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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.

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10 Comments

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 ? 

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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.

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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.

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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 ??

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Wolly !

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

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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. 

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

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

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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.

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