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  1. #691
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    [QUOTE=Aaron;938171 Listening to a you tube video from Peter Switzer he reckons Jeremy Grantham is full of s*it and also that there is no way the Federal Reserve will raise interest rates like they are suggesting.[/QUOTE]

    I would suggest Jeremy thinks a lot more deeply than Peter Switzer.

    https://www.youtube.com/watch?v=JlEGU2ypr1Q

  2. #692
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    https://www.stuff.co.nz/business/127...hoots-up-to-59

    Inflation shoots up to 5.9%
    Tom Pullar-Strecker
    10:46, Jan 27 2022

    The inflation rate has jumped to 5.9 per cent, Stats NZ has reported.

    Consumer prices during the three months to the end of December put the annual inflation figure at its highest level since June 1990.

    That was the same year that Jim Bolger became prime minister and Auckland hosted the Commonwealth Games.

    The annual inflation rate was up from 4.9 per cent during the September quarter and is expected to keep pressure on the Reserve Bank to continue ratcheting-up interest rates.

    The central bank will next reset the official cash rate on February 24.

    ANZ’s economists had said it would be no surprise if inflation landed anywhere between 5.5 per cent and 6.5 per cent, while the Reserve Bank had forecast a 5.7 per cent lift.

    ASB economist Mark Smith forecast that inflation would rise above 6 per cent in the current quarter, saying it no longer looked “transitory”.

    “A broadening front of rising inflation is emerging that will be difficult to slow, and we expect annual CPI inflation to remain above 3 per cent well into 2023.”

    The Reserve Bank clearly had “more work to do”, raising the chances of the official cash rate rising faster and to a higher level than the central bank had previously signalled, he said.

    ANZ agreed that inflation had “some serious momentum”.

    Stats NZ manager Aaron Beck said New Zealand was not alone, “with many other OECD countries experiencing higher inflation than in recent decades”.

    National Party finance spokesman Simon Bridges said Finance Minister Grant Robertson needed to “rein in his spending to avoid adding more fuel to the inflationary fire”.

    “With wage growth of only 2.4 per cent, well under half of inflation’s growth, New Zealanders are going backward.
    At the same time, we’ve got rising interest rates and record amounts of government spending,” he said.

  3. #693
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    Quote Originally Posted by Logen Ninefingers View Post
    https://www.stuff.co.nz/business/127...hoots-up-to-59

    Inflation shoots up to 5.9%
    Tom Pullar-Strecker
    10:46, Jan 27 2022

    The inflation rate has jumped to 5.9 per cent, Stats NZ has reported.

    Consumer prices during the three months to the end of December put the annual inflation figure at its highest level since June 1990.

    That was the same year that Jim Bolger became prime minister and Auckland hosted the Commonwealth Games.

    The annual inflation rate was up from 4.9 per cent during the September quarter and is expected to keep pressure on the Reserve Bank to continue ratcheting-up interest rates.

    The central bank will next reset the official cash rate on February 24.

    ANZ’s economists had said it would be no surprise if inflation landed anywhere between 5.5 per cent and 6.5 per cent, while the Reserve Bank had forecast a 5.7 per cent lift.

    ASB economist Mark Smith forecast that inflation would rise above 6 per cent in the current quarter, saying it no longer looked “transitory”.

    “A broadening front of rising inflation is emerging that will be difficult to slow, and we expect annual CPI inflation to remain above 3 per cent well into 2023.”

    The Reserve Bank clearly had “more work to do”, raising the chances of the official cash rate rising faster and to a higher level than the central bank had previously signalled, he said.

    ANZ agreed that inflation had “some serious momentum”.

    Stats NZ manager Aaron Beck said New Zealand was not alone, “with many other OECD countries experiencing higher inflation than in recent decades”.

    National Party finance spokesman Simon Bridges said Finance Minister Grant Robertson needed to “rein in his spending to avoid adding more fuel to the inflationary fire”.

    “With wage growth of only 2.4 per cent, well under half of inflation’s growth, New Zealanders are going backward.
    At the same time, we’ve got rising interest rates and record amounts of government spending,” he said.

    No signs of any Reporting of the TRUE Inflationary figures when Govt pumped all those artificially created
    Fiat bucks into the economy in the name of Covid-19 Support yet either

    You know the formula -

    X = amount of real goods
    y = monetary supply

    Double Y - the fiat bucks have only half the spending power they had before

    Have money in the bank at a lowly 1/2 of a percent ? - the bad news - it's now worth half of what
    it was before Govt's Support scheme started on reduced spending power

    The wage & salary earners may have thought they were better off out of increases
    - well for just a few moments but then what lands in their hands afterwards has
    half the spending power it used to have ..

    And for the really bad news - those depreciated dollars circulate round faster

    Inflationary huh ?

    And for the Really Really Bad News - watch what the Govt's next moves will be to further
    likely add to the misery of those suffering the Govt's recent past inflationary instalments

    but did anyone think they would be better off out of Labour's fiscal policies ?

    Or did they deep down think "Conned yet again" ?
    Last edited by nztx; 27-01-2022 at 06:04 PM.
    ... the fine art of sniffing out debits & credits hidden under the carpet can pay dividends ...

  4. #694
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    Did Adrian get to the bottom of the Reporting Issue out of Labour's weird & wonderful large
    LOAN Scheme (the one that stopped them in their tracks - so they didn't bother any more
    while everyone was busy trying to figure out how to treat Huge Loans to your shareholder) ?

    Did Robertson sit on it to make it go away or did Orr quietly tell him 'No More'
    after being sat on ?
    ... the fine art of sniffing out debits & credits hidden under the carpet can pay dividends ...

