Yep, there is plucky little NZ, giving the hegemonic superpower a scare. We can load businesses with debt and suck rent out of them like world champions. Now, quick check on outliers... how come Japan has a high household financial worth without the sky high business liabilities? [3/n] - ThreadSky

musicalchairs.bsky.social • 60 days ago

Yep, there is plucky little NZ, giving the hegemonic superpower a scare. We can load businesses with debt and suck rent out of them like world champions.
Now, quick check on outliers... how come Japan has a high household financial worth without the sky high business liabilities? [3/n]

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musicalchairs.bsky.social•60 days ago

Good question. To explain, consider NZ net financial worth by sector. Our balance sheet is dominated by negative financial worth for businesses balanced out by positive worth for households (note: the former *enables* the latter - business liabilities = household assets). Now, Japan... [4/n]

musicalchairs.bsky.social•60 days ago

Japan has similar household net financial worth to NZ (~300% of GDP) but the financial assets held by households are liabilities shared by multiple other sectors - Govt, businesses, and rest of the world. Note that Japan is in credit with rest of the world, NZ is in debt. [5/n]

musicalchairs.bsky.social•60 days ago

Worth a look at the strangest country balance sheet: Norway.
Household net financial worth is relatively low.
Govt invested revenue from oil/gas sales into a sovereign wealth fund. The Norwegian Govt's financial assets are mostly the liabilities of onshore/offshore companies and other Govts. [6/n]

musicalchairs.bsky.social•60 days ago

Why does this matter? Well, NZ businesses pay dividends / interest etc to shareholders & creditors. So, if NZ businesses have net liabilities (shares, loans, equity etc) of 350% of NZ GDP (~$1.4 trn) even a modest payout will be tens of billions of dollars a year. Now... [7/n]

musicalchairs.bsky.social•60 days ago

If NZ businesses are paying out tens of billions of $ a year to creditors, banks, shareholders (and other mostly wealthy folk)... who is paying businesses 🤔?
Yep - us. Is this one of the reasons our cost of living is so high? The cost of giving to rentiers? [8/n]

musicalchairs.bsky.social•60 days ago

Is this why nearly a third of household income doesn't come from wages (or Govt benefits etc)? Is this why people proudly proclaim that they 'dont really have to work'? What with being wealthy and sorted? Where does their income come from? [9/n]

timward2014.bsky.social•47 days ago

Does this chart suggest an alternative interpretation for the "rockstar economy" in that - far from being plucky #8 wire wealth creators, our titans of industry just live off their $ and hoover up cash, transforming it into houses, utes, boats and jetskis written off under "business expenses"?

dialogcrm.bsky.social•60 days ago

We should be more like Japan?

lancewiggs.bsky.social•60 days ago

Is there data breaking down these outlier stats by the types of businesses?
Surely there is something about real estate in there?

musicalchairs.bsky.social•60 days ago

I was just out on my bike pondering exactly this question. Not sure there is much by type of business but there will be clues in the subcategories of financial assets / liabilities. I'll have a look.

lancewiggs.bsky.social•60 days ago

Happy to help when it comes to looking at business financial data

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