ADRIAN ORR our NEW RBNZ GOVERNOR

[Aaron]

The RBNZ board support Adrian's reappointment, surprise, surprise.

https://www.nzherald.co.nz/business/...LWHOVECCPNCTI/

They mention a lot of the things they have achieved under Adrian like a timely review of money creation programmes but they fail to note that the mandate for the RBNZ is "price stability" and whether Adrian and the board have achieved this. They have not.

They have not and are failing terribly. The board is new so I guess we need to give them some time but if they are unable to achieve what the reserve bank act asks of them they should be sacked along with Adrian Orr. My concern is they are a bunch of "world improvers" with no idea what they are supposed to be doing at the RBNZ.

The headline also reads "RBNZ Board assures Robertson Orr will promote a ‘safe environment for debate’"

This is probably true as the large turnover of staff means anyone with a differing view has already left.

[Aaron]

Here we go Dobby an article about how interest rates are controlled. (i.e. not a free market) It explains why interest rates below the rate of inflation are possible.

Bit of a long one and I cannot admit to understanding it all so will try and cherry pick bits and pieces that seem like they support my argument.

https://www.interest.co.nz/banking/1...ng-process-and

The Reserve Bank uses its tools and operations to keep short-term interest rates between banks close to the Official Cash Rate (OCR), which flows through to other interest rates in the economy.

Under the LSAP programme, the Reserve Bank creates new settlement cash to purchase government bonds from the market. Since government bond yields serve as a benchmark for longer-term interest rates in the economy, bond purchases have the effect of lowering longer term interest rates.

The FLP is a monetary policy tool intended to lower overall bank funding costs, and therefore retail interest rates.

Why were all the additional monetary policy (AMP) tools required (LSAP & FLP). It does not say but looking at the stats NZ graph inflation around the time that Adrian Orr lost the plot, inflation was a comfortable 1.5% well inside the 1-3% range (comfortable c.f. current 7%) What did Adrian do? According to figure 4 in the article he increased base money from roughly 15 billion to 55 billion. Interesting in that same graph that broad money has been steadily increasing every year.

https://www.stats.govt.nz/indicators...ice-index-cpi/

This started about March 2020 (pandemic panic time) and has only recently slowed down. Compare that to the inflation graph which broke the 3% top range in June 2021.

I would suggest it was an absolute balls up by the RBNZ but scarily I do not think the beneficiaries of the inflation such as asset owners are that worried. I imagine we will see comments from disgruntled boomers as minimum wage workers get a 7% rise to stay still, relative to CPI but still waaay behind house price inflation.

If Adrian is considered to be competent amongst our rulers then they must be OK with what is happening re inflation and just paying lip service to the so called "cost of living crisis".

If they were really concerned they should have acted against the people most responsible, not hire them for another 5 years. I guess Labour is complicite and did not want to admit how badly they f**ked up with the ongoing lockdowns after the initial response.

Inflation just another regressive tax in NZ no wonder our young people are leaving. The immigrants are only filling up the minimum wage jobs in restaurants and fruit picking. Any young person in NZ can work out at $22.70 or $47,216 annually even at 10 times earnings or $472,160 they will not be able to own their own home or have any sort of financial security.

[Aaron]

Does Broad Money require a 1% - 2% population increase every year hence the need for immigration? What happens if it contracts? Is the monetary system like a ponzi scheme that will collapse if it does not keep expanding?

[JBmurc]

RBNZ looking after the rich for decades .... glad I've got debt free home and other property interest the RBNZ petty much has our backs cheap debt easy leverage .. high interest kick back pay min payments on minor loans to assets ,....

[Aaron]

RBNZ looking after the rich for decades .... glad I've got debt free home and other property interest the RBNZ petty much has our backs cheap debt easy leverage .. high interest kick back pay min payments on minor loans to assets ,....

Lucky your rich, did you send Adrian Orr a box of chocolates for Christmas for all the good work he did on your behalf over the last couple of years?

Hate to say it but Jacinda came in to power promising to do something about the cost of housing after John Key said there was no problem. What did she do???

https://www.stuff.co.nz/business/131...bilisation--qv

If the graph at the bottom of the article is correct, average house prices went from $535k to $808 (they have come back some) that is 51% but to annualise it over 5 years 10.2%. Not sure what fixing house prices involves but hard not to think Jacinda and Labour are just as full of sh*t as National under John Key.

Chippy has got immigration going and is part of the party that reappointed Orr. Chris Luxon wants to remove interest deductibility restrictions and wind back the bright line test to 5 years. Not sure either party has any interest in affordable housing. Actually I take that back, I am sure neither party has any interest in affordable housing.

[JBmurc]

Lucky your rich, did you send Adrian Orr a box of chocolates for Christmas for all the good work he did on your behalf over the last couple of years?

Hate to say it but Jacinda came in to power promising to do something about the cost of housing after John Key said there was no problem. What did she do???

https://www.stuff.co.nz/business/131...bilisation--qv

If the graph at the bottom of the article is correct, average house prices went from $535k to $808 (they have come back some) that is 51% but to annualise it over 5 years 10.2%. Not sure what fixing house prices involves but hard not to think Jacinda and Labour are just as full of sh*t as National under John Key.

Chippy has got immigration going and is part of the party that reappointed Orr. Chris Luxon wants to remove interest deductibility restrictions and wind back the bright line test to 5 years. Not sure either party has any interest in affordable housing. Actually I take that back, I am sure neither party has any interest in affordable housing.

They sure don't ... they care about the rich party funders ... all the promises to the poor are pure BS ...min wage increase while inflation caused by all the Govt created laws rules regs just make it ever harder .. climate targets = EV cash-backs

[Aaron]

ASB morning brief headlines.

1/The value of KiwiSaver assets fell from $90.2 billion to $86.5b over the 2022

2/ House prices fell further last month as more homes were listed for sale on Trade Me

3/ The Reserve Bank may have "already done enough" with its increases in interest rates,

Here is a dreamer on zero hedge.

https://www.zerohedge.com/markets/world-without-finance

[winner69]

Was a load of bull ****e

[winner69]

Sorry Aaron …I’ve been sucked in

This guy Clint is an unofficial PR man for Labour …so he’s probably very wrong

Silly me for not realising

No Point in deleting post cos you have copied it

[Aaron]

Sorry Aaron …I’ve been sucked in buyback f***in idiot

This guy Clint is an unofficial PR man for Labour …so he’s probably very wrong

Silly me for not realising

No Point in deleting post cos you have copied it

Thinking about it further I only looked at the group totals I guess if there was deflation in other transport items then this would reduce the effect of airfare rises on the group.

Looking at the data in the excel spreadsheet on the stats page airfares were 29.1% of the inflation. And petrol prices deflated 22.9%.

So I need to apologies to you and Clint. His figures are probably right. I only say "probably" because I am not 100% sure I understand the data I am looking at.

Also apologies to Baa Baa for unnecessary profanities.

Another timely reminder you should never listen to me.

Mind you Clint might have said the rise in airfares offset the fall in petrol prices while food made up 23% of the inflation, household and household utilities made up 25.4% of the inflation and recreation and leisure a further 20.2%.