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Opinion: Tax Kiwi$ trading to reduce speculation and lower the currency
November 13th, 2009
By Neville Bennett
I want to propose discussion of a new tax, the Kiwi Dollar Stamp Duty. It would be a tax on the Kiwi dollar trades wherever it were transacted in the world. It would reduce speculation in the Kiwi which is causing its over-pricing.
This is not a pipedream; it is entirely feasible, could be only 0.01 cent per $ and can be unilaterally implemented by Government. A major benefit is not only a lower dollar but a new source of revenue.
I am anxious to spread our revenue base, especially away from income and saving. Moreover, I do not favour an increase in the regressive GST tax as it is too easy a target and does not increase productivity.
These columns lead the way in proposing for consideration the then outlandish notion of a land and other property taxes. While I received some hostile emails, the principle has been widely discussed and not dismissed out of hand. I know land tax increased equity in Hong Kong (where I worked for 8 years) and was significant in raising Japanese productivity.
The idea of a financial transaction tax has been raised strongly by Gordon Brown but received no support in G20. Brown wants to use the proceeds on a day-by-day transaction tax to build funds to sue in future bailouts. His proposal is dead in the water. His proposal, however, jogged my memory, so I will discuss my proposed Kiwi Stamp duty. First, a little background:
Tobin Tax
A tax on foreign exchange transactions across borders was proposed in 1971 by James Tobin, a Yale professor and Nobel Laureate. His purpose was to penalize short-term speculation in currencies and thereby increase international currency stability. The idea was revived in the 1990’s, especially in England (where it was favoured by War on Want) and France.
Belgium and Austria pushed the idea in Europe but it was rejected by the European Commission. Nicolas Sarkozy suggested in 2009 that G20 adopt it, and Gordon Brown has just revised it.
Several lobby groups have favoured it as a new source of revenue for the UN or the poor. Financiers detest the idea and plead that it would hurt banking. A currency transaction tax was studied by London’s Intelligence Capital which reported that a tax on sterling wherever it was traded was feasible and could be unilaterally implemented. It would raise vast sums as US$3,200 billion was traded daily in 2007.
Gordon Brown joined France and Germany in saying that that the banks should give something back as governments had poured billions of dollars into their support. The US Treasurer Timothy Geithner said the US would not support it, but his explanation was unconvincing as he said “I think the experiences are mixed”. Perhaps someone should ask Mr. Geithner if he could explain when it was experienced…at all…ever.
The Global Forex Market
This market was discussed in an excellent RBNZ paper by Nick Smyth in 2007 using detailed data from Reuters. The evidence is that the Kiwi has been much traded, especially in London and New York.
Traders are attracted by New Zealand’s relatively high interest rates, which sometimes is the basis of carry trade transactions. Historically, investors borrowed yen and invested in higher yielding currency like the Kiwi. These days the US$ is often used as its interest rates are low and the dollar has declined considerably this year; about 20% against the Euro.
Trading in the Kiwi in 2006 was $5.5bn on an average day, but sometimes reached $9bn. The volumes are massive at the London “fix” at 4 p.m. when both London and New York are open.
The value of the forex trades is much higher than value of exports and imports. A stamp duty would have negligible cost effect on NZ producers and importers. Nor would it deter forex traders but it would raise huge revenue in a painless way for NZ Government, and bring some relief for existing taxpayers. But it would increase trading costs slightly, so speculators might prefer other currencies. A stamp duty might therefore contribute to greater stability in the value of the Kiwi dollar.
Feasibility
Adair Turner, the chairman of Britain’s Financial Services Authority, has provoked the ire of bankers by saying in August 2008 that he was willing to look at a “Tobin tax” on banking transactions. Financial transaction taxes are commonplace and have become easier to enforce, said Avinash Persaud, who heads Intelligence Capital Ltd., a research firm.
