Kiwibank have dropped their interest rates - a clear indication that smiling and waving and voting yourself some more housing money has not been good enough to keep the recovery on track in NZ.
Kiwibank have dropped their interest rates - a clear indication that smiling and waving and voting yourself some more housing money has not been good enough to keep the recovery on track in NZ.
This entry was posted on Friday, July 2nd, 2010 at 6:00 am and is filed under economy, perks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Great point Dave.
That’s what I would like to know – in addition to my question above.
If Labour gets re-elected they will no doubt be very busy reversing everything they disagree with: GST, ETS, NS, ACC increases, ECE cuts, 3 strikes, replacing “borrowing for tax cuts” with borrowing for increased welfare or the Super fund
And then prove that interest rates won’t sky rocket because of a massive increase in government spending (which we all know is why they have increased before – check out Allan Bollard’s previous statements if you don’t believe me).
I may not be an economist but judging by the last decade, Labour are not good for the economy….
Rebecca said:
Of course I don’t believe you, Labour was busy paying off the country’s debt instead of the NACT act of borrowing every week to fund tax cuts the nation cannot afford.
You must think that’s the recipe for a good economy huh
You do realise the tax cuts were funded by increasing the GST and tightening of tax rules on property and not from borrowing, don’t you?
Stop misrepresenting the situation.
So you dear Loota are saying that Dr Allan Bollard is wrong? Is that it? And you have a Doctorate in what exactly? BS perhaps?
No I am not wrong – he definitely said that and he was most definitely right.
Labour spent far too much for far too long. A lot of these so-called cuts being brought in by the Nats is merely trimming back the fat…
The irony is that if Labour had remained in power they would have still had to borrow…question is, what would they have spent it on? Balance deleted
Rebecca that was blatant trolling. I appreciate your participation in Red Alert, certainly more than some of my colleagues, but you must not troll. If you do it again I will put you into moderation which will be a pain in the arse for you because your comments will be subject to a delay which might be seconds but could be hours. And a pain to us because we have to check them. Looking back comments on this post did get a bit off thread but the majority of people who moderate have been together without access to computers so you a forgiven for that – just. Trevor
P.s Dave, I agree. Isn’t it great to finally have a government that is prepared to encourage others to exercise a bit of personal responsibility and pay what they aught.
Btw, do you think that (according to Sam Knowles) the rate cut was to “provide longer-term certainty to customers who were concerned about interest rate volatility.”
translates into being
“a clear indication that smiling and waving and voting yourself some more housing money has not been good enough to keep the recovery on track in NZ.”????
I don’t believe TM is correct, but don’t really have the knowledge to properly quantify my view.
How is it a clear indication of anything? Let alone that the recovery is somehow failing.
I don’t think there is a whole lot of economics to it really, it is just a marketing move to encourage people to Kiwibank. Probably the people that can now withdraw their Kiwisaver money to buy a house.
Mallard is just scaremongering
That was my first thought too, but as I don’t really understand completely how interest rates – whether by the RB or by the banks work in relation to the wider economy, I was not sure whether I was right.
I definitely don’t think the cuts will create another housing boom. I think it is about the banks securing profit.
AXA, Bancorp economists on OneNews making clear that recovery overestimated and while not in recession rate of growth dropping.
@Rebecca, The RB cuts rates to spur economic growth (amongst other reasons)… Kiwibank cuts it’s rates because it wants more customers, the two aren’t really related (except that the RB sets base rates)…
The recovery has been fueled by government debt (some countries are set to double debt to GDP ratios over the next 5 years that took them 40 years to build up) as government debt gets higher it has to lend out bonds at higher rates, making the previous bonds worth less, this is a massive problem as most of these old bonds are held by banks and they rely on them for their viability (bonds from the Greek government from only a few years ago are now considered junk bonds and the European Central Bank ECB is holding onto them even though it is expressly against their charter) what happens if we keep increasing government debt decreasing the value of bank held bonds..? Who bails out the banks then..? On the other hand if governments stop spending growth will dry up and consumers will lose confidence, either way the fundamentals have changed in the normal business cycle recovery…
The big bailouts brought us some time, we need to accept lower growth and spending (both personal and governmental) and hope the BRIC countries will flick from export lead economies to import lead ones and increase spending (not likely), the other options are 10% – 15% loss of wages, house prices, sharemarket and probably (necessarily) government spending or hyperinflation… We’re in the poo for a few more years…