Comments on: RBNZ’s Wheeler warns on housing, holds OCR at 2.5 percent http://business.scoop.co.nz/2013/01/31/rbnzs-wheeler-warns-on-housing-holds-ocr-at-2-5-percent/ Scoop Media Business Blog Tue, 14 May 2013 05:32:11 +0000 hourly 1 http://wordpress.org/?v=3.5.1 By: Martin Buck http://business.scoop.co.nz/2013/01/31/rbnzs-wheeler-warns-on-housing-holds-ocr-at-2-5-percent/comment-page-1/#comment-121461 Martin Buck Thu, 07 Feb 2013 20:24:13 +0000 http://business.scoop.co.nz/?p=75613#comment-121461 Economics is a hall of mirrors which few if any venture into fully. We present a face to the world via our Government bonds, purchased by international financial institutions in an effort to either hedge their potential losses or to maximize their gains for their investors. By maintaining a cash rate of 2.5, we remain a favorable currency investment. This might keep the IMF and S & P happy, but leads directly to an excessively high $NZ, which suppresses the internal NZ economy by penalizing exporters, while stimulating NZ purchases from overseas, usually bypassing GST.

Mr Wheeler is doing NZ no favours. We pay his excessively high wages. He needs to reduce the OCR by at least one point, preferably 1.5, to give heart to our exporters and employers. This might help our real economy far more than the window dressing he offers to the ratings agencies.

]]>