NZ may or might or might not be in a bubble, but it's certainly in a slanging match.
Forbes contributor Jesse Colombo has hit back at criticism by Economic Development Minister Steven Joyce over Easter.
The economic analyst contends NZ is in a housing and credit bubble which, when it bursts, will take down our whole economy.
In a new Forbes post, he says official denials, such as that issued by Mr Joyce over the holiday weekend, are all part of the bubble he's come to expect (a theory that does rather damn the Economics Development Minister either way; Mr Joyce has to agree NZ is in a bubble, or conform to the alleged dupe stereotype of denying the obvious).
"Let’s not forget that Ben Bernanke denied the U.S. housing and credit bubble’s existence just a few days before he was nominated as Fed Chairman in 2005, at the very same time that I was warning about it. Even the IMF missed the warning signs that led to the Global Financial Crisis, and these are the same warning signs that I am seeing once again in countries around the world," Mr Colombo writes.
There a a couple of substantial developments.
In his new post, the Forbes contributor addresses Mr Joyce's criticism that he under-estimated the contribution of agriculture to NZ's GDP by ignoring the directly-related food and beverage sectors. "I did further research and found that food and beverage manufacturing’s share of New Zealand’s GDP is only about 4.35%. Agriculture combined with food and beverage manufacturing accounts for only 9.45% of New Zealand’s GDP, which is just one-third of the finance, insurance and business sector’s contribution to the economy," Mr Colombo writes.
And in comments to NBR Mr Joyce did concede the Forbes man had a point about NZ's high house hold debt (although he added it was starting to recede, and dismissed Mr Colombo's theory overall).
But on the whole, things are heading toward name-calling. "Steven Joyce studied zoology in university and has no background in economics before 2011," Mr Colombo mocks on Forbes.com.
On Twitter, Mr Joyce snarked, "Gosh. I see David Cunliffe has endorsed the bubble guy. Is he serious?"
POSTSCRIPT: When will our bubble burst?
Taking it as read for a moment that NZ is in a bubble, when will it burst?
"As far as the timing of the bubble’s popping, neither I or anyone can give you a very specific time like April 16, 2015, because the popping of these bubbles depends on the actions of policy makers," Jesse Colombo tells NBR.
"I believe NZ’s bubble will pop when the current low interest rate environment ends, which I assume will occur some time within the next few years," he says.
"I have to emphasise that this bubble warning is not a call to short ASAP nor a call for an imminent crash. I am warning that NZ’s economy is going down the wrong path."
The economics analyst elaborates on his bubble theory — and the need to sound the alarm as soon as possible — here.