ADRIAN ORR our NEW RBNZ GOVERNOR

[Aaron]

He is doing the right thing.All the greedies want to keep inflation up,destroying the purchasing power of the citizens.
We had it right in the 90's.Is it to late to relearn that lesson?

David will need to be careful the people who funded his campaign will not be happy with this. Although probably easy to do I do not see it as likely to happen as Luxon is the man for Landlords and landlords won't like the idea that the RBNZ only pushes up their house prices and removes their debt at 1-2% rather than 1-3% per annum.

[Aaron]

https://www.nzherald.co.nz/business/...ODOIUOVL33NPI/

The regulator recognises the system’s vulnerabilities stem from mortgage holders being very exposed to high interest rates.
This is because elevated house prices mean Kiwi borrowers are particularly highly indebted by international standards.

I wonder if excessively low interest rates and Funding For Lending produced a house price boom and FOMO. Who might be responsible for that?

Also they discuss the stock market as part of the financial system more specifically share price performance. I guess we know who has the risk takers backs. The RBNZ and the depositors they continually steal from through inflation.

[Aaron]

An article confirming what we already know. Without being born into the right family you will always be a renter rather than a home owner.

https://www.msn.com/en-nz/news/natio...00fcefd8&ei=14

Why this would be news is what is surprising. We have a central bank whose mandate is to drive prices higher by 1-3% every year. Look at what the RBNZ did to house prices over the pandemic with historically low interest rates and Funding For Lending 20% plus rise in house prices.

We are all currently awaiting the RBNZ's intervention to support asset prices by debasing the currency first home buyers are trying to save in. Although at 6% inflation they don't need to do much.

The RBNZ has said they are keeping an eye on house and stock market levels and will support the asset owners if required.

Currently they are doing very little as 6% inflation eats away at first home buyers savings and asset owners debt much as it should be in a two class society.

I hope we aren't reading articles in a couple of years pretending surprise that the wealth divide is increasing and social mobility is decreasing.

[Aaron]

Having got inflation up and now down with house prices at "sustainable" levels, Adrian is printing money to buy foreign currency as not only does he know what the price of capital should be at any one time he also knows exactly where the NZ dollar should sit in relation to other currencies.

Aren't we lucky to have someone who knows better than a free market.

https://www.interest.co.nz/currencie...cantly-westpac

[winner69]

Having got inflation up and now down with house prices at "sustainable" levels, Adrian is printing money to buy foreign currency as not only does he know what the price of capital should be at any one time he also knows exactly where the NZ dollar should sit in relation to other currencies.

Aren't we lucky to have someone who knows better than a free market.

https://www.interest.co.nz/currencie...cantly-westpac

In the podcast Eckhold also talks about how and where the RBNZ holds its foreign currency reserves ….I can’t be bothered listening to the podcast so where does Adrian hold the reserves …in a mattress at work or in a special vault in the tearoom?

[Aaron]

In the podcast Eckhold also talks about how and where the RBNZ holds its foreign currency reserves ….I can’t be bothered listening to the podcast so where does Adrian hold the reserves …in a mattress at work or in a special vault in the tearoom?

On a computer somewhere like all the other currencies.

Will it be gold in a vault under 2 The Terrace Wellington? I doubt it, Adrian does not seem like someone who wants a stable currency.

Hopefully he will be regretting not buying a stable currency in a few year's time and my gold speculation will have helped me retain some of my wealth after he f*cks the NZ dollar with excessive money printing. (Maybe that is why he sees a need to interfere in the exchange rate, money printing leads to more meddling by our world improver Adrian)

I guess if capital starts leaving the country Adrian will step in to ensure wealthy foreign investors don't suffer losses due to a terrible exchange rate. He is good like that. Productive farmers will be sacrificed to ensure the townies overseas holidays do not get too expensive and foreign investors can get their money out without loss.

Mind you with Luxon's foreigners house buying policy keeping the exchange rate high might prevent a Chinese takeover of the high end Auckland housing market, or has that already happened? Who knows maybe Phil Twyford?

