ADRIAN ORR our NEW RBNZ GOVERNOR

[Logen Ninefingers]

‘Reserve Bank Governor Adrian Orr is calling on banks to lift deposit rates as much as they have lifted mortgage rates, saying their tardiness is boosting their profits and preventing the benefits of the higher Official Cash Rate (OCR) flowing to savers.’

[Aaron]

Orr has been crushing savers for a long time, still is with inflation at 7%. Without his FLP program maybe banks might feel they need to compete for capital.

https://www.stuff.co.nz/national/pol...borrowandspend

Is it me or is he starting to make the right noises IMO.

He diplomatically suggested if the government were minded to do some “reprioritisation” of spending (in other words, to make cuts to redistribute funds to cyclone relief) or jack up taxes to help pay for it, that would make his life easier.

There are a whole lot of cries for help for people hurt by the cyclone but everyone changes party when a tax rise is mentioned. Although cutting wasteful spending would be a better first step IMO. Maybe someone needs to look at how Waka Kotahi has been spending their money.

Problem that was pointed out to me the other day is that we have a lot more "spenders" than "savers" in society so you can't win in a democracy.

[Aaron]

Adrian's inflation hurting everybody with his cost of living crisis. Poorest bearing the brunt.

https://www.stuff.co.nz/business/mon...t-of-inflation

ANZ economist Finn Robinson said rising interest rates were a driver of the increase for higher-spending households.

Finn does not point out the double whammy of rising interest rates. Increased mortgage payments AND more importantly falling asset prices. Fighting inflation hurts the wealthy hardest whereas causing inflation hurts the poorest hardest. Makes me wonder why Adrian and other world central bankers have been creating an inflationary environment for the last 30 years.

Maybe Adrian should focus on price stability and return money to a "store of value" and a "means of exchange" rather than a tool to manipulate asset prices and create "wealth effects". Trickle down economics is b*llsh*t.

A -1% to +1% inflation target would make more sense. Mind you Adrian can't even keep inflation below 3%, which is too high anyway. Ask Arthur Grimes.

[Aaron]

Eleanor Catton is a writer so listening to her on economics might be like listening to me on any topic. A gigantic waste of time.

https://www.msn.com/en-nz/news/other...7bc942d5&ei=11

But confirmation bias is my thing. Huge Betrayal from Jacinda.

saying she couldn't see any evidence of "political change".

"Inequity is rising in New Zealand at a terrific rate," Catton told The Sydney Morning Herald.

She also said the COVID-19 pandemic caused wealthy people to make "a profit and people who struggled were struggling more".

In a separate interview with The Irish Times, Catton slated Ardern for earlier ruling out a capital gains tax - saying it was a "pretty huge betrayal of young people".

In Jacinda's defence she would not have won any election with a capital gains tax proposal. I think Labour won because Jacinda said all the same things John Key and National did 1/no capital gains tax 2/ no touching national super but Jacinda made an additional promise that National did not. 3/To print billions to save old people from covid with young people to pick up the tab. A massive overreaction in hindsight.

If Eleanor wants to see political change she needs to talk to the people of NZ as we are the ones who keep electing the same politicians.

I'll bet Adrian Orr is happy/relieved Eleanor is only blaming Jacinda for the wealth inequality and inflation (cost of living crisis).

[FTG]

Eleanor Catton is a writer so listening to her on economics might be like listening to me on any topic. A gigantic waste of time.

Yip, Eleanor Catton the REALLY good fiction writer. That says enough I would suggest.

[winner69]

Aaron …another Adrian speech

Got a bit carried away with buzzwords etc

Looking ahead, in striving to be exceptional in our work, we are working to act holistically across all aspects of the Reserve Bank’s work strands to draw data, gain insights, and most importantly manage trade-offs. Most of the goals of our work are mutually supportive, but we will meet trade- offs from time-to-time.

https://www.rbnz.govt.nz/-/media/pro...challenges.pdf

[Aaron]

Aaron …another Adrian speech

Got a bit carried away with buzzwords etc

Looking ahead, in striving to be exceptional in our work, we are working to act holistically across all aspects of the Reserve Bank’s work strands to draw data, gain insights, and most importantly manage trade-offs. Most of the goals of our work are mutually supportive, but we will meet trade- offs from time-to-time.

https://www.rbnz.govt.nz/-/media/pro...challenges.pdf

Nice to see he knows what his main priority is.

The first strand is our monetary policy work. Through our role as the supplier of a fiat currency – the New Zealand dollar – we aim to keep consumer price inflation low and stable through time. Our desire is to maintain the purchasing power of our currency through time, by moderating economic demand to broadly match the supply capacity of the New Zealand economy. In doing so we meet the necessary criteria of a trusted currency – it is seen as a unit of account, a means of exchange, and a store of value.

I wonder if this graph is correct.

https://tradingeconomics.com/new-zea...er%20of%201977.

Since Adrian was appointed Governor in 2018 M1 has doubled from roughly 70,000mill to 140,000mill. I wonder how many previous governors doubled the base money supply in 5 years. Does not sound like the actions of someone trying to protect the NZD as a unit of account, a means of exchange, and a store of value.

What about interest rates. He started at 1.75% in 2018 and took it down to .25 of a percent. Has any governor ever taken the OCR so low???

https://www.rbnz.govt.nz/monetary-po...licy-decisions

Admittedly this last year or so he has probably raised the OCR faster than any previous Governor but isn't that due to the cost of living crisis he helped create.

Pumped house prices so hard during covid that frightened first home buyers felt they had to take on a big mortgage or forever be excluded from owning a house. Now Adrian is hammering them with interest rate rises because his extreme actions have led inevitably to inflation.

Actions speak louder than words and Adrian has both, in spades but his words do not seem to be in line with his actions.

Disclaimer I only skim read the article and pick pieces that support my way of thinking without having a good understanding of anything.

[Aaron]

Govt policy driving up rents according to landlords.

https://www.nzherald.co.nz/nz/politi...F6QL6YLRB4DIE/

Buying property at ridiculously low yields and annually trying to pump up rents to make the investment sensible. Who knows maybe a number of factors. At least with inflation at 7% they can justify big rent rises without govt policy.

Maybe unsound monetary policy has inadvertently pushed asset prices too high and now rents are playing catch up.

[GTM 3442]

Out of idle curiosity, how do we all think Messrs Brash or Wheeler would have done?

[Aaron]

Out of idle curiosity, how do we all think Messrs Brash or Wheeler would have done?

Winner might have a view he did not seem to like Wheeler. I suspect they would drop interest rates and print money as well. It has been going on for 30 years. Although the graph does not back my statement the general trend has been down until recently. Now it is a question of how long it will stay up before going negative. Adrian did discuss negative rates awhile back, despite negative rates being nonsensical.

https://www.rbnz.govt.nz/monetary-po...licy-decisions