ADRIAN ORR our NEW RBNZ GOVERNOR

[TeslaGod]

The bank pays interest/settlement /deposit overnight rate based on the OCR.

In real terms minus inflation/tax /fees the OCR rate is several points negative .

Most people don't understand the second you deposit cash into your bank account/savings or not it gets lent back out ~10 time's it's worth/ it also goes back into Wall Street to buy TSLA stock.

[dobby41]

The bank pays interest/settlement /deposit overnight rate based on the OCR.

In real terms minus inflation/tax /fees the OCR rate is several points negative .

Doesn't change what I said one bit.

[TeslaGod]

Most people don't understand the second you deposit cash into your bank account/savings or not it gets lent back out ~10 time's it's worth/ it also goes back into Wall Street to buy TSLA stock.

My real estate portfolio is up 40%

My share portfolio is up 50%

ANZ profit is up 40%

You guys are getting SreweD.

(The Fed increased money supply 40%)

[Aaron]

Well, there's a silly thought - comparing the OCR to house price growth rate.
It's the OCR, not some term deposit!

As you know I am silly.

I guess when you talk about "real" as opposed to "nominal" rates you are accounting for inflation which is measured by the CPI. What I was foolishly suggesting was that as asset prices don't form part of the CPI negative real rates would be much higher if you did take them into consideration. Maybe I am misunderstanding something.

[peat]

RBNZ tried to bury research contradicting climate change fears

Paywalled https://businessdesk.co.nz/article/f...e-change-fears


RBNZ's Orr not even listening to his own organisations research
After an OIA request where a 2018 research paper wasnt provided and he was billed because it 'took a long time...'



Harrison noted: "As the documents had already been identified, the 2018 paper would have been fresh in their minds and the cost of compliance should have been trivial. It seems obvious that the real reason the discussion paper was withheld was that it did not support the governor's claim that climate change presented a systemic risk. Indeed, it more or less said that it didn't," he said.

The RBNZ "deliberately hid their report for months and misled people seeking it under the OIA to promote its new, more catastrophist narrative", he claims.

[Aaron]

RBNZ tried to bury research contradicting climate change fears

It seems odd to be concerned about climate change on one hand, while juicing house prices to get the "wealth effect" so that people will go out and consume more.

Maybe the plan is to push house prices so high and with inflation making life hard, young people will stop having kids. Although the immigration spigot can be turned on at any time. The productivity commissioner says we need to spend more on infrastructure so we can open up immigration again. So no slowdown in population growth.

Debating climate change seems pointless when the basis for society is more people consuming more stuff.

[Aaron]

Orr can’t be any worse than Wheeler even though he has ‘endorsed’ Wheeler’s recent actions and outlook.

The RB is fueling an inflation problem that will require numerous hikes in the future resulting in an inevitable recession in 2019/2020

They seem blindfolded with some idealistic views at the moment. I hope Orr can see what might happen and start acting now before it’s too hard and all too late

Good luck to him ....seems a nice enough guy.

Prescient view from April 2018 although maybe a bit early.

Others joining in today in the herald.

https://www.nzherald.co.nz/business/...UNVSSSLLC5LBE/

To quote Steven Joyce, although I don't know much about him other than he seemed reasonable and level headed when in power and took a dildo to the face like a champion.

Reserve Bank governor Adrian Orr is not doing himself any favours with his revisionist approach to the house price issue. Not so long ago, he was saying increasing asset prices, including house prices, were a feature and not a bug in the bank's policy response to the pandemic because they make consumers feel wealthier and spend more. This week he suggested his bank's policy settings have only a minor impact on house prices.
He actually has quite a bit to answer for. The bank has been consistently under-forecasting increases in inflation and house prices, and overforecasting unemployment. While no one is expecting perfection in these times, the ongoing nature of the forecasting issues is concerning.

Tony Alexander also a well known commentator on the housing market.

https://www.oneroof.co.nz/news/40472

The Reserve Bank governor recently said that his organisation has played only a small part in the 35% jump in average NZ house prices since just before the country went into lockdown last year. I disagree. Record low interest rates have been the main driver of soaring house prices and by not taking away excessively loose monetary conditions from early this year the Reserve Bank has denied home ownership to thousands of young Kiwis and forced others to take on board eye-watering debt.

The governor was right in his claim that lack of dwelling supply growth has been a factor in causing house prices to rise strongly relative to household incomes. But only over the long term and not the past year-and-a-half to two years.


I was starting to feel like a fringe loopy but if winner69, Steven Joyce and Tony Alexander (uses the word negligence in the article heading) can see it, how does Adrian manage to keep his job. I would guess that there is no economist out there to replace him as no economist would be willing to suggest raising interest rates and govts practicing austerity. Also there would not be a majority of voters agreeing with this.

So I guess more of the same until it is more obvious that it is no longer working to the benefit of the majority of the people.

Mohamed El Erian also in this mornings herald as well with an opinion piece but criticizing the Federal Reserve for much the same thing.

[Aaron]

If inflation is always and everywhere a monetary phenomenon, what is Janet Yellen talking about.

https://www.nzherald.co.nz/business/...VSTCSG7SHO2FY/

Covid is responsible for inflation in Amercia??? I though excessive money printing may have played a "bit part". Is Janet not also culpable as head of the Federal Reserve with ultra loose policy and now as treasury secretary with trillion dollar deficits. Are they deluded or are they lying?

It beggars belief but central bankers will need to divert blame because if people catch on they will be and should be very angry.

Meanwhile back in NZ.
https://www.nzherald.co.nz/business/...E3LG6IA5VT464/

Ha's is the second major departure to be announced by the Reserve Bank in recent months.
Long-serving Deputy Governor and General Manager Financial Stability Geoff Bascand announced in September that he will leave the RBNZ in January.

They don't say why they are leaving which would be good to know.

[peat]

From Reddell today

the losses the Reserve Bank has run up on its Large Scale Asset Purchase programme have now reached $5.7 billion

these are really large losses, which were quite avoidable.

https://wp.me/p5KFCd-haD

[Aaron]

From Reddell today

the losses the Reserve Bank has run up on its Large Scale Asset Purchase programme have now reached $5.7 billion

these are really large losses, which were quite avoidable.

https://wp.me/p5KFCd-haD

I tried reading it but a bit over my head. Unrealized losses on bonds wouldn't matter that much if you were holding to maturity would it?