It’s the decade that keeps on giving, isn’t it? I suppose the bulk of its gifts none of us wanted – sort of pass the parcel, only to find a thistle head revealed after the final excited unwrapping. Some of it we brought upon ourselves. Amid cautionary writings and counsel about the future cost of money, inflation, and supply-chain constraints from kill-joy money gurus, many of us found ourselves incarcerated in our own country, with nothing to do and with cash burning a hole in our pockets. Of course, there was also the free money arriving as part of the government’s pandemic response. Rather than ‘rainy day’ it, the net result was to load up mortgage and personal debt to new highs. Cars, houses and holidays, the latter a community service to assist an industry that was once a shining star, now a beacon of caution. In hindsight, was it the right thing to decide not to produce much anymore, instead building empires reliant on the standard of living in countries we have no influence over? If there’s no one there to look, an amazing view is simply a valley, a hill, a river, or a big puddle, often incapable of producing anything at all.

Of course, now we have inflation taking off like a dragster and the cost of money on the rise. The other day, I heard a report on the wireless claiming some banks were already fielding calls from customers expressing concerns about mortgage stress after one, maybe two, rounds of OCR increases. That’s worrying.

The pressure’s really on the lever-pullers at the Reserve Bank and Beehive. The economy’s gone from being demand-driven on the back of cheap money and enterprise to increasingly resembling one where demand is driven by impetus and an inherent ease with debt.

Keeping it humming could be a tricky old challenge, especially with a government as far left as this one is. The keys are in the ‘P’s; ensuring production and productivity are prioritised over propping-up… especially those who have no willingness or desire to contribute to the first two ‘P’s.

Looking more macro globally – what a fascinating time in history for an ageing, angry old lunatic to commence bombing his neighbouring country. In the first two years of the pandemic, there was a lot of discussion on sovereign versus global economies and communities. The pandemic highlighted the issues that global interdependency can bring – we’ve seen the positives and negatives. Obviously, the tourism thing alluded to above being a negative, and the global commodity prices a positive. If you can find a ship to cart off your milk powder, there’s never been a better time to send it off.

“We’re too dependent!” has been the cry at times. Then of course, Vlad forgets to take his Prozac one morning and invades Ukraine. Suddenly, a world with linked arms is the best thing since lace-up shoes, able to inflict a significant garrotte on the Russian economy. The story here is far from over, obviously. Sanctions might just make him angry to the point of desperation, but that said, we’ve not seen a more united and effective passive response to an act of mindless brutal aggression.

Of course, none of the above helps those worried most about the planet’s ability to sustain the lunacy. Russia’s rampage has probably erased any minute gains made in the past 10 to 20 years on climate reduction. I don’t recall seeing too many machines of war with ‘Euro-6’, or ‘fuelled by renewables’ emblazoned on their flanks. I guess if we do get out the other side, we’ll urgently need another Glasgow, Paris, or Kyoto to agree on a new impossible… that being, how to solve a problem using the same tools as you used to create it. Sadly, they’re the only tools we have. As a species evolving, we’re not ready for measures based on anything other than the core fundamentals of power, procreation and possession.

Like I’ve always said, regardless of who says or does what, Mother Nature and the irrefutable laws of the physical universe will prevail. The options we have to play with concern the severity of their application, not the inevitability.

All the best

Dave McCoid
Editorial Director