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Don Brash on reserve bank's moves to lower inflation

From Radio New Zealand:


The latest inflation figures out today are expected to show a fall from the current 32 year high of 7.3 percent.


The former Reserve Bank Governor, Don Brash, was the banker who helped tame inflation during his 14 years at the helm, taking it down from roughly where it is today to under two or three percent.


He spoke to Corin Dann.


Listen here


Addendum: The inflation rate barely moved dropping to 7.2 percent

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42 komentářů


We suck it in, and hope for the best.

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That's a kind way of saying we should put them on the end of a point, and if we an't going to do that then suck it in.

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Ron
Ron
18. 10. 2022

I keep saying this ...

The charlatans in gummint and the financial rackets all imagine they can deny reality and logic to defeat the "market" and make zillions out of thin air. Why we allow this I just do not know. It is the average honest working guy striving to make a living and raise a family who has to pay for it all.

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Where did we go so wrong? Looking back over the post WW2 period, we have probably had the most innovation, productivity and prosperity every experienced. Up until the late 1970's the economic growth was benefitiing the working people as well as the elites in politics and business. Then it changed and the purchasing power of wages and salaries have steadily decreased ever since. In order to sustain and improve their standard of living working people began borrowing more and more which is essentially selling their futures (time and labour). The money that is borrowed (fiat currency) has been created from nothing and has no real value at all until the productive efforts of working people create that value through the efforts required to service and…

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Solution, it is fair to say that Hitler had a solution, as did Stalin along with others.


Often, sadly, the target was not well thought out and failed to achieve a desirable end goal. Often because the ones needed to succeed were included in the target/s.


The adjustment required is for more and more citizens becoming a little clearer now perhaps?

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tom.gollop
tom.gollop
18. 10. 2022

I have asked this question before but nobody has given me an answer,?

I have a mortgage and my interest rate went from 2.45% to 4.99% to combat inflation??

If the bank is making an enormous profit at 2.45% ?

How can more than doubling my interest rate stop inflation ??

When the banks makes hundreds of millions extra profit without doing a thing, ?

Their costs have decreased so much they are hardly ever even open, emails take days to be addressed , staff possibly only get three days a week ???

The govt spending is out of control to buy votes on people who are NON PRODUCERS fullstop. and banks profit from our mortgages when the govt doesn't…

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Raising interest rates lowers demand for borrowing therefore reduces consumption across all products.


One of the prime drivers of inflation was allowing borrowing against property to fund consumer purchasing like cars and washing machines. That supposedly allowed a better lifestyle but all it really did was enhance bank profits rather than second tier lenders and drove inflation.


Remember back in the early 80's when mortgages were around the 20% mark? Some personal loans were structured at finance rates in excess of 100% annual so the desire to buy a washing machine was tempered. Now, not so much.


Most banks roll over loans so they can actually have lendings exceeding deposits by a factor of 10. That would change if w…

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The downside of inflation impacts all and sundry, either badly or worse... Whatever trivial upside there maybe is hard to spot. I would see a significant hike being required, while the completely stupid in Wellington keep on throwing money out there like no tomorrow then inflation will simply get worse and worse...


The Reserve Bank then has no option to go at it hard, all out. That sadly will cost the public a lot of $$ and the blame 100% sits with the Government stupid decisions without a clue what or why.


The OCR being lower than the US has to play a huge factor in the FX drop from 72 cents to 56 cents now, that then adds to…


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zespritz
zespritz
18. 10. 2022
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Taxes like RUC might be justified if it were all spent on maintaining and improving the road structure for which it was designed, but it is not. Much of the South Island is still serviced by one way bridges and gravel roads let alone the pot holes and surface degradation in the main arterial highways, meanwhile vast sums are wasted on cosy touchy feely cultural reports and patch-ups surrounded by duplicated light trucks and cone mustering. Soon the whole country will be 40kph and 20kph speed limited, the speed suited to rickshaws and bicycles. (but your administration like all good communist administrations will drive around in mercedes cavalcades.

Third world administration producing a third world result.

It is said that…

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