Daily briefing for Tuesday, January 18, 2011; Hu, EMU; floods and inflation; Eisenhower's prediction

Daily briefing for Tuesday, January 18, 2011; Hu, EMU; floods and inflation; Eisenhower's prediction

Here is a quick snapshot of some key overnight news, views, and data.

What Hu thinks
In written answers by two major US newspapers, China's President Hu called the present U.S. dollar-dominated currency system a "product of the past". He also noted, "We both stand to gain from a sound China - US relationship, and lose from confrontation". President Hu is not a very open politician, choosing to rarely talk in public. This type of answers-to-written-questions is his style.

What Ambrose thinks
EMU policies are pushing Southern Europe into systemic political crisis, even if they can get over the current debt-rollover issues.

What God thinks
"If you want to know what God thinks of money, just look at the people he gave it to."
Dorothy Parker

more below ...

     7 am       ---   52 week  --  
    Today   yesterday   high low  
     --------    --------   --------- ---------   
FX rates NZ$1=US$ 0.7731   0.7667   0.7964 0.6584  
  NZ$1=AU$ 0.7778   0.7754   0.8212 0.7408  
Gold in US$ 1,361   1,367   1,421 1,058  
  in NZ$ 1,760   1,783   1,877 1,507  
Copper in US$ 9,651   9,591   9,754 6,091  
  in NZ$ 12,484   12,503   12,811 8,951  
Crude oil in US$/bl 90.94   91.66   91.91 70.15  
  in NZ$ 117.63   119.55   121.36 101.30  
US Treasuries 30 yr bond 4.53%   4.53%   4.78% 3.61%  
Dow DJIA 30 11,761   11,787   11,787 9,614  

Ignored or understood?
Fifty years ago today, the retiring US president Eisenhower (a top WWII General) warned about a rising "military-industrial complex," which he described as "a permanent armaments industry of vast proportions" with the potential to acquire - whether sought or unsought - "unwarranted influence" in the halls of government.

Inflationary surge
The Australian floods are set to cause a surge in their inflation. We may be collateral damage. And the RBA may be raising their rates soon.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Just Asking?.....

Given our close association with Oz , and given its our biggest trading partner and the underwriter of our entire Banking system , how come we are able to keep interest rates so low , while theirs keep rising ?

Is Dr Bollard leaning into the wind to keep rates low , and for how long can he do this ? 

Supply and Demand

In the last 2 years our ozzy friends have borrowed and extra $200 billion to put in to housing while Kiwis have hardly increased their borrowings.

The rebuilding of Oz will cause more inflation in NZ than in AUS, interest rates will go up in NZ before they do in AUS.

Dr Bollard is obviously a fairly clued up guy. Give credit where credit is due.  If he wasn't doing the job, who would be ??

Wolly !

stop that..! cripes Gumbo you're a stirrer...ya scamp.

Brash....... but that would have been a tad awkward...especially since it was the Nat's new vanguard that nobbled him in the first place...... that aside any half baked book-keeper that knew how to follow instruction and keep it shut when required.....dovish..? my ass...squeak. 

No way...when I walked out of the Beehive it was job done...!

c'mon Wolly - you could finally pop that Property Ponzi scheme of yours! 

It will never be popped spec...you have to learn to live with it...the banks were handed the economy on a plate by Cullen and her in red skirts...thankfully I left long before that pair of fools got to the 9th floor.