sharetrader
Page 15 of 19 FirstFirst ... 5111213141516171819 LastLast
Results 211 to 225 of 276
  1. #211
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,365

    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.

  2. #212
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,365

    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.

  3. #213
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,365

    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.

  4. #214
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,365

    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.

  5. #215
    Veteran novice
    Join Date
    Jun 2007
    Location
    , , .
    Posts
    7,463

    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.

  6. #216
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,365

    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.

  7. #217
    Senior Member
    Join Date
    Feb 2020
    Location
    Nelson
    Posts
    815

    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.

  8. #218
    Speedy Az winner69's Avatar
    Join Date
    Jun 2001
    Location
    , , .
    Posts
    30,076

    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.

  9. #219
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,365

    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.

  10. #220
    Veteran novice
    Join Date
    Jun 2007
    Location
    , , .
    Posts
    7,463

    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.


  11. #221
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,365

    Default

    Confirmation bias, not sure of the author and appreciate it is not the RBNZ but they are following the same path.

    https://www.zerohedge.com/markets/tw...bubbles-part-2

    Asset price inflation = Financial stability
    Consumer Price Inflation = Inflation

    I didn't appreciate the difference until reading this. That could be why inflation is so hard for me to understand.

    I now feel like a fool complaining that the RBNZ was not doing its job on price stability letting house prices go ballistic.

    I went back to the RBNZ website this morning to refresh myself on their mandate which used to be;

    "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 it has changed with the rebranding. Now it is.

    "Toitū te Ōhanga, Toitū te Oranga. We enable economic wellbeing and prosperity for all New Zealanders."

    I thought maybe Adrian Orr thought he had become an omnipotent god like creature but this is actually "the purpose" in the Reserve Bank Act 1989. I did not realise just how amazing and powerful the central bank is.

    When they say "all NZers" do they just mean NZers with assets?? Otherwise I don't think they are achieving their mandate unless they believe in trickle down economics. Is growing wealth inequality a sign of too little trickle down economics or too much?? I am not sure although I am leaning toward too much.

  12. #222
    Senior Member
    Join Date
    Nov 2018
    Location
    Christchurch
    Posts
    628

    Default

    Quote Originally Posted by Aaron View Post
    Confirmation bias, not sure of the author and appreciate it is not the RBNZ but they are following the same path.

    https://www.zerohedge.com/markets/tw...bubbles-part-2

    Asset price inflation = Financial stability
    Consumer Price Inflation = Inflation

    I didn't appreciate the difference until reading this. That could be why inflation is so hard for me to understand.

    I now feel like a fool complaining that the RBNZ was not doing its job on price stability letting house prices go ballistic.

    I went back to the RBNZ website this morning to refresh myself on their mandate which used to be;

    "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 it has changed with the rebranding. Now it is.

    "Toitū te Ōhanga, Toitū te Oranga. We enable economic wellbeing and prosperity for all New Zealanders."

    I thought maybe Adrian Orr thought he had become an omnipotent god like creature but this is actually "the purpose" in the Reserve Bank Act 1989. I did not realise just how amazing and powerful the central bank is.

    When they say "all NZers" do they just mean NZers with assets?? Otherwise I don't think they are achieving their mandate unless they believe in trickle down economics. Is growing wealth inequality a sign of too little trickle down economics or too much?? I am not sure although I am leaning toward too much.
    Great post and it may be Jacinda had something to do with the rebranding of the NZRB's role. My understanding with inflation... it's a product of having too much $ in circulation in the economy (what Macroeconomics class has taught us). You know, the "quantity theory of money" and the money supply. The lessor of 2 evils; inflation or deflation? The latter is far worse to the economy by a LONG shot. So while the rich got the benefit from rising inflation, overall it's a better outcome than where 'everyone loses' in when assets collapse in value and permanent unemployment trends.

  13. #223
    Legend peat's Avatar
    Join Date
    Aug 2004
    Location
    Whanganui, New Zealand.
    Posts
    6,030

    Default

    economists saying that they dont think RBNZ has a clue

    NZ’s “economic indicators continue to acquit themselves very well". "These, in turn, suggest the economy is on a much stronger footing than the RBNZ appreciates,” said Toplis.

    Did NZ dodge a double-dip recession? | BusinessDesk (free article)
    For clarity, nothing I say is advice....

  14. #224
    Permanent Newbie
    Join Date
    Mar 2010
    Posts
    1,365

    Default

    I don't think any economist has a clue including the ones at the RBNZ. I think they will continue to choose the path of least resistance. The modern day soothsayers might as well be reading goose entrails

    Adrian said the reason for dropping interest rates and keeping them low is to achieve his employment mandate and he wasn't worried about house prices. The herald today suggests he was too successful as there is now a shortage of workers. So I guess we need to recognise this success by the RBNZ. Maybe now he should increase interest rates as labour shortages and house price rises might suggest this is what he should be doing. House prices won't stop rising until interest rates go up.

    As one commentator said if you don't buy whatever you can now while money is so cheap you might look back and regret the lost opportunity.

    SBQ I keep hearing deflation is way worse than inflation although I guess the only proof of this is the great depression. They focus on the tightening of the money supply back then at the wrong time exacerbating the depression. Not much is said about the build up of debt prior to that in the 1920s. Wealthy people telling me that inflation is better than deflation - yea right. Like taxing the rich less will lead to a better society as the wealth will "trickle down".

    I would much rather pay more for my investments, goods and services next week???

  15. #225
    Legend peat's Avatar
    Join Date
    Aug 2004
    Location
    Whanganui, New Zealand.
    Posts
    6,030

    Default

    Quote Originally Posted by Aaron View Post
    I don't think any economist has a clue
    true dat

    I assume you understand why deflation is considered so horrible.
    Demand evaporates. Economy dies... vicious circle downwards as people save knowing their money will be worth more.
    Value judgements depend on the perspective so yeh you could be right that inflation suits wealth. But, no one wants to visit Moribundsville.
    Last edited by peat; 15-06-2021 at 09:58 AM.
    For clarity, nothing I say is advice....

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
  •