Here's our summary of key economic events over the weekend that affect New Zealand, with news central banks are keeping the pressure on the inflation bogey just as there is mounting evidence inflationary pressure are easing and in some places quite quickly. (It sort of mirrors the war in Ukraine.)
However, this weekend China is on holiday (Mid-Autumn Festival), a muted affair with travel discouraged. Authorities have issued warnings about unnecessary travel as pandemic cases grow relentlessly, across many provinces.
New yuan loans expanded more in August than July, but then the July level was very depressed, and the August 'recovery' was less than expected. It was driven by stronger 'corporate demand' including forced financing on Beijing's orders. Household demand remained very weak. Their money supply is now growing (+12.2%pa) at three times the rate of economic activity - maybe much more in recent months.
Staying in China, after effusive official start-up claims, their carbon market trading is grinding to a halt. The need to be carbon-efficient is no longer a priority there it seems.
The inflation impetus has leaked away almost completely in China. The annualised CPI rate over the past 4 months is just +0.6%, even though they are reporting annual CPI inflation of 2.5% to August and down from 2.7% to July. Most of those gains happened in the early part of the year. Food prices are stable now. But lamb prices rose again in August even though they fell in the last 12 months. Beef prices are hardly rising however.
Producer price inflation has vanished in China, replaced by deflation now. Its been a sharp retreat and prices are falling at a rate exceeding -14% pa now. For the full year to August they are up +2.3%, and that is far below the annual +9.5% in August 2021. Current rates are 18 month lows. This sort of data makes sense of the sinking yuan exchange rate.
In the US, and after months of gloom, Americans are finally starting to feel better about the economy - but more resigned to inflation. Petrol prices have fallen quickly, but overall inflation is still relatively high and the August numbers will be out on Wednesday this week (NZT), and are expected to slip from 8.5% to 8.1%. But the fast rise in sentiment isn't because of year-on-year changes, it is because of month-on-month changes to household budgets, and the relief is widespread.
US wholesale inventories rose slightly in July from June, but that just adds to a long string of increases. Year on year they are up a disturbing +25%. That is more than inflation can account for. Supply-chain pressure is also part of the reason. But wholesale sales slipped in July from June. So the inventory-to-sales ratio jumped, and although it is not yet back to pre-pandemic levels, companies will notice the pressure now and the risk of a de-stocking period is high - which is always a corrosive sign.
This year American online sales will rise just +9.4% to US$1 tln, the first time the growth rate has slipped into the single digits, and given inflation's surge, an unusually modest rise. Bloomberg is reporting that sellers on the giant Amazon platform are bracing for a weak upcoming holiday season and the worry that they will need to discount heavily to shift inventories. That will depress inflation too.
The impact of lower order levels is being noticed particularly hard in China. In what should be their peak-season of export shipments, in fact it now looks like an off-season period. It is another key reason why containerised shipping costs are diving. And the number of container vessels waiting offshore of the Port of Los Angeles-Long Beach has declined from more than 100 in January when it was at its highest, to less than 10 now. This is more pressure-relief sure to reduce inflation.
But none of this is deterring the US Fed from its focus on battling inflation, no matter what the impact on demand. Another board member called for an out-sized hike in September in a speech over the weekend.
Canada delivered a surprisingly disappointing jobs report for August. The number of full-time jobs fell sharply in a way that wasn't expected. A small gain was expected. The move was substantial, enough to raise its jobless rate sharply too, up to 5.4% from 4.9% in July. It was a sharp fall in public sector jobs that drove the change, rather than an impact of interest rates on the private sector where employment was unchanged.
In Sweden there is an election underway, with the center-left expected to best a recent surge by the anti-immigration 'Sweden Democrats' party. A failure to deal with a recent gang violence upsurge has bolstered the far-right party.
In New Zealand, grocery heavyweight Foodstuffs is reporting (via Infometrics) that their suppliers raised prices to them +8.7% over the past year with almost 7,500 product lines rising in cost. Fruit and vegetables led the way. Overall the pace is quickening, with the August cost rises running at a +12% pa rate over July.
The UST 10yr yield starts today at 3.32% and unchanged from Saturday. The UST 2-10 rate curve is unchanged at -25 bps. Their 1-5 curve is little-changed at -23 bps. And their 30 day-10yr curve has steepened in a minor way, now at +78 bps. The Australian ten year bond is -still at 3.57%. The China Govt ten year bond is unchanged at 2.66%. And the New Zealand Govt ten year will start today at 3.95%, unchanged but down -6 bps from this time last week.
