sharetrader
Page 11 of 12 FirstFirst ... 789101112 LastLast
Results 201 to 220 of 235
  1. #201
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,334

    Default

    Janet Yellen's about face on interest rate rises or tightening of the monetary supply.

    https://www.reuters.com/world/us/tre...ly-2021-05-04/

    Yellen said during The Atlantic event the main goal of Biden's programs is to help reverse decades of widening economic inequality.

    Fed policy while she was governor has exacerbated economic inequality and more govt spending isn't going to change inequality while the underlying problem remains the same.

  2. #202
    Veteran novice
    Join Date
    Jun 2007
    Location
    , , .
    Posts
    7,453

    Default

    Wasn't she only stating the obvious - that interest rates will inevitably rise, sooner or later.

  3. #203
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,334

    Default

    Quote Originally Posted by macduffy View Post
    Wasn't she only stating the obvious - that interest rates will inevitably rise, sooner or later.
    She was saying that they may need to rise a bit to stop the economy overheating as in the near future.

    Is it obvious they will rise? A 20-30 year trend down, obviously not straight down but no thought of raising rates in a significant way as the debt becomes too large to deal with an interest rate rise.

    I would have to check but I think the Japanese govt would have to use its entire budget to service debt if interest rates in Japan rose 1 or 2%.

    Obviously she spooked the markets and she isn't even in charge of interest rates.

    Powell has said he is not even thinking about thinking about raising interest rates.

  4. #204
    FEAR n GREED JBmurc's Avatar
    Join Date
    Sep 2002
    Location
    Central Otago
    Posts
    7,412

    Default

    Powell knows he can't raise rates.... the bubbles will pop .. he will keep kicking the can down the road talks about normalising rates at some time in the not too distant future
    People don't have ideas, ideas have people

  5. #205
    Speedy Az winner69's Avatar
    Join Date
    Jun 2001
    Location
    , , .
    Posts
    29,765

    Default

    Interesting speech by one of Adrian's offsiders

    The Future of Maori
    https://www.rbnz.govt.nz/-/media/Res...7-ee2cd5d14487
    When investors are euphoric, they are incapable of recognizing euphoria itself.

  6. #206
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,334

    Default

    Looks like I am not the only one unsure about the outcomes of NZRB policy.

    https://www.interest.co.nz/news/1103...hat-impact-low

    Do low interest rates raise asset prices? hmm tough question to answer Adrian Morron.

    per the NZRB
    “The overall effect of monetary policy on inequality depends on the strength of each channel, which may reinforce or offset each other. Therefore, the overall effect of monetary policy easing on inequality is indeterminate."

    Well we have had 20-30 years of falling interest rates so what has happened to wealth and income inequality in NZ over this time? It would be interesting to know if it has increased, decreased or stayed the same. Even then we can't be sure if interest rates and monetary policy were the reason for any change.

    This from Berl
    "In March, the Reserve Bank dropped the Official Cash Rate (OCR) from one percent to a record low 0.25 percent. Interest rate cuts at all major lenders have followed. The intention is to maintain confidence in markets. However, this has the potential to have a long term impact on home ownership and wealth inequality."
    https://berl.co.nz/our-pro-bono/ineq...nd-new-zealand

    I am unsure if BERL is making stuff up or perhaps have some insights or common sense not available to the NZRB.
    Last edited by Aaron; 13-05-2021 at 03:13 PM.

  7. #207
    Senior Member
    Join Date
    Nov 2018
    Location
    Christchurch
    Posts
    593

    Default

    Quote Originally Posted by Aaron View Post
    Looks like I am not the only one unsure about the outcomes of NZRB policy.

    https://www.interest.co.nz/news/1103...hat-impact-low

    Do low interest rates raise asset prices? hmm tough question to answer Adrian Morron.

    per the NZRB
    “The overall effect of monetary policy on inequality depends on the strength of each channel, which may reinforce or offset each other. Therefore, the overall effect of monetary policy easing on inequality is indeterminate."

    Well we have had 20-30 years of falling interest rates so what has happened to wealth and income inequality in NZ over this time? It would be interesting to know if it has increased, decreased or stayed the same. Even then we can't be sure if interest rates and monetary policy were the reason for any change.

    This from Berl
    "In March, the Reserve Bank dropped the Official Cash Rate (OCR) from one percent to a record low 0.25 percent. Interest rate cuts at all major lenders have followed. The intention is to maintain confidence in markets. However, this has the potential to have a long term impact on home ownership and wealth inequality."
    https://berl.co.nz/our-pro-bono/ineq...nd-new-zealand

    I am unsure if BERL is making stuff up or perhaps have some insights or common sense not available to the NZRB.
    Your last link is of most interest and should be a real eye opener on NZ's inequality.

