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28-01-2022, 10:37 AM
#701
Apparently letting the bubbles pop will create something worse than Weimar Germany, Zimbabwe, Venezuela or Japan. Think depression era USA.
Japan is probably the desired result but I wonder if their 1989 stock and housing crash will happen here.
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28-01-2022, 11:14 AM
#702
Originally Posted by Logen Ninefingers
Asset bubbles are dangerous. They need to be defended by further central bank action, or they pop. For more than a decade, central banks have continued to inflate these asset bubbles. They say water finds its level. You cannot inflate assets far above their true values indefinietly. We are soon to pay the price for what the central banks have done.
What is dangerous is mass unemployment, along with the social unrest or even revolution that may result.
I think they need more tools rather than only a loan interest rate (which does have issues). They're stuck using last centuries ideas and policies.
Last edited by Panda-NZ-; 28-01-2022 at 11:16 AM.
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28-01-2022, 11:38 AM
#703
Originally Posted by Panda-NZ-
What is dangerous is mass unemployment, along with the social unrest or even revolution that may result.
I think they need more tools rather than only a loan interest rate (which does have issues). They're stuck using last centuries ideas and policies.
Last centuries ideas and policies worked very well. It's Quantatitive Easing, ZIRP, NIRP, helicopter money etc that has stuffed things up in this century.
You don't think social unrest and revolution cannot come through hyperinflation and a wealth transfer to the 1% via money printing and interest rate suppression? I think artificially raising asset prices to benefit one group of people at a certain point in history - as has happened from the GFC all the way to 2022 - has more potential to cause revolution than umeployment. Some European countries had unemployment rates as high as 22% after the GFC and European Debt Crisis, and there was no revolution.
'Mass unemployment' doesn't come about from a common or garden recession in any case. If we didn't have central banks trying to suppress the natural business cycle then we wouldn't have events like the GFC, where the system finally collapses under the weight of debt and malinvestment.
You can keep harping on about employment all you like, but the idea that everyone should have access to an unlimited supply of dirt cheap money is just flawed thinking and would not pass muster under any economic system.
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28-01-2022, 01:23 PM
#704
Originally Posted by Panda-NZ-
What is dangerous is mass unemployment, along with the social unrest or even revolution that may result.
I think they need more tools rather than only a loan interest rate (which does have issues). They're stuck using last centuries ideas and policies.
I would disagree, the RBNZ has/will use its employment mandate as an excuse to ignore its price stability mandate. I think you will get social unrest sooner by carrying on with current policies. The transfer of wealth and income over the last couple of decades to a few has been pretty obvious. It is not the central banks job to boost asset prices and protect the well-off. Justifying it as trickle down economics (sorry wealth effect).
More tools? like what?
They just need to grow a pair and do their job.
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28-01-2022, 03:36 PM
#705
Originally Posted by Aaron
I would disagree, the RBNZ has/will use its employment mandate as an excuse to ignore its price stability mandate. I think you will get social unrest sooner by carrying on with current policies. The transfer of wealth and income over the last couple of decades to a few has been pretty obvious. It is not the central banks job to boost asset prices and protect the well-off. Justifying it as trickle down economics (sorry wealth effect).
More tools? like what?
They just need to grow a pair and do their job.
In theory we have 'full' jobs now so they have room to follow the price stability mandate (as you put it).
Last edited by dobby41; 28-01-2022 at 03:49 PM.
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28-01-2022, 03:38 PM
#706
Originally Posted by dobby41
In theory we have 'full' jobs now so they have room to follow the rice stability mandate (as you put it).
Long grain or Jasmine?
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28-01-2022, 03:50 PM
#707
Originally Posted by Logen Ninefingers
Long grain or Jasmine?
Good point - brown is best
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29-01-2022, 04:20 PM
#708
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02-02-2022, 08:13 AM
#709
Originally Posted by nztx
The targets that have run away or been conveniently overlooked:
House Prices & Affordability
Inflation
Rental Accomodation
Rental Pricing levels (largely a result of Govt red tape)
Interest Margins - the Large banks
A lot of those targets heavily influenced by RBNZ policy.
Richard Prebble in herald today, concerned about the poor (which is laughable for an ACT party man) but Labour is not doing anything to curb the RBNZ excesses either.
https://www.nzherald.co.nz/business/...KZ3QQMEMP45DA/
To quote from the article "While the Reserve Bank procrastinates, the rich will get richer and the poor will get poorer." and that is from an ACT party supporter.
Another opinion piece about inequality between generations. To me vaccinating the oldies first made sense as they are the ones more likely to die from covid, but she does touch on the inequality being created in the housing market.
https://www.nzherald.co.nz/nz/a-capi...JHH6ADCG44QMA/
How badly does a reserve bank governor fail before they get the boot?
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03-02-2022, 08:48 AM
#710
The Conversation: Inflation is raising prices and reducing real wages – what should be done to support NZ's low-income households?
https://www.nzherald.co.nz/business/...M2OUK6BP4VJ4A/
Sack Adrian Orr and explain to his replacement the objectives of the reserve bank, i.e.
The Bank’s main objectives are—
Economic objectives
(a)
the economic objectives of—
(i)
achieving and maintaining stability in the general level of prices over the medium term; and
(ii)
supporting maximum sustainable employment; and
Financial stability objective
(b)
the financial stability objective of protecting and promoting the stability of New Zealand’s financial system
Increasing the amount of overall debt does not promote stability in financial systems. I would guess the RBNZ's reluctance to do their job in the face of rising inflation and near full employment is to protect those with too much debt, which the RBNZ encouraged with its overly loose monetary policy and historically low interest rates. Their current policy protects the well off at the expense of the poor, by boosting asset prices and now the CPI as well.
I would not expect Adrian to care but I would expect a labour govt to do something, except that I don't see any difference between Jacinda and John Key they both have to pander to the boomers to stay in power.
Bernard Hickey probably says it better.
https://www.rnz.co.nz/national/progr...ly-column-ever
Last edited by Aaron; 03-02-2022 at 08:56 AM.
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