The arrogance of Bollard never fails to surprise me. He now claims that the OECD economies are coming out of recession but keeps a foot in the other camp as well by saying that these economies could easily slip back into recession - brilliant.

But let us not forget that Bollard and his army of neo-classical econmists at the RBNZ with the aid of their so-called spohisticated computer model of the NZ economy completely failed to predict this recession, yes that's right they didn't know it was coming. Yet here he is now telling us that this brilliant model of his is now predicting recovery.

Any one interested in how all the central b(w)ankers throughout the world failed in this respect should take a look at Prof. Steve Keen's website www.debtdeflation.com, where he predicts that the mess that these central bankers caused will get much worse.

However I shouldn't complain because I have made some good profits by doing the exact opposite of what Bollrad says e.g. when he says that the NZ$ is too high I buy it knowing that it will go much higher.

Bolly...Bolly....Bolly.........might do this
Bolly...Bolly....Bolly.........might do that
Bolly... ain't gonna do jack.....cause.....

Bernard has edited this comment. A friendly reminder to all not to use language that a lawyer (or a Reserve Bank Governor) might consider abusive or defamatory. Be nice people. Bryan just wants to ban you. I'm keeping him muzzled for now...

Andy & Tony: I don't really agree re Bollard. I think he has tried to lean against the excesses in the banking & property markets, by issuing warnings & pushing up interest rates during the bubble. An example of a statement the RBNZ made in May 2007 just as the bubble was peaking is below:
http://www.rbnz.govt.nz/news/2007/3000676.html

"... there are significant economic imbalances which present risks for the financial system. The ongoing housing boom and large savings deficit in the household sector are being funded by international borrowing via the domestic banking system."

"While global markets are currently very liquid, we should be mindful that this will not always be the case. And the longer imbalances run, the more likely we are to see a sharp correction".

"The banks are highly competitive, but while competition is to be encouraged, the low level of lending margins has contributed to ever increasing levels of household debt and upward pressure on house prices," said Dr Bollard.

He was up against it with the Clark/Cullen govt going gangbusters on spending, thus stimulating the economy, & the banks borrowing overseas willy nilly.

& I think he is determined to prevent the bubble reinflating if he can, by increasing the amount that banks have to source long term & domestically. I think that this is geninuinely counter-cyclic policy, I think he has put in place a cybernetic correction that will damp down further excesses.

I think it is up to the govt to do the rest. C'mon Bill, don't be a sissy!

Chairman, so the banks borrowing is purely to build their capital base, so they can leverage it yet further and drive more money/debt creation? So does this mean that the Money as Debt series is actually accurate?

Doesn't anybody else find this really worrying? Or am I missing something?

Mozart: I haven't seen those particular videos, but the idea that banks "create money out of thin air" is the standard catchphrase of the money nutters who can't / won't grasp how the money multiplier actually works. I'd like to think it's simply a misunderstanding, but the way they tie themselves in knots building vast conspiracy theories around it suggests wilful stupidity.

@ Miguel

I guess I am a money nutter for believing that the only true money is gold?

I am happy being regard as crazy - when the ponzi scheme that is the global Fiat currency experiment bursts, I will be gracious in my gloating :-)

@ Miguel

Take the time to listen to this:

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/8/14_G...

For the record, I am a gold nutter.

No Martin, you will be robbed by your govt as it steals your gold reserves from the mint, or do you intend stashing it under the house, in which case buy a shotgun.

What does Bollard expect, if you lower the rates, they will come. If you raise the rates, demand for the more expensive credit will slow. If he really wants to stop this housing second wind, he should be demanding banks to require 25% deposit when lending for house buying

My sincerest apologies to Bryan, and thank you Bernard for looking out for us!!

Wally said...........The question is whether Alan Bollard will stand up to English and bring the axe down on the whole banking rort that is sucking the life out of the country.

Now thats a Question I'd love to be around to witness. way to go Wally***

Bryan ....provocation is sometimes the action born of frustration....apologies once again ,I shall be more selective with the rhetoric in future.

Like your passion , Christov ! Borne perhaps , out of that frustration from watching our financial controllers ( Cullen/Brash/Bollard/English ) making such obvious stuff -ups . Or hearing them flapping on and wringing their hands , yet doing bugger -all concrete to sort the mess out . And now , just to cheer us all , Winnie is making a return . And I did predict this ! ( Finally got something right , and hav'nt even got a slab riding on the outcome . Damn ! )

He's a canny political beastie , old Winnie . Labour is still on the nose with alot of voters . And there is an underswell of folk disappointed by the Nat's lack of positive action in our economy . Peters and Ron Mark ( a talented chap , never to get a post to fit his abilties . ) may sop up many of us hacked -off middle of the road voters . To Labour and National : A plague upon both your houses !

Andy Rodgers: re Bollard keeping interest rates low. Well, ok, u have me there! I think they are too low, & therefore reinflating the property bubble. The problem is, if he raises them, the $NZ will go even higher, & stuff our export sector totally. So I think he is damned if he does & damned if he doesn't.

As mentioned earlier, I like Bolly's changes to the banks' funding base, but I think that any real move to reduce the insanity is up to the govt. & not holding my breath.

This is what we warned would happen.
http://www.hawkesbaytoday.co.nz/local/news/bay-forced-house-sales-soar-8...

Wally........... ta for the link!.............rock in the pond.....center ripples out hits the edges and ripples back in .The hype merchants have obviously left town. Mom n Pop are bewildered,.......... and Bolly sits on his hands.

I see Bryan Gould has just placed on his website the full article I gave a taste of on an earlier post. A must read for the serious student of international commerce:
http://www.bryangould.net/id96.html

"But, as governments around the world have "“ with varying degrees of reluctance or enthusiasm "“ found themselves taking centre stage, many commentators and practitioners, not least in New Zealand, have jibbed at accepting the longer-term and wider lessons to be learned from the meltdown. They have been keen to see government intervention to correct past errors as merely a case of dangerous times requiring exceptional measures. The central task, they believe, is to right the ship; it should then be allowed to sail on as before. They impatiently await the opportunity to return to what they see as business as usual, so that governments can safely be put back in their boxes. This is, however, to misunderstand what has happened. The current role of government in correcting and counteracting recession is not an unfortunate aberration. The recession has revealed an abiding truth "“ that the market can deliver its unmatched benefits only if governments are there when needed to make good its deficiencies and act against its excesses."