ADRIAN ORR our NEW RBNZ GOVERNOR

[TeslaGod]

More on the runaway inflation here -

https://www.nzherald.co.nz/business/...7E5QETLN2KWVQ/

PlaceMakers' customers get price rise warning up to 15%: freight, raw material costs cited

12 Aug, 2021 05:18 PM

Fletcher Building's national retail chain PlaceMakers has warned customers of price rises across many different product categories, some going up 15 per cent, and Bunnings is suffering some product shortages.

There's a big wide world outside little old New Zealand

Below are 2 very big players in the world.

American CPI inflation for July was reported overnight at 5.4%, the same as for June. Components of their core inflation (that is, excluding food or petrol) slipped slightly to +4.3% for the year to July, raising the prospect that it may have peaked

China's new yuan loans in July have stunned analysts by coming in at a very weak level, confirming the overall China economic slowdown

But hey Logen Ninefingers according to economist you will get your wish with an OCR increase.

Which will eventually be very painful down the line.

It's like telling me house prices prices have skyrocketed yesterday.

You need to know what is going to happen not what we already know.

I prepared years in advance for the current economic climate.

[TeslaGod]

Try to look outside the New Zealand media fish bowl.

China originated with the virus.

China was the first to lock down.

China was the first to (eliminate) the virus.

China was the first to reopen there economy.

Chinese inflation rate peaked in January 2020 at about 5.4%.

China's annual inflation rate fell to 1% in July 2021.They did NOT raise there OCR in all that time.

There economy is slowing and there is talk in there local media of possible OCR cuts.

Although the Fed may stop bond purchases it's unlikely they will increase there OCR.

[Aaron]

Long term deflationary force's such as

global sourcing

Price transparency

Automation

Demographics like retirees leaving the work force and contribute to deflation over time.These force's have not gone away and are only increasing.

The short term inflation we are experiencing will pass.

A rise in the OCR (which almost seems certain) will most definitely be reversed in a couple of years.

Most likely leading to negative interest rates down the line resulting in

Further asset price inflation

Wage's not being able to keep up

A worthless kiwi dollar

A shrewd investor should always plan ahead.

I agree with what you say. But rather than having further asset price inflation (which isn't part of the CPI) with wages not able to keep up why not raise interest rates and slow or decrease asset price inflation, bankrupt poor or overleveraged investments, create an opportunity for new investors rather than protecting and exacerbating what we have now. Zombie companies should not exist with normal interest rates.

We have $1.7Billion of evil tax money money going into accommodation supplements annually because wages are not keeping up with rents.

Over a decade of unconventional monetary policy and the only solution is more of the same, except that it needs to be more extreme.

I have to agree that this is the most likely outcome with lame ducks like Adrian Orr and Jerome Powell but it is hard to see how it is the best option long term unless you are already wealthy.

[Aaron]

An article pointing out why reserve bank governors don't give a s*it about house price rises.

https://www.nzherald.co.nz/business/...3PHBVBRTSXGGY/

Behind the paywall, so in summary house prices don't form part of the CPI so why should they care. Not their problem even if they are the cause of the problem

[TeslaGod]

I agree with what you say. But rather than having further asset price inflation (which isn't part of the CPI) with wages not able to keep up why not raise interest rates and slow or decrease asset price inflation, bankrupt poor or overleveraged investments, create an opportunity for new investors rather than protecting and exacerbating what we have now. Zombie companies should not exist with normal interest rates.

We have $1.7Billion of evil tax money money going into accommodation supplements annually because wages are not keeping up with rents.

Over a decade of unconventional monetary policy and the only solution is more of the same, except that it needs to be more extreme.

I have to agree that this is the most likely outcome with lame ducks like Adrian Orr and Jerome Powell but it is hard to see how it is the best option long term unless you are already wealthy.

The Fed has to protect Wall Street

The RBNZ has to protect the NZ housing market.

If either of those crash, house prices or the cost of Amazon stock don't really matter because it's only the wealthy who will be able to purchase the asset.

You can't buy bargains if you have lost your jobs and there is no money in the banking system.

[winner69]

Hell’s $13 pizzas went up to $16.66 yesterday

Devastating

Friday 13th special

[TeslaGod]

Hell’s $13 pizzas went up to $16.66 yesterday

Devastating

Friday 13th special

I recommend studying the history of money and the devaluation of the fiat currency to have an understanding of why you need more currency to purchase the delicious pizza.

[Aaron]

The Fed has to protect Wall Street

The RBNZ has to protect the NZ housing market.

If either of those crash, house prices or the cost of Amazon stock don't really matter because it's only the wealthy who will be able to purchase the asset.

You can't buy bargains if you have lost your jobs and there is no money in the banking system.

A good argument for doing nothing. Their mandate is not to protect wall street or the NZ housing market, but it is hard to see their actions in any other light.

[Aaron]

Hell’s $13 pizzas went up to $16.66 yesterday

Devastating

Friday 13th special

Imagine if everything else starts rising as fast as house prices, you might get a few criticising central banks then.

[TeslaGod]

A good argument for doing nothing. Their mandate is not to protect wall street or the NZ housing market, but it is hard to see their actions in any other light.

Trust me you would rather be poor or middle class in a wealthy country than Wealthy in a developing country due to a breakdown of the financial system from a war or pandemic.