New Zealand Dollar Breaks Above 72
April 3rd, 2007WARNING: This is not a recommendation to buy sell or hold any financial instrument.
If youre gonna play the game, boy, ya gotta learn to play it right.
You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count your money when youre sittin at the table.
Therell be time enough for countin when the dealins done.
Now every gambler knows that the secret to survivin
Is knowin what to throw away and knowing what to keep.
Cause every hands a winner and every hands a loser,
And the best that you can hope for is to die in your sleep.
Kenny Rogers – The Gambler
This isn’t a good way to be making money. I know, some of you might think that the decision to move almost everything we had into Kiwi dollars was a cunning plan, and that we should be patting ourselves on the back right now. Wrong. This move is nonsense and it’s going to slam down so hard that average New Zealanders are in for the shock of their lives.
Mainly, this is wealthy people from all over the place chasing better rates on cash bets. That’s really what’s behind this. In the process, New Zealand farmers are going to get nailed to a cross made out of yen and euros.
Obviously, the world wants what New Zealand has. If the New Zealand Government had any courage at all, they would stand up and demand tangible assets for New Zealand’s premium goods so New Zealand could move toward eliminating its high debt and finding a more sensible economic path to tread. The longer New Zealand plays by the rules established by U.S. and European bankers, the worse off the next bust will be.
By allowing this carry trade nonsense to continue, the New Zealand Government is ensuring catastrophe down the road. They’re trying to curb the spending of New Zealanders with higher rates while allowing this funny money casino to continue for wealthy foreigners. Who’s got the balls to stand up and say “No more carry trade swindling.” Helen Clark? HA New Zealand won’t even demand goods to be labeled with their country of origin so it’s fully nuts to contemplate reigning in the operations of the casino. But it’s too late now anyway. The NZ economy would sink like a rusty old ship that just had a massive hole blown through its guts, far below the waterline, if ANY move was made to even slow the funny money racket. Catastrophe later, I guess, is better than catastrophe now.
If you’re a farmer, you probably know about bullshit, and I’m not talking about the stuff that’s good for your garden. I’m referring to headlines like, Fonterra Pours Out Best-Ever Forecast. Gee. That sounds pretty good:
Fonterra yesterday released its most optimistic forecast yet about global dairy demands, which it says could deliver the New Zealand economy a significant boost over the next decade.
Unprecedented demand means global prices for milk powder (which still makes up the bulk of Fonterra’s sales) have hit all-time highs in the past few weeks.
“This is the most optimistic demand forecast that we’ve ever put together as an industry,” said head of strategy and growth Graham Stuart.
It goes on like that for a while, and if you keep reading, you find this:
As long as the dollar remained stable the co-operative was on track to deliver a payout closer to $5/kg of milk solids next year, he said. It has forecast a payout of $4.15/kg this year.
Fonterra was getting “the highest prices for skim milk and whole milk ever traded on the global market”, van der Heyden said. “Spot prices are going through the roof.”
The strong kiwi dollar was masking the extent of Fonterra’s success in delivering good returns to farmers.
Oh. Woops.
For farmers, the message reported in the newspaper is actually the truth: Work harder, produce more of a better product and wind up with less in your pocket as a result. Why? Don’t bother yourself with the finer details of global finance. We know what’s good for you. Trust us.
I’ve got another message for New Zealand farmers: Get small. Get local. Get out of the global casino before the pit bosses in Wellington and that god damned Business Roundtable wipe you out. Work less and do better? That’s right, if you work for yourself and your community and not some foreign bank and middlemen exporters! (Most banks operating in New Zealand are Australian owned. Kiwibank is a quasi government operation. Rabobank is based in the Netherlands and has a higher credit rating than the New Zealand Government.) These guys are getting way too much out of you and they’re literally taking it out of your hide! Stop playing their games.
Sell your goods directly to your neighbors and people close to you. Use farmers’ markets. Instead of your hard work going to pay banks and middlemen, you will get a better price for your goods. With any luck, American and European farmers will do the same, before their top soil is gone, but I wouldn’t count on it. You can make this transition voluntarily, while there’s still time, or you can make it when chaos and starvation constrain your options, or worse.
A message to everyone else: Kiwi dollars, who cares, how does that affect me?
The money is winding up down here because the big consumer economies are doomed, tapped out, collapsing. The shop has been looted and now the criminals are trying to strip the fixtures off the walls. The money is flowing into New Zealand, a small, out of the way place with more sheep than people, and not into the mighty U.S. stock market. How can that be?