Persaud wrote in the Financial Times that the consolidation of clearing and settlement systems means that a Tobin tax was feasible and would be costly to avoid. Financial institutions naturally concentrate on the most lucrative activities, and those are ones that involve extensive trading; consequently, the financial system is biased toward heavy trading and churning and has less interest in developing products that are fit for a long-term purpose but aren’t traded so often, Persaud said.
That’s why great attention is devoted to hedge funds involved in high-frequency trading and less to buy-and-hold pension funds, he added.
Setting the right level of a transaction tax will be difficult, but probably not as difficult as it was for Adair Turner to be one of the first regulators to discuss the matter openly, Persaud concluded.
Lord Turner, who is the City’s watchdog, received a vicious backlash from bankers for saying that Britain’s swollen financial industry was too big for the good of society and should be cut down to size, possibly by a Tobin tax on transactions. Mayor Boris Johnson said Turner was “crackers”. Other spokesmen said Turner was playing into the hands of rival centres such as Frankfurt. The UK Treasury was stonily silent other than saying it is the Government, not the FSA, which sets tax policy.
Summing up
James Tobin proposed his tax in 1971 to put “sand in the wheels of the foreign exchange market. The stock response has been that it is impractical but that is no longer the case. Avinash Persaud has argued that a stamp duty is practical and enforceable. The time has come for Government to explore an idea which could raise revenue and dampen speculation.
* Neville Bennett was a long-time Senior Lecturer in History at the University of Canterbury, where he taught since 1971. His focus is economic history and markets. He is also a columnist for the NBR where a version of this item first appeared.
neville@bennetteconomics.com
www.bennetteconomics.com
Tags: kiwi, Neville Bennett, New Zealand dollar, NZD, Tobin tax
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November 13th, 2009 at 11:54 am
This seems sensible, but I don’t understand how it can be implemented. Won’t traders simply move to using ‘dark pools’ such as Sigma X? Is there any way to tax dark pool transactions?
I’m not against a Tobin tax – I just believe that the largest Market players will find a way to avoid it.
November 13th, 2009 at 1:12 pm
A good way to stop all the trading would be to reduce the external debt. But you have Kiwis borrowing from overseas to buy property which results in a currency transaction. And you have hedge funds shorting the NZD expecting NZ to one day implode. Nominal transactions in any market will always be high. The will alwyas be middle men and sometime they have to trade with each other. Think of a used car dealer for example.
Or you could change the mandate for the RBNZ to keep the currency stable. That would curb speculation. I think most people realize that professional speculators help the markets function.
Or NZ could adopt the Yuan as its currency.
November 13th, 2009 at 1:22 pm
Neville – good idea, but what does Dr B know that you don’t?
http://www.interest.co.nz/ratesblog/index.php/2009/11/11/rbnz%e2%80%99s-bollard-says-nz-must-live-within-its-means/#comment-46394
“RBNZ’s Bollard says Tobin Tax impractical from a NZ point of view.”
There are other good ideas we have discussed on this site that would make the Kiwi less attractive, but you know as we all do we’ll get the, “impractical from a NZ point of view.” response.
Why is that?
November 13th, 2009 at 1:29 pm
Anything that crimps useless speculation and especially currency is something worth considering IMHO.
November 13th, 2009 at 2:14 pm
Seen the latest from our PM on currency speculation;
http://www.stuff.co.nz/national/politics/3059091/Key-pushes-for-free-trade-with-US
He said he would advise Asian countries not to be too concerned if their currencies rise in value against the US dollar because that could help boost US exports and lead to stronger demand for the region’s goods.
To top if off he had a meeting with Geithner – perhaps that’s where he came up with this bright bit of advice!
November 13th, 2009 at 2:18 pm
Comment on Buffet buying rail:
http://www.oil-price.net/en/articles/buffett_buys_railways_because_of_peak_oil.php
November 13th, 2009 at 2:23 pm
I distinctly recall reading on this site a few weeks ago that the amount traded daily on the Kiwi was $80 billion. What’s the correct figure?