The price of gold will open today at US$1717/oz and up +US$1 from this time Saturday.
And oil prices start today -US$1.50 softer at just under US$85/bbl in the US while the international Brent price is now just under US$92/bbl.
The Kiwi dollar will open today just on 61 USc and unchanged over the weekend. Against the Australian dollar we are unchanged at 89.2 AUc. Against the euro we are at at 60.8 euro cents. That all means our TWI-5 starts today at 70.5 and down a minor -20 bps for the week.
The bitcoin price is now at US$21,650 and a 2.3% rise from this time Saturday. Volatility over the past 24 hours has been modest at just over +/- 1.3%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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88 Comments
All this jibber-jabber about replacing the monarchy, when what we should be replacing is the central bankers.
Replace or get rid off all together?
the jibber-jabber has already been replaced by mumbo-jumbo.
You forgot all Polititians, Bankers, wastrels and fingers in till, one and all. There is a long list I could add, but it is a Day of Mourning for a lovely Queen Worldwide, not a rant that I have to extend to our Fair Land.
Let's have a public holiday for the Queen and then be done with it...
Agreed. Let's have a public holiday for the Queen, then get rid of Central Bankers, and then next year (and thereafter) have King's birthday weekend as well :D
In regards to the relationship between economic activity and the money supply. In New Zealand in 1971 the money supply was 40% of GDP. By 2016, when I did this calculation, it had grown to 120%. I haven't done this calc since then.
So the question is: "How much money do you need to run an economy"?
Where does the surplus that the economy really needs go?
Is that a rhetorical question scarfie ?
The RBNZ stopped reporting M2 money supply in 2017, you can't do this calculation anymore without significant effort. That ratio is called Marshallian K by the way, if you want to read up on what it implies.
Yes I know, hence why I haven't redone the calculation. They also discontinued E3, total overseas liabilities. E3 was very close to M3, almost a rounding error difference, so could have been inferred from it.
I didn't know the term for that though, thank you for that. But I worked out what it means for myself anyway. I'd suspect velocity is strongly correlated to it.
The inflationary effects of large increases in the supply of money via LSAP and FLP appear to have been somewhat countered by a decrease in the velocity of money, with that decrease reflected in big increases in settlement accounts. But that decrease may well be temporary, as it is a function of spending behaviours.
KeithW
so our inflation cycle will continue for longer than other countries?
Exactly: LSAP reserves (Bank Settlement Accounts) are not circulating in the private banking system and while the government raised ~$74.47 billion deposits via sovereign debt issuance over calendar years 20, 21 and 22, $29.655 billion remains locked up on the RBNZ balance sheet (Crown Settlement Account). And then that leaves other credit created by banks - C5 - the majority of this purchased residential property.
It must be noted that $16.195 billion of the Crown Settlement Account balance is probably earmarked to redeem the outstanding 5.50% 15/04/23 bond issue.
The inflationary effects of large increases in the supply of money via LSAP and FLP appear to have been somewhat countered by a decrease in the velocity of money, with that decrease reflected in big increases in settlement accounts. But that decrease may well be temporary, as it is a function of spending behaviours.
Yes. To forther illustrate, people don't understand why in Japan inflation is low when QE is the name of the game. It's about turning base money into broad money. Japanese h'holds and firms won't borrow and have been paying down debt. Re broad money supply in the United States, Euro Area, and Japan, normalized to 100 in 2000, over the past 20 years, the following are the annualized rates of broad money supply increase per capita:
- United States: 6.2%
- Euro Area: 5.5%
- Japan: 2.9%
Very interesting. So that total money supply would still be reflected by the Gold Standard, which Nixon dropped that year at Bretton Woods?
My suggestion would be the banks. Question though, would your total include credit issued by the banks - fuelling the housing crisis for example? Or just actual dollars circulating? (note that this is PDKs point that credit/loans are a bet against future income)
Legit questions; I make no claim to understanding how the calculation is made or what it covers.
I recently listen to an interesting video "the Arden experiment". According to Dr. Hartwich , the money supply has tripled in a few years and banks have been making a killing by borrowing at the OCR from the RBNZ and lending it to us at > 4% . With this kind of money printing ,we will now have inflation running at 7% for the next 20y. Simply mind blowing.
