ADRIAN ORR our NEW RBNZ GOVERNOR

[Aaron]

Christian Hawkesby of the RBNZ reckons inflation might be kept up by cyclone Gabriele. I guess that means supply chains and Putin are no longer responsible for inflation.

https://www.stuff.co.nz/business/131...lation-figures

Is Christian an idiot or just being disingenuous to divert blame from the RBNZ as they have been doing all along. Maybe a bit of both.

the impact of Cyclone Gabrielle that saw some consumers having to rush out to replace flood-damaged household items could prove a wildcard.

What about 30,000 immigrants setting up new households? I guess that is over a year rather than all at once.

[Aaron]

Maybe a step up from my blathering as he discusses some figures but it looks like Australia has the same answer to all their problems.

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

The current Government is driving migration to all time highs, and this will put more pressure on the already unbalanced housing market. Big Australia leads to pressure on infrastructure, and the need for more homes to be built, but of course it may well also put a floor on potential home price falls. As a result, it is likely this Government will be responsible for a further spiral down in housing affordability, and ever rising rents. Migration should be slowed.

[Aaron]

Stating the obvious but it may mean more coming from intelligent people.

https://www.interest.co.nz/bonds/120...half-inflation

Grant Robertson and Adrian Orr both largely responsible for the current costs of living crisis (inflation). Both of them spinless weasels who owe the poorer half of NZ an apology for being weak and not sticking to their mandates.

The top 10-20% should be inviting them to their cocktail parties and showering them in gifts as it was asset prices they sought to protect and inflate with ridiculously loose monetary policy.

Good to see X-men pointing out in the retirement village thread what we all know. Flooding NZ with immigrants is not due to labour shortages but to stop the decline of house prices and stop wages from rising to match asset price inflation.

[Aaron]

Inflation out today, looking at the headlines.

NZ Herald Liam Dann

Inflation rate falls big time in surprise result

Stuff Tom Pullar-Strecker

'Pleasant surprise' as annual inflation drops to 6.7%
Annual inflation has plummeted to 6.7%

Am I misreading things inflation has come in lower than economists expectations about 7% lower ((7.2 - 6.7)/7.2). That is plummeting and a big time fall????

Isn't 6.7% still more than 100% above the top of the target range for Adrian? Prices are still rising at 6.7% a year. I guess it is heading in the right direction, and I see winner predicts it is all over on another thread. I wonder if Alohkdir is the alias for Liam or Tom desperate for a pivot and good times again.

Christine Lagarde who has been around through all this monetary policy disaster from way back, came out with some interesting thoughts.

The second-most important central banker in the world behind Powell stated: we are seeing fragmentation into competing geopolitical blocs, which is structurally inflationary; rival FX architecture is emerging; trade invoicing and swap lines are key in that shift; Western fiscal policy must be expansionary on the supply side and into defence; monetary policy needs to act like it did in the 80s; yet it must also work with fiscal policy for “strategic goals” – and Lagarde added later in the day that once the 2% CPI target has been met, “discussions” can be had on changing it

Interesting she wants to raise the inflation target and funnel more into war. Sounds like history repeating to me, debase the currency sh*t on the bottom 80% then go to war to divert blame.

Lagarde sounds dangerous to me, but money printing and inflation is all she knows and the only thing that gets inflation rising faster than money printing is war but that might be because they print money to fund war.

[dobby41]

Isn't 6.7% still more than 100% above the top of the target range for Adrian? Prices are still rising at 6.7% a year. I guess it is heading in the right direction, and I see winner predicts it is all over on another thread. I wonder if Alohkdir is the alias for Liam or Tom desperate for a pivot and good times again.

It's all a matter of degrees, isn't it?
As you say, it is still well above the top of the RBNZ range so don't expect them to take their foot off the brake.
6.7% v's 7.2% is big when it is a surprise, especially with the post-cyclone vege issues we have had.

[JBmurc]

NZ Poised for a Credit Rating downgrade?

As reported earlier in this thread New Zealand has a burgeoning balance of payments deficit.

For the year ending December 2022, the deficit was $33.9 billion or 8.9% of GDP.

This was $12.7 billion wider than in the year ended 31 December 2021 (6.0 percent of GDP), according to figures released by Stats NZ. (Source: https://www.stats.govt.nz/news/annua...o-33-8-billion)

Grimly, the IMF observed last week, that as a proportion of GDP, the deficit was the largest posted by any developed economy, bar Greece, and forecast that while it would fall to 7.2% of GDP next year and 5.3% in 2028, only Cyprus would then be faring worse.

Ratings agency Standard & Poors has warned that New Zealand’s credit rating could be reduced if the current account deficit does not improve and government interest costs rise substantially to more than 10% of revenues.

[Aaron]

I guess the debate should be if affordable housing is a crisis are high house prices something to strive for.

Chippy obviously does not see it as a crisis but something to aspire to.

Stuart Nash said this two years ago.

we can’t afford to simply turn on the tap to the previous immigration settings. That path is a continuation of pressures on our infrastructure, like transport, accommodation, and downward pressure on wages."

Stuart's gone and should be with even a whiff of corruption MPs need to go.

Now we are at record inflows. But is it really a good thing?

https://www.interest.co.nz/personal-...g-crisis-david

[Aaron]

RBNZ controlling the price of houses through LVRs and bank lending. Prices must have fallen too far.

https://www.msn.com/en-nz/news/natio...094fe8f8&ei=12

I await the outrage in the media from Capitalists and Libertarians no doubt outraged by this central planning that prevents the free market going where it wants.

Another central bank economist pointing out that we are all (wage slaves not asset owners) poorer due to central bank actions. Much like RBNZ's Paul Conway, Huw Pill is telling workers to stop asking for pay increases as trickle down economics does not work that way. Just accept that you are poorer.

After central banks push up asset prices to create the wealth effect, the wealth will trickle down some other way, although we are still waiting for this since the 1980-90s. The direction of wealth and income inequality over the last few decades would indicate a problem with the trickle down theory for a majority of people anyway, although a few people might be quite happy with the result.

https://www.theguardian.com/business...land-economist

Britons ‘need to accept’ they’re poorer, says Bank of England economist
Chief economist Huw Pill says workers and firms should stop trying to pass on rising costs by hiking prices or demanding better wages

[JBmurc]

yet another NZ TRADE deficit-- $1.2Bill .. so much for being an export nation ...

[Aaron]

Zero hedge can be as depressing as reading the election threads on share trader but I thought this was interesting.

0% interest rates in the US before too long???

https://www.zerohedge.com/markets/ta...essary-problem