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90 at 9: NZ$ hits post-float high vs pound; Gold jumps on oil-for-gold talk; Peters and Mathias bankrupt
October 7th, 2009
Click here for this morning’s video.
Bernard Hickey details the key news overnight in 90 seconds at 9am in association with ASB, including news the NZ dollar rose to 73.8 US cents overnight after the Reserve Bank of Australia surprised many and hiked its official cash rate to 3.25% from 3%.
The RBA’s cash rate is now a full 75 bps above the RBNZ’s Official Cash Rate on 2.5%. How long can Alan Bollard hold it there without breaking his promise to wait until late 2010 before hiking the OCR?
The US dollar was also weak overnight on talk it may lose its status as the global reserve currency, Reuters reported. A report by Robert Fisk in the Independent overnight that Saudi Arabia, Russia, China and France may start using gold to trade oil instead of the US$ spooked many and pushed the gold price up US$20/oz to US$1,040/oz. These nations later denied the report.
The NZ dollar also jumped to a post float record high vs the British pound of 46.3p. A good Fonterra auction result overnight will also bolster the NZ dollar. The wholemilk powder price rose 5.7% to US$3,022, which is its highest level since February 2008 and up 65% from its July low.
Meanwhile, there are more bankruptcies in the property development sector. Jamie Peters, a relation of Winston Peters, has been declared bankrupt because of unpaid debts worth NZ$100 million. Peters was responsible for some of the Gulf Harbour developments, the NZHerald reported. Jonathan Mathias, a lawyer who advised a couple to invest in Blue Chip, was also declared bankrupt after a judge ruled he could be sued for malpractice, the NZHerald reported.
Tags: 90 at 9, Bernard Hickey, Fonterra
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October 7th, 2009 at 9:17 am
Oops….forget the email….$1039~43 an ounce….
http://www.oil-price.net/
is there that much gold? gold is a pretty finite quantity compared to oil…it will certainly be around a lot longer though….what’s Saudi etc going to do with tonnes and tonnes of the stuff? how will the USA etc pay for oil with its small gold holdings?
If this doesnt put pressure on the USD what will…..
October 7th, 2009 at 9:44 am
Gold for oil? Makes perfect sense to me – real money for real energy. In fact, why not conduct all trade in a currency benchmarked to a fixed quantity of various commodities food, fuel, minerals, precious metals. This forty year global experiment with 100% unbacked paper is drawing to it’s predictable conclusion. The creditors (Chinese, Arabs) know it, the debtors know it, for the moment the charade continues.
Cheers,
David.
October 7th, 2009 at 10:31 am
CanWest (parent of TV3 and C4) files for protection:
http://www.bloomberg.com/apps/news?pid=20601087&sid=awel5irWPQXI
Bernard notes: CanWest no longer owns TV3 and C4 here. It is owned by private equity firm Ironbridge. cheers/bernard
October 7th, 2009 at 10:55 am
Steven
“gold is a pretty finite quantity compared to oil”
Interesting are we suggesting Oil is infinite?
Neven
October 7th, 2009 at 11:35 am
@Neven: Yes and No, in terms of the value of of oil it is $71 a barrel, but there are a lot of barrels of it, 1 ~1.3 trillion left….gold is worth more but the reason its valuable is its not that common…ie the reason we moved off the gold standard was (partially) there was not enough gold…so I guess what Im trying to say is, in terms of gold, oil is infinite as in there is’nt enough gold to buy all the oil…I assume.
regards
October 7th, 2009 at 11:36 am
Will latvia be the trigger for the second recession?
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/6263039/Banks-brace-for-Latvias-collapse.html
October 7th, 2009 at 11:40 am
Worth looking at: http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html
October 7th, 2009 at 11:44 am
and will we all be saving and dealing in Yen in the future?
http://www.telegraph.co.uk/finance/china-business/6266790/China-calls-time-on-dollar-hegemony.html
For me I’m getting the clear picture that the Chinese intend to protect the value of their USD. Meanwhile, the US Govn seems determined not to let the US and the US voters suffer so are trying to “export” as much pain as possible, re-inflate the bubble(s) and just carry on….China is pushing back….and harder every day….All China pain isnt on the cards so its mutual pain or
October 7th, 2009 at 11:49 am
Nobody moved off the gold standard Steven, instead they were forced off it thanks to the fraud committed by the US federal reserve.
We can thank the French for calling the Yanks bluff back in the 1970’s.
October 7th, 2009 at 11:51 am
mutual destruction….China can probably survive it?….could the USA?
October 7th, 2009 at 12:39 pm
Mike Shedlock debunks all the oil for gold talk here
http://globaleconomicanalysis.blogspot.com/2009/10/ridiculous-hype-over-secret-oil.html
His arguments make a lot of sense to me
October 7th, 2009 at 12:52 pm
those UK expats will be lording over NZ property with their super strong pound. Only way is up now, especially seeing that apart from blue chip suburbs, property in the Uk is now cheaper than in NZ (and remember if someone sells over there, they have to take a hit on CGT, which would be quite significant if they have held the property for 10 years). Investment in UK property looking better and better (mind you, could have said the same about Japan for the past 20 years – UK very similar, actually probably worse given the heavy reliance on finance and dwindling manufacturing. Stagnant population likely as well over the next decade).
October 7th, 2009 at 4:15 pm
jimmy
Huh? So is the UK on the way up or the way down? and i don’t quite get your logic that they won’t repatriate their wealth because the NZD is strong, do you think the best strategy is to ride the submarine all the way to the bottom?
Neven
October 8th, 2009 at 11:49 am
“those UK expats will be lording over NZ property with their super strong pound”
I don’t understand this statement – Cable is piss weak – and with Kiw/Cable through 0.4600 there is no way that they would want to be repatriating GBP at these levels – if they don’t have to.
October 8th, 2009 at 11:52 am
I think Jimmy means the UK expats ‘here in NZ’ looking at cashing up and going back to the UK? Uk property cheaper than ours now, and FX gain on their past purchased NZ properties, to go back home?