This work allows me to travel often. Each place I visit tells a story. My most recent trip was to New Zealand and the Cook Islands. I have been to New Zealand around 18 times during my last 25 years of travel.  It is one of my favourite destinations. However, my trip in November scared me. 

The Prime Minister of NZ, Jacinda Ardern, is like Trudeau. She is implementing disastrous green policies that are shrinking the middle class. Just like Justin, she is a hypocrite. She recently okayed the right to import more Indonesian coal even though they have an abundant source of untapped natural gas.  Clearly, she too believes there is not a “business case” for natural gas like our Justin.    

Her leadership is taking the country down a road of very limited long-term growth, if any at all. Their strict COVID policies were some of the harshest in world.  They did a lot of damage and I do not see the country recovering for several years.  Last month she announced that she was going to hit all the big banks with higher taxes because they are making too much money, just like Trudeau.  One of Ardern’s puppets stated the big tax hike is good because the banks are generating too much greenhouse gas (don’t worry, it confused me too).

Like Canada, most who invested in real estate over the past five years is heading for financial disaster. Even if the property has no debt it is still stuck with growing costs such as city taxes, energy prices and general upkeep. Throw in declining equity and the market looks very gloomy.

NZ is now the most expensive country I have ever visited. They are making our prices look extremely cheap.  Food, fuel, and home prices are in the stratosphere.  A similar home that costs $800,000 in Canada, goes for around $1,550,000CDN there.  Kiwis make about the same as the average Canadian and pay slightly higher taxes.

I witnessed empty stores and large buildings with For Lease signs everywhere.  It appeared that many of them have been neglected for a couple of years.  There are so many empty stores that rents will have to drop drastically if the owner wants an income.  It is a safe bet that it will take a generation before real estate prices make new highs in New Zealand.

I have visited Rarotonga, Cook Islands numerous times.  The country imports most of its goods from NZ. The food from NZ is generally cheaper in the Cook Islands.  A few years ago, I reported that the ice cream cones were cheaper in Raratonga even though all the ice cream was made in NZ.  Today the price is roughly 50% cheaper than in Auckland. This is due to Ardern raising taxes and imposing strict useless climate change regulations on business.  

New Zealand will be very lucky to escape a deep recession because of the pending real estate crash.  Canada we can easily slide into a recession for the same reason, but nothing like what is coming to New Zealand.  We will be saved by the energy sector, which when we get rid of Trudeau, will grow, and become even more important than it is today.  If Trudeau wins the next election (which is doubtful) and continues his destructive policies, Canada will become unrecognizable.  

2023 is an election year in NZ.  If the poles are correct Ardern’s days are numbered.  Let’s hope so because like Canada, NZ does not deserve to be governed by crazy elected officials whose platforms take a 180° turn from what they were voted in for.

Should we divest from Canada?  No. Today’s issues are 100% political, nothing else.  If anything, our index offers some exceptional opportunities.  As soon as we get a new government, our reputation of a reliable trading partner and ally will return.  With it will be the trillions of investment dollars that left under Trudeau. We will be one of the best countries to invest in.  New Zealand will be toast for years to come.

Be patient with your money.  Maintain 50% of our funds in one-year GIC’s. If you do not rely on the dividend income for spending, you can reinvest the income in companies with a great dividend history.  Our current recommendations have a very favourable outlook given their current yield. In the meantime, do what the world is doing and find humour in politicians such as Ardern, Trudeau and Freeland making fools of themselves.