I wonder how Cindy and Grant will cope with this?

There is a looming financial crisis, similar in size to the Global Financial Crisis of 2008.

The world didn’t learn its lessons back then, and so the can has been kicked down the road.

This year could see a geopolitical crisis on the scale of the financial crash a decade ago, a New York-based political risk consultancy is warning.

Citing “daunting” global political challenges, Eurasia?Group said that “if we had to pick one year for a big unexpected crisis – the geopolitical equivalent of the 2008 financial meltdown – it feels like 2018“.

However, local analysts say?that barring a nasty global misfortune, New Zealand can expect more general stability and solid business conditions this year.

Except we have a bunch of spend-thrift socialists in charge who think that spending more of other peoples money is a viable solution to any problem you care to mention.

Commenting on the sharemarket, Shane Solly from?Harbour Asset Management?said the outlook for equities this year remained “solid”, supported by the “goldilocks” conditions of solid economic growth, low inflation and easy monetary policy settings.

Economically?New Zealand remained “relatively resilient, with prudent government and private sector debt levels”.?The?two main?risks were a modest rise in inflation, and changes to government policy such as migration which could slow the economy, he?said.

Be that as it may, my banking sources are talking about 100,000 plus mortgage sales in the next 18 months, plus interest rates rising to near 9%, and after that the potential to rise further as inflation gets out of control.

However, no country is?invulnerable to overseas events, and Eurasia?said the biggest uncertainty surrounded?China’s move to fill a political power vacuum as US?influence continued?to decline.

“We see a much greater fragmentation of the global marketplace because governments are becoming more interventionist,” Eurasia President Ian Bremmer said in a Bloomberg Television interview.

Part of it was?”because the Chinese have an alternative model for their investments and they’re increasingly going to be seen as the most important driver of other economies around the world who will align themselves more with Beijing than with Washington.”

Eurasia’s concerns include President Xi Jinping’s successful consolidation of authority which is helping him to fill the gap created by US?President Donald Trump’s move away from Washington-led multilateralism.

In areas such as trade and investment, technology and values, China is setting international standards with less resistance than ever before.

“For most of the West, China is not an appealing substitute,” Eurasia said.

“But for most everybody else, it is a plausible alternative. And with Xi ready and willing to offer that alternative and extend China’s influence, that’s the world’s biggest risk this year.”

We have interventionists in our government now. That won’t be good for trade in the long run.

If there is another global financial crisis, then our trading customers will buy less. Labour is hard pressed with the budget, they’ve basically spent the lot. So, if there is a shut down in trade Labour is going to have to borrow and borrow and borrow to make good their promises. When that happens watch National hurl all their complaints about Bill English’s handling of the economy during the GFC back in their faces.


  • Fairfax