Response: We have a chart of RBNZ data that tracks monthly fx trading in the NZ$. The values are enormous – $250 billion in September 2009 alone. You can find it here … http://www.interest.co.nz/charts/gallery4-40.asp
David Chaston
November 13th, 2009 at 2:48 pm
NZD doesn’t have enough liquidity, that’s why NZD is so volatile.
More speculation will provide more liquidity to NZD.
More speculation will make NZD stabilise.
November 13th, 2009 at 5:20 pm
Neville Bennett is right to propose new initiatives because what we have tried for many years simply isn’t working.
Irwin’s who used to employ hundreds of people is now gone by Xmas.
We have over $ 300 Billion of foreign debt increasing by over 1 Billion $ / month.
We simply cannot carry on with present policies and hope to escape armageddon.
Our foreign liabilities are right behind Iceland and Hungary and we know what happened to them.
Don’t think it can’t happen here.
It can and it will – the issue is when not if.
A slight variation as proposed would be a tax inversely proportional to the holding period.
ie Exports who buy and hold wouldn’t pay.
Day traders would bear the full impost.
November 13th, 2009 at 8:27 pm
Lew(put the gold in the sachs) Burton says,
“I think most people realize that professional speculators help the markets function.”
You bloody wish everyone one would be foolish enough to be brainwashed into that load of Tripe. Those that have created excess electronic entry created credit money in excess of any hope of repayment, then channeled that excess money/credit back into their own hands, now monopolise and manipulate, speculation is not the right technical term to describe complete economic domination, insider manipulation, would better discribe it, and inflation causing an ever increasing disparity of wealth between the monopolisers and the realsector is the end result:
“Michael Greenberger thinks that speculation is a major factor, and he knows a lot about the complex global oil market. He directed the division of trading and markets for the Commodity Futures Trading Commission from 1997 to 1999. That body regulates the trading of contracts for future deliveries of commodities, including crude oil, called futures, which drive oil prices. Now a law professor at the University of Maryland, Greenberger told McClatchy why he thinks that financial speculation is driving up oil prices.”
http://www.mcclatchydc.com/homepage/story/41360.html
“The food crisis is a real one, with rice – basic to the diet in much of Asia – rising in price by 75 percent in two months, and the rise in wheat, equally important to most Western countries, rising by 120 percent over the year. This risks famine in vulnerable countries……..The argument sometimes is made that this speculation is unimportant because the futures speculators will never take delivery; but this is precisely the problem. It is why this speculation is highly destructive of the true market…….Speculative purchases have no other purpose than to make money for the speculators, who hold their contracts to drive up current prices with the intention not of selling the commodities on the real future market, but of unloading their holdings onto an artificially inflated market, at the expense of the ultimate consumer. Even the general public can now play the speculative game; most banks offer investment funds specializing in metals, oil and, more recently, food products.”
http://www.nytimes.com/2008/04/16/opinion/16iht-edpfaff.3.12052202.html
Actually Lew, MR Hedge Fund himself, I think it should be decreed that those that can’t prove they are physically able to take delivery of commodities they trade in should be banned from participation. This would see prices restored to real market value, not virtual market bullshit.
You also said “Or NZ could adopt the Yuan as its currency.”
I say we adopt the Kiwi Sovereign Dollar as our currency, made good by the same credit worthiness afforded us to issue Kiwi Sovereign Bonds which the privately owned central bankers monetise with their created credit, then use our sovereign dollars to vapourise those central banker electronic bits with a Kiwi stamp attached which we currently pay an enslaving fortune to rent although they are backed by the future taxes created by the future utilisation of our own resources, we should cut out the middlemen and manipulators, but beware Lew would not like that now, would you?
