Why I'm poor and getting poorer.

Things are bad in the UK. We all know that. They're not gonna get better for years.

Above is a chart from the recent McKinsey report illustrating just how far the UK has to go in deleveraging before things pick up again. By most counts the UK has about 7-8 more years of debt payoff to go. That's a long time without any growth.

Meanwhile wages in the UK are not keeping pace with inflation (see graph above). With inflation running at 4-5% and earnings growth somewhere around zero for the year, everyone is going backwards at a vast rate of knots.

So is it time to up sticks and head to better climes I hear you say. How about NZ? That's a nice place. Nobody shoots each other and they have a good attitude that people liken to better times when everything was sunshiney and rosey like Britain in the 50s. And us NZ'ers are loads better at sport than people in the UK so you can hang out with winners.

Unfortunately for you NZ is doing its best to put you off heading there at the moment. Here's an article about house-hunting in Auckland. In it, Lauren and Andy are looking for a property for them and their two year old. They've scraped together a budget of $950,000 which involved them selling the car and borrowing from Mum & Dad. $950,000 is huge amounts of money in NZ (and in the UK for that matter). It is 13 times the average salary in Auckland! What bank is lending to these people? A bank I bet that is soon going to have a ton of problems. Anyway, Lauren and Andy can't find anywhere to live as loads of other families turn up to the open homes they visit and outbid them on properties. Properties that should by rights be costing 3-4 times average salary. Remember also that the average salary isn't really average but the mean and we should use the median salary, which estimates suggest for Auckland would be about $50,000.

So you're right in guessing that NZ is in the grips of an enormous housing bubble too. How? Why? When people at home have been able to see what's been going on in the rest of the world, why are they following down that same path?

And if you're thinking that you'll just hold off a couple of years and you'll be able to buy a house when the bubble pops in NZ, think again.

That's right every day you wait the pound collapses a little further against the Kiwi. Driven by high interest rates, a relatively stable economy and the powerhouse of Australia, the Kiwi is seen as one of the safe havens for money in the world. Every day you wait, your pound gets valued a little less. Predictions are for an Aussie dollar at parity with the pound within five years and that will mean a Kiwi at about $1.25 to the £GBP. You won't be able to buy a dog in NZ, let alone a house, with the pathetic pound by then.

And that's why every day I sit here in the UK I get a tiny bit poorer.