sharetrader
Page 3 of 4 FirstFirst 1234 LastLast
Results 21 to 30 of 32
  1. #21
    Senior Member ananda77's Avatar
    Join Date
    Jun 2004
    Location
    New Zealand.
    Posts
    1,465

    Default

    Quote Originally Posted by Hoop View Post
    Hmmm
    Some balance is needed....

    Many in the world don't like inflationary pressures and devaluing currencies ....OK...let the US Treasury stop printing ...increase their US$ value and let the biggest economy in the world go in reverse and have deflation instead......The deflation scenario of a major economy back in 1930's didn't work out too well globally did it?
    ...exactly Hoop, the problem is not QE to avoid deflation -its fine- the problem however will be the never ending increases in debt loads as money ONLY flows as debt into economies. A bankers wet dream for sure as interest loads rise but purchasing power is syphoned off the consumer/companies/governments with devastating effects on economies -but bankers rule the show and they are absolutely happy-

    Kind Regards

  2. #22
    FEAR n GREED JBmurc's Avatar
    Join Date
    Sep 2002
    Location
    Central Otago
    Posts
    8,476

    Default

    Quote Originally Posted by ananda77 View Post
    ...JBmurc, you also get it wrong - NO increase in net financial assets- since the start of the US QE program - QE is NOT printing Money - its a swap of reserves for bonds to increase reserves in the banking system
    ...the Greens plan however involves straight forward targeted money printing to lower the exchange rate as a result to help the NZ economy. The plan also involves targeted use to rebuilt CHCH and the Earthquake fund. Anyway, with a Reserve rate of 2.5%, this plan is plain nonsense

    Kind Regards
    -And what does the bank do with the extra billion's in reserves ?? currently FED wants to buy 40 billion per month of the bonds where is all that money going ???

    .I understood the greens wanted lower loan rates plus to swap NZ central bank reserves for Chch re-build bonds..which in turn would put pressure on the dollar in turn saving many NZ exporters from losing sales to overseas competition ..??
    Last edited by JBmurc; 09-10-2012 at 03:15 PM.
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  3. #23
    Senior Member ananda77's Avatar
    Join Date
    Jun 2004
    Location
    New Zealand.
    Posts
    1,465

    Default

    Quote Originally Posted by JBmurc View Post
    -And what does the bank do with the extra billion's in reserves ?? currently FED wants to buy 40 billion per month of the bonds where is all that money going ???

    I understood the greens wanted lower loan rates plus to swap NZ central bank reserves for Chch re-build bonds..which in turn would put pressure on the dollar in turn saving many NZ exporters from losing sales to overseas competition ..??
    -1- ...well, with the 40 billion/mth, the Fed is now starting to buy up junk MBS -real ****- because they can absorb the inevitable losses down the track

    The Cash (reserves) flowing into the banking system are used mainly for speculation -foreign currency transactions and foreign interest rate arbitrage and currently, the banks are the only ones together with global hedgefunds to buy up US properties at large. So on the back of everyone else, the US banks are able to repair their underwater balance sheets while everyone else is bleeding -officialy its called 'creating asset inflation'- with the purpose to entice consumers/companies/governments to start taking on even more debt

    -2- first of all, unless we have a zero% interest environment, the best thing for the NZ Reserve Bank is to lower interest rates to put down pressure on the NZD -unbelievable they have kept rates steady high for such a long time while inflation is very low in New Zealand

    Well if it is the intention of the Greens that the NZ RB swaps reserves for bonds, well they should not call it 'money printing' and they should not expect the strategy will put down pressure on the NZD in the longer term - of course because eveybody is thinking the QE strategy is 'money printing' initially, speculation based on inflation/hyperinflation expectation drives the currency down - and the Greens need to careful to use the word QE because of its potential negative connotations surrounding the US and Euro QE strategy

    ...its abundantly clear that QE made in US or Euro does nothing fundamentally for the economies !!!

    Kind Regards
    Last edited by ananda77; 09-10-2012 at 04:55 PM.

