Official Cash Rate changes for the last 12 months:

July 26: OCR increased by .25 per cent to a total of 8.25 per cent.

June 7: OCR increased .25 per cent to a total of 8 per cent.

April 26: OCR increased .25 per cent to a total of 7.75…

(And I'm not totally convinced the "family home" should be exempt. It's still "unearned" money (though "improvements" need to be considered) and it *should* even out somewhat in that the cost of the tax to vendors is mirrored in lowerprices for buyers.)

Well that would be:

1. Political suicide. The…

Hit all that consumer spending by hitting all that ludicrous credit – lower the bankruptcy threshold.

However most people who are in the business of trading property don't declare that income, and IRD doesn't go after them.

Kyle, if you're not willing to be part of the solution then you're part of the problem. When the revolution comes it will be fat-cat property owners like yourself who will be first up against the wall.

I'm not sure if my three bedroom ex-Railways house in Dunedin qualifies me…

leaving banks the possibility of lending 100% mortgages for a deserving few

Ah, there's the rub. This thread is full of damn communists!
Who decides who deserves a 100% mortgage? The banks, or some state agency? And who's a better candidate for a 100% mortgage? The young couple who can't scrape…

1. Just enforce existing law. Ie, collect income tax from people who trade property for income. Pursue dodgy trusts, depreciation claims, and LAQCs.

2. Make some…

Housing 'speculation' is no worse than speculating on the sharemarket

No worse, and no…

I think it's time I called 'COMMUNIST!!!' on this thread.

Oh FO, please!! [I say that without malice :) ] Housing 'speculation' is no worse that speculating on the sharemarket

Yes, because it's as trivial to create more land and housing as it is to create more companies and shares on a given stockmarket, and 'somewhere to live' ranks in…

I think we are fleeced on books, CD's, DVD's as well.

I tried to buy a cellphone in Auckland this week. Having held off in Jakarta two weeks ago when I saw it (Sony Ericsson K810) everywhere for about $390, the cheapest I could find it in AK was in…

If Bollard puts interest rates UP, NZ is a more attractive location for foreign investors to park their cash. NZ$ goes UP, inflation goes UP because most of our products are imported.

If Bollard takes interest rates DOWN, the housing…

Because the price you pay is based on the exchange rate at the time the container load of PS3's were ordered (and charged for).

Suuuure. And when the dollar rises, importers will, as they have before, explain that the cost needs to rise to cover the replacement stock they'll be…

why do Playstation 3s cost $1200, when then 60GB model costs US$500?

Because the price you pay is based on the exchange rate at the time the container load of PS3's were ordered (and charged for).

I'm guessing a lot of plasma TV's were bought by importers once the dollar…

No doubt retailers will jack prices up on everything the moment the dollar even looks like falling...

Here's a question: where's the American anguish about their plummeting exchange rate? In a massively importing economy, shouldn't households be feeling the squeeze? Yet I can't recall reading any commentary of that nature.

The sleeper has awoken?

ANZ National: 635mln
Westpac: 216mln
BNZ: 330mln
ASB: 440mln

Total: 1621mln

http://www.scoop.co.nz/stories/PA0707/S00352.htm

Where is the downside of pegging the NZD to a basket of our trading partners currencies? Wouldn't this deliver relative stability over the medium term, and encourage investment in production rather than property? Real products to real customers.

I'm no expert, but NZ used to have a fixed exchange rate,…

I'm not advocating a return to the gold standard. The gold standard didn't cause the great depression in the 1920s, it was caused by massive asset inflation (properties and stocks) caused by huge speculation on the back of bank credit.

I'm advocating that the power to create new money…

Good luck with your plans. Mortgage free has got to feel nice.

How did the gold standard lead to the Great Depression?

We are in the process of selling our house in Auckland. We will then move to Dunedin, where we will be able to buy a house mortgage free, and have a bit left over. (There are family reasons for moving south, as well).

I won't have to spend…

To answer your question as foreigners take cash out of the economy and back overseas they sell NZD so someone has to buy it right? But its the nature of the flows.

The profits made by the Australian banks here in NZD are around $4bln....nice work if you can…

Get rid of debt, unless it's…

Although people might be xenophobic about furriners, it doesn't actually have much practical impact that companies are foreign owned – why is it better to work for a a wealthy kiwi than a Japanese pension fund?

Rich: imagine two NZ companies--one sells to a foreign owner and the other remains…

Lee, Although the USD is in a major downtrend the NZD has had major moves against the Yen especially. Australia, the US, Japan and China are…

Three of those are just numbers. They are inputs but they don't have any practical effect on actual people. You aren't…

If you're old enough to vote you're old enough to go to jail!!

No incarcertation without representation!

/me throws tea into harbour

People are suckers for polls & surveys. My favourite is when someone (ANZ Bank I think) releases 'results' from their tally of jobs advertised in the newspaper. They actually add up the column inches in the Employment sections and…

Sometimes when I venture down to Papamoa (Fashion Island or Plaza) it sounds like I am in Britain....…

then there are all those saying it is broke.

