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.

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