U.S. equities are so obviously doomed that Asians and Europeans would rather make reckless currency bets than invest in U.S. companies. This is a shocking criticism of U.S. profligacy and an indication that America’s gig is finally up.
Reckless? Don’t get me wrong, I bet my life on New Zealand, and I’m glad I did. But taking on New Zealand dollar denominated assets is a reckless bet given the debt levels involved. Take a look at the handy Current Account Balance (Per Capita) by Country chart and scroll all the way to the bottom, deep into the red zone where the most indebted people in the world live.
Iceland? I don’t know what happened there. But look at the second and third heaviest debt loads per capita. The U.S. is number two with -$2,778.07 per person. New Zealand is small, but Kiwis know a thing or two about profligacy as well. At -$2,376.76, New Zealand is carrying the third heaviest debt load per person in the world.
And which of the top traded currencies gained the most over the last year, and is now breaking higher?
Forget the bridge, bub, I’ve got some New Zealand dollars to sell ya.
Can New Zealand avoid going down the drain along with the U.S.?
As Americans lose the taste for increasingly expensive Kiwi commodities—in terms of U.S. funny money—how will New Zealand cover those interest payments on the shocking piles of debt that are growing larger by the day?
Borrow more?
I’m sure that Ivy League bankers are making the rounds in Wellington and Auckland, explaining how America did it for decades.
Like the man says, “Know when to run.”
Via: Bloomberg:
Australia’s dollar rose to a 10-year high and New Zealand’s to the strongest in almost two years on their interest-rate appeal and a rally in commodities.
The New Zealand dollar is the biggest gainer of the 16 most traded currencies in the past 12 months, followed by Australia’s. In that time, the Reserve Bank of Australia has raised rates three times to a six-year high of 6.25 percent and New Zealand’s central bank once to a record 7.5 percent.
“Rates are really driving currencies, particularly the Australian and New Zealand dollars,” said Jeff Gladstein, global head of foreign-exchange at AIG Financial Products Corp. in Wilton, Connecticut. “You have a real trend in play here, so it’s going to be hard to unseat that in the very near term.”
Australia’s currency traded at 81.63 U.S. cents as of 12:14 p.m. in Sydney compared with 81.47 cents in Asia yesterday and reached 81.82 cents, the highest since December 1996.
The New Zealand dollar was at 72.22 U.S. cents from 71.91 cents and reached 72.42 cents, the strongest since May 2005.
The Southern Hemisphere currencies extended yesterday’s gains as prices rose for commodities, which make up about 60 percent of Australian exports and 70 percent of New Zealand’s. Gold futures for June delivery gained 0.4 percent in New York and copper futures for May delivery rose to an almost four-month high. World dairy prices are the highest since at least 1986.
“As commodities prices rally, demand for their currency grows,” said AIG’s Gladstein. The New Zealand dollar may rise to 72.60 cents today, he said.
Back Into Carry
New Zealand’s currency has gained almost 19 percent in the past year, exceeding the Australian dollar’s 14 percent rally, as investors take advantage of the higher yields in a strategy known as a carry trade.
“The fact the New Zealand dollar is outperforming the Australian dollar suggests people are getting back into the carry trade,” said Tony Morriss, a currency strategist at Australia & New Zealand Banking Group Ltd. in Sydney. “The carry is just too attractive for short term players to pass up.” Australia’s dollar may reach 81.90 cents today, he said.
New Zealand government three-year bonds yield 2.09 percentage points more than in the U.S. and 5.68 percentage points more than in Japan.
Related: The Inconvenient Truth About the Kiwi Dollar
Summary of 3 sections below:
1. We will invade Iran to protect the US Dollar.
2. Producers will work for devalued dollar.
3. Producers will have to work until dead.
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Follow the money. The following article is one of the most succinct summaries of how the USD became the world reserve currency and how we use that to benefit our empire at every other countries expense.
http://www.cpa.org.au/garchve07/1314iran2.html
1900: US started to dominate world economy
1920-1929: Ballooning US deficits
1932: Roosevelt decoupled USD from Gold.
1945: Bretton Woods; birth of US empire. USD reserve currency of world.
1960: LBJ prolific Warfare and Welfare spending creates world inflation tax on foreign ‘subjects’.
1971: World demands repayment in Gold. Nixon say No. US = World Empire.
1973: US makes iron-clad agreement with Saudi to ‘protect’ them if they sell oil only in USD.
2000:Saddam started selling Iraq oil for Euros.
2002: Iraq War
2007: Iran Oil Bourse starts selling oil in Euros.
