Depression in the USA - Deflation verus Inflation

[macduffy]

Indeed, Aaron. It's hard to see a dead cat bouncing this high and for so long! Perhaps we need a new term for this phenomenon!

;)

[Aaron]

Indeed, Aaron. It's hard to see a dead cat bouncing this high and for so long! Perhaps we need a new term for this phenomenon!

;)

Unprecedented Monetary Madness???

[JBmurc]

Well Aaron how has your Gold plays treated you ? If I was in your shoes I’d be spreading some funds across some better prospective micro caps gold plays like MEU - RXL- CWX etc or soon to be producers OBM , CNB as all this monetary madness is very bullish for the Gold price $2koz USD likely to be crossed before the years out.. I’m of course not only invested my own funds but the banks cheap 2.65% funds and doing the above ... last Qtr I was up $200k NZD ... should be many more positive Qtrs till we see saving in cash as a good idea again prob later this decade...

[greater fool]

.................................................. ......

[Aaron]

Well Aaron how has your Gold plays treated you ? If I was in your shoes I’d be spreading some funds across some better prospective micro caps gold plays like MEU - RXL- CWX etc or soon to be producers OBM , CNB as all this monetary madness is very bullish for the Gold price $2koz USD likely to be crossed before the years out.. I’m of course not only invested my own funds but the banks cheap 2.65% funds and doing the above ... last Qtr I was up $200k NZD ... should be many more positive Qtrs till we see saving in cash as a good idea again prob later this decade...

They are doing OK but I haven't looked at the timeline for a while. I have them in the portfolio section in ASB Securities NCM is my biggest holding but only up 42% but that is because I bought more after a surge a couple of years ago and $30,000 more recently in an SPP. EVN 150% NST 239% and RMS 461% but these are meaningless unless I annualise this as RMS was in the bottom draw for a long time. I bought what turned out to be a tiny bit more NST in a capital raising. I am reluctant to invest more as a percentage of my modest investment funds as gold miners become too large a portion of my portfolio especially as it is very speculative for me as I don't do any research. No way would I borrow to invest in gold producers even more insane for me to invest in explorers but well done on the last quarter. I could have been significantly(for me) wealthier if I was less risk averse or had put in the effort to do some research to guide my investing but that has been true for my life to date. I guess the pain of losing capital overrides my joy when it is going up.

[JBmurc]

They are doing OK but I haven't looked at the timeline for a while. I have them in the portfolio section in ASB Securities NCM is my biggest holding but only up 42% but that is because I bought more after a surge a couple of years ago and $30,000 more recently in an SPP. EVN 150% NST 239% and RMS 461% but these are meaningless unless I annualise this as RMS was in the bottom draw for a long time. I bought what turned out to be a tiny bit more NST in a capital raising. I am reluctant to invest more as a percentage of my modest investment funds as gold miners become too large a portion of my portfolio especially as it is very speculative for me as I don't do any research. No way would I borrow to invest in gold producers even more insane for me to invest in explorers but well done on the last quarter. I could have been significantly(for me) wealthier if I was less risk averse or had put in the effort to do some research to guide my investing but that has been true for my life to date. I guess the pain of losing capital overrides my joy when it is going up.

Yes harder I have worked(study/following the market) the luckier I get IMHO..

. everyone has there risk profiles personal I'm more than happy to have 250k on tick to the bank @ 2.65%pa and have most of those funds in spec Gold(with cu,Ni,REE interests) plays on the ASX Vs say having 1-2mill tied up in rental property at this time..

..which I could as the Bank hates me using there funds for the Sharemarket and commercial property so I could sellout and join in with 80%+ of kiwis that think Res Property/term deposits/bonds etc is going be a great going forward...Personally I think I'll be adding another mill to the asset base before the 20/21Fy is out ...

Those that think its hard to make a decent return at present ,,,, If you had purchased Silver ETPMAG.asx at its lows in March you will be up over 50% at present(plus 5%+ NZD/AUD gains) 120 odd days ago ... safer than any house SILVER bullion ETF ...no earthquake or fire or crazy tenant is going affect a metal ETF

[Aaron]

Yes harder I have worked(study/following the market) the luckier I get IMHO..

. everyone has there risk profiles personal I'm more than happy to have 250k on tick to the bank @ 2.65%pa and have most of those funds in spec Gold(with cu,Ni,REE interests) plays on the ASX Vs say having 1-2mill tied up in rental property at this time..

..which I could as the Bank hates me using there funds for the Sharemarket and commercial property so I could sellout and join in with 80%+ of kiwis that think Res Property/term deposits/bonds etc is going be a great going forward...Personally I think I'll be adding another mill to the asset base before the 20/21Fy is out ...

Those that think its hard to make a decent return at present ,,,, If you had purchased Silver ETPMAG.asx at its lows in March you will be up over 50% at present(plus 5%+ NZD/AUD gains) 120 odd days ago ... safer than any house SILVER bullion ETF ...no earthquake or fire or crazy tenant is going affect a metal ETF

Watching gold closing in on $1,900 so quickly I am sorely tempted to become a momentum investor but would need some sort of exit strategy. I would have thought the price of gold can change direction quite rapidly. I guess I would need to see more Monetary Madness as in my view the rally in gold will continue if central banks continue on their retarded ways.

[JBmurc]

Watching gold closing in on $1,900 so quickly I am sorely tempted to become a momentum investor but would need some sort of exit strategy. I would have thought the price of gold can change direction quite rapidly. I guess I would need to see more Monetary Madness as in my view the rally in gold will continue if central banks continue on their retarded ways.

Gold could take a breather for sure ..but the BULL trend is in place and has been that way IMHO since it broke the weekly Supertrend late 2018.. now Gold will need to crash below 1700 to see this trend broken so some room at present for a breather...

So Marco wise Gold and now SILVER(which recently smashed into a weekly bullish supertrend) are in place ....

Micro wise we kiwis are very lucky to have one of the best PM mining nations in the world next door ...Aus #1 biggest exporter of GOLD
So ASX brilliant ....then we must look over good prospects on the ASX ...for me its the best Mgm+F/A+T/A =

Like I was saying to friends and family back in march ....BUY OBM.asx ....why purely as it was a no brainer BUY ....80mill Mrktcap ....2Moz Gold resource ,1mtpa Gold
Plant, 270mill tax credits,20mill cash balance etc etc the SP went from sub 10c to 33c high which was passed yesterday but as pulled-back

Now OBM has just raised 55mill so they are fully funded to Gold Production 1Q21 ... I still think OBM 220mill cap are great buying at current levels....Silver ..I would look at MKR I purchased my first lot yesterday..Plant + producing Gold at present

Explorer wise for me pretty much same as developers/producers ....grade + widths are king ....CWX is one I hold that has been quiet and missed much of the hype we see with many others F/A sound with J/V with RIO,FMG,IGO majors .... but when you look at their HILL800 prospects with 92.7m @ 3.22g/t Au from 2.3m (H8DD006)
 43m @ 4.24g/t Au, 0.3% Cu are massive large hits that if they were announced at present would see the SP double ...

I have a few others as I like to spread my risk / reward ...

the fear of buying to lose all your money only makes sense if you're a BUY and forget type investor..that doesn't do the hard work ...

IMHO you throw say 50k across the above 3x your have 100k before 2Q21

[Aaron]

Cheers for that JB. You are forcing me to make an effort but I will most likely procrastinate.

[Aaron]

Wonder if I am too late or if the party is just getting started. Gold 2% in a day and silver 7-8%.

Sometimes I should just follow my gut. although results do vary.

If it does keep going it is quite scary as on a large scale it could mean a loss of faith in currencies which was my concern as I was hoping for a downturn in the financial markets before a currency crisis. A loss of faith in currency also means inflation is on its way an inevitable result of money printing. Although that said it pisses me off every time I hear we don't have any inflation. House prices compounding at 6% a year is substantial inflation. Stop bulls**ting.

[Aaron]

Gold could take a breather for sure ..but the BULL trend is in place and has been that way IMHO since it broke the weekly Supertrend late 2018.. now Gold will need to crash below 1700 to see this trend broken so some room at present for a breather...

So Marco wise Gold and now SILVER(which recently smashed into a weekly bullish supertrend) are in place ....

Micro wise we kiwis are very lucky to have one of the best PM mining nations in the world next door ...Aus #1 biggest exporter of GOLD
So ASX brilliant ....then we must look over good prospects on the ASX ...for me its the best Mgm+F/A+T/A =

Like I was saying to friends and family back in march ....BUY OBM.asx ....why purely as it was a no brainer BUY ....80mill Mrktcap ....2Moz Gold resource ,1mtpa Gold
Plant, 270mill tax credits,20mill cash balance etc etc the SP went from sub 10c to 33c high which was passed yesterday but as pulled-back

Now OBM has just raised 55mill so they are fully funded to Gold Production 1Q21 ... I still think OBM 220mill cap are great buying at current levels....Silver ..I would look at MKR I purchased my first lot yesterday..Plant + producing Gold at present

Explorer wise for me pretty much same as developers/producers ....grade + widths are king ....CWX is one I hold that has been quiet and missed much of the hype we see with many others F/A sound with J/V with RIO,FMG,IGO majors .... but when you look at their HILL800 prospects with 92.7m @ 3.22g/t Au from 2.3m (H8DD006)
 43m @ 4.24g/t Au, 0.3% Cu are massive large hits that if they were announced at present would see the SP double ...

I have a few others as I like to spread my risk / reward ...

the fear of buying to lose all your money only makes sense if you're a BUY and forget type investor..that doesn't do the hard work ...

IMHO you throw say 50k across the above 3x your have 100k before 2Q21

I've thrown $30k at it possibly at the peak but will see if it is $60k by the 30/06/2021. If it craps out I will blame myself for not doing the research. If your right I might have to go skiing in Queenstown next winter and shout you dinner.

[JBmurc]

What price did u get in the end ...

[Aaron]

What price did u get in the end ...

Including fees obm .406 mkr .34 and cwx .205 down 12.56% up 13.24% down 7.32% respectively. Roughly $10k in each company, no thought involved or appreciation of risk. I appreciate I acted rashly and will get around to looking at their annual reports and possibly getting scared out eventually. I hope your profit taking doesn't drop the price too much. Totally relying on your post which is insane as everyone should do their own research.

Fed speech last night confirms interest rates low forever and when the flow through from the pandemic hits the economy further, possibly more money printing to ensure no big company fails. Good for gold in my view. Oil below $50 dollars a barrel so one big input at a low cost. Labour might not be pushing hard for increases in the current employment climate but once we get inflation in things other than assets who knows.

I got caught up in the speed and size of the increases, a pull back expected from here. That said I usually buy near the top or bail out way too early. Gold featuring in a lot more news articles lately, sometimes feeds on itself and carries on way beyond what I would consider reasonable. That said I have no idea what a reasonable price for gold is.

[macduffy]

That said I have no idea what a reasonable price for gold is.

I don't think anyone does, Aaron. The POG moves according to changes in fear and greed on the part of investors and the usual supply and demand factors. An exaggerated version of all markets, or so it seems to me.

[JBmurc]

Including fees obm .406 mkr .34 and cwx .205 down 12.56% up 13.24% down 7.32% respectively. Roughly $10k in each company, no thought involved or appreciation of risk. I appreciate I acted rashly and will get around to looking at their annual reports and possibly getting scared out eventually. I hope your profit taking doesn't drop the price too much. Totally relying on your post which is insane as everyone should do their own research.

Fed speech last night confirms interest rates low forever and when the flow through from the pandemic hits the economy further, possibly more money printing to ensure no big company fails. Good for gold in my view. Oil below $50 dollars a barrel so one big input at a low cost. Labour might not be pushing hard for increases in the current employment climate but once we get inflation in things other than assets who knows.

I got caught up in the speed and size of the increases, a pull back expected from here. That said I usually buy near the top or bail out way too early. Gold featuring in a lot more news articles lately, sometimes feeds on itself and carries on way beyond what I would consider reasonable. That said I have no idea what a reasonable price for gold is.

Right well MKR is going very well IMHO I'd be tempted to take profits on them and put a sell order at 49.5c etc... and take the 45% return for less than a week hold (if you get the trade) I personal think they have run too quick compared to the advancement of project any many issues could see their SP pullback to flatline till results match Mktcap which is closing in on $125mill @50c and they do have 24.3mill in debt. (If you did take the profits I would recommend the likes of RXL that was sold off after pretty solid results)

OBM HOLD TILL Production ...CWX see how J/Vs + Hill 800 drilling goes late this year.... I don't think you paid overs for these two ...

[Aaron]

Right well MKR is going very well IMHO I'd be tempted to take profits on them and put a sell order at 49.5c etc... and take the 45% return for less than a week hold (if you get the trade) I personal think they have run too quick compared to the advancement of project any many issues could see their SP pullback to flatline till results match Mktcap which is closing in on $125mill @50c and they do have 24.3mill in debt. (If you did take the profits I would recommend the likes of RXL that was sold off after pretty solid results)

OBM HOLD TILL Production ...CWX see how J/Vs + Hill 800 drilling goes late this year.... I don't think you paid overs for these two ...

I was going to hold them all until June next year but will sell MKR on your advice.

I don't know that 49.5cents will be achievable if silver dropped 3.5% overnight. I will put in a sell at that price and see what happens. maybe I should sell at market $3,000 in 3days is not to be sniffed at.

I feel bad now you are having to take time to hold my hand. I tend to buy and hold.

I hope this isn't because you don't have any faith or conviction in the long term prospects for your picks??

[Aaron]

MKR sold for .50 less fees on the opening of the market.
I was thinking I would hold everything until June 2021 and see how it went. That way I was not abusing your advice assuming it works out.

Don't like to use your hard work as I am bringing nothing to the discussion. I guess I will compound the returns into RXL. But I guess the investments your looking at could probably disappear on a bad drilling result or an unexpected company announcement so you need to be a bit more up to date and light footed than I am.

Currently gold related articles and You Tube clips are ramping up. Anything to do with gold may continue up on nothing more than optimism. US GDP historically bad report but not a huge reaction from the market. I guess the next quarter is expected to rebound. Or a lot of money printing will be required to fill the hole.

[Aaron]

just had a quick look at RXL. To June 2019 burnt through $6.5million for the year with 3.9Mill cash left. A quick look at the announcements in ASB Securities indicates latest raising was for $988,000 for shares valued at .024cent less than half of what I would be paying today on the secondary market. Not sure how that works.

[macduffy]

Thoughts on "Depression in the USA", anyone?

;)

[Aaron]

Thoughts on "Depression in the USA", anyone?

;)

A historic quarterly contraction in GDP in the US could indicate a depression on the way but no big drop on the US indexes might indicate otherwise.

I wonder if it caused MKR to rise to almost 60cents today with me missing a nearly 20% one day rise by selling at .50cents.:crying:;)

[JBmurc]

A historic quarterly contraction in GDP in the US could indicate a depression on the way but no big drop on the US indexes might indicate otherwise.

I wonder if it caused MKR to rise to almost 60cents today with me missing a nearly 20% one day rise by selling at .50cents.:crying:;)

Yeah MKR hit a 70c intraday high !!!! Gutted I sold way to early .., I purchased more OBM today 36c on open will for sure crack 40c and head towards 50c so many updates to come now cashed up .... RXL did raise low then announced --results like>>• High grade results returned during the program from Grace Prospect include:
o RXRC287: 25m @ 34.79g/t Au from 143m, including: 6m @ 140.7g/t Au from 150m
o RXRC266: 4m @ 88.81g/t Au from 27m, including 2m @ 176.03g/t Au from 28m
o RXRC260: 11m @ 18.75g/t Au from 8m, including 3m @ 61.27g/t Au from 8m
o RXRC268: 9m @ 9.28g/t Au from 9m, including 2m @ 33.53g/t Au from 11m
o RXRC252: 4m @ 7.56g/t Au from 17m
• The Project Mineral Resource Estimate currently totals 12.4Mt at 2.97g/t Au for 1,190,600
ounces of gold which will be updated in due course.....IMHO Grace is a Parallel structure (so potential another 1moz+ size)

I don't know if you followed SPX but they were taking over by RMS for over $208mill ... for a 355,000oz high grade deep Gold deposit.. they held small permit surrounded by RXL - VMC the main holders in the Gold Rich Youanmi shear

https://stockhead.com.au/resources/gold-ramelius-launches-friendly-208m-takeover-offer-for-spectrum/

RXL Holds 70% of the only decent Gold plant in the area that needs 25mill to 30mill re-furb costs ... would be very straight forward to once again become a Gold producer esp. if RMS joined into the mix .... RXL only valued @ 115mill and that doesn't even give any value to their other Projects like the major Nickel projects that had focus back before moving into GOLD ....

I have certainly put my money on RXL with 1.7mill shares

[Aaron]

Well if you are still happy to guide me through to doubling my money by June then I might as well buy some today. Looks like ASB fees for aussie shares are.3% no minimum fee so I was wondering if I should put $10,000 in RXL and the remaining $4,000 in a higher conviction company like OBM. I need to be putting my profits back in but wonder if it should be all in RXL.

Apologies to Macduffy for hijacking a thread.

To be honest I really do need to make an effort as all the numbers in your post mean nothing to me.

[JBmurc]

Well if you are still happy to guide me through to doubling my money by June then I might as well buy some today. Looks like ASB fees for aussie shares are.3% no minimum fee so I was wondering if I should put $10,000 in RXL and the remaining $4,000 in a higher conviction company like OBM. I need to be putting my profits back in but wonder if it should be all in RXL.

Apologies to Macduffy for hijacking a thread.

To be honest I really do need to make an effort as all the numbers in your post mean nothing to me.

yes maybe we should be moving this topic of gold companies across to the Jnr Gold companies thread ..?

[greater fool]

https://www.smh.com.au/technology/why-apple-is-about-to-turn-the-iphone-app-industry-upside-down-20200811-p55kki.html

[Aaron]

So inflation is the winner and continues to be the winner.

Despite demographics (aging population spending less) and technology supposedly going to cause deflation it is not happening.

It is all good while it is just asset prices but what if the asset price inflation drives everything else up starting with rents. Interest rates are not going to rise so asset holders will win with rising asset prices and inflation getting rid of debt.

Is there a downside?

https://www.msn.com/en-nz/money/other/it-s-almost-free-to-borrow-low-interest-rates-driving-house-prices-up-economist/ar-BB19VeMX?ocid=msedgntp

No surprises what is driving up house prices, all the other twaddle about RMA, councils red tape, immigration etc is possibly not as relevant.

I know buying anything and holding on is the answer but don't like the idea of too much debt (if there is such a thing)

It is not a world for the conservative or faint hearted.

[Aaron]

An economist stating the obvious but offering no solutions much like all the political parties in this years election.

https://www.msn.com/en-nz/money/homeandproperty/going-to-get-worse-economist-s-dire-warning-for-renters-as-interest-rates-plummet/ar-BB19WWMq?ocid=msedgntp

I can't find the post but vaguely remember Bill English gave a speech on why people might not understand why asset prices will keep rising even in recession. I can't remember the exact details or timing of the speech and don't know how to search this site well enough to find it but to his credit he was on the money from what I remember. I think it was a speech to the NZ Stockbrokers assn or something like that.

Stop targeted inflation and trickle down economics it is not working anymore, if it ever really worked in the first place. Before you get the trickle down you need to get all the wealth to the top.

[Aaron]

More economists thoughts on central bank inflation.

https://www.stuff.co.nz/business/300131658/reserve-bank-would-rather-do-too-much-will-it-come-to-regret-that

The reserve bank would rather do too much (thanks Adrian). "House prices up 11% but inflation outlook is so low". How can these morons have both of these statements in the same paragraph. Economists bloviating is beyond belief sometimes.

Actually I do appreciate that these economists are a lot smarter than me but the results of central banks controlling inflation and employment with interest rates and money creation don't appear to be sustainable long term to me.

[macduffy]

The reserve bank would rather do too much (thanks Adrian). "House prices up 11% but inflation outlook is so low". How can these morons have both of these statements in the same paragraph. Economists bloviating is beyond belief sometimes.


Is the answer that the prices of housing don't feed directly into the CPI but are captured somehow by some dodgy calculation of rentals?

[Aaron]

Is the answer that the prices of housing don't feed directly into the CPI but are captured somehow by some dodgy calculation of rentals?

It would be interesting to know how they calculate the housing portion of the CPI and what portion of the CPI this reflects. maybe I should put in a bit more effort and find out. If housing costs are 50% of your budget does it matter if your iPhone and clothes costs are coming down. How can the housing component of the CPI rise by 7% compounding over the last 20 years yet economists say there is no inflation. There is huge inflation in asset prices but no one wants it to stop (at least no one in a position to stop it.)

A survey in the herald re house prices today indicate maybe some people want change. Young people can't save fast enough to keep up with house price growth. A bloke with a couple of rental properties makes more a year playing golf everyday than a fulltime worker on an average wage and he doesn't even need to rent the properties out (although cashflow becomes an issue) and all those gains are not taxed.

It is good for the haves and the kids of the haves who will get a hand onto the property ladder but we must be getting to a point where social mobility is being restricted and it is largely due to 30 years of lower and lower interest rates and easy money. Targeted inflation should go.

[macduffy]

Does this help?

https://www.interest.co.nz/news/91579/statistics-nz-completes-its-3-yearly-review-cpi-components-monitor-consumer-inflation

[Aaron]

Does this help?

https://www.interest.co.nz/news/91579/statistics-nz-completes-its-3-yearly-review-cpi-components-monitor-consumer-inflation

Interesting if I read it correctly house values make up 5.42% of the CPI, so not likely to play a big part in the overall CPI calculation. I guess rents, rates and power have been going up just as quickly as house prices to have a 7% compounding increase in housing costs over the last 20 years.

Rent makes up 38% of the housing cost sector and home ownership 23%. So the 7% compounding is not just in house prices but rent, power and rates as well. I assume rents are rising to justify the price being paid for houses as an investment. Still these prices are rising at nearly double the wage portion of the CPI.

It almost makes discussion of house prices and the CPI irrelevant. Quoting the CPI is a way to obfuscate discussions around asset price increases caused by monetary policy. It is sort of working in Japan so maybe I am getting upset about nothing. It is just that I am on the bottom of the ladder not moving up very far and currently not sure where the next rung is to climb the ladder of financial success.

Maybe working instead of posting on sharetrader is a better way forward.

[Aaron]

Stanley Druckenmiller gets it, inflation targeting should go.

https://www.youtube.com/watch?v=PLIko_4sb08

Three years old, still relevant.

[macduffy]

Stanley Druckenmiller gets it, inflation targeting should go.

https://www.youtube.com/watch?v=PLIko_4sb08

Three years old, still relevant.

Yes, he's still spot on with that!

[Aaron]

Brian Fallow questioning monetary policy in the NZ herald today. Do the benefits outweigh the costs of lower and lower interest rates.

https://www.nzherald.co.nz/business/brian-fallow-when-rates-are-this-low-why-go-lower/CCYHLJXOAMQGUIEG4BSJXXWA74/

Let the market decide interest rates and I am pretty sure we would see a repricing of capital and savings.

I wonder if there is a single central banker in the world today with a spine or a pair of cajones.

[winner69]

Brian Fallow questioning monetary policy in the NZ herald today. Do the benefits outweigh the costs of lower and lower interest rates.

https://www.nzherald.co.nz/business/brian-fallow-when-rates-are-this-low-why-go-lower/CCYHLJXOAMQGUIEG4BSJXXWA74/

Let the market decide interest rates and I am pretty sure we would see a repricing of capital and savings.

I wonder if there is a single central banker in the world today with a spine or a pair of cajones.

Aaron ...it’s all a big game eh ....Central bankers controlled by a few

[Aaron]

Aaron ...it’s all a big game eh ....Central bankers controlled by a few

Central Bankers are controlled by economic theories that have pros and cons. Depends I think on if you own a house(s) if you think it is good or bad. You never know trickle down economics might work in spite of all the evidence building to the contrary. Not really a conspiracy theory just seems like they are taking the easy option. The inflation, free lunch might turn out costly in the future even though it appears to be working great at the moment. Particularly for the older generations who hold most of the capital.

