This, I can attest to, though the sheep I refer to are not the four-legged kind.
Part of the reason why New Zealand has what is arguably the most docile population in the developed world is because of this.
The New Zealand media is 100% unapologetically socialist. Citizens are not being subjected to or even interested in world events, other than what is fed to them by the aforementioned socialist media.
While much of the rest of the world is waking to the globalist agenda now solidly afoot.
People in New Zealand actually believe that the government saved their lives by turning the country into a hermit island, shutting its borders to the rest of the world.
Very few understand that the government, led by self-acclaimed communists, is merely implementing the United Nations’ Agenda 21, now renamed Agenda 2030.
New Zealand Government Blatantly Caught Using Maori As Useful Idiots
For those of you not too familiar with New Zealand. Māori, also known as te reo, is an Eastern Polynesian language spoken by the Māori people, the indigenous population of New Zealand.
This has begun with “Maorifying” everything. Starting with the name of the country and our major cities suddenly being referred to (on taxpayer-funded media) in te reo Maori.
And government departments insisting on the use of some te reo in both internal and external communications.
Also, with school boards told they should take all reasonable steps to include instruction in te reo, with every public sector meeting beginning with several paragraphs of te reo, despite almost none of the audience understanding what is being said.
They're Rewriting History
Additionally, as is the case in the United States where CRT (critical race theory) is being used to rewrite history.
Over in New Zealand, they are rewriting the history curriculum, emphasizing all things Maori and with the overarching narrative being one of white supremacy enslaving Moari and a need to address this.
It now begins with government departments mandated to buy at least 5% of their purchases not on the basis of best value for money, but on the basis of the business being a “Maori business”.
I witnessed the exact same methodology being implemented in South Africa years ago. And knowing history, I looked at it and cried internally for what was bound to happen.
New Zealand Government Proposes 'Three Waters'
Over in New Zealand, the government has proposed something they call the “Three Waters”. This puts control of the country’s water directly in the hands of the government under the auspices of it being “Maori”.
Again, useful idiots.
I could go on and on, including the shut down of offshore natural gas operations, which has meant the country (previously self-sufficient in electricity) has had to import coal in order to keep the lights on.
Yes, really. We are witnessing a massive and radical restructuring of the entire country, using both the manufactured pandemic as well as race as the justification.
The Mainstream Media Has Been Bought By The Government
All of this is appalling, but what has allowed it to take place with not so much as a bleat from the sheeple is the fact that the mainstream media have been bought by the government.
The government bailed out the media industry and hidden in the bailout details, for example, was a requirement to “commitment to Te Tiriti o Waitangi and to Maori as a Te Tiriti partner”.
So if you want to argue that the Treaty of Waitangi, in both English and te reo Maori versions, makes absolutely not the slightest mention of Maori being a partner with the Crown, don’t expect to get published in any of the mainstream media.
On the Financial Side
With inflation now running at over 5% in New Zealand, the problems look to be rather unsustainable for the average Kiwi who has a mortgage the size of Texas and an income the size of Rhode Island.
By my math, interest rates should be tracking up to about 7% from the current 3%. That is one helluva jump.
Many will be unable to sustain payments doubling.
As you can see all of this lowering of servicing costs on debt has ballooned asset values while lurking under the surface is the fact that the financial stability of households has deteriorated.
A big part of what has allowed for Kiwis to keep paying their bills can be seen in QE.
The Reserve Bank has already blown through $53bn of the $100bn of QE. Firepower is not unlimited. This is aside from the fact that $100bn may not sound like a lot to an American where GDP is over $2tn, but remember this is a country where GDP is just over $200bn.
More CPI Inflation Spikes Coming
The Reserve Bank of New Zealand has been reassuring everyone that this is — wait for that word you’re going to be hearing a lot of — transitory. Transitory my ass.
I suspect they know this isn’t transitory but you sure can’t tell people the truth.
This statement is useful:
“The Committee reiterated that there will be near-term spikes in headline CPI inflation in the June and September quarters.”
So they’re positioning themselves to be able to say, oh yeah, we said there will be additional “spikes,” but that just means we’ve got it under control.
Ah no! They’re losing control.
Look, the problem here is simple. For monetary policy to actually work they will have to raise rates. The Stalinist government will not want that to take place because unemployment will rise and housing prices will decline.
Most every Kiwi has one investment strategy. Buy real estate. That’s it. This has the potential to do more damage than it would in a country where consumer debt wasn’t eye wateringly high. But it is.
The Piper Has To Be Paid. Few Understand This.
The piper is going to have to be paid, and few understand what that may mean. Why? Easy. Two generations now have never seen inflation and have further been led to believe that rising real estate prices meant they were getting rich.
If the country was getting richer, we’d have seen output growth increase. It hasn’t. It’s a mirage created by monetary policy and social spending. It is the classic situation of more money chasing the same or fewer goods.
That, my friends, is inflation, and it’s here. They can call it transitory if they like.
Heck, they can call it whatever they like, it won’t matter a jot. It is inflation, and it’s here.
My Best Guess
My best guess is that things will track along fairly smoothly for another 6 months to a year at which point in time the Reserve Bank will have blown through the full $100bn and the stark reality that fiscal and monetary stimulus not only can’t be continued but they contribute to the now blindingly obvious inflation on everyone’s doorstep.
Agriculture is the lifeblood of New Zealand. The government seems intent on destroying it with a barrage of completely unworkable compliance and regulatory costs.
This will do nothing to increase the income side of the financial statement and even more troubling will cause further disruptions in the food supply chain.
Something we have made mention of before in these pages and yet another reason why we are long agriculture in select areas.
All in all, it is a deeply troubling time for New Zealand as this is a country that literally has everything going for it, and yet its future looks bleak.
See how contrarian hedge fund managers are front-running central banks and out-of-control governments.
Go here (it's free)