Just for you moosie .... what the NZD looked like once
He was a great man that Piggy Muldoon ..... just like that Maggie woman who recently died
Printable View
Just for you moosie .... what the NZD looked like once
He was a great man that Piggy Muldoon ..... just like that Maggie woman who recently died
Just to elaborate on reason 2
The countries that are applying large QE are those trying desperately trying to avoid their economies sliding into depression and its companion deflation ...in some cases Greece are already there.
Depression / high deflation are interrelated so to prevent deflation, inflationary measures such as the milder monetary easing measures e.g lowering interests are used...if gentle easing fails or a crisis appears the heavy guns come out in all shapes and forms..the 2 edged sword QE:cool: Used right its OK, used wrong not OK..hence its use today and its risk has attracted some major academic critics
NZ applied monetary easing and our economy responded thanks partially to the strengths of our banks, high prices for our major export commodity and the resilience of our property market to hold firm... I suspect applying QE in NZ would result in a massive overkill..creating out of control inflation, creating property and Equity bubble bursting type stuff...artificial demand upsetting supply/demand in the markets etc.
History tells us that Massive QE type of easings has resulted in some major disasters over the Centuries when used when not necessary or not managed properly due to public and political pressures....
Belg....go on the net and download an economic sims game ..create a situation similar to NZ is in and then pump in your QE and see what happens..let us know..huh?
I had a go at this simple web game..You are the FED boss and using just one Monetary tool (interest rate) you have to keep employment rate, interest rate and inflation rate at a suitable level to be reappointed for another 4 years.
I got dismissed a few times :(:t_down::p....there are some different scenarios with each try and I got undone with the oil shock
How good r u ?......http://www.frbsf.org/education/activities/chairman/
Nice one Hoop
When inflation gets out of control seems impossible to bring it back eh .... but plenty of people in work
Methinks we need a decent dose of inflation
Received 19 shillings and sixpence.. for every pound ... When I first landed at Whenuapai Airport..
Immediate PR STAMP.. On a standard canteen style table..
No Bull**** !!!.. ... Welcome to NEW ZEALAND !!..
Heheheee.. I have never regretted stopping of here.. NEVER ...NEVER...NEVER..
For Gods sake try to keep it that way !!!..
yur on to it....think secular ;)
Its a 10 year secular cycle with our No 1 trading partner A$/NZ$...... (China is our second biggest trading patner (half the size of Aussi)
USA (3rd biggest) on it own isn't a huge problem but Japan (4th) now devaluing combined makes life tougher...RB will be looking at the recent secular break with the Aussi Dollar and be heading for the cupboard to find the genie lamp...
Hoop - you might enjoy this article. Thatcher drive inflation down and now 20 years on her death may signal a period of high inflationary
http://www.davidmcwilliams.ie/2013/0...on-legacy-ends
Here's a couple of charts from your favourite chart of the day people.....I have a feeling David McWilliams would not like inflation returned is he saw these historic charts.
The right hand 210 year chart clearly shows the oilshock inflation years 1970's the 1923 Germany hyperinflation and the WW2 supply/demand inflation...all creating hardship for the people.
The great depressions of 1813 1857 1873 and 1930 stand out with high deflation...also creating hardship for the people..
On the left hand side the 800 year chart the inflation and deflation years just followed each other,,,so imagine the continual hardship of the people back then flicking from boom to depressionary busts every few years.
There's a decreasing trend in the oscillations, so it looks as if the Economists and the Treasuries/Central Banks are slowly getting a grasp on this inflation/deflation thing.....OR...if we believe in the law of averages we are overdue for a mother of all deflations
When you look at history anything seems possible...eh ? NZX50 from 4455 to 445 might not seem quite like fantasyland stuff after looking at some catastrophic events in History on these charts.
http://www.zerohedge.com/sites/defau...n%20DB%202.jpg
Deflation sounds wonderful doesn't it? Things just keep getting cheaper... houses, bread, petrol, lotto prizes (that others win)...
You are right Janner except for one thing that does not get cheaper is ones mortgage payments. And when wages decrease to the point where the average citizen's mortgage payment cannot be met, things turn ugly. When too many can't pay their mortgages, the banks go bust, and when the banks go bust everyone loses a lot and the country is left with a huge population of unhappy voters.
Governments will always opt for the comfort of inflation for this reason. Seems to be a lesson from somewhere in the past that successive governments anywhere in the world have not forgotten.