The one graph every New Zealander should see
18 August, 2020
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?