  5. #695
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    Quote Originally Posted by Logen Ninefingers View Post
    It is hard to see central banks doing anything as they need inflation to clear the debt.
    To clear the debt they own themselves? hardly.

  6. #696
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    Quote Originally Posted by Panda-NZ- View Post
    To clear the debt they own themselves? hardly.
    That was a quote from Aaron, not me.

  7. #697
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    Quote Originally Posted by Panda-NZ- View Post
    To clear the debt they own themselves? hardly.
    What I mean is that across much of the western world china and japan included I believe debt to GDP has increased significantly, more so over the last couple of decades.

    Japan now can't raise interest rates without bankrupting the govt and the US seems to be heading toward a similar position. If these govts don't intend to pay back their debt then they can default or they can inflate away the debt. I think what we are seeing is debt being inflated away. This is also true for over indebted corporations (think zombie corps) and indebted investors (think interest only loans on residential property).

    The borrowings that central banks have encouraged through low interest rates and loose monetary policy are becoming so large that destroying the value of the currency they are denominated in (inflation) is the only solution to getting rid of the debt. Central Banks will never have a problem with debt as they can always just print some more money to sort things out. That is why they are supposed to be independent of govt. as politicians can't be trusted with the money printer.

    It turns out neither can incompetent (weak, greedy, lazy or possibly evil(take your pick)) central bankers.

    Inflation running at almost double the top end of their inflation target would indicate failure by the RBNZ. The Large Scale Asset Purchases I think nztx was referring to a few posts ago was the RBNZ not the govt. That is why Orr and Bascand have both tried to downplay the RBNZ's role in a nearly 30% annual rise in house prices, they both know they are largely responsible and like me are probably wondering why they aren't being held accountable. To be fair in hindsight it is easy to see that it was a massive overreaction, probably not so easy at the time, but take responsibility for your actions Adrian Orr like any good leader does.
    Last edited by Aaron; 28-01-2022 at 09:01 AM.

  8. #698
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    Quote Originally Posted by Aaron View Post
    I guess what I mean is that across much of the western world china and japan included I believe debt to GDP has increased. Japan now can't raise interest rates without bankrupting the govt and the US seems to be heading toward a similar position. If these govts don't intend to pay back their debt then they can default or they can inflate away the debt. I think what we are seeing is debt being inflated away. This is also true for over indebted corporations (think zombie corps) and even some over indebted households.
    The borrowings that central banks have encouraged through low interest rates and loose monetary policy are becoming so large that destroying the value of the currency they are denominated in is the only solution. Central Banks will never have a problem with debt as they can always just print some more money to sort things out.
    Aaron, you do not want to go down that path because it leads to hyperinflation. Believe me, endless money printing is not the answer to this problem, particularly when the US dollar enjoys the status of the worlds reserve currency. If they trash their money to the extent that you are suggesting then they will lose that status and they will never get it back. We could talk about Weimar Germany when we talk hyperinflation, but there are actually more recent examples including Zimbabwe and what is going on now in Venezeula and Turkey. Once a currency collapses you are not on a path to some sunny uplands of prosperity, you are on a path to starvation and dystopia.

  9. #699
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    Quote Originally Posted by Logen Ninefingers View Post
    Aaron, you do not want to go down that path because it leads to hyperinflation. Believe me, endless money printing is not the answer to this problem, particularly when the US dollar enjoys the status of the worlds reserve currency. If they trash their money to the extent that you are suggesting then they will lose that status and they will never get it back. We could talk about Weimar Germany when we talk hyperinflation, but there are actually more recent examples including Zimbabwe and what is going on now in Venezeula and Turkey. Once a currency collapses you are not on a path to some sunny uplands of prosperity, you are on a path to starvation and dystopia.
    I don't want to go down that path for all the reasons you mention and also inflation is considered theft (per the RBNZs own John Mcdermott) and morally reprehensible even though targeted inflation indicates a little bit is acceptable to an economist.

    I am very upset that society is being lead down this path by weak central bankers who have given up on their price stability mandate. I think it has been pointed out that since Alan "bubbles" Greenspan responded to the dotcom bust with lower interest rates and easy money, the resulting debt problem in 2008/09 was solved with more debt, the March 2020 sharemarket crash was fix with even larger money printing. Do you see a pattern forming.

    Even 0% was no boundary. Negative interest rates actually happened and they are happening (in real terms), this is insane but there is no rush to reverse course from what I can see.

  10. #700
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    Quote Originally Posted by Aaron View Post
    I don't want to go down that path for all the reasons you mention and also inflation is considered theft (per the RBNZs own John Mcdermott) and morally reprehensible even though targeted inflation indicates a little bit is acceptable to an economist.

    I am very upset that society is being lead down this path by weak central bankers who have given up on their price stability mandate. I think it has been pointed out that since Alan "bubbles" Greenspan responded to the dotcom bust with lower interest rates and easy money, the resulting debt problem in 2008/09 was solved with more debt, the March 2020 sharemarket crash was fix with even larger money printing. Do you see a pattern forming.

    Even 0% was no boundary. Negative interest rates actually happened and they are happening (in real terms), this is insane but there is no rush to reverse course from what I can see.
    You are right that it started under Greenspan with ultra-low interest rates leading to the US housing bubble which burst in 2007 / 2008.
    The response from central banks was to blow up more asset bubbles to induce a 'wealth effect' (people feel richer when asset prices increase) and get people spending in the economy. 'Money printing' and interest rate suppression has been used to artificially inflate asset prices.
    Asset bubbles are dangerous. They need to be defended by further central bank action, or they pop. For more than a decade, central banks have continued to inflate these asset bubbles. They say water finds its level. You cannot inflate assets far above their true values indefinietly. We are soon to pay the price for what the central banks have done.

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