The Aussie Dingo is even more overvalued than our Kiwi . Where's the advantage to our exporters in linking to that ? The Chinese yuan/renimbi is an option , as we'd get links to the US Peso , and backing of the massive PRC's savings .

Fix to the Aussie $ and our exports to our largest trading partner immedialtey become 20% more expensive, although remaining so therafter, and our imports get cheaper across the board. I wonder who will buy what's left of our export goods?

It seems strange to me that exporters would want it, ok they might complain about a fluctuating currency, but then lately the AUD has been all over the place as well.

If exporters are complaining about how high the dollar is now, why would you want to hook up the AUD and go at least another 10 percent higher on what we have now?, with a very real potential for going even higher than that.

Is this guy John Allen trying to help out exporters? or maybe importers?, you have to wonder.

Why would you want to 'fix' at anything other than parity, raf, when the longer term distortions could play havoc with both pegs to that union? If people think we have excessive funds flows now, I shudder to think what they could be under a disproportionate union. I would imagine harmonisation, a la Euro, would have to be a prerequisit, anyway. But,hey, I'm not an economist or a financial market guru.

In a curious move Bernard........really..?

Ah been shouting this from the rooftops for ah dunno how long on here now .
No surprise.. but uuuuurgh!! if you have any U.S. paper get out now.!!!!!

raf : Only amongst Tasmanians is it acceptable to " end up in bed with our cousins across the ditch ". ........ . There it is de rigueur .

ABC Ltd, Wellington sets up subsidiary in Melbourne. Does all exporting from Welly at 0.8 and importing from Melb. at 1.0. Banks with ANZ Group and uses export recepits held in Welly as collateral on borrowings to finance importing business in Melb. etc etc. It becomes the ultimate arbitrage at anything other than 1=1. ? Change of postcode to 9 the only real answer -Territory of New Zealand - has a ring to it!

All the talk about the NZ$ being a small currency and therefore being exposed to too much volatility as being a reason for a common currency doesn't stack up. The A$ is just as volatile. We often follow it.
For exporters worried about volatility they can forward cover some or all of their expcted FX receipts. With a common currency they would still have to do that except for sales to Australia. ( The NZ$ does not vary alot against the A$ anyway , in comparison to other currencies ).

Agree that we need to get our debt levels down, so pegging to the AUD so we can take on more debt is not a good idea.

Agree that it in fact turns on 'sovereignty', but is that such a stupid thing to consider?
We'd fit in the Aussie federal system and it would potentially save a fortune on government costs, if done well.

Better to merge the currency with the Zimbabwe Blurta. That way we wouldn't have to buy wallpaper, or toilet paper!

Why your at it, may as well through in our legal system, voting, sporting teams and any remainder of our national identity.
You don't have to scrape the surface too far to realise how the Aussies will treat us once we become marginalised under their direct control.

Might be prudent to also discuss - would they have us and what's in it for them?

Wally well said in all above. Once sovereignty has gone, it will be gone for good under corporate dominated international law and would add to the international demise of the nationstate and the seemingly inevitable return to an overt empires. Any chance of this nation ever enacting its public credit facilties in its national interest will be gone for good, and I suggest with it any chance of a majority of its citizen ever again acheiving the dignity of economic equal-opportunity.
We certainly would not want to peg it to the US Dollar if this article is anything to go by, Wally, they will soon be using that for wallpaper:
"The title "Farewell America" is fitting because, in the final section of the document, Switzerland's oldest bank reveals a momentous decision. Wegelin & Co. is in the process of recommending that clients "exit from all direct investments in US securities... on the grounds of the threat of inheritance tax coupled with uncertainty as to whether one might not, one way or another, be turned into a US person."
http://www.taipanpublishinggroup.com/taipan-daily-090409.html

These for those who dont believe multinational corporate influenced rule has reached a tipping point of where it will be almost unstoppable:
1. The WTO Is Fundamentally Undemocratic
The policies of the WTO impact all aspects of society and the planet, but it is not a democratic, transparent institution. The WTO rules are written by and for corporations with inside access to the negotiations. For example, the US Trade Representative gets heavy input for negotiations from 17 "Industry Sector Advisory Committees." Citizen input by consumer, environmental, human rights and labor organizations is consistently ignored. Even simple requests for information are denied, and the proceedings are held in secret. Who elected this secret global government?
http://www.globalexchange.org/campaigns/wto/OpposeWTO.html

This for the best 25yr chronology of creeping of multinational corporates and their central banker parents
http://www.multinationalmonitor.org/hyper/list.html
especially this on IMF and Worldbank outcomes for developing nations
http://www.multinationalmonitor.org/mm2001/092001/
I for one would like to see us join a fight for freedom, not throw in the towel.

Bernand, you are making a dumbo call here....
I am not sure why the Aussie banks are complaining, after all they were the ones who bought out our banks, NAB bought BNZ, Commonwealth purchased ASB, ANZ bought National. These guys knew future earnings when they made the decisiion to invest in NZ and they are making a killing out of us. Otherwise why did they iinvest an extrta $10B this year.
The reason we are an indebted lot is that the Aussie banks have offered us lots of money to borrow, then the banks have become to scared to turn the taps of and cause property values to plunge. That would really hurt the Aussie banks loan book.
Not our fault mate, so why bail out the dumb investor bank directors of Melbourne.
A common currency means that the Aussie banks will inflate our economy further to increase the speed of payback, which can be only bad for us.
Origin Directors of Contact will get their high directors fees in A$, another cost transfer to Australia, and the multi nationals will charge Sydney prices to NZers.
Our economnies and wage rates are two different to sustain a common currency.

Don,

Many thanks. It's true I do have big ears and very large feet...

But one of your points is internally inconsistent. You say the Aussies would like to inflate our economy. That would be very bad for the banks because is bad for lenders and great for borrowers.

cheers
Bernard

We'll all sing Matilda like it or not,,...... the C.E.O. is in da house cranking up the sound.

No it's not a distraction, it's a directive he's got to figure how to make us WANT it.

Capital Flow Controls are a far more sane answer than giving up our sovereignty

Then a team of IMF staffers admitted - albeit implicitly - that their agency had been driven by ideology rather than empirical observation in doggedly opposing capital controls. These are measures to regulate the speed and volatility with which short-term and speculative investment - so-called ''hot money'' - is allowed to cross borders. Investors would shun countries using controls, the IMF had long argued.

But the agency's Monetary and Exchange Affairs Department admitted in a report that controlling both the inflows and outflows of capital has, to varying degrees, helped countries to protect themselves from crisis. Indeed, overwhelming capital inflows precipitated Asia's woes by encouraging investment in projects of questionable financial pedigree and economic merit.
http://www.atimes.com/global-econ/BA20Dj01.html

http://www.frbsf.org/publications/economics/letter/2001/el2001-25.html

http://rspas.anu.edu.au/economics/publish/papers/wp2007/wp-econ-2007-07.pdf