New Zealand Dollar Gaps Through 73
April 13th, 2007You might have thought I was exaggerating when I wrote, “New Zealand farmers are going to get nailed to a cross made out of yen and euros.” If anything, that statement wasn’t strong enough.
And what are they proposing in Wellington? Raise rates, making the carry trade action even more severe!? Driving the thing even higher? I don’t know who’s behind the wheel of this thing, but it’s not Kiwis. There is some kind of insidious, international banking octopus thing happening here. New Zealand politicians are selling their own country out to a global criminal elite that is going to eat this land alive and spit what remains out into the sea.
I wonder: will the government still blame the Kiwi consumer for this as they get wiped out, lose their homes and unemployment kicks in, AND the New Zealand dollar continues to rise because of the carry trade?
If I’m wrong about the influence of the carry trade, can anyone explain to me why the New Zealand dollar is rising with Kiwis behaving like American consumers?
Hint: The Kiwi consumer is a big fat red herring that is being used shift the focus away from the international looting that the government is allowing to continue.
The government needs to cool the jets of the Kiwi consumer, BUT where is the plan to limit the carry trade funny money casino for wealthy foreigners? Hmmm?
Via: Bloomberg:
New Zealand’s retail sales rose almost four times the pace expected in February, driving the nation’s currency to a 23-month high on expectations central bank Governor Alan Bollard will carry out his threat to raise interest rates.
Retail sales gained 1.9 percent from January when they rose 0.7 percent, seasonally adjusted, Statistics New Zealand said in Wellington today. The median estimate in a Bloomberg News survey of 13 economists was for a 0.5 percent increase.
The biggest surge in spending since March 2004 will further stoke the economy and inflation after growth accelerated in the fourth quarter. Governor Bollard raised the official cash rate a quarter point to a record 7.5 percent last month, saying a pickup in domestic demand may fan price increases and force him to increase borrowing costs again.
“The pickup in growth is gathering momentum, adding to signs that interest rates need to increase,” Craig Ebert, senior markets economist at Bank of New Zealand Ltd. in Wellington, said before the report was released. “This would set the scene for another above- trend spending increase for the March quarter.”
The New Zealand dollar jumped after the report. It bought 73.52 U.S. cents at 11:03 a.m. in Wellington from 73.11 cents before the report was released.
Bollard Threat
Bollard on March 8 said domestic demand and housing must slow to reduce inflation pressures. He said a further rate increase may be required unless consumer spending cools.
After five years solid of this carry trade being TOTALLY ignored by the NZ press, last year they started characterising it as “Japanese housewives buying NZ dollar bonds for the high interest rates compared with Japanese bank rates”. The Japanese retail market (referred to as Uridashi bonds in the NZ press) is a drop in the bucket compared with the massive hedge funds borrowing yen and then buying NZ dollar instruments.
People in NZ are deliberately being kept in the dark about what is behind the out of control NZ dollar and NZ real estate bubble. I wonder why?
When this unwinds (when, not if), NZ will not be able to service its current account deficit. In other words, the cost of imports will sky-rocket and household budgets will melt down under the weight of rising prices and high debt levels. Which means panic selling of ridiculously overpriced real estate. Bingo. Game Over.
I’ve been working on an article about this called “New Zealand: Where is the Outrage?” I just posted it:
https://cryptogon.com/?p=628