Same country, different views [update 5]
New Zealand is likely to begin recovering from the global financial crisis ahead of the pack , Reserve Bank Governor Alan Bollard said today. . . “The New Zealand economy has taken knocks, but some form of recovery is now on the horizon."
Speaking at the Herald's Mood of the Boardroom breakfast, Bill English admitted that the current global recession made it difficult to take any long-term economic views with certainty.
"It's getting a little easier to get a fix on what the picture will be like in a month's time", he said, "but forecasting a year or more out is not so easy.” . . . English certainly was not about to promise any quick fixes. He described the ten years we face until we achieve fiscal surpluses again as a "demoralising trudge"
Well, they can’t both be right, can they.
Meanwhile, NZ’s M2 money supply is increasing at a year-on-year rate (as of May) of 10.7%. We still haven’t learned, have we
UPDATE 1: Says Bernard to Alan Bollard: “Stop wagging your finger and start hiking”:
Reserve Bank Governor Alan Bollard has developed a finely tuned style of finger wagging lately. He has wagged his fingers at so many people and in so many directions he risks looking like a man who just waves his hands around a lot and doesn't actually do much. . .
So what is it Dr Bollard? Should we borrow less and spend less? Or should we borrow more and spend more? Or would you like us to save more and spend less? Or should we do everything at once? Why do you tell us to do one thing with your finger and then do another thing with your OCR?
Here’s what Alan should do. He should stop wagging his finger around and just resign. Shut down the Reserve Bank, and step down – and let interest rates be what they will on a genuine free market. That, dear friends, is what genuine deregulation looks like. Central Banks: Who Needs Them?
UPDATE 2: I love this comment from a National Business Review reader:
I was optimistic till I heard Mr B says we are out of trouble. This guy couldn't pick last weeks Lotto.
UPDATE 3: If Alan’s relying on the States to pull us out he’d better think again. Morton Zuckerman at The Wall Street Journal says “The Economy Is Even Worse Than You Think.” Read the 10 reasons the US is in even more trouble than the 9.5% unemployment rate indicates.
A week ago the RBNZ berated banks for interest rates being too high; today, Bollard berates consumers for responding to interest rates being too low. Which is it?
Life’s always tough for an economic dictator.
When the hell did the Reserve Bank become a central planner? Their mandate is to control medium term inflation, not to decide how national income should be divided.
Give an economic dictator an inch, and he’ll try to take your smile.