If you went to bible school as a kid you might remember the story of the Pharaoh of Egypt who had a dream and how Joseph was pulled from his jail cell to interpret the dream. To cut a long story short Joseph said the dream was a message from God that Egypt would have a seven year period of plenty and that the Pharaoh should use that time to prepare for seven years of poverty that will follow. Its in the book of Genesis.
I can’t remember whether the Pharaoh did as Joseph suggested or not but fast forward 2000 years and there seems to be a ring of truth to the old tale in 2012.
From around 2001 to 2008 there was a boom in just about every sphere of business in NZ and around the world. Money was flowing freely and being spent freely. You know its a time of plenty when people who have no idea about property investment introduce it as dinner party conversation. 2001 – 2008 = 7 years of ‘plenty’.
Then in 2009 it all seemed to reverse quite quickly with the GFC. Could that have been the start of 7 years of ‘famine’?
Quite possibly if you read a recent report from the NZIER. They say the outlook for the NZ economy remains ‘challenging’, a situation that has been present since about 2009.
They go on to say that the Reserve Bank is likely to leave interest rates unmoved until as late as 2014 (the underlying message being that any increase to rates would stifle an economy that, like a boxer who’s taken a good upper cut, is just staggering off the ropes). 2009 – 2014 = 7 years of famine.
That’s all very well, Campbell I hear you say. So what? What do we do, if anything?
Here’s some ideas. With interest rates at historic lows ask yourself if it presents an opportunity to set yourself up for the future. Maybe buy a new home for your family? The start of a rental property portfolio? Or do you really focus on knocking your mortgage back?
Whether we’re in a period of famine or not depends on your perspective. Opportunity may be just around the corner…
About Campbell Hastie