ADRIAN ORR our NEW RBNZ GOVERNOR

[kiora]

Markets are forward looking
"Central banks in several countries will be forced to reverse course on tightening interest rates as their economies either go into recession, or teeter on the edge of it, independent global economics researcher Capital Economics says."
https://www.interest.co.nz/personal-...y+26+July+2022

[winner69]

Our Adrian not the only one to get it wrong .... even though Grant has a lot to answer for

https://www.ft.com/content/7dfed876-...8-088f20a4e550

[winner69]

and even more hindsight

HOW CENTRAL BANK MISTAKES AFTER 2019 LED TO INFLATION

https://www.nzinitiative.org.nz/repo...-to-inflation/

Coming from one who was probably one of the least effective Governers we've seen

[Aaron]

Our Adrian not the only one to get it wrong .... even though Grant has a lot to answer for

https://www.ft.com/content/7dfed876-...8-088f20a4e550

Had trouble with the link as the FT wanted me to pay a sub first. Googled it and got through OK. Is he arguing central banks only dropped rates and loosened monetary policy so as not to go below their inflation target? I don't remember reading any articles about inflation being too low or dropping significantly below 1%. Imagine how terrible the world be if the RBNZ was 3.9% below its bottom target (-2.9%) instead of 3.9% above its top target of 3% (6.9%). Prices falling, people starving to death as apparently they would stop buying anything in a deflationary environment as they would be waiting for prices to fall further. Economic activity decreasing, businesses closing, unemployment rising, end of the world?

Businesses exported manufacturing jobs to China for the cheap labour and CPI prices stayed low thanks to cheap asian labour while asset prices ripped.

CBs have been goosing asset prices since 2008 when they went to war on savers and investors for the benefit of borrowers and speculators.

https://www.zerohedge.com/markets/wh...es-are-bad-you

This guy points out they are still doing it via negative real rates.

I think we have been complaining about CB policy a long time before covid as their actions spurred a massive inflation in asset prices and exacerbated wealth inequality and cut out young people from the property market long before Covid arrived.

Wheeler alludes to mistakes he made in 2014 by raising interest rates. Is that a no no for central bankers or did he cut off the recovery from 2008/09? Winner has criticised him. What did he do wrong?

An article yesterday in the herald did remind us all at the time no one knew what the pandemic or pandemic response might do and it is easy to criticise in hindsight.

[unhuman]

So Luxon has also jumped on Graeme Wheelers report and wants a review of stimulus measures.

Good to see the mainstream finally paying some attention to the RBNZ missteps.

[winner69]

Is this Orr sort of saying sorry

https://mailchi.mp/rbnz.govt.nz/mone...1?e=e08aa757c0

[peat]

Is this Orr sort of saying sorry

https://mailchi.mp/rbnz.govt.nz/mone...1?e=e08aa757c0

it sure looks like it.
quite out of character.

its an 8.8bil snafu though

[stoploss]

it sure looks like it.
quite out of character.

its an 8.8bil snafu though

Thats a lot of money , even for this Government .

[Aaron]

Is this Orr sort of saying sorry

https://mailchi.mp/rbnz.govt.nz/mone...1?e=e08aa757c0

Not really an apology but does he have to say sorry? If you are a home owner his reckless actions before during and after covid have benefited you, greatly, at least compared to the people who have no assets. Inflation is getting rid of debt while pushing up asset prices while we all suffer a little as CPI prices rise, it is only the poor who are really paying a proportionally higher price.

The angst is only coming now that Adrian is pretending to fight inflation with higher nominal interest rates and that has stalled asset price rises. Those expressing concern now were pretty silent earlier when it was clear what has been happening since the 1990s.

History says they will destroy the currency before they let asset prices take a significant hit, because that hits wealthy people (voters) proportionally harder.

[Aaron]

I wonder if Adrian is learning from Mr Erdogan

https://www.abc.net.au/news/2022-07-...tion/101248214

It starts by saying the policy is unusual, which is not true, it is just more extreme than other central banks. Keep interest rates below inflation to steal from savers and get rid of debt.

A huge success by the looks of it imagine borrowing at 14% while inflation is running at 80%. All the people in the article were poor people. It would be interesting to see what the homeowners in Turkey think of it.

I had heard that in Zimbabwe things weren't half as bad if you had a house or some assets.