  4. #24
    Senior Member
    Join Date
    Jul 2007
    Location
    Waitakere New Zealand.
    Posts
    1,083

    Default

    Belgarion the interest rates are indeed the problem they are actually to low Double them & see the spending by those holding bank deposits flow into the economy. Also you will cut out the stupid spending on poor investments by those trying to make a decent income from their savings. Also it will stop others spending more than they can afford in repayments if Interest rates go up. Just like the housing loans in the USA that started this crisis
    Possum The Cat

  5. #25
    Senior Member ananda77's Avatar
    Join Date
    Jun 2004
    Location
    New Zealand.
    Posts
    1,465

    Default

    Well said Possum The Cat - moving on anyone???
    ...anyway SPX 500 testing *1440 support with a good chance of a nice rebound here - look at crude overnight and the ASX 200 hanging on

    Kind Regards

  6. #26
    Senior Member ananda77's Avatar
    Join Date
    Jun 2004
    Location
    New Zealand.
    Posts
    1,465

    Default

    Quote Originally Posted by belgarion View Post
    I couldn't agree more!

    The bollocks argument given for not dropping i-rates further is that dumb kiwis will bid up the price of property even further and then get turfed out in mortgagee sales when i-rates rise. Frankly, I think that would be a very good thing as it might teach kiwis once and for all that 1) all asset prices; including property; go up and down and 2) don't take on debt you can't service!

    In the meantime however, rising property prices might stimulate the building industry (and private investors) to produce more property thereby increasing supply and reducing our un-emplyment rate.

    The RBNZ is being far, far too hawkish on inflation IMNSHO!
    Here you go Belgarion and its high time too!!!!: Greens seek rate cut after low inflation
    http://www.3news.co.nz/Greens-seek-r...5/Default.aspx

    Kind Regards

  7. #27
    Guru
    Join Date
    Apr 2007
    Location
    Hamilton New Zealand.
    Posts
    4,251

    Default

    The only reason for the interest rate drop by the Greens + (exporters) is self interest in a hope for a lowering of the NZ$.
    People + Mr Norman have to realize there are many more factors in play than just interest rates. There's a very real possibility a .25% reduction will have no medium term effect on the NZ$ it may in fact increase it if that reduction is seen as economically beneficial (e.g lack of flow on into property)...The demand is NZ$ is high atm because the perceived stability of the economic situation in NZ is seen by others as favourable.

    It wasn't that long ago we had decades of chronic high interest rates, stagnant growth and low currency value which created high retail prices...Hell I can still remember going on a trip to Aussi specifically to buy a microwave oven and a set of golf clubs.

    Remember ...A country's currency is a good measure as to how well the economy is fairing compared to the rest of the world......... be thankful for that as it makes all NZers (except people with no assets) globally more wealthy.
    Last edited by Hoop; 18-10-2012 at 01:49 PM.

  8. #28
    Money Manager
    Join Date
    Sep 2012
    Location
    Dunedin
    Posts
    21

    Default

    Here's an idea for how the RBNZ could maintain the value of our currency in a manageable range and protect us from dramatic appreciation of the currency. I don't agree that we should try to devalue but I do think that if NZD rises 5-10% more within a year it will be devastating. It would be better to allow the NZD to appreciate at a maximum of 1% per year against a trade-weighted basket of currencies and in the meantime use this fancy strategy to hedge NZ against the risk of global trade collapse and foreign fiat devaluation:
    Buy foreign currencies with government bonds that pay out in printed NZD --> Use the foreign currency to buy strategic long-term stable commodities (Lithium, rare earth metals, aluminium, copper, silver) and strategic high-tech equipment from other countries which we cannot produce here in NZ.
    Results: NZ currency will slowly drop as more bonds are created, we will be hedged against a collapse of global trade, our companies will have a supplier of last resort in case of such a collapse of global trade that requires NZ to be self-sufficient for a number of years.

    What kind of collateral damage would you expect if NZ implemented this kind of plan?
    Last edited by mknz; 18-10-2012 at 09:10 PM. Reason: formatting

  9. #29
    Guru
    Join Date
    Feb 2010
    Posts
    3,809

    Default

    Keep in mind the USA can only get away with printing money,like they do, for the most part because they are the reserve currency

  10. #30
    Veteran novice
    Join Date
    Jun 2007
    Location
    , , .
    Posts
    7,289

    Default

    An interesting article from The Guardian on Britain's QE.

    http://www.guardian.co.uk/business/2...nsions-experts

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •