NZ dollar & economics

[cowpoos]

All my effort to raise the level of general discussion just a bit undone by a random meaningless comment.
Grrrrrrrrrrrrrrrrrrrrrrrr
Vandal!!!!!!!!!!!!!!!

have a beer....you'll feel beter...and we can start the intelectual convo in the morning...work finnished hours ago...

[Hitcher]

I suspect that there is at least one generation on this site that doesn't remember the "good old days" when HP and credit card credit rates hovered dangerously close to 30% per annum; when you needed overseas funds to buy a new car; when second-hand cars were worth more than new ones; you needed a doctor's certificate saying you were disabled to get an automatic one; and when heaters were dealer fitted extras. Mrs H and I had a first mortgage at 18% when we bought our first home and that is only 17 short years ago.

Inflation in New Zealand in the 1970s ran at about 15%, plus or minus, for years. This is what set the scene for Roger Douglas' economic reforms of the mid-1980s.

We were precipitously close to falling into the third world. People who scoff at the Reserve Bank's current inflation target have no idea of the havoc that rampant inflation causes and should wake up and smell the coffee. Our nation's current account deficit scares me silly. I should stop here before I get too excited about left-wing political agendas and the journey to hell in a handcart...

[TwoSeven]

All my effort to raise the level of general discussion just a bit undone by a random meaningless comment.

It wont happen. Generally if they try using the intelligence center in the brain they end up curled up on the floor thumb in mouth making baby noises - I think the single-cell suffers from neural overload causing a short circuit.


Following on with Hitchers post, does anyone remember what the top tax rate was in that period. It was something like 70-80% I think - compared to the current 48%.

[idb]

A strong currency is generally a reflection of a strong economy with good fundamentals. NZ's case is a bit different because our domestic economy is so small. Instead of reflecting good fundamentals (e.g. productivity) our dollar is over-valued because of speculation in it by overseas speculators attracted by the high interest rates to be earned in NZ (they're vastly higher than in the USA for instance).That can change in a very short time if the interest rate differential changes back the other way. We are pawns in a global poker game, you could say if you were a conspiracy theorist.OK I may be a bit of Luddite when it comes to these things but I figure it like this: we make stuff to sell overseas to earn our "income", right? And our exporters are struggling with a high NZD making many of them uncompetitive (eg forestry industry, a real good current example) so production volumes are down, plants working reduced hours, workers being laid off. So our income is shrinking. Meanwhile our laissez-faire trading policy allows cheap imported goods (cheap because of the high value of the NZD) to flow into NZ, practically without restriction. So our spending is increasing (mainly on crap so far as I can tell....although that is a different subject). Now...I can't run my household budget like that, not for long anyway. So...WTF?

Sooooo....doesn't that just show that economics is all voodoo and that economists might as well wear big grass skirts and wooden masks while leaping around rattling bones and bleeding goats?
That is to say, economics is a pseudo-science trying to predict cause-and-effect when the whole model can be so easily upset by something as unpredictable as human nature, or a big wind on the other side of the world....

[idb]

And in fact make economists the most dangerous group of people in the world because, despite dictating government fiscal policies and social agendas, in fact they have no f*cking idea what's going to happen......?
I propose a jihad.

[riffer]

Following on with Hitchers post, does anyone remember what the top tax rate was in that period. It was something like 70-80% I think - compared to the current 48%.

I can remember 68% but I never qualified. - I must have been around ten at the time (1977).

[idb]

I suspect that there is at least one generation on this site that doesn't remember the "good old days" when HP and credit card credit rates hovered dangerously close to 30% per annum; when you needed overseas funds to buy a new car; when second-hand cars were worth more than new ones; you needed a doctor's certificate saying you were disabled to get an automatic one; and when heaters were dealer fitted extras. Mrs H and I had a first mortgage at 18% when we bought our first home and that is only 17 short years ago.

Inflation in New Zealand in the 1970s ran at about 15%, plus or minus, for years. This is what set the scene for Roger Douglas' economic reforms of the mid-1980s.

We were precipitously close to falling into the third world. People who scoff at the Reserve Bank's current inflation target have no idea of the havoc that rampant inflation causes and should wake up and smell the coffee. Our nation's current account deficit scares me silly. I should stop here before I get too excited about left-wing political agendas and the journey to hell in a handcart...