November 13th, 2009 at 8:41 pm
If we strike oil , Iain , we can issue our own Kiwi-Petro Dollars . That’d be one in the face for our big brother to the west . William Buechler reckons a mother lode of oil and gas is in the oceans surrounding us . ……… . We could name our dollar , ” the Kiwi crude ” . Foreigners wanting our currency , would have to come on bended knee to us , and we could be crude to them . Yeahhhhh !
November 13th, 2009 at 8:54 pm
Sorry Neville Tobin Tax is a good and needed concept, but without coinciding with a reintroduction of our own sovereign right public credit facilities, it is just rearranging the chairs on the Titanic.
Kate, I am sure you are not one of many conned into fearing how little Johny from downunder will go in the company of the big boys, because there is no need to worry as Little Johny ain’t so little, in-fact is very much among friends in the central banking fraternity. I will let him tell you(below) just how big he is in the banking world, I bet him and Geitner had a great laugh and a catchup:
” Bellotti made him global head of foreign exchange and he revolutionised the “blue blood” investment banking sector. “There was this massive opportunity to cross-sell the firm,” says Key.
“We’d go to these fund managers and we’d talk to them about equities, but we wouldn’t necessarily leverage foreign exchange – and when we did, they’d say our capability wasn’t that good.
“So I wandered up to London and said, ‘we’re going to go interbank FX – make prices to the other banks’. Morgan Stanley, Goldman Sachs and Merrill Lynch, the blue-blood investment banks, didn’t do that,” he explains. “We actually took on the big banks, Citibank, Chase, then we went and hired their staff and went to their clients and told them ‘look, we’ve got all those same capabilities as Citibank in FX and options. Plus we had this beautiful thing going because we were the first to supply margin trading to big hedge funds. We had the capability to cross-sell them several products using one bit of margin.”
Remembers Bellotti: “I brought him to London and he shot the lights out there too. Within three to four years Merrill Lynch, London, was regarded as one of the premier businesses………. Geoff Massam, a New Zealander then running the IT part of Merrill Lynch’s FX business, now with Deutsche Bank in Connecticut, remembers how Key would be on the phone to the Governor of the Reserve Bank, Don Brash: “Though he wouldn’t do it in a name-dropping way – he was talking to people like that all the time.”
Massam believes Key’s knowledge of the global economy would give him a “huge advantage” in running the country.”
For one of the most comprehensive work histories of John Key – The Central Banker On Sabatical:
http://publiccreditorbust.blog.com/2009/06/01/john-key-born-again-good-guy-or-still-a-bankster/
November 13th, 2009 at 8:58 pm
Roger that ain’t as foolish and flippant as you intended it, but we should not give a stuff if any speculators wanted it or not, because we dont want them and would put inplace measures to deter speculators from our own dollar backed by the future utilisation of our own resources.
November 14th, 2009 at 3:20 am
Expanding on David Chaston’s point. From interest.co.nz’s charts, NZ GDP for year to date was ~$174bn. Total global FX trade denominated in NZ$ for year to date is ~12*30=$3600bn of which nearly all (>95%) is FX swaps. So total global NZ$ speculation is 20 times that of real national economic activity.
So Neville’s suggested 1% tax could raise an extra ~$35bn – effectively increasing GDP by 20% in one fell swoop. Sounds great – why aren’t we doing it already? Because it appears impossible to implement – all these FX swaps are occurring overseas in foreign jurisdictions between large players who don’t tell anyone else what they’re doing (Rob w’s “dark pools’). Short of changing our currency system and insisting all holdings of the new currency are held onshore (VERY damaging for trade I suspect) there appears to be no way to enforce any such tax. But wouldn’t it be great if we could….?
November 14th, 2009 at 8:20 pm
Iain : The only problem would be preventing our political leaders ( i.e. Labour , specifically ) from blowing the lot on an orgy of big government and welfare-statism , like they did in Britain …………. Come to think of it , they’ve already done that here , without the oil bonanza .
November 14th, 2009 at 8:30 pm
Not that I agree with an FX transactions tax, Chris B, but surely, unless the participants to an FX swap compensate the deal ( ie; no exchange of principal monies- like a CFD) then the legs of the swap must be settled at some stage through a New Zealand denominated vostro bank account? Compensated deals are notorioulsy difficult to acheive outside the borders of a country ( eg: Australian banks could compensate – offset- their deals at maturity by agreement, but how would Oz versus, say, HK banks do it?). Levying a turnover tax may not be as difficult as it seems.
November 15th, 2009 at 4:47 am
Re Comment by Huda: ‘NZD doesn’t have enough liquidity’ I just wondered what it meant. If it means the amount of money traded then I don’t understand , maybe it means the actual number of people trading the NZD. Does anyone know how many people actually trade the NZD. I imagine that there will be an amazingly small number of people doing nearly all of the trading and a large number of people trading the balance. Does anyone know for sure?
November 15th, 2009 at 9:33 am
Come’on Roger, you can tell where your tribal political alegiances lie, you have a very selective memory, it has not only been Labour that has ramped up the current account deficit, the fact is that whilst we surrender to current privately controlled debt based monetary system we will inevitably end up in debt repayment crisis because it is insolvent and usurous by design. Sure, current account crisis have happened systemically all around the world no matter if Right or Left were sitting in the drivers seat, because there is no longer any Right or Left, only Right and Wrong, because the world is currently beholden to the lenders who sit in the passenger seat with another set of controls, just as does a driving instructor to the driving student. Every time the banking corptocracy loan you more than you can repay, then put you into receivership, tell you you must sell your necessities of life to their subsidiary transnational corporations, they also impose structural adjustment programs that impose more control upon your economic and social policy, these adjustments have made every nation they have been imposed upon even more subsebtable to the banking corptocracy’s predatory lending scam.
Part of those imposed structural adjustment programs have been setting and auditing a nations higher learning cirriculum to their “world best practice” standards, which just happen to be unfettered neo-conservative in ideology, thus the reason we they have been able to currently carry this off on a systemic scale never seen before is that most nations have back room advising beaurocracies that are full of foreign advisors complicate in the scam, locally recruited sell outs who have taken the bribes and a whole lot of young kids who know no better because they have been indoctrinated with “worlds best practice” through the cirriculum they were taught.
http://publiccreditorbust.blog.com/2009/08/09/international-high-finance-dictates-education-curriculum/
What has made it so much easier for them is that we have had a raft of leaders, especially in the modern era, 1961> that have been elected because they had the populist gift of the gap, but did not have a worldly knowledge of economics and commerce, hence where completely reliant upon back room advisors, hence when they got deceived, the nation got deceived. Jim Bolger recently said that he regretted he had not read the – Ascent Of Money – before his time in politics.
http://publiccreditorbust.blog.com/2009/10/07/ruth-richardson-takes-the-baton-from-roger-douglas-on-behalf-of-corporate-raiders/
Take the blinkers off Roger.
November 15th, 2009 at 10:00 am
Blinkers ? My mistake was not to include that if National oversee the crude , our oil bonanza to come ( maybe ) , it’ll be lost to NZ citizens by a combination of National incompetence , sweet-heart deals , and lobbying by the international oil majors . ( Now inform me where my tribal political allegiences lie . Hint : I did not vote for Jelly Key ! ) …………[ credit where it is due , we go back a few decades to find political competence and fiscal responsibility from either the blue or the red spectrum of the light-curve . ]
November 15th, 2009 at 10:42 am
I am glad to hear it Roger, I believe the common folks of this nation would become far more participating if knowledgable people made an effort when they speak to avoid gross generalism’s and expand the depth and breadth of what they are saying.
