US inflation expectations high; China property woes extend; South Korea wants in to CPTPP; German wholesale prices jump; lithium jumps; UST 10yr 1.41%; oil soft and gold firm; NZ$1 = 67.6 USc; TWI-5 = 72.2

Like Alice and looking glass Mr Oar is looking through this inflation blip.

And next week ? What happened to the $ 100 per barrel oil we were sposed to have "soon", before xmas I think it was.

Give the guy some credit, he started tightening well before any other central bank has. And the RBNZ has been caught out by raising rates too early several times in the last 12 years, so I think he was right to be cautious before pulling on the handbrake during a pandemic. Interest rates in NZ have almost doubled in the last 6 months, it would be quite risky to increase them much faster. 

It certainly gives credence to those commentors on this site who stated that Orr was just parroting, and acting as a mouth piece of the Fed. My thoughts are that seeing how evident that is becoming, then his view of monetary matter is irresponsibly shallow, in that he was/is too dependent on other bank/s for their view before expressing his own. 

Even I, looking at the global reports, mostly summarised on this site on impacts of logistics, climate change, pandemic and general market upheavals, could see that inflation was going to be much more than a blip. Indeed I had commented that inflation was very apparent on the street although the RBNZ and Government were trying to tell us it was very low. And if it was a blip then the prices should fall back. but they haven't and personally i do not think they will.

Inflation is a good thing / we are happy to overshoot for a while to make up for years of low inflation

More time passes and curves continue to do what they’ve already done, the longer they go without correcting themselves back to steep/upward sloping, more confident the market is in what the curves are getting at: again, neither inflation nor “inflation.” https://alhambrapartners.com/2021/12/10/omi

 Link

'to help first home buyers'

I'm not even sure how to describe that, pure greed? (edit - by the central bank)

It's difficult to find solid repeatable data on boosters but I think once you start giving them they only last 3 months before it's "recommended" to get another (it stop providing the required protection). Why force this this when case numbers are decreasing? Anyone who wants a booster can get one.

Lets not mention omicron where I there are enough anecdotes out there that any booster protection will be very short lived. If govt wants force a new jab on the population before we open the borders (out PM is a fanatic so I am not ruling that out) it wont help uptake if we had to get redundant jabs before that.

by Audaxes | 12th Jan 21, 12:26pm

Lower interest rates are supposed to be stimulatory, helping boost inflation and employment in line with the RBNZ’s monetary policy mandate.

Indeed:

This is what Milton Friedman called the interest rate fallacy, and it indeed refuses to die. We can tell what monetary conditions are in the real economy, as opposed to financial liquidity, though the two can be linked, by the general level of interest rates. When money is plentiful, interest rates will be high not low; and when money is restricted, interest rates will be low not high. The reason is as Wicksell described more than a century ago:

[The natural rate] is never high or low in itself, but only in relation to the profit which people can make with the money in their hands, and this, of course, varies. In good times, when trade is brisk, the rate of profit is high, and, what is of great consequence, is generally expected to remain high; in periods of depression it is low, and expected to remain low.

When nominal profits are expected to be robust, holders of money must be compensated for lending it out by higher interest rates. Thus, the same holds for inflationary circumstances, where nominal profits follow the rate of consumer prices. During the Great Inflation, interest rates weren’t low at all, they were through the roof well into double digits and higher by 1980. At the opposite end in the Great Depression, interest rates were low and stayed there because, as Wicksell wrote, the rate of profit was low and was expected to be low well into the future. High quality borrowers were given as much money as they could want while the rest of the economy was deprived of funds; liquidity and safety being the only preferences in what sounds entirely familiar. Link

Should've kept their nuclear on. Immense sunk costs crystallised

They really need to split Air NZ into a government backed domestic airline and a free market international one. I'm happy for the government to make sure we all have access to domestic flights as it is effectively a necessity these days, but international flights can be free market. Also I am sick of monopoly domestic fares propping up the loss making competitive international ones. 

Time for a name change back to NAC.

Yeah this country is a joke, it takes 2 years to sort a roundabout in Bayfair.

It's another delivery debacle, this time overseen by both major parties.

I thought PPP's were supposed to be more efficient and effective?

One of the great myths of neoliberalism