Mike's Minute: Confidence in our economy is growing

The Mike Hosking Breakfast

The good news is confidence in our economy is improving.

It has been a decent week: farmers confidence is up and markedly, our confidence is up a bit —still overall pessimistic, but up nevertheless— and last week we saw business confidence rise a bit.

Then come the newest numbers, our current account.

It’s a mess. We are a mess. In essence we buy more from the world than we sell it, and given we are in the business of selling stuff, that doesn’t make us a very good business.

Glass half full, the figure we got yesterday is stable as a percentage of GDP. But the percentage of GDP is hopeless, that's the worry.

This by the way is for the June quarter. In actual number terms it widened by $269 million.

It's all part of the wider picture we will get later today on the actual GDP, which we mentioned earlier has almost certainly gone backwards for the same period.

So, join the 2 bits together. You have an economy going backwards, driven in part by the fact that we buy more stuff than we sell. Think about that scenario in your own life.

You make a living selling stuff, but you still buy more things. They cost more than what you make, you are sinking. That's the story of this country.

Our net investment liability position —another good comparison we can make with our own lives, note the words net liability— was $205 billion, which is 49.7 % of GDP. That is over $6 billion more than it was in the last quarter.

It’s getting worse, we are more liable. You don’t in life want to liable, you don’t in life want a deficit. In really simple terms, in the deals that involve NZ and the world, we have more liabilities than we have assets.

As I say most of us don’t run our lives that way, and yet we seem happy to watch our country being run that way.

It has become very clear this week from the Tory Whanau revelations that we have people in decision making positions who have no idea how to turn a dollar, spend a dollar, value a dollar, or run anything that resembles an economy of any sort or size.

The numbers don’t lie. The numbers aren't good but they can't be a surprise given the sort of people who have been in charge.

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