Monday, October 8, 2012

Beware, the Politicians Are Coming

Beware of politicians and their brilliant suggestions.

Years ago the Reserve Bank of New Zealand (RBNZ) was mandated to keep inflation low. The mandate included no interference from the NZ government. Just use all the tools necessary to get the job done.

Now the Greens, Labour and NZ First want to start tinkering with the RBNZ Act and make that institution less independent.

Oh dear, here we go. They can't get enough cheap money to pay for their promises, past and future, so they look to the Global Financial Crisis as an excuse to abuse. A crisis they were arguably complicit in creating in the first place. You can't make this stuff up.

So what's their best plan? They want to print money to bring down our exchange rate.

Would someone please tell them that printing money equals inflation. Here's the definition: "When the money supply grows faster than the underlying pool of goods & services on which to spend it, their prices are bid up."

Printing would equal higher prices for everything here in NZ. That money you saved for retirement; gone. Where, you say? Stolen by these very people who would deem to save us by their duplicitous ideas. If you don't understand, then here it is. Your savings bought a basket of goods and services one day for one price, and the next, because of inflation, you need more money to purchase the same amount of goods and services.

I hope this latest thought and media spin doesn't happen. We need other ideas.

Tomorrow, I have a suggestion.

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Previous all-time high: $2311.02 per oz (15 Nov, 2011)

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Previous all-time high: $59.19 per oz (30 Apr, 2011)

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