He has only carried on what previous governors have done but done a lot more.
https://www.nzherald.co.nz/business/...PXNBXKV7QS7W4/
Adrian says that an $8billion dollar loss is just "noise"
Former RBNZ deputy governor Grant Spencer says the cost is real and shouldn’t be disregarded. Who to believe?? Adrian also said things like the central bank only plays a "bit" part in the housing market.
The reason for the loss is that Adrian desperately needs to reduce the RBNZ balance sheet so he can do it all over again. The central bank guarantee to support asset prices remains in place.
W
hen previously asked about the issue, Orr and his colleagues have explained the cost of the LSAP programme to the Crown should be considered alongside its benefits.
For example, the downward pressure it put on interest rates lowered the Crown’s borrowing costs. Lower interest rates also helped stimulate the economy, which increased the Crown’s tax take. (As well as increasing asset and house prices)
As for the smooth functioning of the bond market at a time New Zealand needed to issue a lot of debt – it’s hard to put a price on that. $8billion seems like a high price to me.
What if we did not have a crazy RBNZ governor and the NZ govt was forced to sell debt at higher yields. Would we have had the second (pointless) round of lockdowns in August 2021 or would the govt have been forced to seriously consider the costs and benefits of its massive over reaction when faced with higher interest rates.
Are we (NZ taxpayer) not effectively paying a higher interest rate anyway when these bonds are sold at a loss? Money for nothing, thanks Adrian.