RBNZ's Wheeler sends NZ$ down; Mixed message from RBA's Stevens; US shares drop; China fradulent trade uncovered

RBNZ's Wheeler sends NZ$ down; Mixed message from RBA's Stevens; US shares drop; China fradulent trade uncovered

Here's our summary of the key news overnight in 90 seconds at 9 am, including in an unexpected move yesterday afternoon the Reserve Bank issued a statement quoting Governor Graeme Wheeler saying the level of the New Zealand dollar is unjustified and unsustainable, and it’s susceptible to a significant downward adjustment over the next six to nine months.

Wheeler’s comments saw the Kiwi drop under US80 cents for the first time since September 9 last year. Having been at US80.7c 24 hours ago, the NZ$’s now at about 79.25c. Over the same time period it’s down to A90.20c from A90.9c, with the Trade Weighted Index at 77, versus 78.2 24 hours ago.

The Reserve Bank’s statement has led to suggestions it’s a pre-emptive explanation for why it has intervened in the currency markets with figures on the level of its foreign currency holdings at the end of August due for release on Monday. In late August there was speculation the Reserve Bank had intervened to try and weaken the New Zealand dollar.

And BNZ economists suggest Wheeler's statement opens the possibility of an extended campaign of currency intervention.

Meanwhile, in Australia their Reserve Bank Governor Glenn Stevens thinks Reserve Bank of New Zealand type macro-prudential tools to cool the housing market are either a great idea or a terrible one, depending on which Fairfax publication you read. The Age focuses on Stevens suggesting such tools are worthy of serious consideration, and that he’s open to using them.

However, the Australian Financial Review angles its story on Stevens’ less enthusiastic comments, noting he said he was old enough to remember 1970s style limits on home loans and was not “naive enough to believe these kind of tools are any kind of panacea or permanent solution.”

US shares had their biggest fall in eight weeks, thanks to Apple’s problems and concern Russia could seize foreign assets. Apple shares were down 3.4% and the S&P 500 index dropped 1.4%, the Dow Jones Industrial Average fell 1.4%, and the Nasdaq 1.9%.

Apple withdrew its iOS 8.0.1 mobile software update after it caused customers to lose cellular service, and the company also has issues with some of its new 6 Plus phones bending. It’s preparing iOS 8.0.2 with a fix for the software issue.

China has uncovered nearly US$10 billion in fraudulent trade including numerous irregularities in the port of Qingdao. Companies “faked, forged and illegally re-used” documents for exports and imports, Wu Ruilin, a deputy head of the State Administration of Foreign Exchange's inspection department, said. The trades had “increased pressure from hot money inflows and provided an illegal channel for criminals to move fund,” he added. Industrial metal prices such as copper fell and the yuan weakened after the announcement.

Data out in the euro-zone showed lending to households and companies contracted for the 28th month in a row in August, as questions over whether the European Central Bank’s efforts to stimulate the economy will actually work continue.

You can check what happened yesterday here, and see our Economic Calendar here »

Daily exchange rates

Select chart tabs »

The 'US$' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The 'AU$' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The 'TWI' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The '¥en' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The '¥uan' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The '€uro' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The 'GBP' chart will be drawn here.
Daily benchmark rate
Source: RBNZ
The 'Bitcoin' chart will be drawn here.
End of day UTC
Source: CoinDesk

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?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


Comment Filter

Highlight new comments in the last hr(s).

The bank's move fuelled speculation about whether it has already put its money where its mouth is and intervened in the market or, if not, whether it is about to.
I know this much - it's Rosh Hashana and markets are thin right at the last moment for US traders to square up for quarter end - that adds to the directional pressure along with our own bank traders closing off for the financial year end.

As most people know the free market is an illusion and Wheeler is proving this time and time again.

Wheeler and a short on the electric fence have much in common.

Hmmmmm - without any official comment about what constitutes a sustainable currency pair level business capital development will collapse as businessmen assess the impact of rising imported input costs on sustainable sales of goods at higher prices. As Cowboy noted yesterday farmers pay retail and sell wholesale.

Here's a statement from Labour's Grant Robertson this morning;
“In response to numerous media inquiries, I would like to reiterate that I respect David Cunliffe's statement that he is taking time to reflect and take soundings in light of the election result and discussions at Caucus on Tuesday.
“Like all MPs and members of the Party I am doing the same.
“In the meantime my only other comment is to say that I fully support the processes that the Party has in place to deal with these issues."

