Here are some numbers buried in the Reserve Bank's "Money and Credit Aggregates", as measured by "M1", which is the amount of cash held by the public, as well as in cheque accounts used to finance transactions: Narrow Money Supply (M1) March - 2020 TOTAL $ 91,128 million Currency held by the public $ 6,697 m Transaction deposits $ 84,430 m Narrow Money Supply (M1) March - 2022 TOTAL $ 140,155 million Currency held by the public $ 8,361 m Transaction deposits

The NZ Herald's Business Editor, Liam Dann, asserts that National Party Leader Luxon's linking of high government spending to inflation is a marketing ploy without substance. According to Dann, it is politics, and Luxon is merely selling a fictional "story" which he is skilled at doing due to his time selling "brands" at Unilever. Like Persil. Just over a week ago, Newshub ran a story saying the ACT Party Leader's similar claims were "lies" and "economic illiteracy". The Hera

At the recent meeting of Parliament's Finance & Expenditure Select Committee, the Reserve Bank Governor was reported as voicing “discomfort” at being questioned on government spending. “We don't get involved in fiscal policy. That is the Government,” he said (see below). If only things were so simple. Ever since the RBNZ purchased $52 billion of government bonds which are currently sitting on its balance sheet, the Bank immersed itself in fiscal policy. That purchase led to t

I'm trying to muster up some prominent guest speakers with an economics background to visit this country, either virtually on Zoom or physically next year, to get back to the way of things before the virus closed our borders. On that note, a line I sometimes use to hook high profile types is to say we are a quite isolated little island and would greatly appreciate the visit to connect us better with the world and enable us to benefit from alternative views. In the case of For

Look at who our main media outlets have asked for commentary today on the RBNZ's OCR increase (to two percent): primarily the Chief Economists at our big banks. And didn't they have many flattering comments to make about how much the RBNZ was so keen to lower inflation (in spite of it so patently missing its sworn inflation target). Well, there's one thing we know about monetary policy: you need to act quickly and pre-emptively to avoid inflation taking root. Our RBNZ never d

Below is my column in the NBR this month: France has a real estate wealth tax scheme. It is assessed on the total value of property owned by an individual. The tax starts when the value of your real estate assets exceed €1.3 million. It rises from 0.5% up to 1.5% of the total value of the properties. From everything that I know about Attorney General and Revenue Minister David Parker, this is the kind of tax he wants for NZ. How come? The story begins with Mr Parker’s hero, t

Look at the document below which I found in the government's files - its says that inflation in NZ is to be held at 1 to 3 percent over the medium term and is signed off and "agreed by" the Finance Minister and Reserve Bank Governor: Yet on Budget Day yesterday, Treasury released its inflation forecasts which are HIGHER than 3% for 2022, HIGHER than 3% for 2023 and HIGHER THAN 3% for 2024. It was also over 3% this past year, 2001. Yes this inflation is not temporary, it is no

In extraordinary comments this week, Shamubeel Eaqub called ACT Leader David Seymour "economically illiterate". It was said in response to Seymour arguing that government spending was helping to drive inflation. Eaqub added, "It is not Government spending that is driving inflation. We had the UK hit 9 percent inflation yesterday because there is a global inflation crisis .. Yes, we should talk about inflation, yes, we should talk about Government spending but you can't just t

It's a shame that our Deputy Prime Minister, Grant Robertson, has an ambition, come what may, to achieve a Zero Carbon target, yet no plan to achieve Zero Poverty. "Monday is the most significant day in NZ's journey to combat climate change", Robertson said today. When was our "most significant day" in the journey to eliminate poverty? So how about the following plan to achieve Zero Poverty (you be the judge about priorities): Overturn Labour's ban on new oil & gas exploratio

Back in August last year, when this Covid-19 outbreak had begun (and which has never been eliminated) the Coronavirus modelers hit the headlines in the NZ Herald: "Expert's worst-case scenario: 1000 cases and weeks in lockdown" Te Pūnaha Matatini modeller Prof Shaun Hendy said the cluster was clearly reaching towards the upper limit of expectations when it was detected in Auckland nearly a week ago" ... Hendy said a "best-case scenario" could see about 200 cases .. "It's very

In what must amount to extremely damaging comments, John McDermott, who is the Director of Motu and winner of this country's most prestigious award for economists, a Yale PhD graduate, the former Chief Economist and Assistant Governor of the Reserve Bank and who has worked at the IMF & National Bank of NZ, writes in the NBR today: "Just when we needed a disciplined monetary policy framework the most, the Reserve Bank started an excessive quantitative easing programme & talked

It fell on Max Key to pose a brilliant question to the PM at a Business NZ event. He addressed the single biggest issue confronting the nation. Max started by saying he wanted to ask about "intergenerational fairness". Then he went on to enquire as to whether the PM was "concerned" about how the cost of the build-up in Government debt will have to be repaid by young Kiwis. His specific words were, "Do you think that this is fair?" However PM Ardern poured ice cold water over

Way back in the middle of last year, we were forecasting high inflation in NZ, fully breaching the country's agreed targets, at the same time as the RBNZ & Finance Minister were not. We questioned the Monetary Policy Committee's repeated characterization of Kiwi inflation as "transitory". We have long disagreed with the Finance Minister's assertion that most of our inflation is being driven by external shocks completely outside of his control. Now a former Chair of the US Pre