– they want to get elected

– they have some sort of economic ideology to push

– they are naturally grumpy

– they have a vested interest in some business activity (like low-added value manufacturing) which the current NZ economy isn't…

Hey Stephen from Tokyo,
I am there next week for short visit (10 nights)
Any recommendations/hot tips? (food, beer, sights)
will be a bit of a culture shock for me (i have only travelled to english speaking countries before) and i want to make…

Well i was a trader for those years and it was probably the most unstable times the markets…

– they want to get elected

– they have some sort of economic ideology to push

– they are naturally grumpy

– they have a vested interest in some business activity (like low-added value manufacturing) which the current NZ economy…

But then there are all those saying it is broke.

If we don't want to end up as a tin-pot banana republic in the bottom of the South Pacific we need to cast off the shackles of old thinking and embrace some radical new ideas to put us on the…

Inflation is 4%
Unemployment is 3.8%

I'd call that pretty successful. We should be careful about trying some snake oil scheme (like cutting short term interest rates to drive the dollar down)…

some of the NZD prices quoted for food in above post are way off reality

I think you'll find the NZD prices were just translations of the USD prices for comparison, not the prices of comparable products in NZ.

Like energy, interest costs are embedded in the price of everything we buy. As someone mentioned in a controlled money supply the increase in rates would…

I am currently studying a Grad Dip Teaching (Secondary) and am researching for a paper i need to write on this topic. My original degree was in Geo and then i had a career in rural banking so this is all new territory…

all the cheap oil is used up, here comes the (really) expensive stuff!

Not without some creative thought.

As Nat said, Americans are used to and prefer marbled meat, with lots of fat throughout the muscle. You simply do not get that with grass-fed beef. There are feedlots in New Zealand, and we…

Yet I am still so thoroughly confused by global markets, 'pegging' to the US dollar, and what our interest rates actually mean that my head is swimming

Isn't this the problem so where are the economists?? Most of them are alongside the same boat as the correspondent . Which means…

Well, Avocadoes are about $4 each right now, down to maybe $1 in season. Although Haas fruit all year so I wonder about that sometimes.

Pork, milk & salmon look about the same I think, but my, can we sell them more beef? Those…

Haas avocados: USD$1.79 per. (NZD$2.26) It's summertime here, remember.

Peaches: USD$2/lb (NZD$5.57/kg)

Bananas: USD$.79/lb (NZD$1.75/kg)

Yogurt: USD$3 for 5 tubs (NZD$3.79 for 5)

Milk: USD$4.29/gal (NZD$1.13/L)

Pepsi: USD$3.79 for a 12 pack (USD$4.78)

Cheese: USD$3.88/lb for cheap Cheddar (NZD$10.80/kg)…

The increasing interest rates have the effect of appreciating the currency, as people invest their money here. This in turn worsens, not improves, our trade deficit, and increases overseas ownership of our economy.

In theory (cough cough- in a nice cleaned-up model of a wholely rational world market economy- as…

Do you have any references regarding why 'teenagers' exist in our society (and not in others)? Also if deliquency is normal for a teenager (for the reasons you have outlined) what happened in our society before this demographic existed? (and in other societies…

Yeah, but didn't the Police Association also tell us prior to the Anti-Smacking Bill that their hands would be tied and by law they would have investigate every reported case of smacking? But once legislation was passed it wasn't all so grim afterall was it?

I'm all in favour of…

Just got a quote on UK petrol (taxigas.co.uk) – 86.9p = NZD2.24
NZ caltex = NZD1.51

So the Brits are paying 50% more for petrol. However, because this is mostly tax, when the price of crude oil goes up, we get hit correspondingly harder.

Petrol is a bit of…

But our interest-rates look spectular in comparison, and while our economy has a similar imbalance to the US, there's been the feeling that NZ (via the interest rate at least) is doing something to correct the trade deficit

I've only got an undergrad economics degree, but my understanding is that…

You can vote at whatever age adult criminal responsibilty begins.

Brilliant! If you're responsible enough to do the time, you're responsible enough to vote (& drink & drive & join the army & get carnal etc). One size fits all.

Better yet, have an exam, an adulthood exam, you can sit it at any…

NZ consumers must be the most gouged/rorted in the Western world in terms of price and quality. Food, books, telecommunications, electricity, petrol, and so on and so on and so on...

Where are all the good news stories about how the exchange rates are making capital goods for the service and manufacturing sectors (otherwise known as "the post-colonial economic future") significantly cheaper?

If, putting aside sectoral pleading,…

I guess it's always bad to generalise from your own experience, but when I lived in the UK my salary in pounds was exactly the same number that I now get in dollars. I think my standard of living is similar if…

Prices in NZ for most things are outrageous. Especially eating out and admission prices for attractions. It makes Japan look cheap.

The only thing I thought was a good deal were the B&Bs. Butter, cream and soda water were cheap in Pak'n'Save. The…

I guess you have to feel some sympathy for them drafting a bill like this without the expert advice that the government gets (I assume) but for Becroft and Kiro to slate it in the terms they did, it must be quite a shambles.