... at what point do the Labour Party just come out and honestly admit that David Cunliffe screwed up big time ... bigger than big ... and they want him gone ?
What's with all the pussy footing around ... treading softly softly , trying not to hurt his feelings ...
... their worst election result since 1922 ... We , the great unwashed public can see it so plainly and obviously , why can't they ?

It might be more complicated than you wish to acknowledge - Chris Trotter has calmly set out the dilemma the Labour party has to resolve in his two most recent articles here and here.

Normally I avoid Chris Trotters rants like Ebola, however his words from the outside to me looks spot on.  Like I said this is a rinse and repeat of UK Labour and once UK labour got it right under Neil Kinnock, they won with Tony Blair. However it took Neil K 9 years of clean out to get electable and for NZ Labour it is only (and maybe at that) just starting on this road.
Probably one of the most under-rated left UK Pollies.

Brings home to me more and more the point that the old characterisation of dominant political ideologies of left (socialism) and right (conservatism) are nul and void. These major groupings of old have both morphed into globalism - the central ideology of our day.
Competing political parties have to find their places outside this dominant ideological sphere.
More than anything, the union movement in New Zealand has to decide whether globalism is an ideology it supports.
The six core claims of globalism:
Claim one: globalization is about the liberalization and global
integration of markets
Claim two: globalization is inevitable and irreversible
Claim three: nobody is in charge of globalization
Claim four: globalization benefits everyone (. . . in the long run)
Claim five: globalization furthers the spread of democracy in the world
Claim six: globalization requires a global war on terror

Globalisation does not achieve those things for most people.
You notice the simularity about the claims and those of First order Communism

I think you're saying you don't accept
Claim four: globalization benefits everyone (. . . in the long run).
Anchored within this particular claim are the accepted neoliberal economic theories, and its 'trickle down' characteristics, e.g., the John Key explanation that tax cuts serve to stimulate the wider economy.
Not sure what you mean by first order communism - there are so many different definitions (Marxian communism, Orwellian communism, Maoism, Stalinism etc.).  In the main, most states that purport to be 'People's Republics' these days are really just totalitarian regimes.  Not a lot of worker and/or producer cooperatives going on - which was the Marxian-type socio-economic / ideological concept. 

These claims are about as accurate as what is now recognised as complete BS, "trickle down" which has been seen not to work as advertised, and when examined it is obvious why.

the First Order (or Convention) was that of Marx's original doctine of a workers paradise.  While he did think Intelligent Anarchy was the best policy, he saw it as unworkable.  The Communist philosophy was next.

The workers (who did the job, thus knew how things worked would organise the system resources)
The produce that a community made and services it needed would be shared out to all members of the community, so it was fair to all.  This meant there was no advantage in theft, and really no need for it, as everything available would be provided at the cheapest most efficient means possible.
Those that could work would be expected to do so.  The community as a whole (ie those working) would decide who was most suited for their contribution.  Those with the best systems would be best utilised in those roles, so theoretically maximum productivity would be reached.
As the community distributed everything evenly according to need, their could be no unnecessary hardship, and what hardship occurred would be borne by all equally so there was no grounds for complaint.
 As everything was given, there could be no theft.  Since there were no poor and no rich then  assaults, thefts and injurous insult had no reason to occur.  Likewise there was no reason for standing armies or police forces, as the workers acted communally and would solve issues communually.  This was because it was simply more efficient to organise this way - without corporation and competition or heirarchial government there were no artifical barriers - how could stealing a neighbouring towns land work, if no-one owned the land, or their production, if all production was shared anyway.  In globalisation this is expressed as the common global price.


It's a wishlist, it's not actually achievable, and like trickle-down all it takes is an understanding of the principles and processes as they actually work (not as they show up in promotional pamphlets, textbooks, or political ideologies)

I'm not saying globalism as an ideology 'works', nor am I defending it - rather, I'm saying that it is the now dominant set of narratives/principles that society organises around - and that both the National and Labour parties in NZ are basically following this narrative.
You've described Marxian communism (a competing narrative) really well. And I agree with you that an understanding of political ideologies is necessary, and it would also be true to say that regardless of whether they 'deliver' in the 'real world' - we/society always have some kind of overarching narrative that we organise around.
So, I'm curious, what narrative - i.e., what basic principles/premises of societal organisation do you favour most, if for example, you cannot support the claims in terms of globalism?

I support anti-globalisation.

