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View Full Version : New Zealand makes interesting moves...




idiom
05-27-2009, 10:32 PM
Huzzah for not totally selling out the country (http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10575044&pnum=2):


International credit rating agency Standard and Poor's has given a favourable verdict on the budget, upgrading New Zealand's outlook from negative to stable.

Finance Minister Bill English today delivered his first budget, which dragged down long term debt forecasts through a mix of axing planned tax cuts, suspending payments to the New Zealand Superannuation Fund and reducing long term spending increases.

And the Money Quote:


Just a year ago, conditions like this were unknown, 'every worst case scenario eventuated', he said. Our current recession had highlighted structural imbalances, which had grown over the past ten years. Imbalances caused by excessive debt-fuelled consumption.

It looks like we may actually let the mal-invesment flush out and the losers take their hits!

idiom
05-28-2009, 03:38 PM
Bump for entitlement cuts.

sailor
05-28-2009, 04:23 PM
Doesn`t NZ have one of the highest interests rates around?

idiom
05-28-2009, 04:33 PM
Its currently at 2.5%, although it was at 8% in the middle of last year.

Young Paleocon
05-28-2009, 04:38 PM
I've heard the Aussie and Kiwi currencies have links to commodities, how so?

idiom
05-28-2009, 04:43 PM
Well our reserve banks are part of the government with no shareholders and fully publicly audited.

We are both major exporters so all policy decisions are strongly controlled by international commodity prices.

New Zealand will have to deliberately inflate to match the USA, as a lot of other countries have had to do.

Australia however is more and more closely tied to China who buys most of their iron ore etc. and are not so vulnerable to weakness in the US dollar.