I remember it Hitcher but it was just a bit before I was old enough to care.
Alcohol, bikes, cars and gir.......no, mainly alcohol, bikes and cars were my concerns.
No argument about the inflation target, my query is whether the method of control is working.
Maybe Marmoot is right - the old ways just aren't appropriate any more.
A shared currency with a big player is looking more logical the more I think about it. Maybe Indonesia - what's that, is it the Baht or something?
That would teach Australia for shitting on us twice over the World Cup!

[idb]

have a beer....you'll feel beter...

Heyyyy....you're right...!!!

[scumdog]

idb, I agree with you initial post on this thread, as a selfish prat I want to know why I can't get my T'bird at a $ for $ rate instead of 69 cents for the (US) $.

And as we are so dependent on imports does it NOT make sense to have the dollar high?

Paradoxicaly I guess that to pay for these imports we need top dollar for our exports - hence the need for a 'lower' dollar... what a conumdrum eh?

[idb]

idb, I agree with you initial post on this thread, as a selfish prat I want to know why I can't get my T'bird at a $ for $ rate instead of 69 cents for the (US) $.

And as we are so dependent on imports does it NOT make sense to have the dollar high?

Paradoxicaly I guess that to pay for these imports we need top dollar for our exports - hence the need for a 'lower' dollar... what a conumdrum eh?

Hmmmm, a conumdrum indeed.
But what to do..........?
Still 69c is damned good compared to 3 years ago or so.
It used to hover around 52c as I recall (not always reliable).
Isn't it over 70c at the moment?

[scumdog]

Hmmmm, a conumdrum indeed.
But what to do..........?
Still 69c is damned good compared to 3 years ago or so.
It used to hover around 52c as I recall (not always reliable).
Isn't it over 70c at the moment?

Got married in las Vegas in 2001, licence cost $35, not bad thinks I - but then the NZ dollar was worth only 40 cents US!!

In 1980 it was dollar for dollar.

[Brian d marge]

Heres the Solution . Buy NZ , ( I know they tried it, but the stuff that was made was crap ... you could buy better overseas ,cheaper ,,)
So we buy NZ , if its crap we say so .... and with the internet we can do a lot ... So instead of buying that Harris exhaust ,,,you buy NZ made and demand quality and GOOD service OR you will get it from Overseas

Oh and Save money in Kiwibank Countrys come to NZ for its farming expertise ..I am sure they can come to NZ for other stuff as well


Just a thought ....( but not Canterbury Draught ,,,you couldnt inflict that on an unsuspecting world !)

Stephen

[Marmoot]

Maybe Marmoot is right - the old ways just aren't appropriate any more.
A shared currency with a big player is looking more logical the more I think about it. Maybe Indonesia - what's that, is it the Baht or something?
That would teach Australia for shitting on us twice over the World Cup!

Dammit, I'm absolutely right! I'm always right and you know it! Long live me...

If we want to peg it, the choices would only be Euro, USD, Chinese RMB or JPY. There is no point pegging it onto anything else except from those as they are normally the benchmark for export/import and stability (well....relatively speaking, at least politically)

Indonesian Rupiah is crap. The country may be big (220milion people, 1/8 world circumference, 13k+ islands, etc) but the economy is as stable as a prancing horse standing on a jelly pudding (yes, thank you I like that idiom. Newly invented by me).
Country size is not an indication of how good their currencies are. The political situation is the good indication.

Mr. Hitcher, the 'good ol days' is good, but if the government is not careful (or if we stop whinging) then next year may become back-to-the-future for us.

And Brian'd'Marge suggesting Buy-NZ in bike forum? never You know you want that Akrapovic exhaust

[Lou Girardin]

Inflation in the '80s did me a big favour. House prices soared, wages followed, and my good old Housing Corp mortgage stayed the same.

[Brian d marge]

And Brian'd'Marge suggesting Buy-NZ in bike forum? never You know you want that Akrapovic exhaust

I admit ..I would like the ohilns and My Enfield does have a Carrillo rod and Kibble white valves set up ..

But knowing how some of these after market people make stuff.. I am sure people could do better in NZ (2 smoke expansion chambers)

For example I offer as evidence in my defense F1 engineering footpegs/rearsets beautiful stuff
Suspension tech .... why deal with america for the same stuff

I do where i can , for example I deal with local engineering shops ( F1) and I live miles away !!!!

Stephen