Globalism concentrates the production and decisions in a chosen few (as the Second Convention did with Communism - The Party (representing the amorphous People) became the decision makers.
   Theirs is only the personal freedom they allow,  Freedom of thought and ethics (and anything smaller) as long as it fits in the defined parameters.  Real "Brazil" style dystopia.

I see the freedom of expression and liberty and comfort of the people as the highest forms of civil goals.  Globalisation comes to me in sheeps clothes promise cheap, easy, secure - but cheap means the labourers and capitalisers dont' get good return, easy means it's bulk produced and assigned, and security is the watchword of the mind-police.
Likewise with Socialism, the goals can be admirable. But they can keep their hands in their pockets, and me in mine.   No Socialism means that people are encouraged to find sustainable answers to problems themselves and take responsibility - not saying help and charity should be available...just that when it's provided by destroying working operations/lives it's self-defeated.

We see things like the Pharmaceutical wars over NZ's choice to only offer 3 years IP protection.  It's in the public interest of NZers.   But look at the empire builders trying many sorties, and ghosts in sheets of many colours, to try and reap excess profits (and the generics waiting, salivating, in the wings for some juicy bones).  But all irrelevant if TPPA goes ahead.
- - 
eg I'm with the US farmers, I don't support Fonterra using price undercutting to get into the US market.   product spread, yes. volume support, yes.  but prices wars and over-competition harm everyone (drives down returns that can be passed on to _all_ of the economies so no-one wins, and taking into account velocity of money NO-ONE wins.).

One of the more interesting discussions around here for a while.
What I think is useful to put into the mix is that the idealogies and narratives are centered around the consumption of resources. While traditiionally seen as an argument around the control of the means of production, the means of production is only useful if there are the resources to support it. If there is a shortage of resources then they start to fall apart.
When it comes to the harder decisions that I believe are facing us, and the population statistics support the conclusion of a crisis in progress, then democracy is going to be of limited use to drive the changes required. Remember this because I just coined the term this week. "Democracy is a system of governance, it isn't a system of change".

cowboy, I'm a bit in that camp as well but haven't yet seen a well articled summary of what an anti-globalist ideology is. I think in terms of the article on globalism (from which I cut and pasted the six claims) - anti-globalism might be referred to as national populism (in NZ I see NZF as possibly the closest thing to this - and then there is the other side having a similar approach but addressing different issues, such as copyright law, being IMP), but I need to do some more reasearch.
Yes, scarfie, I agree about this being an interesting discussion. It seems to me we have a lot of people who do not agree with what globalism's claims are - but I don't think the wider populus really understands a) that this is today's dominant narraitve and b) all political parties trying to be 'centrist/populist' are following this narrative.

I used to be party to what was labelled the Leisure Movement.  

The philosophy was that much of the routine work in a persons daily life could be removed or reduced by automation, electronic technology, or better work methods.  By reducing the mundane work, the same output could be produced in less time, resulting in less time spent in labour and more time available to personal improvement.   You've seen me write of disposable income in a similar manner.   The thought was that output could be maintained steady, while cost of production would reduce, this gives a better margin, and a higher pay rate can be achieved for the same shelf price and profit margins.

But government and corporations stomped it.
First up they (the left) wanted competition.  This would force down prices, how dare businesses make profits.   This has created the race for the bottom to try and get the lowest cost product on the shelf...because the majority of people don't receive that promised higher pay rate (due to competition squeezing margins) and so end up buying as cheap as possible.  the competition philosophy creates the low quality drive and the poverty trap that minimum wage earners are stuck in.

Then they found they could get more data.  Because government doesn't pay for what it gets from businesses and people, and corporations are filled with similarly trained academic advisors/educated managers, there is an excessive demand for more.  more monitoring, more data, more storage, more details about customers - so what if it costs us $1.05 to get $1 more out of a customer, if we get even more data and paperwork we can mine them for even more dollars.  (the people doing this probably think dimishing return is some kind of airline ticket for dwarves)

And, not from government but from natural development, specialisation occurred.  As less hours were required by top skilled operators, the most skilled operators could specialise their work (and thus specialise contract/position).  and as Adam Smith observed specialisation reduces cost (so great for competition angle) but it also requires higher production and consumption (not so great for deflating wages, good for loan services)

so how do the school texts of 
production frontier (guns & butter) and
ricardo (comparative advantage) fit.
or is it because these core understandings assume
1. a mid/long term limit to production exists. 
2. no multi-national. In the sense that it assumes no common ownership or control of or supply chains.
3. producer free pricing, in that producers can determine retail prices of their goods, assuming away the effect of supermarkets (colesworth/walmart, or closed systems - Aldi).

