So why the sudden change from the "unbalanced economy, high dollar unjustified by fundamentals bla bla bla"¦" rhetoric? Something has rattled Bollard's cage that he's not letting on about. Who exactly is pushing his buttons?

hmmm...90year old back at work because of madoff

http://www.youtube.com/watch?v=UsuCfz47d4U&NR=1

The $NZ is so entrenched as a speculators dream that every time the reserve bank hints at putting up our already comparatively high rates it soars. There are other ways to control the housing bubble, such as lowering interest rates so that there is less cash slushing around the system for banks to lend out.

We need to get a level of control of our $ somehow and can't afford to do it through using non-existent cash reserves.

There are plenty of things that can be done to control the kiwi dollar, they are just choosing not too... don't be fooled.

Of course he cant control it, hes not bloody Muldoon.

The good news is that it is keeping the cost of imported fuel down, which is helping the recovery-

The NZD is not "high"- the USD and GBP are low, because those countries are now irrelevant, and the world has moved on from them.

The magical money that is/has being printed, Megan, goes nowhere near to replacing the amount of magical wealth has been lost over the last 2 years. That lost illusory wealth that was spent on durable items will result in the sale of those items for people to live on. ie: as an exaggerated example, people will soon have to start selling their houses/cars/shares to retrive the savings tied up in them to pay for living costs/food etc.
So I'm not too sure it's right to say that 'high inflation is on the way' if by that you are talking about asset price rises. Consumption goods, maybe, but we shall see.

Kiwis - including a few commentators here - need a reality check. A low value currency = a low value country. Simple really. If someone said that your house should be half its current value, then how would that make you "better off"? However, a lot of people see a lower NZD as the answer - which is avoiding the root of all the problems to start with. The root problem is global debt and govts everywhere who want to pretend that it will go away without consequences. Debt levels and down-the-road inflation pressures make 1929 look like a panacea. Bollard and other central bank leaders have two simple choices over the next 5-10 years:

1) Keep interest rates low and inflate the money supply - a bit of a "drug" to deal with the problem short-term. The consequences of this course of action? Massive inflation and wealth destruction on a huge scale - not to mention the probable demise of fiat currencies in their current form (USD, NZD, etc). Central banks and govts are loath (but probably, like a heroin addict, unable and unwilling to reverse course) to go down this path as it will likely take away a lot of their power (i.e. the ability to print money and spend at will). They are deluded in thinking that they will be able to "manage" it (a bit like Mugabe).

2) Raise interest rates to restore confidence in currencies and provide a return for savers (who are sorely needed and almost extinct). The consequences of this course of action? Many bankruptcies and massive asset value writedowns and a big reduction in govt (read less welfare largesse, etc), but ultimately a return to reality and future growth from a firmer foundation.

My guess is that the public and govts will opt for option 1. A case of "who cares about the country...what's in it for me?" Be careful what you wish for...ultimately we will get exactly what we deserve.

"These woods are starting to scare me mummy"
"I know dear but the wolf promised we would soon see the light"
"and feel the heat mummy...he said we would feel the heat"
"Yes dear...I'm a bit confused about that bit"

@ Ludwig - I say go right ahead with Option #2. It's best for NZ as a country and will better reward the Savers who have done the right thing by not choking themselves on debt. Ultimately, people must live within their means, it's really that simple. If you do that, you shouldn't have too many problems. Hardly rocket science!

I see far greater investment in Noddyland from China as they move to buy up future commodity supply. That means they will own the future growth. Little to stop productive property being absorbed by the red dragon enterprise. The power that lights the Beehive is Beijing property! I am sure the Chinese Embassy staff in wgtn get great enjoyment every time they turn on a switch. This thought must be similar to those Maori had in the 1800s as the British machine rolled the tribes. Quite an achievement in a little more than 160 years! I expect Mandarin to grow in usage and economic importance over this century in Noddyland.

Matt S - we can't afford lots of things but we still buy them...

I love how the media has jumped on the single report, that NZ may be out of recession, and now the recession is being treated like a past event. However I believe what is to come is going to be more felt within NZ, as people are laid off and house prices plunge as interest rates skyrocket.

We don't need to buy gold, we produce 16.3 tonnes a year.

http://www.crownminerals.govt.nz/cms/news/2009/nz-gold-production-highes...

As the USD goes down our foreign debt gets less!

Sorry I forgot to post this earlier today. Enjoy

Who's looking at the data says PEC

As the dollar hits 76.4 cents to the US dollar, we are told there is nothing we can do to protect our own currency and that's just not true. "Why are New Zealanders not being told the truth", says Selwyn Pellett spokesperson for the Productive Economy Council.

"The public are tired of hearing "Oh it's the US Dollar or the Pound" and "We are in the same position as everyone else". Well this may serve the needs of banks and the politicians but it's just not true. In the 22 day period from the 1st of August the NZ Dollar has appreciated 5.1% against the US Dollar with a 0.1% improvement in GDP, while Singapore achieved a 15% improvement in GDP with just a 1.61% increase in its dollar against the US Dollar, and Taiwan's currency decreased 0.6% in the same period. So let's stop telling the New Zealand public we are helpless and can't do anything. The lack of leadership on this issue puts us in danger of becoming another Iceland." says Pellett.

"If politicians and bureaucrats were paid in US Dollars this problem would be solved by lunchtime. Perhaps that's what we should do. The solution required to fix New Zealand's recurring monetary and productivity problems are tried and tested. Australia and Singapore both have compulsory superannuation, both have capital gains tax, and Singapore's intelligent monetary policy does a great job of protecting its productive / tradeable economy while maintaining price stability" says Pellett

We are told we need fresh ideas to solve the problem of the dollar and our lack of productivity as a nation"¦why do we need fresh ideas when such problems have been solved elsewhere?

"Eighty percent of the solution lies across the ditch in Australia in their tax and savings plans and the remaining twenty percent resides in Singapore's superior monetary policy. Fresh? Well not since the days of Bob Hawke and Lee Kuan Yew; but perhaps that's the problem. Perhaps our government really can't bring themselves to adopt policies introduced by other governments, policies that have stood the test of time and delivered superior prosperity to their nations. To this we say get over it! Left and Right is the politics of yesterday, we need national leadership that is more concerned with right and wrong than left and right."

"The facts can't be ignored. Until 1984 when we floated the dollar and introduced our version of monetary policy, our GDP was significantly greater than Singapore's. Since that time Singapore as steadily gained ascendency in every area of their economy. We don't have to be Singapore but we want to adopt the sanity of their monetary policy and the sooner the better." says Pellett

Selwyn -
Is there any chance that your PEC presentation could be up in the Top 10 daily news?
Perhaps, Bernard could consider it. Thanks.