Is this a research case too difficult? How is it possible that I see a recession and not the banks?
The highly anticipated GDP figure for the first quarter of the year is -0.2%. To have a recession, you need two consecutive quarters of negative growth, we now have one.
I’ve tried to explain that we’ve been heading into recession for months. You can’t have a recession if you don’t have negative growth, and no bank was forecasting a negative number for yesterday. Therefore, they said there was no recession.
I have to be right for this current quarter, Q2. I’m not 100% convinced, but it’s going to be dangerously close. The difference between Q1 and Q2 is a war, an oil shock and a market correction.
Here’s the scary thing; those predicting a recession do so later this year, possibly next.
So if I’m right, and so are they, it’s more of a recession. This is most likely a double dip recession.
So what is it? How come these so-called experts don’t see what you and I are doing? How come, until recently, central bank whiz kids didn’t see the need to raise interest rates until they did and now they’re freaking out?
US Federal Reserve Chairman Jerome Powell laughed off a 75-point hike, until he did yesterday.
The Australian Reserve Bank has talked about the need to raise rates, until they raise rates. And the reason they didn’t need to raise rates is because they didn’t see inflation, until they saw inflation. They now see inflation at 7 percent.
And Australia doesn’t have an inflation problem like we do, and yet we say our inflation peaked at 6.9%. So our inflation is better than Australia’s? Are you kidding?
What I know is what I see. Maybe that’s an advantage? Maybe I spend more time in the real world and less time on spreadsheets.
What I know from the real world is that the government gave us over $50 billion to blow shit up, and we did.
But once we toasted it and had to pay for it ourselves, the price of everything went up and we had to cut our expenses. And when you cut spending and 70% of your economic activity is in the service sector, guess what happens? You step back.
That’s exactly what we did.
Economically, it is a disaster. The economy that Grant Robertson says is doing so well is not doing well.
Australia’s first quarter figure was 0.8% growth. New Zealand recorded a decline of 0.2%. We are one percentage point behind them.
The borders are open and the brain drain is underway.
I don’t blame the forecasters; we are all wrong. But if you can’t see a recession when it knocks on your door, if you can’t feel the lack of confidence, then it’s time you left the whiteboard and walked the streets for a while.