In further regard to Ruth Richardson and the fact that only a fool thinks there is never more detail to learn, having just recently completed her book -Making A Difference – I used to think that Richardson was as treasonist to the interests of the majority as Douglas and Prebble, but having read the book I summise that Richardsons intentions were civil, but she was insufficiently knowledgable to realise that the advise she was given from her Treasury mentors would infact acheive exactly the opposite, Wyatt Creech as Minister of Revenues overseeing taxes was in the pockets of corporate raiders and suppressed some equalising measures Richardson tried to get through:
http://www.interest.co.nz/ratesblog/index.php/2009/11/04/opinion-rbnz-needs-effective-tools-to-control-non-tradeable-inflation-and-volume-of-credit/#comment-45148
She from my studies joins my list of those that the banking corptocracy brainwashed to become what I call “Monetarist Jukeboxes” they filled these people with their favourite tracks, then wheeled them around, punched in the number of the track they wanted them to play to suit the venue. Richardson’s relationship with the Treasury was like a love struck nerd when the cool kids bother to talk to her. I include in the list of monetarist Jukeboxes Keith Holyoake, Norm Kirk, Mike Moore, David Lange, Ruth Richardson, Jenny Shipley, Jim Bolger. Why did they target so many Kiwi’s to become their Monetarist Jukeboxes? because of our reputation as the greatest little equal opportunity democracy on the planet, that why, they knew other nations would be subsebtable to listening to those that appeared to represent New Zealands cutting edge advances. Little did they know those advances would lead to the greatest systemic global financial crime history has ever witnessed.
Even funnier, Ruth Richardson is still being wheeled out unto this very day playing the Banking corptocracy’s favourite tracks:
http://www.guardian.co.uk/commentisfree/2009/nov/09/ruth-richardson-fiscal-responsibility
Roger, I believe the greatest hurdle to human advancement is the fact that behind most great fortunes is most great crimes, and after most great crimes those that committed them have very rarely been forced to give back the loot, thus they set off in the supposedly new system with immediate monopolist advantage, and in many cases the new system has been designed by them on a similar basis to that of a burglar being taken on as the new security advisor. How many times are we going to keep re-hiring them to have them do us over again?
November 15th, 2009 at 10:54 am
Laissez-faire is dead and has been dead since long. Governments better wake up to that and start manipulating the market as speculators are doing. And if that requires a Tobin Tax, so be it. Or we could follow countries like India which have forex controls in place to contain speculation in forex and are not floating their currencies fully and which also have quantitative credit control measures, effectively used by their Central Banks.
November 15th, 2009 at 11:41 am
@Giles, I’m guessing, wildly, that Huda might be referring to ‘twilight zone’ effects and inferring extrapolation of that short-wave dydnamic? That is, bid-ask spreads widen between Wall St close and Asian open because volume of trade drops. However, we are talking extra pips for a few hours, not extra cents worth of volatility over days, months and it’s the latter that stuffs people trading real goods and services, not a few pips for a few hours a day. It is this latter type of longer-wave volatility that could be countered by something to damp long-wave momentum (speed and volume) of trade of our wee birdie, eg. Tobin tax, or make it less attractive to carry traders and speculators by having lower interest rates, by having a different monetray policy. However, see Iain Parkers comment November 13th, 2009 at 8:54 pm, and then Raf’s comment,
http://www.interest.co.nz/ratesblog/index.php/2009/11/11/have-your-say-inquiry-finds-banks-guilty-suggests-more-capital-for-kiwibank-enhanced-monetary-policy/#comment-46687
Maybe Bill and Michael before him, have been getting those conspiracy theories a little out of perspective and thought signing something like ‘Executive Order 11110′ would be signing their death warrant! (No ‘Grassy Knolls’ in Wellington are there??)
It’s not as though NZ hasn’t had a grip of it’s currency before, see part 4, 1.45 mins in on Ellen Brown’s ‘Web of Debt’ vids,
http://www.youtube.com/watch?v=QU0XiklHPMc
It’s not as though this can’t be done again, with Kiwibank say, they do it in North Dakota, see part 4, 2.45 mins in, plus see NZMEA’s and PEC’s submission to Labour’s banking inquiry. Again, why not?
