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Source: Reuters
Making big business investment decisions - or even interest rate decisions - in this economic environment must be a nightmare, because right now the financial world seems almost paralysed with uncertainty about the true strength and sustainability of the global economic recovery.
Last week, for example, markets started pricing in a double dip recession on the back of poor US jobs numbers and increasing fear about the impact of austerity measures in Europe. It was all looking very dire.
One week on and the glass is now half full again. This follows growing confidence about a good upcoming US earnings season and the IMF upping its growth forecast for the world economy.
So what's going on? Which one is it? A double dip recession? Or a solid sustained global recovery?
The problem is no one can really say yet with absolute confidence which way it will go, and that means markets are jumpy and will ride the good and bad news on a day-to-day basis.
Until solid evidence emerges (and it could be a strong US reporting season that does it, according to CNBC) many businesses will probably and quite understandably remain cautious about committing to big long term investments.
It would be shame for the New Zealand economy if this economic stalemate continues to stifle investment.
We need to see greater business investment in plant and machinery in order to boost productivity and thereby increase the speed at which the economy can grow without overheating and causing inflation.
For the time being, there does not really seem to be much danger of the economy overheating, because unemployment is still high at around 6% and there is little sign of wage pressure flowing through into pricing.
However already there are warnings that skill shortages in the economy are just around the corner.
Recruitment firm Robert Walters says the employment market is in a fine balance - at the moment employers are generally able to find the staff they need.
However it says this could quickly change if the economy continues to improve and skill shortages could be back with a vengeance.
Of course, whether the New Zealand economy does continue to improve at a steady rate is now hotly debated much like the fortunes of the global economy.
This week we saw a poor business confidence survey, weak Auckland housing data and a falling Fonterra auction price all bolstering the case for a pause in Reserve Bank interest rate hikes - and economists from the NZIER suggested the recovery may have stalled.
Notably the Bank economists disagreed with the assessment, pointing to strong export demand out of Asia as proof that New Zealand's economic recovery remains on track.
And boosting the case of those optimists was a rosy assessment of Asian economic growth from the Australian Reserve Bank and the IMF this week.
The argument could swing back to the pessimists next week though with two sets of data due out on the housing market as well as retail sales figures for May.
It's not likely that set of data will be particularly strong, given Auckland housing figures out this week show a sharp drop in sales and retailer Postie Plus recently warning its sales were NOT quite coming through as strongly as predicted earlier in year.
Watching all this data closely - and no doubt listening to the debate - will be Reserve Bank Governor Allan Bollard.
He'll review the official cash rate on the 29th.
It won't be an easy decision given the climate and he's bound to cop flak whichever way he goes.
But then... that is why he is paid the big bucks.