Henry, here is how the USA will compete with our dairy farmers.

Your knowledge is well advanced from mine :-)!

I wouldn't bet my life on it. Forgive me while I let my mind runaway.




  Germany is an export goliath, number three in the world next inline to the USA, China is number one. Germany exports 1.4 trillion dollars of goods a year and it could overtake the USA soon. Germany exports cars, stereos and has more local control than China where companies like Apple maintain tight control on where the money ends up ( ie Cayman islands?  ). Germany exports the kinda stuff we would all like to own if we could afford it.


  The problem is that the German currency is tied up with the Euro and thanks to Spain,Portugal,Italy, Greece et al, they have a very competitive currency.


 The Euro looks likely to join Japan in a deflationary spiral, where you put off buying today what will be cheaper tomorrow.


 Europe, like Japan and China has one major weakness that the USA doesn't, it is the lack of local oil and reliable supply as seen by Putin's control over the Ukraine.


  China is most exposed and feels vulnerable to the vagaries of the USA controlled Persian Gulf. The USA also will end up in control of the strait of Malacca if the TPP goes ahead, which we support at the peril of our exports to China.


 China is the worlds biggest oil importer it passed the USA in September last year. It imports 11 million barrels a day, the USA consumes 19 million barrels a day. Guess who the biggest supplier to china is? Its Saudi and we know who controls Saudi oil. Venezuela is next biggest along with Iraq, that would give anyone a few sleepless nights.


  Japan did a big gas deal with Australia, our neighbour could be a big player in the world energy markets, Japan is happier relying on Australia for its energy supplies. especially as Australia is very supportive of the corporate structure, that makes sure the money flows in the right direction to the right people.


 China has a neighbour up North who has a lot of energy that in the past has supplied Europe with reliable gas and crude imports, going all the way back to the Rothschilds,the Nobel family, Shell and the Baku oil fields.


 Siberia is very close to China but its not all plain sailing.


“Russia’s death will come in either of two ways – from the East by the sword of the awakened Chinese, or through the voluntary merger with a pan-European republican federation”. These stunning words were written by Konstantin Leontyev, a Russian philosopher, already in 1891. 









Then China goes and does this






World oil transit chokepoints






  Deflation reduces costs, your economy becomes more competitive except in Japan which is in an interesting experimental stage that could, ' kill us all' with the carry trade.


  The USA is very energy reliant, my petrol price has dropped from $4.30 a gallon to $3.33 in the last month and thats in good old expensive California.


 The USA also looks to be entering a period of deflation, it will become an export powerhouse if its cost of production falls. 

 Our dairy industry could find very soon that it cannot compete with the USA or the EU. In fact NZ's experiment in high cost wealth transfer could find us on the rocks very soon.


  Its still all about the energy.  The FED has failed like Shinzo Abe in Japan to create inflation, without inflation debts will crush those with highly leveraged positions and the value of money increases but the newcomers will enjoy lower costs and be highly competitive without the debt.


 Banks will get restructured and its going to be expensive but if the shareholders and management take responsibility and not the depositors and taxpayers we will come out a lot better off.The other option leaves the taxpayer with an unmanageable tax burden while the elites make off like ' a robbers dog'.


 Thats my take of the world in 2014, I suspect I'm wrong on many fronts.

If 1 is true please identify the figure.
2 - ownership is tenant in common
3 - a little oversight goes a long way, however as supermarkets and medicine hav proven, and more recently comments by the US government that the promtion of GE foods and the companies that push them is in the National Interest  (note therefore that the legislation passed recently in Australia would make it illegal for citizens to expose or speakout against such interests).

However let my own example of controlled systems serve as an example:  My NZ college decided who got to go on what courses and were unassailable in the matter (they had monopoly domination).  They forbid me to take Economics in the sixth form (and thus it wasn't an option in the seventh).  It fitted with my schedule, I had an interest, it would have been useful, the class was tiny...but their decision was final, "policy stated" I could only take 5 subjects, and that was the masters law - failure to comply was evidence of deliberate disobediance again the legal authorities.  
 So I haven't read those "school texts" you mention.   This is also why cowboy has to work from fundamentals and hard tests of evidence rather than hearsay philosophies.

Here the latest newsletter for you

thats the point, some of the assumptions policy makers (trade/commerce) base their actions on, sometimes appear not to be first best, i.e. effectively gamed by participants.

