Here is the one graph every New Zealander should see. In every country in every historical period the over-issue of money has led to hyperinflation. In its latest report the NZ Reserve Bank has confirmed that since December it has more than doubled the money supply. For years the bank’s assets have been around $30billion. They are now $56 billion. In response to COVID-19 we’ve introduced a range of initiatives to provide additional monetary stimulus and to support the smooth functioning of New Zealand’s financial markets. These initiatives have enlarged our balance sheet from its December (pre-COVID-19) level of $24.6 billion to $56.0 billion at the end of June. Of this increase $4.9 billion occurred during June. However the story does not end there. As the bank mentions in the next sentence: Our balance sheet is likely to increase further from here. Clearly this is not business as usual. New Zealanders have become good preppers for earthquakes, tsunamis and viruses. Should they now be prepping for hyperinflation? Last week New Zealand’s alternative gold-pegged currency RedPill released 7 Hyperinflation Essentials that help business owners evaluate the risk. If the Labour government’s May announcement of pumping another $163 billion into the economy transpires the Reserve Bank’s balance sheet will reach $187 billion by 2024. For an economy the size of New Zealand this is a staggering sum. By way of comparison the Reserve Bank estimates the total cost of rebuilding Christchurch after the 2011 earthquake at $40 billion. Is it only a matter of time before the NZ dollar hyper inflates?
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October 2020
CategoriesAuthorI live in Christchurch. I love NZ and it is time to give something back. I have three grown up children. My wife is a GP. I enjoy trail running, tramping and gardening. You can see what I do for a living here. |
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If there are no buyers the value of your tokens could fall to zero.
The information on this site is not financial advice or personalised advice and is intended for general informational purposes only.