"The RBNZ’s balance sheet puts the claim in June 2022 at $8.8 billion, over $4,000 per household. At the same time, the higher policy rates see central banks paying commercial banks much more interest on the massive excess reserves the latter have at the central bank. Banking system settlement balances at the RBNZ are currently $45 billion. Each 2% rise in the RBNZ’s overnight cash rate adds $900 million a year to the cost to taxpayers."
From "How-Central-Bank-Mistakes-after-2019-led-to-inflation-Final"
Remarkable news from Ukraine over the weekend. Months of grinding Russian gains have collapsed in a matter of days.
"The Ukrainian counteroffensive in Kharkiv Oblast is routing Russian forces and collapsing Russia’s northern Donbas axis. Russian forces are not conducting a controlled withdrawal and are hurriedly fleeing southeastern Kharkiv Oblast to escape encirclement around Izyum."
https://www.understandingwar.org/backgrounder/russian-offensive-campaig…
There is a news blackout on current Ukrainian actions so we don't know how far they have got, but there are rumours they are in Donetsk and even rumours they are on the way to Mariupol.
Carlos67 is weeping in front of his portrait of Putin.
As is Blobbles.
Carlos67 is weeping in front of his portrait of Putin.
I get the feeling that most Western people look at this conflict and believe once the Russian invasion is repelled, everything goes "back to normal." I think that's a little bit wrong-headed and misguided. The whole conflict is not as simple as it seems and the good / evil dichotomy has its limitation.
Not to simpletons JC who simply cast people as baddies and goodies, like the above two posters who have to resort to personal attacks. Brock, for example, will accuse all and sundry for using logical fallacies, but his own ad-hominen attacks are fine in his book. Murray loves to cast everyone that doesn't side with America as an evil collaborator in a vain attempt to look like a superhero when they bomb everyone to oblivion and therefore get to write history. Sad really, but shallow thinkers can't do much else, small minds resort to small arguments.
Not to simpletons JC who simply case people as baddies and goodies, like the above two posters who have to resort to personal attacks. Brock, for example, will accuse all and sundry for using logical fallacies, but his own ad-hominen attacks are fine in his book. Murray loves to cast everyone that doesn't side with America as an evil collaborator in a vain attempt to look like a superhero when they bomb everyone to oblivion and therefore get to write history. Sad really, but shallow thinkers can't do much else, small minds resort to small arguments.
It's representative of our media and popular culture. Cowboys vs Indians; Star Wars; etc.
It's more like one of those cases in life where there's a little bit of bad behaviour in everyone, but in some instances a lot more than others, to the point of being pathological.
We can see issues in the United States, and that's a relatively open democracy. There's massive great flashing neon signs surrounding Russia, and that's even with a decent amount of media control.
Perhaps you should look in a mirror Blobbles, and check your comment again?
You attribute an attitude to me that I've never espoused, while you have universally regurgitated Putin's claptrap to justify his war crimes. How many people are the US bombing at the moment? And who has threatened nukes in the current situation?
Not taking away from Putin being a Nutbar, but US are by no means saintly, they just happen to not be doing too much overtly evil things at this point in time.
Historically the USA have had a finger in almost every pie going, they have led rebellions, insurgencies, and outright wars. They are currently(Officially) involved in three ongoing conflicts, Yemen, Syria, and Somalia, and I struggle to see how any of those three are directly threatening US national security.
But in saying that, they did not poke the bear. NATO stationing arms in Ukraine, has the same impact on Russia, as Russia stationing arms in Ukraine has on NATO. There is no defined no mans land in Europe. So at some point NATO and non-NATO countries will share borders. It does not and should not mean war.
Putin's constant reference to Nuclear weapons is concerning. But again, no different to the other nuclear powers. All allude to the fact they have them and will use them.
The issue as I see it, is that of the current bunch, Putin is likely to be the most willing to use them. However, historic actions suggest the wider Russian Hierarchy and military are generally a lot less trigger happy. So unlikely to eventuate.
I've always acknowledged that the US have a far from stellar record on the international stage. But if I recall correctly NATO did not ever position forces in Ukraine. Ukraine applied for membership of NATO about 10 years ago but were rebuffed as they didn't meet the standards required for membership. In the interim there was no agreement explicit or implied that NATO would form some level of defence for Ukraine. You will also note that there were no news articles about NATO forces withdrawing from Ukraine when Russia attacked. NATO has however stepped up it's readiness in every European country that is a member since then, and Russia has scared two countries who had been staunch hold outs against being members of NATO, and being neutral into joining NATO.
