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  • rmacculloch

Did the Comms Team write the RBNZ's Financial Stability Report? Since its 100% Spin; 0% Economics.

How does the RBNZ's latest "Financial Stability Report begin? With the line, "There are increasing downside risks to the global economic outlook". Then it continues, "Strong & persistent inflationary pressures are requiring continued monetary tightening, as acute challenges from COVID-19 and global supply chain issues lessen .. Russia’s invasion of Ukraine in February sparked a large increase in global commodity prices ..".

Fascinating stuff. I guess its known in propaganda circles that if you repeat the untruths enough, then people will eventually believe them. The 63 page document doesn't refer once to "Quantitative Easing" (the most commonly used phrase for "money printing") and the words "Large Scale Asset Purchases" appear one time as part of the line, "The end of pandemic-related support measures, namely the Large Scale Asset Purchase program and Funding for Lending Program, will normalise funding conditions for banks".

So here is my brief summary of the theme of the Report: 'The current house price crash in NZ has nothing to do with us, the current level of runaway inflation has nothing to do with us .. to the extent people bankrupt as they cant pay their mortgages and go into negative equity, none of that is anything to do with us'. Go blame the virus, Go blame Putin. What. A. Farce.

In the interests of human decency, can't these powerful institutions at the heart of our democracy stop spinning? How's the following for an alternative "narrative"?

The Bank helped fuel a house price bubble by coaxing people into borrowing at dirt-cheap interest rates to buy overinflated properties, flooding the markets with $50 billion of newly printed cash even as inflation spiraled out of control in 2021. We screamed warnings throughout that year on this blog. Now the Bank has hit the panic button by hiking rates through the roof to try convincing its political masters that it at last cares about inflation. Those rate hikes will probably turn out to be an over-reaction, likely to provoke a recession.

Yes, the spin masters at the RBNZ are ensuring that the institution is doing just fine out of all this shambles. Meanwhile, the private Banks are hitting record profits. There's just the one issue of who bears the collateral damage - namely everyone in the nation with a mortgage.



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