How Likely is an Economic Crisis to Hit New Zealand?
You know everyone thinks we’re crazy, right?
To most of the country being prepared for an emergency, natural disaster or economic crisis is reserved for those Doomsday Prepper “crazies” on Discovery Channel.
Try having a rational discussion about it with your family, friends or co-workers and they’ll likely look at you like you’re some kind of nutjob!
We should know as we’ve been laughed at for taking an interest in gold and silver for years.
But some news we read a while back points out that it’s not just the “nutters” preparing bug out locations in case the brown stuff hits the rotating air particle distributor.
At the World Economic Forum in Davos, Switzerland, (a gathering of global economic and political elite) it was reported that Hedge Fund managers have been buying “bolt-hole” properties to escape to.
Whereabouts Are These “Bolt-hole” Properties for Escaping Economic Collapse?
Many here in New Zealand as it happens. The UK’s Daily Mail reported:
“Financial experts attending the recent World Economic Forum in Davos this month revealed many wealthy hedge fund managers have already started planning escapes for themselves and their clients should life in the northern hemisphere descend into chaos.
Robert Johnson, president of the Institute of New Economic Thinking, said: ‘I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway.’
Pointing out that the gap between the rich and the poor was increasing even in wealthy countries…
Here’s the full video interview:
“Mr Johnson was backed up by Stewart Wallis, executive director of the New Economic Foundation.
Mr Wallis told CNBC Africa at the Davos gathering that a New Zealand bolthole was ‘a way to get off’, adding: ‘if they (the wealthy) can get off onto another planet, some of them would. I think the rich are worried and they should be worried.’
He pointed out that the 80 richest people in the world had more wealth than the bottom three-point-five billion: ‘Very soon we’ll get a situation where that one percent, one percent of the richest people, have more wealth than everybody else (combined), the 99 per cent,’ he said.
Suggesting that there was a risk the poor would rise up against the rich, he said: ‘What’s happened now mean we are going to see all sorts of social problems. It is a breeding ground – not just for terrorism.’
Here’s one of the properties:
It comes complete with your very “own personal airstrip means you can fly in, or out, with the minimum of fuss – and all for just $NZ850,000”.
Read the full article here.
So if the super wealthy are preparing for more difficult economic times, perhaps it’s not so crazy to do the same?
The odds of an economic crisis may be a lot shorter than most think.
Given the Super Wealthy Are Looking at Escaping to NZ, Does That Mean We Don’t Need to Worry?
Well, while New Zealand may be better off than many, if you’re in a city it would pay to be prepared. Reading the full article you’ll notice most of the properties mentioned are fairly remote. For good reason, the more people around, the higher the odds of trouble brewing.
Also New Zealand won’t necessarily escape a global economic crisis completely unscathed.
We have previously posted a video on our sister site looking at this topic:
“Which Countries Will Survive Economic Crisis?”
Which countries stand to survive the coming crisis the best?
In this short 3 minute video WealthCycles.com CEO Michael Maloney shares his thoughts and they might well surprise you.
Here’s our take on how New Zealand would survive Economic Crisis:
We’ve said many times in the past that New Zealand may well be one of the last “dominoes to fall” when the current monetary paradigm crumbles. The world must remain fed first and foremost and due to its largely primary industry base New Zealand may well fare better in the end than say Australia, with their main exports of minerals which are involved in construction.
We are seeing this currently, with Australia recently cutting interest rates in a bid to keep things humming. Also evidenced by the NZ dollar getting close to parity with the Aussie dollar.
But we are probably still more closely related to the rest of the developed world, rather than the developing world in how we will fare IN THE LONG RUN.
That’s because New Zealand still has a net debt position, (i.e. we owe more as a nation than others owe us) so if Maloney is likely to be right then businesses and property here in NZ will likely eventually be on “sale” after the next round of the crisis hits. And that will be the time to swap your precious metals for other beaten down real assets. But of course you’ve got to have some first…
Warning Signs for New Zealand
Now things are happening in New Zealand that are work taking note of. Yesterday the Reserve Bank slashed interest rates by 0.50% to a new record low 1.00%. This is while unemployment is at an 11 year low.
So we have record low interest rates when things around the country aren’t yet that bad, What are the central planners at the RBNZ preparing us for? Is trouble around the corner?
We now also think the odds of negative interest rates in New Zealand have gone up sharply.
What are negative interest rates?
This is where the bank actually charges you money to keep your savings with them. This is meant to “encourage” us to spend money and boost the economy. But obviously it makes it very hard to save.
So what can we do to prepare for the economic trouble that seems to be brewing?
Here’s 12 Things You Can Start Doing Right Now To Prepare For a Financial Crisis.
These 12 things offer a good place to start anyway:
#1 Become Less Dependent On Your Job – investigate alternative sources of income
#2 Get Out Of Debt
#3 Reduce Expenses
#4 Purchase Land
#5 Learn To Grow Food
#6 Find A Reliable Source Of Water
#7 Explore Alternative Energy Sources
#8 Store Supplies
#9 Protect Your Assets With Gold And Silver
#10 Learn Self-Defense
#11 Keep Yourself Fit
#12 Make Friends – it’s hard to survive by yourself
You Need More Than Just Food or Water in an Economic Crisis
Being prepared for an economic crisis or collapse with emergency supplies like food and water is only half the battle. If you’d like to maintain your standard of living (or even increase it) then you need to consider a means of protecting your current wealth. Our personal belief is that is best done with real time tested assets such as gold and silver.
If you’d like to learn more about that head over to our sister website and get access to our free Gold Survival Guide Ecourse. You’ll learn why gold is your must have insurance and 9 ways to profit from it:
Editors note: This article was first published in March 2015. Updated 8 August 2019 to include latest warning signs for New Zealand.