ADRIAN ORR our NEW RBNZ GOVERNOR

[Aaron]

Headline caught my eye due to confirmation bias.

https://www.rnz.co.nz/news/business/...id-wealth-boom

Next generation unlikely to get repeat of Covid wealth boom

The next generation gets to pay off the debt that caused the boom, that makes it even more galling.

Still the one man largely responsible for this disaster keeps his $820,000 pa job and has no remorse and accepts no responsibility for his actions and his offsider Paul Conway has explained to all the people who did not enjoy the wealth gain that they should just accept that they will be poorer.

The last line of the article got my attention as numbers rather than opinions are always more interesting.

Households had $243.7b in deposits with registered banks and almost $300b in total loans of which $268b is home loans.

I recall a debate on the Black Monday thread about cutting rates and whether savers lose income in equal portion to borrowers gaining when rates are cut. Like Datyr I had imagined that a small amount of deposits would have been a small proportion of the debt being issued. The statement above does not reconcile with my perception of how it all works.

Maybe it is commercial loans that have no corresponding depositors.