Current Account Deficit (aka take your money offshore)

[Squeak the Rat]

Not trying to be doom and gloom, but we should be concerned as NZ's current account defecit continues to worsen. This *could* have some serious problems for our country.

For those that don't know, the CAD is the difference between the amount of money that gets brought into the country versus the amount that gets sent out. We are sending out heaps more than what comes in.

1st link I could find on google:
blah blah

Not concerned? Our situation is very similar to Argentina's pre-economy crash.

Won't happen? If we can't fix it (and we haven't been able to for 20 years), the silver bullet for fixing a high CAD is to severely devalue the dollar. Imports will be more expensive, and exports will bring relatively more revenue.

Still not concerned? Foreign investors will start to be. So will people who provide loans to NZ. Interest rates will go up, so more money will flow offshore to service loans. And on goes the cycle.

[Motu]

Pah! - put another bike on the mortgage!

[WINJA]

how will thiss effect the way i grow potatoes and corn for my own consumption.


what makes the economic problem worse is when people talk about it and gives everyone a negative vibe stopping them spending and worsening the situation so stfu

[Flatcap]

what makes the economic problem worse is when people talk about it and gives everyone a negative vibe stopping them spending and worsening the situation so stfu

Which is exactly what Bollard is doing now he has lost control of inflation...

[Squeak the Rat]

Bollard is a moran who only has one lever to fight inflation - raise or lower interest rates. This is the man who said the fall of the dollar against the US after record highs was a "surprise".

Yes - the media is currently getting all creamy in the pants over this, but it has been like this for a while now. They will find something else next week, but the problem will remain.

WINJA - I'm sure there is only one plant that you grow for your own consumption, and don't worry that won't be affected at all.

[poorbastard]

Let the bloody dollar go down. More exports suits my pocket.

[WINJA]

WINJA - I'm sure there is only one plant that you grow for your own consumption, and don't worry that won't be affected at all.

OK , I LIED MY POTATOES DIDNT COME THRU THIS YEAR BUT THE GROUND WAS TO MUSHY

[Finn]

how will thiss effect the way i grow potatoes and corn for my own consumption.


what makes the economic problem worse is when people talk about it and gives everyone a negative vibe stopping them spending and worsening the situation so stfu

Because you wash your corn & potato bread down with a 6 pack while watching TV on you 50" LCD.

The media love to talk about doom and gloom which helps bring the market down. They are the same with real estate. They should all STFU. Kiwi's find it hard making decisions as it is.

[WINJA]

Because you wash your corn & potato bread down with a 6 pack while watching TV on you 50" LCD.

The media love to talk about doom and gloom which helps bring the market down. They are the same with real estate. They should all STFU. Kiwi's find it hard making decisions as it is.

SERIOUSLY FINN , I DONT DRINK ANY ALCOHOL AT ALL , I HAD MY LAST BEER IN 1989 COULD YOU IMAGINE WHAT A CUNTY CUNT ID BE IF I WAS A DRINKER

[SimJen]

Cullen fortunately has most of his financial interests overseas to avoid tax....

[Finn]

SERIOUSLY FINN , I DONT DRINK ANY ALCOHOL AT ALL , I HAD MY LAST BEER IN 1989 COULD YOU IMAGINE WHAT A CUNTY CUNT ID BE IF I WAS A DRINKER

Bullshit mate. You don't get a gut like that from corn bread.

I can't last a day without a drink. It helps ease the pain of a bad chilhood and my boring existance of a life. The wife gets the bash now and then but now she's drinkin she bashes me back. It's a give and take relationship. My dog can't stand it either so even he's drinkin now. We're a sad but content family. We're thinkin of having kids.

[RantyDave]

Not trying to be doom and gloom, but we should be concerned as NZ's current account defecit continues to worsen.

Stop pissing about and raise the interest rates. At least one point if not two. Pop this goddamn housing bubble and make houses affordable for first time buyers again. Get all the people who thought they'd make a ton on property investing and give their greedy arses a slap. Stop the onslaught of Japanese plasma tellies into the living rooms of those whose finances are, honestly, on the edge anyway. Take some heat out of the economy. Bring the whole damn country back to the realisation that we're rushing headlong into being a third world country and need to do something about it ... pronto.

F*cks sake. Raise interest rates. Do it now.

Dave

[Ixion]

Very simple solution. Capital gains tax. And death duties. Sorted

Never see it from this capitalist right wing government though. Hit them too hard in their own pockets

[Finn]

Very simple solution. Capital gains tax. And death duties. Sorted

Never see it from this capitalist right wing government though. Hit them too hard in their own pockets

The answer to turning around our deficit is not to add more tax. That's just plain stupid. It'll have the opposite effect as people struggle to think of reasons to live and invest in NZ. Wealthy people don't pay much tax in the first place anyway. It'll hit people more like yourself with one foot in the grave, the other on a banana skin who want to retire. They sell their house which they've worked their entire life to pay off, only to be hit with CG tax.

Good one Itchy.

[chickenfunkstar]

Not trying to be doom and gloom, but we should be concerned as NZ's current account defecit continues to worsen. This *could* have some serious problems for our country.

For those that don't know, the CAD is the difference between the amount of money that gets brought into the country versus the amount that gets sent out. We are sending out heaps more than what comes in.

1st link I could find on google:
blah blah

Not concerned? Our situation is very similar to Argentina's pre-economy crash.

Won't happen? If we can't fix it (and we haven't been able to for 20 years), the silver bullet for fixing a high CAD is to severely devalue the dollar. Imports will be more expensive, and exports will bring relatively more revenue.

Still not concerned? Foreign investors will start to be. So will people who provide loans to NZ. Interest rates will go up, so more money will flow offshore to service loans. And on goes the cycle.

Errr, not really.
You know that our dollar is floating right? Argentina had a fixed exchange rate prior to 2002. Is it even possible to have a financial / currency crisis with a floating exchange rate?

Just let the dollar devalue, exports will increase, domestic interest rates will rise, capital inflow will occour, problem solved.