ADRIAN ORR our NEW RBNZ GOVERNOR

[Aaron]

I find myself agreeing with John Minto on tax policy. How far left have I swung? Further left than labour that's for sure.

https://www.nzherald.co.nz/nz/john-m...7II45S4XIJETA/

Although for all his annoying shouting John Minto would appear to be on the right side of history regarding the springbok tour and apartheid. Maybe not to hard core racists and rugbyheads but to most sane people.

He highlights that if national wanted to reduce tax they could lower GST, especially as this is a regressive tax and poor people are doing it hard currently with housing and the cost of living crisis. Chris would rather make a progressive tax less progressive. Chris Luxon knows who his voter base is though so it makes sense and he doesn't do too badly out of the proposed changes either. Why go into politics if you are not going to make life better for yourself.

[Aaron]

Good old Adrian and the RBNZ hard out fighting inflation and the cost of living crisis.

https://www.interest.co.nz/banking/1...illion-will-be

Only a $8.5billion more available to the banks to pump into the economy. That should really slow inflation.

Lucky we have smart people like Adrian who understand the economy and how to make it better.

RBNZ Assistant Governor/General Manager Economics, Financial Markets and Banking Karen Silk said with the Government needing to increase bond issuance to support the Large Scale Asset Purchase programme, monetary support was needed so interest rates did not increase substantially. The options to reduce the OCR, then at 0.25% was inhibited. The FLP supported the lower interest rates.

Silk said the three year term of the FLP and two year application window were critical design features.

“They were designed to support commercial bank confidence to incorporate its use into their medium term funding programmes at the time of launch. And banks have incorporated that usage into those medium term programmes," she said.

“My point around it is that early removal [of the programme] would undermine confidence in this as a tool, which could potentially inhibit it from being used in future should it be required again in the future."

Translation; They have not even finished but expect to be using FLP in the future as they expect interest rates to be back to zero in the future.

I guess it is true they are at a point where it is "inflate or die" When they say "die" I think they mean deflation which according to economists and central bankers if we have deflation we might as well all be dead. A bit hyperbolic but the church used the fear of god to control people in the past so I guess central bankers use the fear of deflation to maintain this corrupt ponzi scheme.

[Aaron]

Bernard Hickey confirmation bias.

https://www.interest.co.nz/property/...it-nz-inc-kick

Interesting how the labour shortage crisis only seems to be a crisis for business owners and politicians seeking to boost asset prices and suppress wage costs.

TOP party might be a viable alternative to National and Labour. Not as nutty as the others. Maybe Chloe could jump ship and win the Auckland Central seat so the TOP party can have a seat at the table and my vote will count.

Don't know all their policies so maybe shouldn't nail my colours to that mast just yet.

[smpl]

I never thought we would see 1yr fixed rates more than double within 12months ... who did ???

I did.

Not only am I fixed for 5 yrs but I'm short the 90 day bank bills.

And its not me stating potential 4.5% OCR in the short term ...thats the RBNZ ...I think the pain for NZ households will be greatly felt across the country ... the spending spurge coming back to bite ... still think the OCR will be forced to drop before long into the 4%+ OCR... once the domino's start to fall esp in the property sector

I think rates could go higher and I am still prepared for it.

[JBmurc]

I did.






I think rates could go higher and I am still prepared for it.

Great to hear ...many are not .. Also not going be that affected minor LVR well covered by incomes generated from the assets held

[Aaron]

Will the pension be enough if you have to rent in retirement?

https://www.nzherald.co.nz/business/...MTVA4WH5X4HYE/

The number of retirees renting is rising and the article suggests they might struggle, but what they don't understand on the other side, the owner of the property will be getting RBNZ guaranteed capital gains creating the "wealth effect" which is good for everyone, or at least that is what Adrian thinks. I am unsure how many houses he has though, so his views could be skewed.

Also in the news today "middle aged couple buy a home in Auckland" that must be quite news worthy.

https://www.stuff.co.nz/life-style/h...in-the-regions

How we contribute to society could be part of the inequality problem. Who knew?? but we know neither Labour or National will change it. To be honest complicating GST doesn't appeal but a capital gains tax does. Also change the inflation target to -2% to +2%.

https://www.msn.com/en-nz/news/natio...ca8c6b65841ef0

[Aaron]

Matthew Hooton admittedly ex national party staff member putting the boot into Labour.

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

It took this Government's special idiocy to decide that which wasn't broken should be fixed, by moving the Reserve Bank away from its laser-like focus on inflation, approving the appointment of Adrian Orr as Governor and signing the so-called dual mandate in March 2018.

It may just be unfortunate wording or is he saying it take special idiocy to appoint Adrian Orr as reserve bank governor? I guess the results achieved speak for themselves. Best summed up in the last line of the article.

Labour governments can do many things and survive. Enriching property owners while slashing workers' real wages isn't one.