In a word: balls. I'm not…

Discussions of the sustainability of the US current-account deficit—trending upward from $800bn—rarely plumb the long-term motives of its creditors. Taggart Murphy analyses the historical roots of Tokyo’s post-1868 geofinancial support for the ruling superpower, London or Washington, and the implications of…

I'm all in favour of those at the coalface (in this case the judiciary who will have to action this proposed law change) having an input but surely it is up to the Govt to set the law?

It wasn't a government bill. It was a NZ First bill supported…

Judge Becroft's argument makes the assumption that the Youth Justice System is working OK currently, and why would you want to chuck it out? Ron Mark is coming at it from another direction i.e. It is broken and we need to "get tough". (Death Penalty, anyone?)

As always, the truth…

Here's a question: where's the American anguish about their plummeting exchange rate?

In a massively importing economy, shouldn't households be feeling the squeeze? Yet I can't recall reading any commentary of that nature.

With the source of many of their imports rapidly shifting to China which has a peg (albeit…

no, sorry, can't accept that. nz has one of the highest current account…

"Where is the statistical evidence to suggest offending by 10 to 13-year-olds is spiralling out of control?"

I didn't think that the bill was designed to counter a (non-existent?) increase in crime rate by that demographic. My impression was that it was about more severely punishing the offenders we are…

In a massively importing economy, shouldn't households be feeling the squeeze? Yet I can't recall reading any commentary of that nature.

have you heard of the sub-prime mortgage fiasco?
and keep an eye on the US retail sales stats, especially the "excluding gasoline" figure.
oh, and personal bankruptcies, credit card…

Here's a question: where's the American anguish about their plummeting exchange rate?

The Americans are amazingly insular in their view of the world. As far as they are concerned they're a Global Superpower and world's economy revolves around their dollar. And it's unlikely they'll wake up to reality any time…

You've got it backwards. The ~20% appreciation against the AU / Euro / Pound is the baseline due to high interest rates. But that's only a quarter of the increase in the US$ and Yen;

And that's exactly my point. Remove the "Interest rate" inflation of the NZD and you…

Judge Andrew Becroft told a parliamentary committee yesterday that NZ First MP Ron Mark's Young Offenders (Serious Crimes) Bill would abolish the Youth Court and end family group conferences.

Yeah, but didn't the Police Association also tell us prior to the Anti-Smacking Bill that their hands would be tied and…

If you take the rough appreciation of NZD vs EUR or GBP (using the RBNZ figures or your graph) -…

I'd be happy to be corrected on this point, but wouldn't the $NZ be rising less against those currencies if it was not for the…

In a massively importing economy, shouldn't households be feeling the squeeze? Yet I can't recall reading any commentary of that nature.

http://www.ecb.int/stats/exchange/eurofxref/html/eurofxref-graph-jpy.en.html

(Hey! We can play at being John Key for a day! :)

High interest rates are indeed bad, and…

The WaPo published a rebuttal piece yesterday:
Why Bush is a loser

Moreover, high…

I/S is right that a lot of the headline exchange rate is the US dollar being weak – and we can do nothing about them trying to build an imperium on…

I'm an exporter myself, and years ago made what is in retrospect a very wise, if novel decision. I pegged my charges to the *NZ* dollar. Why noone else ever thought of such a thing I don't know.

Nice if you can do it – my main US…

http://www.rbnz.govt.nz/statistics/exandint/b1/download.html

Since the most recent trough in our exchange rates in Apr – Jun 2006, the NZ$ has appreciated 8.5% against the AU$, 14% against the Pound, 16% against the Euro, and 22% against the US$. But the others are all…

But surely it is NZ's interest rates that are the primary driver for the high currency. The TWI is peaking, there has been 30% appreciation against the Euro and similar rises against most currencies.

If it was just a NZ Dollar story, then yes we could do something about it,…

Roger Kerr has never cared about the transition cost of journeying to the small-government nirvana he preaches.

Damn straight. He is also pretty good at ignoring the cost to NZ of effective monopoly in telecommunications, going so far as to argue that it is a good thing.

I don't think…

One of the things I've always wondered about – raising interest rates cools the economy by slowing down the housing market ... but it also heats it up by making imported good cheaper (despite my…

Because the $US is currently weakening against all other currencies due to Bush's poor economic policies. And that is not something our reserve bank can do anything at all about.

But surely it is NZ's interest rates that are the primary driver for the high currency. The TWI is peaking,…

What I've been wondering more recently is why the imported stuff I buy hasn't gone down by 20%

The other side of the "death spiral" is what would happen if the NZ sank rapidly to a "comfortable" US$0.65.
We'd see some very uncomfortable price inflation- fuel being the one that…

Double ouch. Still, this is form for New Zealand First. As Holden Republic and others pointed out last year, Barbara Stewart's failed bill to reduce the number of MPs in Parliament didn't make much sense either.

It made perfect sense. It was suitably drafted. If reduction in the number of…

I run my website in US dollars. It might be time to change that to Euro for traffic outside the US.