Central planning historically does not always work I am unsure if it will again. Mind you if Adrian wanted ridiculously high house prices he has certainly achieved that. Whether it is good for NZ and has made NZ a better place is another debate but I am 100% positive that Adrian and the MPC are much better off under his stewardship.

[Aaron]

Paul "Just accept you will be poorer" Conway from the RBNZ says don't follow the USA's lead regarding interest rates (bad news for Alokdhir).

Why not?? the RBNZ has been doing the exact same ridiculous, irresponsible things the Federal Reserve and other central banks have been doing for years now.

https://www.thepost.co.nz/business/3...odule#cxrecs_s

I thought the link might be interesting to visit in a year or two to see how accurate Paul's forecasts were.

Interesting, suppressing wage inflation with massive immigration might work out well as it also drives up rents (but not so much CPI). NZ's owners should be giving Adrian and Paul a big present this Christmas as they continue to screw the workers and renters.

[Aaron]

Tim Hazeldine an Auckland University emeritus professor of economics (so he is very smart) says that the RBNZ is doing the wrong thing trying to stop inflation by raising interest rates and stopping the printing of money.

He says the inflation is caused by covid related "supply shocks". He did not blame the Ukraine war as Adrian has in the past but I guess with the benefit of hindsight that would look foolish. Tim says inflation will sort itself out if large corporations stop increasing prices and the supply chains fix themselves.

I am not sure what he is suggesting but as he is an economist I guess he wants zirp and money printing so that everyone has a job and everything is awesome again. Unfortunately, Tim I think if you trade your time for something that is being devalued what is the point in trading time for money. Especially if you can borrow it for nothing off a bank and invest it in housing or bitcoin, why would you work. I guess if your salary is in the triple digits his ideas might seem more sensible, his ideas would also protect his housing and stock portfolios as well I suppose. From Tim's angle he might make sense but from my view he comes across as more stupid and weaker than Adrian on the issue of inflation and overstimulating the economy.

https://www.thepost.co.nz/a/nz-news/...tm_id=mh_stuff

It appears that the supply chains are fixing themselves at the same time central banks raised interest rates and stopped printing massive amounts of money.

Tim is worried about the working man as unemployment is his bigger concern. I am not sure but perhaps Tim could confirm whether inflation is much like a regressive tax in which case his stated concerns about the average working man and interest rates would appear to be misguided.

Tim talks about "massive" interest rate hikes. I am no historian Tim but historically would todays interest rates be closer to the average or were the last few years more normal?

[Aaron]

Inflation down, rates cuts ahead.

https://www.cnbc.com/2023/12/13/fed-...mber-2023.html

Last chance to grab some yield before we go back to interest rate suppression and outright theft from savers.

You can be sure the central banks worked out that the covid lolly scramble caused the inflation and we can be guaranteed low interest rates and cheap money will only be funneled through the banks in the future, to the right people, so from now on so we can get back to asset inflation without it affecting the CPI.

Don't know about energy but it would appear it is a large part of the reduction in inflation in the US if I read this right.

https://www.bls.gov/cpi/

I thought the move to renewable energy was going to be expensive. Maybe not or maybe not actually happening.

[Aaron]

Only focus on price stability for Adrian now.

https://www.msn.com/en-nz/news/other...51ae1c9b2&ei=9

Finance Minister Nicola Willis said the new mandate had led to a lack of focus on inflation from the bank.

Labour’s finance spokesman Grant Robertson, who added the second mandate when he was Finance Minister, told Parliament that it was a “sad indictment” on the new Government that reverting to a single mandate was the first piece of legislation put forward.

I am a left leaning bleeding hearted liberal but tend to agree with Nicola on this one. Polite way to say Adrian f*cked up. Can't be all things to all people.

I wonder what the "sad indictment" that Grant Robertson talks about is?

The fair pay agreement sounded like a good idea although I do not know enough to comment. One of the reasons put forward why Aussie's wages are higher than NZ is that they have stronger unions.