2007: Iran War
2008: US massive warfare & deficit spending continues massive USD inflationary tax on ‘subjects’. Thanks for the nice NZ lamb! Here’s some paper for it! Good on ‘ya mate!
20??: USD collapses and gold becomes safe haven.
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I love the hilarious circus of the worlds currency rates and interest rates. It is so funny to see Iceland offering 12% interest, NZ offering 7.5% and the USD offering 5%.
They are trying to convince people to buy their currency to get their fabulous interest rates!
If people go for it, their currency gets ‘stronger’, as if paper can get stronger.
The really funny part is that there are still some faint connections to reality, like selling real commodities helps demand for your currency, but when all currencies are complete fiat and the banks can infinitely expand them (in secret even), then most all connection to reality is lost.
So there may be a ‘credit crunch’ to the poor sucker sub-prime lenders, but there certainly is no credit crunch to Goldman Sachs that can borrow a few billon yen at 1% interest, convert to NZ dollars at 7% interest and make a whopping 6% return to pay for Jet Fuel for the G5.
The NZ farmer selling a few slabs of lamb is like a bug hitting the windshield of these super tankers of money.
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Do Work For Me.
The only true wealth is the ability to do something. Grow a carrot, cut hair, build a patriot missile, manage my investments, whatever.
Money is what you get in exchange for doing something. Money is what I give someone to ‘Do Work For Me’.
But if I have the power to create fiat currency it allows me to short-circuit the process and create money that I can give to anyone and they will Do Work For Me.
Hopefully, you continue to take the Blue Pill and continue to Do Work For Me in exchange for my paper or electronic credits.
The hilarious part of the joke is that you do not get any real wealth from me, just paper, so you cannot ever stop working!
So if you are a farmer in NZ, or cut hair in NYC, you will have to do that for the rest of your life or work as a greeter at Walmart. Be sure to think of my pile of gold in Switzerland and me winging down to the Cayman Islands on my G5 during my golden years.
A buddy emailed me this link which is pretty interesting:
:
I think this explains a lot. You know that I believe in the goldenrule – the one with the gold makes the rules. He who controls themoney of this country controls this country.
This has been keeping me up at nights. I have long had a theory aboutthis. We both know that we are lied to all the time by our governmentsand we are trained at birth with force fed propaganda. I have donesome research on the federal reserve and came up with this
information.
http://land.netonecom.net/tlp/ref/federal_reserve.shtml
I believe that in 1913 the British government and financial
institutions of England took control of this country. The illusion ofthe Unitied States has been kept in place to prevent war. Think aboutit for a moment. after 1776 we were strong enemies with Britianincluding the war of 1812. We have been fighting them up until 1914when we joined with them against Germany.
Follow the timeline. 1913 – Federal Reserve takes over the financialcontrol of the USA, 1914 – World War 1 breaks out, 1922 – Germany hasfinancial problems and over the following years restructures itsfinancial status becoming a threat to England – let the propagandabegin. 1933 – World War 2 agaist the Germans. Bring on the propoganda
– Nazis and killing jews. Just like fighting the civil war to free slaves. Bullshit! The civil war was about tobacco and cotton. WorldWar 2 was about MONEY! If Germany would have been allowed to continuethey would have established a currency throughout all their newterritories that would have been a threat and undermined the banks ofEngland. Even noticed that the US and England have this weird tie -joined at the hip thing? If one jumps off a cliff the other follows.
The Rothschilds and the Bank of England, and the London banking housesultimately control the Federal Reserve Banks. NOT american banks.
Now lets look at current events. Iran. What is Iran doing? They arechanging the rules by trading in Euros. I think you know where I amgoing with this.
Another point about New Zealand. There is no deposit insurance!
This is a hard concept for Americans to grasp, as US bank accounts have been insured up to a pretty high FDIC limit since the great depression. No such thing as deposit insurance exists in New Zealand. Note that all of the banks are heavily invested in the downunder housing bubble (or for Rabobank the Anglo/Dutch housing bubble). If the fucked mortgage borrowers default, the banks can fail, and depositors are screwed. (The one exception might be the government owned Kiwibank, which would probably not be allowed to fail. The Reserve Bank of NZ could just create more money out of thin air and deposit it in Kiwibank)
So, I keep just enough fake Kiwi money in my bogus bank to fund daily life. Any surplus is used to buy useful stuff. (I just bought a very nice pedal powered Hobie fishing kayak I can even tow behind a bicycle. So I will still be able to use a fishing boat even when petrol is not available.)
The deep reserves go into precious metals stored in the vault in NZ where I can get to them.
[…] 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 […]