The US is invariably very quiet about it's nuclear arsenal and posture, and that they are ready to use them. True Trump blustered to North Korea about the size of his button, demonstrating that the size of his brain was actually a lot smaller(!), but he is really an exception. And indeed when he started to talk nukes, the CJCS, General Mark Milley, called in the aide to the President to ensure he understood the law with respect to the "football" and the codes it held, meaning that even Trump would not be able to employ them at will. So by action the US stance has been one of restraint overall. i hope you are correct that the Russian military share that restraint.
Hi Blobby,
You certainly raise some interesting ethical questions about whether it is appropriate to ridicule those who are so developmentally retarded that they can't tell right from wrong.
"but shallow thinkers can't do much else, small minds resort to small arguments."
"like the above two posters who have to resort to personal attacks"
and Blobbles scores an own goal!! remarkable
Probably make believe to get extra $$$$ from the dimwits who think they know best, in the US and Europe, who seem to want a war to distract from the disasters are causing in their own countries. The Ukrainian leaders have got to increase their billion dollar overseas stashes somehow, after all.
The Russians are masters of maskirovka and the giant kessel.... They also have far more men and materielle (do the Ukrainians have many actual, you know, shells, left).
You think the advance isn't real? Even RT have reported it, with some euphemistic language.
https://www.rt.com/russia/562571-zelensky-ukraine-offensive-liberation/
"Earlier in the day, The Russian Ministry of Defense acknowledged the withdrawal of its troops from multiple locations across the region. Over the past three days, soldiers stationed in the area have been “re-deployed” to territory of the Donetsk People’s Republic, the ministry claimed.
“In order to achieve the goals of the special military operation, a decision was made to regroup troops in the areas of Balakleya and Izyum in order to build up efforts in the Donetsk direction,” the Russian military said in a statement."
The Maskirovka here was Ukraine tempting the cream of the Russian army towards Kherson and then attacking the void they left behind.
I guess we can reconvene in a week - if Russia have staged a glorious counter-attack and regained this territory then he is probably right. If Ukraine have held or extended the gains, then I'm sure he (and maybe you?) will eat humble pie.
I expect the stories of mass Russian troop surrender and equipment losses are just Russian propaganda to make themselves look weak and incompetent before the counter.
I think Russia is more interested in killing Ukraine solders on open flat land (steppe) than taking land. Kharkov deaths are thought to be high
In order to prevent “damage to Russian troops,” the military has been subjecting Ukrainian units in the area to “powerful” artillery, missile and aircraft attacks, the ministry said, claiming destruction of over 100 armor pieces and artillery, as well as elimination of “more than 2,000 Ukrainian and foreign fighters” in the past three days. Link
Citing RT on what a great strategy it is to tuck tail and run leaving behind all your military equipment, ammunition and thousands of troops to be killed or taken prisoner. Do you even believe the links you are posting?
OK - from the Russian Defense Ministry - Russian army eliminates over 2,000 Ukrainian militants in battles at Balakleya, Izyum
Are you taking the proverbial? I ask for abetter source than Russian State TV and you provide a link to the Russian News Agency. LMAO
Here is video footage of Russia's tactical withdrawal:
https://www.youtube.com/watch?v=_J2AQ6NyQqo&ab_channel=UntoldNews
Did you mean Nazi Key Infrastructure?
That video is amazing. Do you see how the skilful Russian Army can deploy troops and equipment on the move? Also they can camouflage a tank in 2 seconds flat, very impressive.
Of no surprise what so ever. The truth has become what the majority of people believe it to be.
That's the role of social media...pump your narrative and 'win' the truth.
Just like the NZ property market commentators over the last decade.
It is quite entertaining to see Russia's famed troll army fail to live up to expectations. Remember when Russia was able to influence US elections with their internet presence? Remember their disinformation campaigns used to great effect against the West? Now they can't even craft a narrative about their own actions.
It is quite entertaining to see Russia's famed troll army fail to live up to expectations. Remember when Russia was able to influence US elections with their internet presence? Remember their disinformation campaigns used to great effect against the West? Now they can't even craft a narrative about their own actions.
It's not just a Russian thing. China, U.S., NZ. Everywhere.
They also have far more men and materielle ...down to the dribs and drabs Roger, and the overall leadership seems to based on world war 1 tactics?
All of these autocrat militaries have BIG numbers. Too bad it's un-maintained 50+ year old technology and unmotivated troops.
