ADRIAN ORR our NEW RBNZ GOVERNOR

[Aaron]

Ongoing discussion about economists and central bankers that provides confirmation bias to my views.

https://www.zerohedge.com/markets/se...tes-criminally

If you are interested, won't change anything though.

How much faith you have in articles from Zero Hedge is over to you.

Is this really just a supply issue?
https://www.msn.com/en-nz/money/news...?ocid=msedgntp

Prior to lockdown a 10% decrease in house prices was predicted. Adrian Orr in his wisdom dropped interest rates and printed money to give to the banks to encourage lending. More than even the banks wanted by the sound of it. House prices shot up 20%.
Politicians express concern about housing affordability and although Adrian has calmed down the money printing, interest rates have not moved.

Adrian has explained asset prices are not in his mandate so he doesn't care, but what are govt doing? Tinkering with tax changes making life unnecessarily complicated while ignoring the obvious. Unfortunately not a single politician has spoken out about this ongoing travesty. (The greens may have but I don't listen to them much)

It is nice to see in the first article someone reminding us that economics is not a science.

[TeslaGod]

Arron has caught us out!

What are you planning on doing about it?

Shake your angry fist's in the air and stay broke...or join the club.

[Aaron]

Is it really just a supply issue??

Between August 2019 and August 2021 the Real Estate Institute of New Zealand’s national median selling price increased from $415,000 to $620,000. Over the same period the average of the two year fixed mortgage rates charged by the major banks declined from 3.70% to 2.82%.

And it's a fairly safe bet that the landlord’s rent would have increased over that period as well.

[Aaron]

I might have to actually make an effort to read some stuff and understand what the reserve bank does. Mostly looks like a discussion about cash and digital currency, rather than central bank support for asset owners.

https://www.interest.co.nz/currencie...s-stable-value

[JBmurc]

https://www.msn.com/en-us/news/polit...AOXLcU?ocid=st

Minting the coin is not new to Tlaib, either. She suggested in 2020 that the Treasury direct the US Mint to issue two $1 trillion platinum coins that would then be distributed to every American in the form of debit cards with $2,000 preloaded onto them to help people recover from the pandemic without incurring government debt.

Insider's Andy Kiersz and Joseph Zeballos-Roig reported on the role minting the coin would play in avoiding a debt-ceiling standoff, highlighting the catastrophic effect a debt default could have on the US economy. Treasury Secretary Janet Yellen said allowing a default would delay Social Security payments and increase unemployment, but minting the coin would avoid that by bypassing Congress.

But minting the coin has yet to be adopted as a viable option by Democratic leadership, and the party is working against an October 18 deadline to raise the debt limit before the US goes into debt default.

[TeslaGod]

I might have to actually make an effort to read some stuff and understand what the reserve bank does. Mostly looks like a discussion about cash and digital currency, rather than central bank support for asset owners.

https://www.interest.co.nz/currencie...s-stable-value

"The so-called stablecoins are like a type of cryptocurrency, but backed with assets of equal value fiat currency. "

So long as you own quality asset's, a CBDC is just another way of growing new debt because let's be honest... fiat currency is worthless .

(I have access to so much of it I see it as worthless)

[TeslaGod]

"The so-called stablecoins are like a type of cryptocurrency, but backed with assets of equal value fiat currency. "

So long as you own quality asset's, a CBDC is just another way of growing new debt because let's be honest... fiat currency is worthless .

(I have access to so much of it I see it as worthless)

And because when interest rates go negative and trust me they will, you can only go negative so far.

Enter CBDC.

[FTG]

And because when interest rates go negative and trust me they will, you can only go negative so far.

Enter CBDC.

And how far are you suggesting that can be TG? And what specifically stops them going further negative than that supposed limit?

[Aaron]

"The so-called stablecoins are like a type of cryptocurrency, but backed with assets of equal value fiat currency. "

So long as you own quality asset's, a CBDC is just another way of growing new debt because let's be honest... fiat currency is worthless .

(I have access to so much of it I see it as worthless)

Whether it is fiat, crypto or gold its value lies in the faith people have in it as a store of value and medium of exchange. The crypto debate just highlights how worthless and absurd fiat currency is if central banks have no restraint. Crypto and gold are also worthless if people lose faith in them.

I think you might be right about interest rates, they are already significantly negative in real terms compared to real estate. There is talk of interest rate increases but it is hard to believe they will be significant before turning down again and going negative in the next crisis/excuse to inflate away debt and enrich the wealthy.

Real estate and businesses that can provide cashflow and/or growth above inflation are the way to go and debt is actually an asset in this environment whereas cash is a liability. By that I mean you can buy less with your cash after interest received each year so you are losing money in real terms, but if you have debt it gets easier to repay each year and your assets provide a store of wealth. All because central bankers don't know what their job is. Central banks were split off from govt as politicians could not be trusted with the money printers. Central bankers are proving just as reckless.

It ends badly if history is any guide but maybe I should try being glass half full. How about the fact people are making more money sitting on their arse owning a home doing sweet fa than if you went to work each day on an average salary and that is before charging rent, also not paying any tax on the capital gain is just salt in the wound. Sounds to good to be true, but it is true.

In some ways it is a continuation of the boomers ripping off the next generation. They will retire make more just owning their houses and investment properties without even having tenants, while they rely on the tax on the labour of the next generations to fund their national superannuation and they pass on their tax free wealth to their kids with no need to contribute to society.

Crazy but true.

[TeslaGod]

And how far are you suggesting that can be TG? And what specifically stops them going further negative than that supposed limit?

Negative 2% to 3% max because people won't deposit cash into retail bank's, you would be charged for depositing your salary/and savings into a bank account.

Following the decreasing trend line of the OCR over the last 40 years, this should happen sometime this decade or early 2030 depending on how the world economy play's out.

That's when they will replace the kiwi.

Word to the wise, you might want to start growing your asset base.

Time's running out.