- Am I the only one who wonders why the announcement of a bureaucrat should be listened to with so much interest? Why should he have so much power? And why is his 'basket' of goods and services by which he measures inflation necessarily an accurate reflection of things as they are?
- Has anyone met the "average consumer" who regularly purchases this basket?
- Surely Bollard realises that a rise in interest rates will encourage even more foreign investment in New Zealand, and so give heightened support to a dollar already at record highs? How important is 'price stability' when its pursuit threatens the existence of New Zealander's exporters by pricing them off the world's stage, and New Zealand's producers by raising the price of their borrowing?
- Does anyone else wonder at the sanity of strangling the backbone of our economy -- producers and exporters -- in order to deal to "the profligate household sector"? Is that sane? And, given that many household borrowers are fairly well insulated from Reserve Bank interest rate hikes, will another Reserve Bank interest rate hike deal to them anyway?
- And why should they be 'dealt to' anyway? Why is the 'price stability' of Bollard's 'basket of goods' such an important thing, and should New Zealand producers and exporters be sacrificed on the 'cross of stability'? Don't prices in a free market rise and fall naturally as a way of clearing markets? Is that such a bad thing? Don't free markets, when they're left free, exhibit over time a gentle 'deflation'? Why is that a problem?
- How "profligate" is the household sector? Why is it "profligate" to pay what you can afford? And just whose money is it anyway?
Westpac says it expects this week's hike to be the last of the cycle, although, it says, the Bank is not likely to relax for months.Linked Articles: RBNZ could deliver 'grand slam' to the economy - Westpac
"The RBNZ's campaign to give housing a king hit will continue with a further hike on December 8.
"But the stakes are getting higher: the RBNZ risks getting an unwitting grand slam over all aspects of the economy as it targets the last pocket of resistance with the tenacity of a pit bull.
"The economy is slowing, and has been since 2004. Consumer spending growth is slowing, residential construction has contracted in 3 of the 4 last reported quarter, investment in other fixed capital is losing pace and increasingly being dominated by the public sector.
"Net exports are mired in red ink. Business and consumer sentiment are very weak. Horticulture, fishing, forestry, manufacturing, and tourism are already in technical recession.
"Only the government is set to remain a strong growth industry in 2006," Westpac said...
Cue Card Libertarianism - Banking