Looks sweet in a parade though. So strong. So mighty.
Plenty of shells left, even GPS guided ones courtesy of our friends in NATO. Terrifying things to be on the wrong side of.
looks like Roger and Carlos are going to be weeping together
Russia has a track record of sudden changes happening - So dont be surprised to wake up one morning and find Putins picture is no longer hanging in the leaders great hall in Moscow
Putin has limited aims. His successors will just flatten Ukraine, destroying the water supply, electricity supply and bridges and ports, if necessary with battlefield nuclear weapons. They think Putin is too soft on the Ukrainians and has a romantic view of the Kievan Rus as the birthplace of the Russian Empire.
https://en.wikipedia.org/wiki/Golden_Gate%2C_Kyiv#/media/File:Golden_Ga…
Getting more and more limited by the day, I expect...
It's a bit hard to maintain the charade that you are in Ukraine to protect the people from Nazi when you start dropping nukes on the people.
Ukraine is a land of two halves, Russian speaking and Ukrainian speaking. They have a terrible history of doing unspeakable things to each other. The Ukrainian nazis have made only Ukrainian the official language, effectively making Russian speakers secondclass citizens, in order to stir up old hatreds. The solution, agreed in the Minsk agreements brokered by France and Germany, was to sort out what people wanted in the two regions by voting. This was violated by the nazis shelling Donbass.
Historically, the border between imperial Russia and imperial Austria/Hungary/Poland was the Dneiper river, which still reflects the linguistic preference. From Russia's point of view, the West agreed not to expand Nato to their border. The West later ignored this, which they got away with when Russia was weak and the populations small, but is seen as an existential threat with a populous neighbour like Ukraine or White Russia.
The US are shit stirring here, from Afghanistan to Iraq, to Libya to Syria and now Ukraine. The warmongers in the US are the driving force behind the conflict. They control the majority of the Democrat and Republican politicians, who always do what they are told, because "National Security". Any politician who disagrees is demonised and excluded from the lucrative positions that enable them to gorge themselves at the trough.
These people read Orwell and thought "There's some good ideas here. We can use this." They think command and control is the only way to organise anything and that what we think of as civilised society, is for sissies.
Russia is the war monger. Everyone seems to forget Russia invaded Poland along with Hitler in WW2 and that Stalin and Hitler were good buddies until Hitler betrayed Stalin. Russia then went onto to gobble up a heap of countries at the end of WW2, a dick move the Allies let slide which resulted in the cold war and the current shit storm.
Everyone knows if you have nukes there is no existential threat (mutually assured destruction ensures this. This invasion is all about Putin's legacy and ego. Putin is a bully and he has bitten off more than he can chew.
Roger you need to read some more history book as your view is a pretty lightweight picture of the region
try something by Serhii Plokhy - say Gates of Europe
or something by Anne Applebaum - say Red Famine
and Yes I try to understand what is really going on as my wife's family come from the region and grandparents died as a result of being railed to the Russian gulag
Roger knows you should never let the truth get in the way of a good story.
"They also have far more men and materielle (do the Ukrainians have many actual, you know, shells, left)." I guess that's why they're (the Russians) signing up criminals to fight, recruiting Syrian fighters and buying shells and rockets from the North Koreans (are they getting North Korean troops too?).
If 100k North Korean troops showed up in Ukraine there would be 100k refuges for the West to look after. (https://edition.cnn.com/2017/11/22/health/north-korea-defector-parasite…).
Does Ukraine have shells left? I understand Russia has donated their total stockpile in the Kharkiv region. Generous little souls they are.
Yes remarkable indeed.
Given Ukraine’s success it’s hard to see them capitulating. It’s also very hard to see the Russians capitulating, too much ego and pride at stake.
This war could drag on for quite a while.
Takes info from all over, both sides, so reasonably informative. A fiddly site, but faff about and find Ukraine and the especially the map.
Unusual times, is China's economy slowing down or crumbling. House prices in US tumbling. And I'm still puzzled why the FED have to keep on raising interest rates.
After a massive 75 bps interest rate hike, RBA is indicating a lower 25 bps follow up hike.
RBNZ have been cautious in increasing OCR, and NZD weakened. For the next two meetings, is it possible to see consecutive 75 bps interest rate hikes.
After a couple more hikes the Fed’s work will be done.
China is crumbling.
Probably why the US is raising rates into a recession....
Inflation pressures easing significantly. A tiny minority of us have been calling that.
