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  1. #61
    Speedy Az winner69's Avatar
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    MPS nxt week. It will be interesting to see if it’s Adrian’s show or will the new Monetary Policy Committee have some input?

    An OCR cut looks on the card next week .....but is this laying the foundations for what happened when the then Governor went on a misguided pro growth strategy only resulting in a series of rate hikes and a recession?

    I reckon RBNZ not giving likely wage inflation sufficient consideration in their thinking

    Only time to tell.
    Last edited by winner69; 04-05-2019 at 12:48 PM.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  2. #62
    Speedy Az winner69's Avatar
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    Well, he did cut and says more to come

    Good for many now but I fear we will look back in 2021 and say why did he do it.

    Must have a different agenda from than just caring for monetary policy.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  3. #63
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    Quote Originally Posted by winner69 View Post
    Well, he did cut and says more to come

    Good for many now but I fear we will look back in 2021 and say why did he do it.

    Must have a different agenda from than just caring for monetary policy.
    The Reserve Bank manages monetary policy to maintain price stability, promotes the maintenance of a sound and efficient financial system, and supplies New Zealand banknotes and coins.

    1/Price stability by my definition is not pushing the price of everything up by 1-3% per year. Worse they are pushing asset prices up way ahead of general inflation and the price of other goods.

    2/Promote the maintenance of a sound and efficient financial system. Is that why the NZ taxpayer provided a guarantee to the businesses in the financial sector in 2008/09. The rate cut is to protect house prices which is the security underpinning the NZ financial system. I would suggest the Reserve Bank is beholden to the financial services industry.

    3/Supplies NZ bank notes and coins.

    1 out of 3 ain't bad.

    Stealing off people who save and invest for the benefit of spendthrifts and gamblers seems wrong to me but what do I know.

  4. #64
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    It always seems to be a difficult decision to make for a Guvnor, I mean committee, i.e to make a change to the rate rather than just leave it alone.
    Wheeler was superbly boring. But Orr probably wants to make his mark and 'show off' just a little, by pre-empting, or 'picking perfectly' (depending on how it all goes) the time to cut. Time will only tell, but Orr has done something! I have actually read the speech yet though I'm very curious about how it will be woven into the world of Tane Mahuta

    I reckon it should be called an Orr Put!
    Last edited by peat; 08-05-2019 at 03:14 PM.
    For clarity, nothing I say is advice....

  5. #65
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    Quote Originally Posted by Aaron View Post
    … but what do I know.
    I think you know that despite how ‘wrong’ it all is (all the things you’ve talked about that is wrong and will blow up one day), the great reckoning isn’t working out for you so well and you’re more afraid of missing the reckoning than your fear of missing the wealth creation that abject dysfunction is presenting to you.

  6. #66
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    [QUOTE2/Promote the maintenance of a sound and efficient financial system. Is that why the NZ taxpayer provided a guarantee to the businesses in the financial sector in 2008/09. The rate cut is to protect house prices which is the security underpinning the NZ financial system. I would suggest the Reserve Bank is beholden to the financial services industry.
    ][/QUOTE]

    There was a good reason in 2008/9 to provide that guarantee - charged for, admittedly cheaply as it turned out - at a time when every other comparable Western country had a similar deposit guarantee in place. Not to do so would have risked a massive capital outflow from the NZ financial system/economy. Now that would have been "bad".

  7. #67
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    Quote Originally Posted by macduffy View Post
    There was a good reason in 2008/9 to provide that guarantee - charged for, admittedly cheaply as it turned out - at a time when every other comparable Western country had a similar deposit guarantee in place. Not to do so would have risked a massive capital outflow from the NZ financial system/economy. Now that would have been "bad".
    Yes it would have been bad, really really bad, the Gummint did what it thought it had to do at the time, perhaps a bit knee jerk and awkward, but saved a ton of folks who would've otherwise been right royally shafted (although disparately lots were shafted that had no choice or say in the matter).

    Gummint never gets it quite right, damned if they do, damned if they don't and they suffer the long tail of derision from perfect hindsight with 2020 vision of the perfect present. Despite all that there is no real vision for what might unfold in the future, or policy to avoid, mitigate or minimise the damage from it. History might not repeat as they say, but it does rhyme.

  8. #68
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    Quote Originally Posted by Baa_Baa View Post
    I think you know that despite how ‘wrong’ it all is (all the things you’ve talked about that is wrong and will blow up one day), the great reckoning isn’t working out for you so well and you’re more afraid of missing the reckoning than your fear of missing the wealth creation that abject dysfunction is presenting to you.
    Not sure I entirely understand what you are saying but the thought of missing out on a large fall in asset values has meant watching a lot of wealth creation missed for me and being endlessly frustrated by Central banks ability to keep asset prices inflated at what I think might eventually be at the expense of "the maintenance of a sound and efficient financial system". Unless a "sound and efficient financial system" involves constantly dropping interest rates and printing money to keep asset prices elevated and increasing debt levels.

    It would be interesting to know how many on the reserve bank committee are committed to a leveraged investment approach or how many still have a mortgage or have recently helped family into an overpriced house lately.
    Last edited by Aaron; 09-05-2019 at 07:54 AM.

  9. #69
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    Quote Originally Posted by macduffy View Post
    [QUOTE2/Promote the maintenance of a sound and efficient financial system. Is that why the NZ taxpayer provided a guarantee to the businesses in the financial sector in 2008/09. The rate cut is to protect house prices which is the security underpinning the NZ financial system. I would suggest the Reserve Bank is beholden to the financial services industry.
    ]
    There was a good reason in 2008/9 to provide that guarantee - charged for, admittedly cheaply as it turned out - at a time when every other comparable Western country had a similar deposit guarantee in place. Not to do so would have risked a massive capital outflow from the NZ financial system/economy. Now that would have been "bad".[/QUOTE]

    What interest rates in NZ would have had to rise to attract capital back and NZ house price growth would have been stunted by higher interest rates??
    Last edited by Aaron; 09-05-2019 at 07:54 AM.

  10. #70
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    Quote Originally Posted by macduffy View Post
    There was a good reason in 2008/9 to provide that guarantee - charged for, admittedly cheaply as it turned out - at a time when every other comparable Western country had a similar deposit guarantee in place. Not to do so would have risked a massive capital outflow from the NZ financial system/economy. Now that would have been "bad".
    Thinking about it a bit further it might not have just been outflows from NZ but a good number of people in NZ were considering stashing some cash in the mattress which may have created a run on the banks.

    We are on a well trod path other countries have already taken. There is already speculation regarding the next steps.

    https://www.stuff.co.nz/business/opi...-going-to-zero

    I am seriously looking at buying land at a crappy yield just so I have some borrowings and no money in the bank.
    Last edited by Aaron; 09-05-2019 at 08:09 AM.

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