KiwiSaver and doom-mongers
The chance of a US recession by 2022 is about 70 per cent.
With it would come falls in share and bond prices, which would make quite a dent in all our KiwiSaver funds.
The doom-laden prediction is not mine.
It’s respected US fund manager PIMCO, and it’s been breathlessly reported around the world.
One of the reasons for all the reporting (after all fund managers are notorious for getting things wrong) is that journalists the world over are pretty bemused about two things.
The first is that the world got itself out of a debt-fuelled financial crisis by governments borrowing a lot more money, and encouraging households to do the same.
In 2008 when the global financial crisis began, combined global government debt was
US$35 trillion, The Economist‘ s government debt clock shows. At the end of 2015, it had increased by a third.