New Zealand is in something of an economic bubble, having one of the highest gross domestic product (GDP) growth rates in the developed world.
Business and consumer confidence is soaring and is likely to stay that way for the foreseeable future.
Expectations for businesses are increasingly positive, with most business owners forecasting growth in their own prospects and the belief they will need extra staff by the end of December and beyond.
Retailers will now be looking forward to a bumper Christmas, and who can blame them after some lean holiday seasons just a few years ago.
Everything is looking positively rosy. Or is it?
There are some warning signs of which to be wary. One of the main signs is the increasing amount of private debt consumers are taking on because they feel confident about their future.
Economies are cyclical and even though it is less than 10 years since the global financial crisis, short-term memory syndrome is alive and well.
The GFC started in the United States when a complicated set of circumstances allowed large banks to slice and dice mortgages in such a way people with no hope of ever paying back a home loan were lent money to buy a home.
When the loans failed, US law allowed those failed homeowners to hand the keys, and property, back to the bank. As the number of loans failed, banks started calling in more loans and the cycle began.
Major US banks were regarded as too big to fail and received bail-outs for just that purpose - to stop them failing.
In New Zealand, it was used cars which caused the worst damage. People who really could not afford late-model cars were encouraged to borrow through second and third-tier lenders.
When they lost their jobs, or could not afford the repayments through other circumstances, the cars were repossessed.
Billions of dollars of savings from people looking at the high returns, without taking note of the high risks, were lost and retirement plans were shattered.
New Zealand interest rates are at record lows and the Reserve Bank looks likely to cut its official cash rate next month and perhaps early next year to another record low. Borrowing money has become cheap. But it has to be paid back eventually.
Housing prices continue to rise exponentially and who can blame people for cashing in on the increased equity to fund a lifestyle they have dreamed about?
At present, it seems unlikely house prices will fall markedly, but that is exactly what has happened before. Lessons from the past have not been taken on as a new generation arrives in the market.
Concerningly, people who have experienced the same cycles in the past are ignoring the signs.
The International Monetary Fund is maintaining its forecast for weak global growth and warned further stagnation will fuel more populist sentiment against trade and immigration.
Such measures will stifle activity, productivity and innovation. The IMF says advanced economies as a whole will see a slight weakening of growth this year to 1.6%, while emerging market economies will see a slight gain to 4.2%.
New Zealand sells its goods into advanced economies such as the US, Japan, the United Kingdom and Europe. Australia and China remain this country's largest trading partners and any further signs of a downturn in either economy will have ramifications for New Zealand.
Borrowers will be wise to act with care. The chances of New Zealand having a recession are slim, the chances of major redundancies are not large.
However, the chances of an economic change out of the hands of the Government, trading banks and financial companies loom large.
Reducing debt is the safest option, even as property prices soar in the meantime. Change will come.
