Mike's Minute: Economic day of reckoning is still coming

Grant Robertson, if you remember back to Friday's programme, defended the Reserve Bank when I suggested to him that their forecast of 4.1 percent for the OCR to top out wasn’t real. He said, and rightly, that the same bank had forecast the GDP figure last week at 1.8%, which was close enough to being right while most of the rest of us were wrong. Therefore if they had seen that growth and were still suggesting 4.1 percent was it, why don’t we believe them? Fair point. Apart from the fact it's wrong. ANZ, and they won't be the last, have seen what most of the rest of us have seen. They're now calling a peak of 4.75 percent. 4.1 percent can't be it. Because what the bank have done so far, 50 point rise after 50 point rise to take us to 3 percent and mortgage rates climbing over 6 percent, has achieved what? 1.7 percent in growth, that’s what. We have paid no attention, we have kept spending, we have booked air travel, we have ordered cars, and we have gone and paid 6 bucks for coffee. And we have done this because we've all wandered off to the boss or the union and got a pay rise, and an absurd one at that. We aren't making anymore or doing anymore. We just held our hand out after threatening to walk across the road for another job that paid more. And it paid more because there is no labour because of the damn borders. So with our new wages we kept on pretending we weren't in trouble. It will end. It always ends. It can't not end. It's just a matter of how badly it ends. They call a bad ending a hard landing. The Reserve Bank and banks all over the world are trying to do the same thing, a soft landing. They are failing. And, the more money they printed during Covid the harder the trick is they are trying to pull off. No one printed more money per head of population than we did, bar America. We are in a mess but we just don’t want to face it. And the mad wage grab is hiding the truth that’s coming. 4.75 percent, if the ANZ are right is mortgage money well into the sevens. And if you think there is another double digit wage rise coming next year to offset all that, you are dreaming. The Government is out of money and your employer is fast running out as well. We are living in a giant buy now, pay later scheme. And sadly for the Government, the year of reckoning is election year. LISTEN ABOVESee omnystudio.com/listener for privacy information.