[Aaron]

Confirmation bias
https://www.zerohedge.com/personal-finance/inflation-your-best-interest-or-feds
It would be interesting to see what people would say if the reserve bank governor got up and said thanks to targeted inflation we have pushed up the price of houses at double the rate of wages.

What we would really like to do is push up the price of everything else as well as there is so much debt.

Austerity will never work as voters won't vote for a government that proposes it.
Default is probably secretly desired by a lot of people and govts with large loans but that is so obviously wrong it would upset the people on the other side, although provided you lose your security for the loan it isn't the end of the world.

Finally inflation is the only realistic way to deal with too much debt so our insane policies will continue for the foreseeable future. so don't expect price stability anytime soon.

In fact of the three purposes for our existence stated on our web page only supplying banknotes and coins is being achieved and this is getting simpler every year.

The Reserve Bank manages monetary policy to maintain price stability, promotes the maintenance of a sound and efficient financial system, and supplies New Zealand banknotes and coins.

[Aaron]

From Michael Every Rabobank.

In New Zealand, we did see strong wages data – up 1.1% q/q in Q4 vs. an expected 0.3%, and with employment rising 0.7% y/y vs. an expected -0.1%, and unemployment fell to 4.9% from 5.6%. This is despite the utter destruction of the tourism sector, but obviously yet another housing boom/bubble and bumper agri production is helping in a housing- and agri-led economy. There is even market chatter that the RBNZ will be hiking rates in 2022(!) Good luck with that and keeping NZD at a level where all that lovely agri is affordable. The RBNZ started the inflation-targeting and fiscal prudence paradigm that lies at the root of our new normal: are they really going to try to normalise rates when everyone else is going the currency war route? Didn’t we see that end badly once already? I call quits on that double-down call. After all, Aussie building permits also surged 10.9% m/m, and yet the RBA was dovish this week and is extending QE.

[macduffy]

I don't see the RBNZ being a first mover on increasing interest rates. Much more likely to move with the pack, if and when.

Incidentally, what is this thread doing amongst the ASX stocks?

[Aaron]

I don't see the RBNZ being a first mover on increasing interest rates. Much more likely to move with the pack, if and when.

Incidentally, what is this thread doing amongst the ASX stocks?

You'd have to ask Tricha, I just took it over as it had deflation and inflation in the title and people will know to ignore me by now. No debate on inflation or deflation really the odd small dip is like the central banks taking a breath before breathing more money and lower interest rates into a bigger and bigger bubble. I am an idiot for not going with the obvious trend and leveraging up as much as I could at what were low prices.

Like you say Adrian Orr would have the spine of a jellyfish but I wonder what central banker would raise interest rates? They want rampant inflation it is the only way to clear the debt. If you are buying a rental property at a 3% net yield eventually the repairs will mean 0% return except for the debasement of money clearing your loan. Prices are probably still low compared with money in the bank.

[macduffy]

I am an idiot for not going with the obvious trend and leveraging up as much as I could at what were low prices.

Again, repeat after me "Don't fight the FED!"

;)

[Aaron]

Really just a reminder for later to see if they do what they say.

https://www.msn.com/en-nz/news/national/migration-will-not-return-to-pre-covid-levels-when-nz-border-reopens-immigration-minister-warns/ar-BB1e1nMg?ocid=msedgntp

I imagine that will change if house prices were to fall.

[Aaron]

This article makes the NZRB sound like they thought of it. Little do they realise it is a mealy-mouthed response from Grant Robertson to look like he is addressing house price inflation.

https://www.zerohedge.com/markets/pioneer-inflation-targeting-adds-asset-prices-its-framework-while-fed-adds-more-fuel

I doubt anyone at the central bank has had an original thought since the 1980s/90s. Trickle down economics still seems to be in vogue. Lower interest rates to increase asset prices making people feel wealthier so they will consume and spend more, rinse and repeat. Run out of interest rates to cut no worries go negative even if it makes no sense. Printing an endless amount of money is also great with apparently no consequences.