    The problem with monetary policy is it does not discriminate. When the approach to lowering interest rates, with the intent to provide economic stability to businesses does collateral damage. That being it makes the rich get richer. Something so elementary in macroeconomics that I wonder why people never come to that conclusion.

    Anyways about rising asset inflation (particularly residential houses) in NZ. I bring back the question, 'which came 1st, the chicken or the egg?'. Central banks around the world are not at fault for this and instead, I put the blame at "investor behaviour" because they got a free ticket to borrow more cheap $ and buy more and more houses because the banks and the NZ Gov't makes it so easy. All while the reserve bank wanted to maintain liquidity for the financial markets to keep things afloat, at the same time causing more inequality (as the report cites)

    I put it all down to bad gov't policy - such one as allowing no CGT on residential investment properties - yep best game in town. Bring on the inequality band wagon with Kiwi Saver at the working class and houses for the wealthier which is a better ride. The 20% that own 70% of NZ's wealth enjoy rubbing their hands and the wealthier oligarchs love sending their children to private schools.
    Last edited by SBQ; 14-05-2021 at 08:25 AM. Reason: grammar fixes

  8. #208
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,334

    Default

    Bank of Canada may have worked out that central bank policy is helping to create inequality.

    Stanley Druckenmiller has worked it out too and he seems pretty smart.

    https://www.zerohedge.com/markets/dr...inequality-fed

    Glaring and expanding wealth inequality is destructive to society. While there will always be inequality and successful capitalism should rightfully reward those that work hard and come up with great business concepts the artificial exponential enrichment of the few by a “government created agency” (Jay Powell) is not in the purview of the Fed’s mandate.

    Same could be said of the NZRB.

  9. #209
    Senior Member
    Join Date
    Nov 2018
    Location
    Christchurch
    Posts
    593

    Default

    Quote Originally Posted by Aaron View Post
    Bank of Canada may have worked out that central bank policy is helping to create inequality.

    Stanley Druckenmiller has worked it out too and he seems pretty smart.

    https://www.zerohedge.com/markets/dr...inequality-fed

    Glaring and expanding wealth inequality is destructive to society. While there will always be inequality and successful capitalism should rightfully reward those that work hard and come up with great business concepts the artificial exponential enrichment of the few by a “government created agency” (Jay Powell) is not in the purview of the Fed’s mandate.

    Same could be said of the NZRB.
    Doesn't mean anything and Bank of Canada is saying "It COULD... but we will look into it". BIG difference to what we have here in NZ where it's very clear the wealthy got rich off owning multiple houses. Anotherwords, the low interest rates in Canada does not mean (to the same effect as in NZ) of the wealthy rushing out to buy more houses as i've mentioned before, the taxation and gov't policies in place already discourage the investment into buying multiple houses as a way to excess profits. The statement made by the Bank of Canada is simply a pre-warning "Inequality could be widen more in Canada due to QE". Do you understand the difference and compare it to what's happened in NZ?

  10. #210
    Senior Member
    Join Date
    Feb 2020
    Location
    Nelson
    Posts
    715

    Default

    An interesting alternative perspective from ARK's Cathy Wood:

    US is set up for massive deflation.

    https://nz.news.yahoo.com/arks-cathi...160519316.html

    Though she probably would say that given all her high pe funds.
    Last edited by Panda-NZ-; 24-05-2021 at 07:25 AM.

  11. #211
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,334

    Default

    https://www.stuff.co.nz/life-style/h...rs-and-economy

    I don't think he got this right. The choice isn't between house buyers and the economy, it is between home owners and tenants or older asset owning generations versus younger generations wanting to get ahead.

    The economy does not want to see rate rises either as this will drive up the $NZ making exporters less competitive and a lot of businesses are carrying debt and enjoying cheap capital.

    The choice is now that not just asset prices are inflating but also consumer goods prices are rising, do you squeeze the tenant further with inflation or do you not back the asset owners/risk takers/job creators with loose monetary policy. Anyone buying a house on what has been described as an expensive market is taking a risk. Is it the NZRBs job to protect them or provide a sound stable currency. I know the NZRB is in their words "The Reserve Bank manages monetary policy to maintain price stability, promotes the maintenance of a sound and efficient financial system, and supplies New Zealand banknotes and coins." But central banks have been using monetary policy to protect risk takers from taking any losses at the expense of price stability and the maintenance of a sound efficient financial system.
    The wealth effect and trickle down economics are bulls*it yet that seems to be what is driving the RBNZ and central banks around the world.