Anyone know the population and GDP of North Dakota?
Huda, anyone, grateful for any comments that might help clarify things?
November 15th, 2009 at 11:46 am
Correction to my last comment, Ellen Brown highlighting North Dakota’s state bank is on part 5 at 2.45 mins, NOT part 4.
November 15th, 2009 at 2:59 pm
Roger:
If we do strike oil then it won’t be long before central banks drive our debt rating so low and our debt payments so high that we will be forced to default, bringing in the IMF to get us to borrow more money and tell us how to run our economy. Just as in Indonesia and much of South America, the banks will own it all in the end.
November 16th, 2009 at 7:36 am
Hi Harriet,
My knowledge of the FX swap market is limited so I could be completely wrong here, but hey, this is a blog so what the hell… My understanding is that the big overseas players (US and European investment banks) only settle their net position at the end of the trading day. This is a fairly small percentage of the total days trading volume. In addition they can in principle settle this against NZ$ denominated debt – of which there is quite a bit floating about on the international market…
As regards compensated deals – given that FX swaps comprise both a spot and and a future component – aren’t they compensated by definition? Isn’t that the whole problem – it is possible to deal vast amounts of electronic money without actually holding the principal? Hence FX leverages of 400:1 at some retail brokerages, let alone the big boys.
November 16th, 2009 at 7:56 am
OK – I’ve been thinking about this over the weekend.
If the foreign exchange rate is not susceptible to changes in terms of trade and purchasing power it is to all intents and purposes broken. And with a 20:1 ratio of speculative FX deals to real trade deals it appears that this is indeed the case with the NZ$.
Frankly it looks like we are being taken for a bunch of mugs by the international banking community. Its our dollar, our exchange rate, our denominated debt and our economy. Why the hell are we (the RBNZ) letting them tell us that its worth more than we know it is? The rational response for the RBNZ here is to sell as many dollars as possible right now, in the knowledge that if it doesn’t self correct the RBNZ can take interest rate action to ensure the dela will be profitable. We know the NZ$ is overvalued and that volatility is killing our tradeables sector.
This course of action is much easier now AB has his flash new capital reserve lever to keep a lid on housing. I know the RBNZ made a few billion $ last year playing round the edges, but the only real way to stop the speculators playing in our sandpit is to really hurt them, take a couple $100bn out of the market and stop being a patsy. Being transparent and predictable is only sensible when the market is working for you. Sometimes you have to front up and take your place at the table as a rational self-interested party and stop being pushed around. Come on AB – grow some balls. There is a LOT of money to be made here and the country is going to need it sooner rather than later.
The profit could be used to start an NZ sovereign wealth fund which would pay for our unaffordable health care and future pensions bill + develop some new indigenous industries, preferably engineering based to power the future economy. After a couple of hits I suspect the speculators would B**** off , find some one else to pick on and let us get on with our own little currency by ourselves. Hopefully leaving several hndred billion dollars behind as they go.
November 16th, 2009 at 9:17 am
Seems like a good idea.
November 16th, 2009 at 10:34 am
The simple fact that the bankers are against it says the idea is a good one. Modern computer technology being is used by the speculators so supporters of the tax ( or some other form of FX control ) have to look at the same thing.
From a political point of view this would be a great thing for Labour to latch onto. Their recent inquiry into the banks , while it probably will just gather dust , it did show they had supporters with the technical skills and knowledge. So if they could muster this skill to work away in the background they could be on a real winner. The Govt will not do it .
November 16th, 2009 at 11:29 am
Maybe this would help:
http://www.interest.co.nz/ratesblog/index.php/2009/11/16/top-10-at-10-south-canterbury-losses-china-bubble-to-pop-mad-butcher-vs-chrisco-dilberts/comment-page-1/#comment-47427