Because it isnt just a DC problem. It looks like an endemic problem inside the Labour party. 
It so looks like a repeat of UK Labour's problems in the 1980s.
Just reading that statement from GR and it reaks of "I want the leader job" and his knife is out....(or whatever he wants to use as a weapon, but lets not go there).
Add in D Shearer's p*ssed comments about having to watch his back constantly (so I take it he was being back stabbed by Cunliffe) and boy that looks like another large knife.
DC might want to book a blood transfusion, maybe a 2inch pipe, and sit in a bath....
Have to wonder who will be left breathing....maybe its a 2020 thing.

Mr Wheeler is doing all exporters a favor,double edge sword with increase cost of imports fuel & fert though,rule of thumb for our payout-1cent movement either way 10 cent increase or decrease following US dollar.Hopefully Fonterra is hedging to get our milk price a lot closer to $6 again

 Does it hedge though?
Also it would hedge about an increase in NZD and we see a decrease, so if its hedged, that would be a loss?

yes they do. significantly so.  thats why they're reliant on volatility to give them decent exit times in the market, otherwise sooner or later the piper needs paying.

USD would be expected to strenthen as loose money runs back to it from risky currencies in the event of another global event/recession.
Given so many commodities seem to be dropping and now that chart, Im left wondering if this is a yet another global recession breaking out.

Perhaps the effect of China not wanting to boil over/boil the markets.

Not really much on the cards that is over the top risk

I find it interest that the Fed as the ambulance at the bottom of the cliff that is there collecting the mess the "free market" as willingly and knowingly driven off the cliff, is now being blamed as the cause of and the problem.
For zerohedges comment, Back in the 1929 stock market collapse no one would buy shares, maybe this is a similar event...but in corp bonds, if anyone (trys to) sell it goes to worthless.

"over the top risk" Well only peak oil, but apart from that.
I dont see how china can effect so many things like this....but I suppose who knows.
One "traditional" explanation is,
Lots of numbers look down or up as expected for risk eversion based on fear of another recession with the sheepies running back to the USA.
I suppose watch the trend....

electrical current is resource moving from one place to another.

China was the miracle consumer.  credit is the PD. money the current.  can't move the lumps if there aren't holes to full.  but if you pump all the current in at once (low impedance) and consumption (work) or demand/credit (PD) isn't enough  it all slows to a stop.

Quite true Andrew. The US is living off an increased export market share and a narrowing trade gap:
And NY Fed chief concerned about the rising USD: 
The US risks turning Japanese if they don't have more support from the consumer. But the consumer needs wage growth and employers want improvements in the top line before they give out wage increases.  

For the few people here concerned about mass Surveillance  this article from across the ditch is another concerning development http://www.smh.com.au/digital-life/consumer-security/terror-laws-clear-senate-enabling-entire-australian-web-to-be-monitored-and-whistleblowers-to-be-jailed-20140925-10m8ih.html

Thank you for posting this - I noted it yesterday -certainly puts the pre-election spying denials by John Key into perspective.  

“they had come to a time when no one dared speak his mind, when fierce, growling dogs roamed everywhere, and when you had to watch your comrades torn to pieces after confessing to shocking crimes.” 
― George OrwellAnimal Farm

I find it interesting that the (far) right compalin that we are drifting into socialism and will suffer complete control of our lives. Yet dont seem to be saying a dicky bird that it seems to be the right wing Governments who are doing it and the Green's who are opposing  it.
Thats Ok then, we will be kept safe by the very pollies we wont be able complain about or whistelblow on for our own good.
bound to end well.

Ell'wa lla aveha ota peaksa ifferentda anguagela.

Hatw? Otna gainaa? Ia lreadyaa oda peaksa ifferentda anguagela... ;-)

Otala mmersionia sia ompulsorysa ota earnla.....yma hildrenca houghtta heyta adha tia llaa veroa ema henwa heyta erewa oungya peakingsa hista.

a bit of decimation always keeps the troops and proles loyal.

... well , it is a big improvement on the days when we had to get our heads around pounds , pennies , ounces , bushels and furlongs ....

don't you mean rods & chains....

What ever happened to our Queen's Chain rights?

