A review of things you need to know before you sign off on Thursday; TD rates rise, household inflation higher, NZGBs very popular, swaps on hold, NZD rises, & more

Iwi will be getting hit with the 8% wealth tax stick too, right? Right??? 

TPM's tax policy is absolutely the closest to what the majority of commentors here have been advocating. A serious wealth tax on property, land and empty houses in favour of a significant tax-free threshold. Perhaps take your hood of and critique it? I'm not in favour of it, but that's not the point.

The company tax rate will hit foreign resident investors the most.

However, our FDI figures shows NZ has barely attracted new investments since 2009 anyways, so this tax is probably designed to claw back some of the big margins from the Big-4 banks and Woollies - which I am all for (as are the sheer majority of Kiwis).

Foreign direct investment in New Zealand continues to increase | Stats NZ

I read some of their policies, social justice and co-governance aside (easier said than done, these being huge ideological barriers for most) their socioeconomic policies aren't all that bad.

The party said this would mean a person earning $60,000 would keep an extra $6520 a year, and a person on $90,000 would keep an extra $6220 a year. They suggested take-home pay would increase for 98 percent of people.

Seems a good idea..unless of course you earn over $300K a year?

So where is the wealthy Iwi taxation bracket ?

So if you own a nice house, a holiday home, a boat, and a couple of cars you're probably getting caught. 

"clowns to the left of me, jokers to the right..."

Great song. 

Frank likes it. A lot. It’s all sensible tax options which have been proven to be feasible overseas. A good first step in getting the country back on its feet.

It’s only the kiwi inertia and “know-best” isolation mindset which has stopped this in the past. 

Next step, levelling up the super industry with Australia. Look at their investment and infrastructure funded by compulsory super. No wonder their economy is booming

I know and zero capital risk weights for bank buyers. Nonetheless:

Low nominal interest rates help reduce debt servicing costs while a high incidence of negative real interest rates liquidates or erodes the real cost of government debt. Thus, financial repression is most successful in liquidating debts when accompanied by a steady dose of inflation. Inflation need not take market participants entirely by surprise and, in effect, it need not be very high (by historic standards). Link 

Bottom line - you need to own a lot of them to make the risk free aspect overcome inflation concerns in one's own life time, but they never ring up asking to unblock the dunny. 

Time to buy more bitcorn?

No Buyer at any price.

I think this is confusing correlation with causation. Post GFC both tanked. This time around we won’t see a tanking of rates.

Just you. Nothing extreme in their tax policy if you look outside our borders

Its not just you, I made the identical comment in another forum earlier today.

It's time for playschool to be shutdown & the adults back in the room.

Its completely virtue signalling nonsense, ultimately adding back into the major supermarket chains profit margins.

? You just select nil GST when entering in a bag of spuds...not rocket science.

Nothing to see there, everything is hokey dokey, no recession forthcoming there nor here!!!

On our planet earth – as opposed to the very different planet that economists seem to be on – all markets are rationed. In rationed markets a simple rule applies: the short side principle. It says that whichever quantity of demand or supply is smaller (the ‘short side’) will be transacted (it is the only quantity that can be transacted). Meanwhile, the rest will remain unserved, and thus the short side wields power: the power to pick and choose with whom to do business. Examples abound. For instance, when applying for a job, there tend to be more applicants than jobs, resulting in a selection procedure that may involve a number of activities and demands that can only be described as being of a non-market nature (think about how Hollywood actresses are selected), but does not usually include the question: what is the lowest wage you are prepared to work for?

Thus the theoretical dream world of “market equilibrium” allows economists to avoid talking about the reality of pervasive rationing, and with it, power being exerted by the short side in every market. Thus the entire power dimension in our economic reality – how the short side, such as the producer hiring starlets for Hollywood films, can exploit his power of being able to pick and choose with whom to do business, by extracting ‘non-market benefits’ of all kinds. The pretense of ‘equilibrium’ not only keeps this real power dimension hidden. It also helps to deflect the public discourse onto the politically more convenient alleged role of ‘prices’, such as the price of money, the interest rate. The emphasis on prices then also helps to justify the charging of usury (interest), which until about 300 years ago was illegal in most countries, including throughout Europe.

However, this narrative has suffered an abductio ad absurdum by the long period of near zero interest rates, so that it became obvious that the true monetary policy action takes place in terms of quantities, not the interest rate.

Thus it can be plainly seen today that the most important macroeconomic variable cannot be the price of money. Instead, it is its quantity. Is the quantity of money rationed by the demand or supply side? Asked differently, what is larger – the demand for money or its supply? Since money – and this includes bank money – is so useful, there is always some demand for it by someone. As a result, the short side is always the supply of money and credit. Banks ration credit even at the best of times in order to ensure that borrowers with sensible investment projects stay among the loan applicants – if rates are raised to equilibrate demand and supply, the resulting interest rate would be so high that only speculative projects would remain and banks’ loan portfolios would be too risky.

The banks thus occupy a pivotal role in the economy as they undertake the task of creating and allocating the new purchasing power that is added to the money supply and they decide what projects will get this newly created funding, and what projects will have to be abandoned due to a ‘lack of money’.

It is for this reason that we need the right type of banks that take the right decisions concerning the important question of how much money should be created, for what purpose and given into whose hands. These decisions will reshape the economic landscape within a short time period.

Moreover, it is for this reason that central banks have always monitored bank credit creation and allocation closely and most have intervened directly – if often secretly or ‘informally’ – in order to manage or control bank credit creation. Guidance of bank credit is in fact the only monetary policy tool with a strong track record of preventing asset bubbles and thus avoiding the subsequent banking crises. But credit guidance has always been undertaken in secrecy by central banks, since awareness of its existence and effectiveness gives away the truth that the official central banking narrative is smokescreen. Link