Also he notes who has benefited from Labour's and the RBNZs policies. I still marvel at the lack of anger from the people disadvantaged by the RBNZ's actions. Most NZers unlike me are very nice people, even when they are being screwed over they don't get upset.

Some bold Covid response was needed. But, as early as April 2020, the Government was warned by everyone from Treasury to me that its monetary and fiscal policies would hurt the young, poor and thrifty and benefit the old, rich and profligate.

Care was called for, but the Government disagreed.

It is no excuse that other governments did the same.

Infamously, ultra-loose monetary and fiscal policy transferred about $1 trillion to property owners at the expense of wage earners and savers. Now the data is in on real wages.

From mid-2020, real wages began falling and have done so for eight quarters. Since the Labour Cost Index (LCI) began in 1992, that has never happened before.

That said I do not see any policy from National that would change things for the people being screwed over. Labour don't deserve to get back in but National's tax cuts for the people who aren't struggling reeks of trickle down economics as well, just like Labour pushing up house prices. In the interests of fairness I have copied and pasted a post from Blue Skies from another thread highlighting some achievements from labour. Both articles quoted are opinion pieces so hopefully any numbers used are not just made up from either author.

The estimated cost of fixing NZ's water infrastructure is $185 Billion, just to maintain critical services. Wouldn't you want that debt/cost spread over all taxpayers rather than just the ratepayers?
National reduced the Police budget & closed many community stations, including the terrible decision to close the Fort Street station in Downtown Auckland city.
Nursing problems can be solved by further raising their pay (more than Labour already has) but that means higher taxes.
National put a lid on the Health budget for 9 years, effectively meaning it went backwards all while hospitals were having to put off maintenance & repairs & the population grew by another million or so people.
Labour has given the Health budget the biggest increase in funding of any govt. We now have funding for Cancer drugs which were not previously funded under National.
If you get Cancer, you are a hell of a lot better off under this govt than you were under National & that's a fact.
Do you have any idea 161,000 homes have been built since Labour came to office, over 41,000 homes in the year to June 2022, under this Labour govt 20,000 more homes built in 5 years, than in 9 years under National.
It's been a seismic shift, by far the largest addition to housing stock going back to 1991
Kiwibank estimates we will have housing surplus in less than 12 months.

I guess when Adrian talks of a "path of least regrets" he is talking about his own personal situation as I imagine he is in the group that benefited most from the actions of the RBNZ at the expense of others. Jacinda and Grant probably did alright out of it as well which would help if you wanted to keep your job.

[peat]

What Adrian Orr learned at Jackson Hole | The Spinoff

Bernard provides five takeaways , and I edit those down to two.

• Growth rates have been hit hard and in a more permanent way than previous thought
• Covid may have changed labour supply and practices in permanent ways that could improve productivity

[Aaron]

In a crazy financialised world a .3% return makes sense? Even a 3% return is hard to justify unless you are not going to spend anything on the rental property.

https://www.stuff.co.nz/business/pro...tax-data-shows

Mind you, the RBNZ guarantees 1%-3% tax free capital gain and has achieved well in excess of that annually over the last 30 years for asset values as they don't form part of the CPI.

So I guess I am the dummy wanting to buy based on yield.

Markets down today in the US as there was some slightly positive news. Good news is bad news for the market as the actions of the central banks are all that really matter when investing.

Don't panic here in NZ Adrian has ensured the system can cope with negative rates, at that point there is no upper limit for asset prices.

I wonder where all the savers and investors will come from when QT starts in earnest. Much easier to print new money than encourage people to save and invest.

[Aaron]

Did QV general manager David Nagel just admit that immigration pushes up house prices???

https://www.stuff.co.nz/life-style/h...n-more-than-16

It is odd as from the John Key govt to a study by the RBNZ and treasury it almost seems like a conspiracy to deny this fact.

David Nagel said there had been some significant price falls now, particularly in the main centres where there had been strong price increases previously.

There was no immediate sign of things getting any better with interest rates likely to rise further and business confidence waning, he said.

“It looks as though it’s going to get tougher before it gets any easier for sellers. First-home buyers will continue to struggle for finance with tight credit conditions and affordability constraints.

“Plus there are still plenty of new homes in the pipeline, which will add further to oversupply, putting further downward pressure on prices.”

The reopened borders might help, but there were plenty of people heading offshore, he said.

“The market performs much better when net migration is positive, and that time might not be too many months away.”

Both Labour and National can shut the f**k up about concerns around the housing crisis or climate change as they both can't wait to juice the economy with more people. Townies love it, and sadly there are less and less country folk as land gets subdivided for housing.

Adrian even quipped that he can't print people. This would indicate his way of thinking and his concern for the bottom half of NZ struggling under his crazy monetary policy, real wages declining while enriching asset owners now an undeniable fact. Inflation has meant a wee pause in his easy money, low interest rate approach but immigration might plug the gap as we wait for the central bank pivot.