Problem with inflation are "sticky" prices..once they are hiked they never come down.
And they don’t need to come down to kill inflation.
They simply need to stop rising.
Well knock me over with a feather!
Some prices can even keep rising - they will be counteracted by things like falling shipping and commodity prices.
Yep in terms of overall CPI. Which of course is critical in terms of interest rates.
Food prices will keep rising, for example, but I suspect housing cost inflation (rent / construction costs) will subside a lot.
Transport inflation will be heavily dependent on whether the government keep the fuel tax exemption going. I suspect they will - election year.
I really don’t think hospo can sustain further price increases either.
Oh, yes. Pressies time. I wonder what I'll get this time. Should be good, they probably noticed that silly Billy's promised "tax cuts if you're good", did not work as planned. Got to give out the bribes beforehand, as we know politicians promise, but don't deliver.
Got some bad news for you Housemouse, historically the USA waits 120 days after it sees that inflation is actually crashing BEFORE it decides to reduce rates. The whole process is very laggy and we don't yet have actual numbers yet that inflation has even stopped rising let alone it falling. It could easily be another 12 months minimum before rates start to fall. We are not yet even at the top of rate rises yet, inflation is not yet under control.
Baywatch, some people said that about the price of houses.
Yep...just look at the price of a V8. The tell me tradie type Utes are getting hard to shift in the used car market too.
Just had another round of base price increases at the local Duopoly supermarkets
10 cent here 20 cents there.
Food inflation data out tomorrow
Where in that whole article does it give any evidence as to "inflationary pressures easing?'
Did you follow this link?
https://www.drewry.co.uk/supply-chain-advisors/supply-chain-expertise/w…
Container shipping now costs about 50% of what it did a year ago.
Conventional wisdom would say that inventories rising into falling sales would generally imply that vendors will begin to discount in order to move stock that's taking up warehouse space. What isn't mentioned is whether higher inventory levels are a reaction to the supply chain shortages of the past few years, and this might be the way our supply chains are handled in future.
Easing?
Cost increases from suppliers remain broad-based across product categories,” said Brad Olsen, principal economist at independent consultancy Infometrics. Groceries from suppliers rose at an annual pace of 8.7% in August.That’s up from a 7.9% increase in July, and a 7.1% increase in June, and compares with an annual increase of 1.9% in August 2019.
well it has been a shite growing season
But govt increasing costs for farmer is also partly responsible
Good article from Roger Kerr on this website this morning.
Price of oil down a lot. He discusses implications for inflation and USD
https://www.interest.co.nz/currencies/117574/roger-j-kerr-questions-whe…
Let's say the NZI CPI number drops to 2%, quickly.
What do we think will happen to the OCR?
Will it be left at 3% (or whatever it's pushed up to in the meantime) to normalise the financial system; put the last 15 years worth of extraordinary measures to bed? After all, a primary reason for having the RBNZ is to control inflation, and keeping the OCR above the CPI figures makes sense.
I think the answer to your question is quite dependent on what happens with employment.
Demographics has already answered that question for us.
Unemployment will stay low. Wage rise demands will continue, or exacerbate.
Something like 10,000 workers per day are leaving the US workforce, mostly due to ageing, and we haven't replaced ourselves adequately. I'm sure there will be a stat for NZ that tells us something similar. (as it even will for places like China)
Ironically those of us with 2015 - 2020 era mortgages will probably need wage inflation to continue for a while yet, so it would be interesting to see if there's a policy solution that lets us inflate our earnings to pay down debt yet can stop house prices ballooning again to stupid levels.
Almost seems like a job for a capable and proactive central bank. What a shame we don't have one.
The Great Resignation Didn’t Start with the Pandemic. It might better be thought of as the Great Retirement. In 2021, older workers left their jobs at an accelerated rate, and they did so at younger ages.
https://hbr.org/2022/03/the-great-resignation-didnt-start-with-the-pand…
And Demographics aren't controlled by the OCR.
There are little to no deflationary inputs in the world economy currently?
Once it is realized that (any) central bank rate won't control inflation what's the next lever?
These things seem to set off self reinforcing processes, once unemployment starts rising, it takes on a force of its own. Usually the dimwits in charge then do things that make it worse. Timing matters and they apply the brakes too late and don't stop until they have caused years of damage.
In the unlikely scenario that the RBNZ can keep inflation at target with the OCR anywhere between 3% and 1%, surely it makes sense to choose 1% as there would be more growth.
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