Posts by WH
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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 our interest rates are a product of RBNZ policy. The RBNZ increases the prevailing interest rate in order to slow economic activity and thereby control inflation. (As you point out, low interest rates both encourage productive investment and encourage speculation in housing. A stronger capital gains tax regime for investment housing would help decouple this link.)
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. This is why rising house prices and rising oil prices are not good for us.
As for the US, on multiple fronts George Bush is responsible for diminishing US hegemony. As Russell mentioned, I can't say I've seen much comment on this in the US media.
Great post just btw, Nat. I'm hoping to travel through the Americas sometime soon and am biding my time for my purchase of $USD. Hello, currency speculation.
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I/S, I'd have to accept that the yen and $US are falling, but wouldn't that be a consequence of the relative yields from those currencies?
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 interest rate differential? Surely the price of the $NZ reflects both the buying pressure on the Kiwi and the selling pressure on the other two?
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Russell,
The WaPo published a rebuttal piece yesterday:
Why Bush is a loser -
The point about the fall of the US dollar is a good one. Still, if our own currency is "significantly overvalued" (especially against the yen) then it is our interest rates that are to blame. I take it that Cullen gets his advice on this point from Treasury?
Moreover, high interest rates themselves hurt our economy by making productive investment more expensive. They also effectively lower the standard of living of people with mortgages. High interest rates and an overvalued currency will hurt us in long run ways that cheap TV's can't compensate us for.
Otherwise Cullen has been an outstanding Finance Minister. We are lucky to have him I think.
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I was chatting with a charming and attractive bio-chemistry PhD candidate at a dinner party a couple of years ago. Her thesis was on the neuro-toxicity of recreational drugs. She told me that P kills brain cells at a uniquely alarming rate, and that the resulting damage was severe and probably irreversible.
I'm not saying there is a connection, but Sue Bradford's use of the Green Party as her personal vehicle is not the kind of carpooling that we should be encouraging.
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I like Jeanette Fitzsimmons. I think she is kinda neat. Unlike some Green Party MP's I can think of.
You can learn more about Jeanette here:
http://www.greens.org.nz/people/fitzsimons_j.asp -
I'm more moderate (politically speaking) than Michael Moore, but I think he gets unfairly relegated to the status of unreliable firebrand sometimes. I understand that the basic critique of Moore is that he uses misleading editing, but the less conspicuous lack of balance in something oestensibly neutral like Time or HANNITY and colmes is prolly more insidious.
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When you do or say something stupid on your Facebook page, all of your friends see it pretty much simultaneously. Putting up a photo of a horse as my profile picture seemed like such a good idea at the time.
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I know that this is not really on topic, but Calvin and Hobbes may well be the best mass market comic strip ever.
http://en.wikipedia.org/wiki/Calvin_and_Hobbes#Cardboard_boxes
http://progressiveboink.com/archive/calvinhobbes.htm
http://calvinandhobbes.awardspace.com/ -
I guess having marijuana found in your Prius is one cause for anxiety that taking Xanax can't help you with.