    IMO it is wrong but it won't change any time soon 65% of NZ owns a house so they have no reason to get upset about this and we live in a democracy.

    Please note any reference to the NZRB was not the royal ballet but my mixed up acronym.

  12. #212
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,334

    Default

    More of the same.

    https://www.stuff.co.nz/business/125...nt-projections

    Anyone in power expressing concern about house prices, is not being genuine.

  13. #213
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,334

    Default

    Were independent central banks created to ensure price stability and a sound financial system because politicians could not be trusted with this.

    https://www.interest.co.nz/bonds/110...ent-bonds-some

    I guess if financial stability is rising debt then job well done. If 2% inflation provides stability 4% should provide twice as much stability. Is this why house prices are so stable? They have been averaging 7% for a long time and recently seem to have gone super stable. No wonder economics and banking is so difficult to understand for the average person.

    I see Adrian trying to talk down house prices as he doesn't have the balls to do the job he was entrusted with.

    https://www.newshub.co.nz/home/money...drian-orr.html

    Only FOMO keeping them up??? I would suggest monetary policy is driving the FOMO but what do I know.

  14. #214
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,334

    Default

    “When looking at the future of our balance sheet, it should come as no surprise that climate change and sustainable finance is at the forefront of our minds,” she says.

    https://www.goodreturns.co.nz/articl...s-in-size.html

    How about you stop pushing prices up to create a "wealth effect" so people consume more, that might be a start if you are concerned about climate change. It also will align with the banks "stated" goal of "maintaining price stability".

    Is climate change even a part of the central bank role?

    Are these statements taken out of context or is Vanessa Rayner a f**king idiot.

  15. #215
    Veteran novice
    Join Date
    Jun 2007
    Location
    , , .
    Posts
    7,453

    Default

    Good points, Aaron. It seems that everything has to be seen through a climate change lens these days. A sound financial system doesn't need to be "justified" in that way.

  16. #216
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,334

    Default

    Quote Originally Posted by macduffy View Post
    Good points, Aaron. It seems that everything has to be seen through a climate change lens these days. A sound financial system doesn't need to be "justified" in that way.
    I was thinking that monetary policy designed to push up prices to create the wealth effect so people will consume more runs counter to any real attempt to address climate change if it is man made. Any talk is just hot air unless you are looking to actually change the consumption led constant growth model that society is currently based on. Not that this is any of the RBNZ's concern as it is not part of its mandate.

    Our elected representatives should be making the hard calls and overhauling the mandate of the NZRB if it is not working for society.

    https://www.newsroom.co.nz/ideasroom...ing-as-science

    Unfortunately I can't access Don Brash's response as I am not a subscriber to this site.

  17. #217
    Senior Member
    Join Date
    Feb 2020
    Location
    Nelson
    Posts
    715

    Default

    Interest rates are the only tool reserve banks are given.
    After that's exhausted they hand a pile of money to the govt for free to spend on what they wish.

    Reserve banks need more tools such as variaable income tax rates (moved up when there's austerity, down for easing).

    Don is not right on much but a variable component to kiwisaver rates is an idea which is sound (combined with the fixed 4%). Tax and Kiwisaver both have better coverage than mortgages.
    Last edited by Panda-NZ-; 03-06-2021 at 07:13 PM.

  18. #218
    Speedy Az winner69's Avatar
    Join Date
    Jun 2001
    Location
    , , .
    Posts
    29,765

    Default

    Our Adrian obviously doesn’t really understand his role ....and has far too much spare time

    https://www.stuff.co.nz/business/125...000-on-rebrand
    When investors are euphoric, they are incapable of recognizing euphoria itself.

  19. #219
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,334

    Default

    Quote Originally Posted by winner69 View Post
    Our Adrian obviously doesn’t really understand his role ....and has far too much spare time

    https://www.stuff.co.nz/business/125...000-on-rebrand
    I guess everything else is under control. Why not fiddle.

  20. #220
    Veteran novice
    Join Date
    Jun 2007
    Location
    , , .
    Posts
    7,453

    Default

    Quote Originally Posted by Aaron View Post
    I guess everything else is under control. Why not fiddle.
    Exactly! And it's only 100 Grand; plenty more where that came from.


Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •