Oil experts fear global reserves are being sucked down by 100mbpd each week the Strait of Hormuz is closed. They see oil prices spiking over US$150/b from June & reserves effectively gone by September
Australia—the world's largest coal producer and a top-3 LNG producer—are tracking well on their goal to reach 82% renewable energy generation (leveraging solar and increasingly batteries). Ignominiously, they will likely hit that target at roughly the same time we are doing a ribbon-cutting ceremony for an LNG terminal that will economically dilute our own renewable energy substrate.
Thanks so much for the deep dive on this Bernard. It would be great if it could get to 100 likes (or you’re able to open up earlier) as this analysis is in very short supply in Aotearoa’s mainstream media and the more people who understand the gravity of the situation we face, the better (especially policymakers - the cartoon is apposite).
We should, like Australia, start serious work on moving to renewable energy. I live in the South Island and I watch new houses, which get sun, installing gas for general heating, cooking and water heating. Keeping warm and surviving this winter will be expensive.
Awesome dig into all of this. I would love to understand why Simeon Brown thinks LNG is the way to go. I mean I understand why National might, but as individuals, as people who make up the government, why do they think this is the way to go?
Also, I struggle to understand why people thought the US/Iran thing would end quickly. This sounds a lot like the report that came out before COVID saying that the US was best placed (globally) if a pandemic hit. Whatever assumptions are going into this thinking, they’re clearly flawed.
I would love to know who is going to benefit from the LNG scheme. Who lobbied whom? Some people somewhere are set to make a bundle if it goes ahead. It won't be ordinary New Zealanders, that's for sure.
Thanks for the shoutout Bernard! FYI? Having a chat on this with a party policy guy “I think we’re actually getting close to agreement.
I agree banks are behaving rationally within the current framework. Mortgage lending is safer collateral, carries favourable prudential treatment, and aligns with how risk is presently managed.
But that’s precisely why I see this as a systemic governance issue rather than simply a market one.
If individually rational bank behaviour repeatedly produces nationally irrational outcomes — housing-heavy credit expansion, weak productive investment, rising household leverage, infrastructure deficits, and low productivity growth — then the issue becomes the architecture itself.
And I think your SME underwriting proposal is important precisely because it implicitly acknowledges that undirected private credit allocation does not automatically produce optimal national development.
That’s historically normal. Most successful productive economies have used some mix of:
development finance,public underwriting,targeted lending support,and allocation-aware monetary tools.The deeper issue for me is that New Zealand adopted an unusually pure/inaccurate inflation-targeting framework where:
OCR signalling became the dominant macro tool,CPI became the dominant success metric,and credit allocation itself was largely treated as outside economic strategy.But CPI has major blind spots in a housing-credit economy. Especially when it mismeasures reality.
Such as when it largely excludes:
land prices,house purchase prices,mortgage principal,and mortgage interest costs.So you can have:
stable CPI,while simultaneously experiencing
escalating housing-credit inflation,rising leverage,asset inflation,and deteriorating productive investment.Which means the framework can describe itself as successful while the underlying economic structure weakens.
That’s why I think the interesting territory is not “markets versus government,” but:
how do we preserve financial stability while improving the direction of credit allocation across the economy?
To me, that’s where the TOP direction becomes genuinely compelling.
Because an LVT helps reduce speculative land dynamics.
But combined with:
SME underwriting,Kiwibank expansion,development finance,and more allocation-aware Reserve Bank tools,you begin moving toward a genuinely productive-capital model rather than a predominantly property-credit model.
That feels like a much more interesting long-term direction for New Zealand than simply arguing over redistribution after the fact.
That also outflanks the old left/right divide.
Because the goal is not bureaucratic command economics.
It is building a high-trust, high-productivity, low-extraction economy that compounds national capability over time instead of primarily inflating asset prices.
And importantly, that approach potentially avoids some of the political traps that pure tax-and-transfer framing runs into.
Because instead of primarily arguing about redistribution after the fact, the focus shifts toward:
how we structure credit, investment, infrastructure, and productive development in the first place.
In other words:
not merely dividing the pie differently
but rebuilding the machinery that determines what kind of economy gets produced.”
The United States gutted it's State Department last year, and the people Trump is sending to cosplay as negotiators are so very very very "BADLY" incompetent. It's likely proper diplomacy hasn't even started between the two yet. And if it does, it'll take months.
The cartoon at the end was completely appropriate. Labour and Hipkins have been MIA for some time and appear as a deer in the headlights when thet do get airtime. Weak sauce policies like three free doctors visits are not the vote grabbers they think they are and I wonder if the really want to win an election. I like him, he's a nice guy, but they have to dump Hipkins now and bring in McAnulty, kicking and screaming if necessary.
Australia—the world's largest coal producer and a top-3 LNG producer—are tracking well on their goal to reach 82% renewable energy generation (leveraging solar and increasingly batteries). Ignominiously, they will likely hit that target at roughly the same time we are doing a ribbon-cutting ceremony for an LNG terminal that will economically dilute our own renewable energy substrate.
Interesting auto-captions going on at 14:56 Bernard... I assume that's not what you actually meant to say 🤣
If only people would just stop buying stuff!
Yep, what a bunch of a$$holes 🫠
Lol, yes I cracked up to those pesky assholes
Thanks so much for the deep dive on this Bernard. It would be great if it could get to 100 likes (or you’re able to open up earlier) as this analysis is in very short supply in Aotearoa’s mainstream media and the more people who understand the gravity of the situation we face, the better (especially policymakers - the cartoon is apposite).
We should, like Australia, start serious work on moving to renewable energy. I live in the South Island and I watch new houses, which get sun, installing gas for general heating, cooking and water heating. Keeping warm and surviving this winter will be expensive.
Urea as well, shiz getting real in Thailand
https://archive.is/5IoB7
Thanks for that link. A bit frightening to be honest.
Awesome dig into all of this. I would love to understand why Simeon Brown thinks LNG is the way to go. I mean I understand why National might, but as individuals, as people who make up the government, why do they think this is the way to go?
Also, I struggle to understand why people thought the US/Iran thing would end quickly. This sounds a lot like the report that came out before COVID saying that the US was best placed (globally) if a pandemic hit. Whatever assumptions are going into this thinking, they’re clearly flawed.
I would love to know who is going to benefit from the LNG scheme. Who lobbied whom? Some people somewhere are set to make a bundle if it goes ahead. It won't be ordinary New Zealanders, that's for sure.
The answer will be somewhere in here
https://elections.nz/democracy-in-nz/political-parties-in-new-zealand/party-donations-and-loans-by-year
yes, there is a foul stench coming from the LNG scheme.
Thanks for the shoutout Bernard! FYI? Having a chat on this with a party policy guy “I think we’re actually getting close to agreement.
I agree banks are behaving rationally within the current framework. Mortgage lending is safer collateral, carries favourable prudential treatment, and aligns with how risk is presently managed.
But that’s precisely why I see this as a systemic governance issue rather than simply a market one.
If individually rational bank behaviour repeatedly produces nationally irrational outcomes — housing-heavy credit expansion, weak productive investment, rising household leverage, infrastructure deficits, and low productivity growth — then the issue becomes the architecture itself.
And I think your SME underwriting proposal is important precisely because it implicitly acknowledges that undirected private credit allocation does not automatically produce optimal national development.
That’s historically normal. Most successful productive economies have used some mix of:
development finance,public underwriting,targeted lending support,and allocation-aware monetary tools.The deeper issue for me is that New Zealand adopted an unusually pure/inaccurate inflation-targeting framework where:
OCR signalling became the dominant macro tool,CPI became the dominant success metric,and credit allocation itself was largely treated as outside economic strategy.But CPI has major blind spots in a housing-credit economy. Especially when it mismeasures reality.
Such as when it largely excludes:
land prices,house purchase prices,mortgage principal,and mortgage interest costs.So you can have:
stable CPI,while simultaneously experiencing
escalating housing-credit inflation,rising leverage,asset inflation,and deteriorating productive investment.Which means the framework can describe itself as successful while the underlying economic structure weakens.
That’s why I think the interesting territory is not “markets versus government,” but:
how do we preserve financial stability while improving the direction of credit allocation across the economy?
To me, that’s where the TOP direction becomes genuinely compelling.
Because an LVT helps reduce speculative land dynamics.
But combined with:
SME underwriting,Kiwibank expansion,development finance,and more allocation-aware Reserve Bank tools,you begin moving toward a genuinely productive-capital model rather than a predominantly property-credit model.
That feels like a much more interesting long-term direction for New Zealand than simply arguing over redistribution after the fact.
That also outflanks the old left/right divide.
Because the goal is not bureaucratic command economics.
It is building a high-trust, high-productivity, low-extraction economy that compounds national capability over time instead of primarily inflating asset prices.
And importantly, that approach potentially avoids some of the political traps that pure tax-and-transfer framing runs into.
Because instead of primarily arguing about redistribution after the fact, the focus shifts toward:
how we structure credit, investment, infrastructure, and productive development in the first place.
In other words:
not merely dividing the pie differently
but rebuilding the machinery that determines what kind of economy gets produced.”
The United States gutted it's State Department last year, and the people Trump is sending to cosplay as negotiators are so very very very "BADLY" incompetent. It's likely proper diplomacy hasn't even started between the two yet. And if it does, it'll take months.
The cartoon at the end was completely appropriate. Labour and Hipkins have been MIA for some time and appear as a deer in the headlights when thet do get airtime. Weak sauce policies like three free doctors visits are not the vote grabbers they think they are and I wonder if the really want to win an election. I like him, he's a nice guy, but they have to dump Hipkins now and bring in McAnulty, kicking and screaming if necessary.