The battle against the robbing effects of inflation had been largely won for more than 30 years, delivering wealth into people’s pockets. Now, as a result of the profligate spending by this Government, the inflation Kraken has awoken again:
Annual inflation has hit a near 10-year high of 3.3 per cent after prices rose by a shock 1.3 per cent in the three months to the end of June.
The inflation figures released by Stats NZ were much higher than expected by forecasters and are cementing expectations the Reserve Bank will raise the Official Cash Rate to 0.5 per cent next month.
Finance Minister Grant Robertson said the inflation was a “problem of growth”.
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That’s just bullshit from Grant Robertson. They have ploughed billions upon billions into the economy and it has seen fuel prices and housing prices soar. Those prices are NOT an indicator of a growing economy. But fools be fools;
“The economy has obviously been operating at a level that’s far exceeded expectations and the recovery has been very strong. We’re seeing that in growth and the unemployment data – that is a good thing,” Robertson said.
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He’s dreamin’…stores have empty shelves, car dealers are retrenching, there are no spare parts, building supplies are non-existent…but the fat controller thinks the economy is going gang-busters.
The Reserve Bank will have to act, so expect mortgage rates to start climbing. When that happens you are going to see home owners pinched even more.
Westpac economist Satish Ranchhod said financial markets were pricing-in a 90 per cent chance of an August rate rise after the release of the inflation figure, with the two-year swap rate – an indicator of interest rate movements – rising 7 basis points to 1.11 per cent.
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Robertson will then, no doubt, express concern and then shrug his shoulders.
Inflation is literally burning money…and this Government keeps pouring gasoline onto the fire.
This Government is on track to keep Labour’s perfect record of always leaving a country in recession when they leave office.
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