Monday, September 17, 2012

The Call to Print Getting Louder

The call today has gone out for New Zealand to start printing money.

Imports are cheap right now, but exports are suffering. Our competitiveness is hitting all-time lows.

But money printing for us may not have the desired effect. Confidence in a 'little' New Zealand dollar would not take long to disappear. New Zealand does not have the firepower to make a long-standing difference in huge money-markets. After all, New Zealand needs capital to rebuild Christchurch and to fund our deficit. Attracting that capital with higher interest rates is crucial. Right now we are stuck between a rock and a hard place

Those private interests, who lent money to us over the past ten years of profligacy, would not be happy campers if suddenly our dollar, and their investments, suddenly dropped through the floor in value.

Not happy indeed. This is mainly why the Government is holding back on money printing. Allowing private interests their day in the sun. Namely, a chance to grab assets of value before they disappear.

Maori aren't 'getting it' yet either. Water, air, these all mean nothing for ownership when we are already owned by those whom we borrowed from. If Maori want to grab ownership, using some reinterpretation of the Treaty, then good luck, there are far greater forces at play of which they have no control.

Money printing is not the answer, it sucks the wealth from savers, mainly the elderly.

Then again, once the tipping point is reached, we may not have a choice. Make sure you are protected.

Gold in New Zealand dollars: $2136.22 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $41.84 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)

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