It's hard to know if all the turmoil of global politics has eased off in the past few weeks or if I have become more numb to it.

Donald Trump's son has been implicated more deeply in allegations of Russian election interference. And there's been the US President's usual parade of embarrassing tweets and encounters with more sophisticated world leaders - particularly in Europe.

The threat of war is present in hot spots around the world.

The Middle East looks worrying ... as usual. The dynamics have changed and there are new tensions involving the Saudi Arabian-led bloc and Qatar. This has heightened tensions with Iran.


It's not hard to imagine an escalation there exacerbating Cold War-style tensions between the big powers.

It's also not hard to imagine an escalation out of North Korea, perhaps provoking the US into a targeted military strike on a missile facility.

This would deeply complicate US Chinese relations.

There is even the threat of a border war between India and China - unfolding in the past week.

Terrorism remains a worrying and complex problem in the UK and Europe even as Isis loses ground in Syria and Iraq.

Then there is the wild-card threat of cyber terrorism. Destructive malware like the Petya virus that came out of the Ukraine last month has caused chaos for many companies. It offered a frightening glimpse of the potential power of hackers.

In New Zealand we've been distracted by six weeks of amazing sport, on the water and the rugby field.

We've also had an increasingly internal focus as we build towards the election campaign.


Or perhaps it is the school holidays. In the northern hemisphere the silly season malaise of a long, hot summer is also in full force.

Regardless, stock markets have decided there is nothing imminent to worry about in all this geo-political theatre.

In the past couple of weeks markets have soared to new peaks - on Wall Street and on New Zealand's NZX.

The bull run - the second longest in US history - is now eight years and four months old.

There's a risk we're in such extended territory that investors' time frames have shortened. Irrational exuberance sets in and people forget that markets can fall.

Globally, trillions of dollars have poured into passive exchange traded funds (ETFs) which track stock market indexes - offering easy, low cost returns ... as long as markets rise.

Analysts are worried this is causing market imbalances by putting too much weight on a handful of big, index dominating stocks. This could potentially a turn a sell-off into a crash.

In the past couple of weeks markets have soared to new peaks - on Wall Street and on New Zealand's NZX.

The risk of a crash is always lurking though. Timing is the thing, not predicting that the boom times will end.

There's always an end.

I sincerely hope the market's golden run continues for some time yet.

I hope so for the sake of my KiwiSaver fund and yours.

I hope so for our listed New Zealand companies. Share market strength increases their capitalisation. It gives company directors confidence to stay in a more expansive mode.

Fletcher Building's woes aside, there are plenty of local stocks looking highly valued.

So let's hope some of that NZX growth will prove to be grounded in corporate earnings.

Locally, consumer confidence has stayed high. The ANZ Roy Morgan NZ Consumer Confidence survey for July was off a fraction but remains at historically strong levels.

It shows a relatively high proportion of people are feeling it is a good time to buy major household appliance - a giant TV or better car or family holiday.

In isolation that's a blunt and dispassionate measure of economic success. Despite all the headlines about poverty and inequality, it is a politically important one none the less.

As with the stock market booms, one can never be sure how much of confidence is driven by global sentiment - big macro-economic forces - or how much is due to fundamentals.

New Zealand has benefited from immigration and tourism. Our economy grew, on Chinese trade, through the post-GFC period.

We've followed that by hitching a ride on the economic upswing coming from recoveries in the US and Europe.

It's a good trick. We hold a rare and privileged position in the world's trade networks. We are seen as a desirable place to live and holiday.

That's why we have to keep paying close attention to world affairs.

We need to be braced for shocks and prepared for global downturns that could cut our growth sharply.

They would dent our ability to work on important domestic issues like inequality, productivity, wage growth and infrastructure.

For all the political chaos out there, these remain benign days for the global economy.

We must be sure to make the most of them.

This election is important because it might be the last for a while in such stable times.

If the bull market is still running in 2020 it will be Wall Street's longest.

The odds of a dramatic correction also grow as it rolls on.

The next New Zealand Government, however it emerges after September 23, should have time to make domestic policy improvements and to allocate spending in ways that ensure our future growth path.

It should treat that time as precious. It will need to be ready to cope with a crash.

• For more Economy Hub and NZ Herald economics follow Liam Dann: Economy Hub on Facebook to join the discussion.