Here's my Top 13 (!) links from around the Internet at 10 am in association with NZ Mint.
As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
See all previous Top 10s here.
My must watches are Jon Stewart's post-election coverage at #10/11/12. Laughed. Out. Loud.
1. And then there was one - Clancy Yeates at The Age reports the Reserve Bank of Australia (RBA) may have been quietly buying US dollars and Euros off other central banks to try to keep the Australian dollar from rising.
If true, that would leave New Zealand as pretty much the only country in the world that is not interfering with its currency. The RBA tactic is in line with the proposals put forward by former RBA director Warwick McKibbon a few months ago
The Age refers to a UBS report on central bank deposits at the RBA that UBS says suggests the RBA has been printing money.
This would tally with the rise in the New Zealand dollar vs the Australian dollar in the last four months from around 76 Australian cents to almost 80 Australian cents.
In the game of money printing musical chairs we look like being the last ones left standing. Or more correctly, the last ones left losing their jobs.
We are naive spectators in a world riven by currency wars. Just nuts.
In research published on Wednesday, UBS strategist Gareth Berry said there was “compelling” evidence to suggest the RBA had taken the unusual step of meeting central bank demand in direct off-market transactions, which would dampen the currency’s strength.
In the three months October, foreign central banks’ deposits at the Reserve have jumped by $848 million to more than $2 billion, the highest since early 2009. At the same time, the Reserve has lifted its foreign exchange reserves by almost exactly the same amount.
Mr Berry said these trends suggested the bank was effectively “printing” new Aussie dollars and supplying them to foreign central banks, which were then keeping the Aussie dollars on deposit at the RBA.
‘‘The Reserve Bank of Australia may have recently begun printing Australian dollars to satisfy overseas currency demand from foreign central banks,’’ Mr Berry said, adding that the evidence was not conclusive. If this is a genuine policy innovation, then it takes the RBA into uncharted territory.’’
2. And here's Alex Tarrant's interview with Warwick McKibbin on how the RBA would do this. Here's McKibbin's now famous AFR Op Ed on how the RBA could intervene.
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3. Here's what a Greek protest looks like. They don't do things by halves in Athens.
4. How Obama could do it - Now the talk starts about how Obama could fashion some sort of bipartisan budget deficit deal.
John Gapper at FT.com has an idea:
Mr Obama would gain hugely from hammering out a long-term approach to deficit reduction. Not only would he prove himself to be a bipartisan leader but the economy could also gain jobs. Any deficit reduction plan would further squeeze public sector employment, so he needs companies to pick up the slack.
A deal won’t be easy to negotiate. The Tea Party wing of the House Republicans will try to block any tax rises. But, if he is adept, Mr Obama has a chance of outmanoeuvring his most intransigent – and most bitter – opponents by marshalling the backing of business leaders as well as Democrats. A grand bargain requires a broad alliance.
5. We're fantastic! - The Legatum Institute has published a Global Prosperity Index that puts New Zealand at number 5, thanks largely to our free, democratic and well educated society.
6. What will Xi do? - China's all-important 18th Party Congress started last night. It's the much more important political transition for New Zealand.
Here's David Pilling at FT.com explaining what it might mean.
“Today the most important thing is political reform,” says Ren Yi, the grandson of reform-minded former Chinese leader Ren Zhongyi. “All Chinese, including those inside the system, all agree that it’s the next big thing.”
Another princeling, as the progeny of senior officials are known, puts it more bluntly: “The best time for China is over and the entire system needs to be overhauled.”
This son of a former government minister says the party’s authority is “declining at the same time that the economic backdrop has become much worse”. He added that without new rules of the game, Chinese politics would “descend into chaos”.
7. Totally a video of a girl playing American football -- We need to get her into the All Blacks. She looks like a young Cory Jane. We could call her Jane Cory.
8. Sensible Advice - David Wessel at WSJ has some advice for Barack Obama. Cut the unemployment rate before you fix the deficit. Fair enough.
Steering away from the fiscal cliff is important. Not only would the abrupt across-the-board spending cuts and tax increases of the fiscal cliff push an already-weak economy into recession, going over the cliff would convince the public and financial markets that Washington truly is dysfunctional.
The budget deficit, for all the hue and cry, isn't today's economic problem. The U.S. government is borrowing more than $3 billion every weekday and paying the lowest interest rates in history. Today's problem is unemployment.
The deficit is tomorrow's problem: Spending on promised benefits will far exceed anticipated tax revenue even after the economy recovers. And this, Democrats and Republicans agree, is unsustainable. Doing something now that reduces the 2016 deficit is more important than reducing the 2013 deficit.
9. Buckle up - Political Scientist Jamie Chandler points out at US News the partisan poison in Washington will make any sort of fiscal cliff compromise very difficult.
We have two diametrically opposed parties in camped in the Capital. Perhaps the 2014 elections will yield some change, giving the president an easier go in the last two years of his second term.
If Democrats and Republicans commit to grooming compromise candidates, then bipartisanship, so prevalent during the 1960s, will return. But for now, expect legislative discussions to produce nothing more than Capital carpets soaked with slicks of oil and puddles of water.
12. Totally Jon Stewart on Barack Obama getting his groove back.
13. Totally Clarke and Dawe on Australia's budget surplus. It's on its way.
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