ADRIAN ORR our NEW RBNZ GOVERNOR

[Beagle]

I think the RBNZ got this decision wrong and a general malaise, (which will suppress economic activity) will fall over N.Z. as Covid inevitably spreads throughout the country. Stimulatory setting should have been maintained...a bit of inflation over the top end of the targeted 3% range is not the end of the world.

[TeslaGod]

I think the RBNZ got this decision wrong and a general malaise, (which will suppress economic activity) will fall over N.Z. as Covid inevitably spreads throughout the country. Stimulatory setting should have been maintained...a bit of inflation over the top end of the targeted 3% range is not the end of the world.

Totally agree I see the kiwi dollar is falling, fuel is going to sky rocket if our dollar keeps falling. Add extra costs to small businesses credit line, there's going to be pain coming.

Everyone crowing to raise interest rates because house prices are too high,that's going to be the last of your worries the next 12 months.

[Aaron]

Maybe I am wrong but disagree.

Raising the cost of capital always makes things harder that is why it has been dropping for the last 30 years because it is the easy option.

That said a nobel winning economist has poo-pooed one of my reasons for raising interest rates which is to slow rising wealth inequality.

https://www.theage.com.au/business/t...06-p58xl9.html

To be honest I read the article and if I understand him correctly interest rates are low because investors see fixed interest as a better alternative than investing in business or land and running the economy hot will drive up employment and wages once there is a labour shortage.

Amazing how much crap you could come up with as an economist that sounds plausible. I think fixed interest rates are low because central banks are printing money and buying bonds to keep rates down. They are also setting the OCR at low levels which apparently affects short term rates. But who am I to argue with someone of Paul's intelligence.

I guess comparing today to early 19th century Britain is appropriate. I found this summary that seems to be the society we are set on creating.
"During the 19th century, members of the middle class were the moral leaders of society (they also achieved some political power). ... The upper class had titles, wealth, land, or all three; owned most of the land in Britain; and controlled local, national, and imperial politics."

Inflation is always and everywhere a monetary phenomenon. Rising prices are what central banks are after and they are getting them. Raising interest rates reduces inflationary expectations.

Obviously I am no economist but I thought raising interest rates was going to strengthen the Kiwi dollar not weaken it making fuel cheaper relatively speaking.

[TeslaGod]

Maybe I am wrong but disagree.

Raising the cost of capital always makes things harder that is why it has been dropping for the last 30 years because it is the easy option.

That said a nobel winning economist has poo-pooed one of my reasons for raising interest rates which is to slow rising wealth inequality.

https://www.theage.com.au/business/t...06-p58xl9.html

To be honest I read the article and if I understand him correctly interest rates are low because investors see fixed interest as a better alternative than investing in business or land and running the economy hot will drive up employment and wages once there is a labour shortage.

Amazing how much crap you could come up with as an economist that sounds plausible. I think fixed interest rates are low because central banks are printing money and buying bonds to keep rates down. They are also setting the OCR at low levels which apparently affects short term rates. But who am I to argue with someone of Paul's intelligence.

I guess comparing today to early 19th century Britain is appropriate. I found this summary that seems to be the society we are set on creating.
"During the 19th century, members of the middle class were the moral leaders of society (they also achieved some political power). ... The upper class had titles, wealth, land, or all three; owned most of the land in Britain; and controlled local, national, and imperial politics."

Inflation is always and everywhere a monetary phenomenon. Rising prices are what central banks are after and they are getting them. Raising interest rates reduces inflationary expectations.

Obviously I am no economist but I thought raising interest rates was going to strengthen the Kiwi dollar not weaken it making fuel cheaper relatively speaking.

Understand the end goal Aaron

I have been trying to tell you.

I was hoping to short our dollar but FX trader's are well ahead of the game.

The last time the RBNZ raised the OCR the The kiwi dropped from .88c USD to 63c , before stopping the bleeding and eventually lowering the OCR .

That was massive, and like I have been saying they will have to lower interest again.

Eventually negative.

[Aaron]

Understand the end goal Aaron

I have been trying to tell you.

I was hoping to short our dollar but FX trader's are well ahead of the game.

The last time the RBNZ raised the OCR the The kiwi dropped from .88c USD to 63c , before stopping the bleeding and eventually lowering the OCR .

That was massive, and like I have been saying they will have to lower interest again.

Eventually negative.

The Kiwi dollar falling on an interest rate rise seems counter intuitive. A higher interest rate in theory will attract capital and strengthen the dollar.

Raising interest rates and making our exporters less competitive was an excuse not to raise rates previously.

[TeslaGod]

The Kiwi dollar falling on an interest rate rise seems counter intuitive. A higher interest rate in theory will attract capital and strengthen the dollar.

Raising interest rates and making our exporters less competitive was an excuse not to raise rates previously.

Like analysing future earnings growth on a company all I've got to go on is the past.

The OCR has been falling for decades.

The game is rigged.

[Aaron]

The angst has started.

https://www.msn.com/en-nz/money/home...?ocid=msedgntp

Pressure on Adrian to drop rates and take them negative.

Hard times for First Home Buyers?

https://www.msn.com/en-nz/news/natio...?ocid=msedgntp

Here is a thought experts what if house prices dropped then mortgages could be smaller, much like the 70s