Quote Originally Posted by Aaron View Post
Don't get me started on the incompetence of Adrian Orr. He was concerned about a 10% downward correction to the housing market prior to the lock downs and also wanted to create a "wealth effect". Mission accomplished a 51% increase in house prices in less than two years during the most extreme response to a bad cold we have ever seen.

The article I quoted above describes how complicit Grant was in the RBNZs actions. To quote.

Robertson said the conversation involved what the tools would be, giving the tools to the bank, and then asking, “how are you then, Adrian Orr and your team going to use those tools?”
One of those tools, printing more than $50 billion of digital money and buying injecting it into the economy by buying Government debt from banks and financial institutions. The tool worked. The economy bounced back and employment stayed low. But it had massive consequences, particularly in the housing market.

Looking back, does he think he made the right call when the Reserve Bank asked Robertson for the Crown to indemnify the purchase of up to $30 billion worth of bonds in March 2020?
Robertson said the conversations around the indemnity were “iterative”.

Iterative? I had to look it up but it means he just looked at the numbers not the consequences of his actions.

To keep up appearances the money printing to buy govt bonds had to go through the banks (banks no doubt clipping the ticket at the taxpayers expense) and with Funding For Lending the banks made record profits.

So a massive overreaction to a bad cold resulted in exacerbating the wealth divide and asset owners making out like bandits as well as record bank profits and a now heavily indebted NZ taxpayer via our govt debt rising from (to quote from Ithaka article) just over $80b in 2017 to over $130b; or 42% of GDP to nearly 70%.

The young and the poor saw any dreams of homeownership crushed and they are now paying the regressive inflation tax.

So who was Grant Robertson working for? or was he just in over his head and money printing and borrowing was his solution to everything and what has the nation got to show for all his excesses?
Just insane that these guys slashed interest rates and pumped money into the economy and then were shocked that asset prices spiked.

Isn’t that Economics 101.