First National

A_R_1stNat-1A_R_1stnat-2A_R_1stnat-3The Fiscal Clock is an old fashioned gauge that helps us understand ‘where we are at’ in the business cycle. With increased Globalisation and open economies, it is a bit harder to read, and factors like quantitive easing (printing money!) may have changed interest rate habits, but this still bears reading.

JL15-FstNat-Fiscal-clock-2Without a shadow of a doubt, Commodity prices have fallen, fortnightly in our case on the GDT! To rescue exporter incomes, and reflecting the widening trade deficit, the exchange rate has dropped. This in turn feeds into higher fuel prices, more expensive holidays, dearer cars, and on the positive side more tourism!

Generally, a slowdown in the rural export sector takes 12 to 18 months to impact on the main cities, provincials will already be feeling this slowdown as Farmers stow away their chequebooks.

The China Sharemarket right now is a mirror image of NZ in 1987, just a few years after deregulation from Muldoonist controls. How much of the money flowing into Sydney, Melbourne, and Auckland and inflating house prices, is pure froth from paper money, made in China??

Good to know that locally we still have a large chunk of the $1Billion Expressway spend to tide us over!


Grant Robertson