.. havn't they closed the Royal Dungeon ... where Liz purred 'like a cat as she birched old Phil , trussed up in chains ? ...
They're in their 80/90's now .... they don't still use the Queen's Chain , surely not ... imagine that , in your mind's eye ...the right royal wrinklies , semi-naked , in leathers , going at it hammer and tong .... not a pretty picture ...

you mean that Groom's job
was the most intimate of an English monarch's courtiers, whose physical intimacy naturally led to him becoming a man in whom much confidence was placed by his royal master and with whom many royal secrets were shared as a matter of course. This secret information he was privy to—

I was wondering how this would affect the Australian Constitution so thought I'd have a little read up on it and found that NZ is specifically mentioned in the Australian Constitution.  Now I know that NZ was governed by NSW and I have never found any clear date of when this officially ceased to be so. I'm finding this very amusing.
6. Definitions
The Commonwealth shall mean the Commonwealth of Australia as established under this Act.
The States shall mean such of the colonies of New South Wales, New Zealand, Queensland, Tasmania, Victoria, Western
Australia, and South Australia, including the northern territory of South Australia, as for the time being are parts of
the Commonwealth, and such colonies or territories as may be admitted into or established by the Commonwealth as
States; and each of such parts of the Commonwealth shall be called a State.
Original States shall mean such States as are parts of the Commonwealth at its establishment.

Here's a link for the full Constitutional Act...you can download it in PDF please note all dates.

Here's an update from Simon Cunliffe on his cousin David;
"Labour Leader David Cunliffe remains at home taking a break with family. He will not be making a statement today."

You know if you ever see a dog that has been badly beaten by its owner, it hides often in a hole and will not come out.

Go easy, he just found out about how "his mates" were behind him - and just realised the manifestation of the "social dream" that the Labour party have become.  Things the rest of the country already suspected, the wee lamb is probably feeling rather sacrifical at the moment (and he had such a *big* smile after the election)

a week later and they are still losing the election.
aside from finding out the form for Fridays, we wondered what was on the stero, maybe this:
And the night got deathly quiet
And his faced lost all expression
He said, "If you're gonna play the game, boy
You gotta learn to play it right

You've got to know when to hold 'em
Know when to fold 'em
Know when to walk away
And know when to run

Wheeler talked down the NZD?
Amazing... and it pretty much stay exactly in step with the USD rises.... so did he talk down the NZD...or was he talking up the USD (impressive job Wheeler - to make all those US reports match your speeches)

I noticed that many drops lined up with the US news releases, housing sales up, payrolls up, credit lending on target, production up.   The EUR has been pretty stagnant except for those same jumps.   
 The other news happening was the Chinese slow down, the Chinese speeches looking for alternative suppliers.
I doubt the $8 to $5.30 had much impact, as the Russian treatment of European dairy has likely already factored in a major drop.

I'm sure the foreign talking of tighening credit tended to draw money home to their countries.

Wheeler has just done what Bollard did afore him- arrange the NZ economy to suit the patrons of the pollies, viz. a great subsidy from taxpayers and consumers to realestate agents and fontera. With NZ terms of trade the best for 40 years and manufacturing expanding every quarter, compared to other moribund western currencies, the NZ $ more than deserves to be north of 80c US.

If that's the case with Fonterra, how come they can only afford a 5.30 payout?

Cowboy, with respect, you have the cart before the horse; this hysterical rant by Wheeler is a function of fontera's $5.30, not the cause of it.

You're not making sense.

If Fonterra is getting subsidisation from taxpayers then how is it only paying out $5.30?

If Wheeler is ranting hysterically how is that creating a subsidy for Fonterra?


Demographer Joel Kotkin, author of the new book The New Class Conflict, has coined the word Clerisy to describe what I have been calling the Upper Caste: America's new class system.
Oligarchs are assisted in their control by what Kotkin calls the "clerisy" class — an amalgam of academics, media and government employees who play the role that medieval clergy once played in legitimizing the powerful, and in implementing their policies while quelling resistance from the masses. The clerisy isn't as rich as the oligarchs, but it does pretty well for itself and is compensated in part by status, its positions allowing even its lower-paid members to feel superior to the hoi polloi.
Because it doesn't have to work in competitive industries, the clerisy favors regulations, land-use rules and environmental restrictions that make things worse for businesses — especially the small "yeoman" businesses that traditionally sustained much of the middle class — thus further hollowing out the middle of the income distribution. But the lower classes, sustained by government handouts and by rhetoric from the clerisy, provide enough votes to keep the machine running, at least for a while.
This describes the Savior State perfectly: a centrally planned and controlled government that enforces its absolute control via force, legal regulations and the blandishments of complicity: there's billions of dollars in free money social welfare to buy the loyalty (or at least the passivity) of the disenfranchized and marginalized.


the proper term is Second Estate.