Forum Archive Index - March 2000

[RIL <RIL99_99@yahoo.co.uk>]

Currently NZ is running a very high deficit. International funds are
exiting because, along with the dog infested stock market, classical
economics says that if a country runs an enormous trade deficit the
currency will decline. A fall in the currency with respect to the
denomination of the investing fund is a loss.

Now with a falling currency the cost of imports increases thus imported
inflation. Dr Brash consequently, given the expected rebound in the NZ
peso, sorry dollar did not occur, has raised the OCR by 50 basis points.
He has promised more if the dollar doesn't respond.

This rise in interest rates is contractionary for the economy and
investment, profits and so on.

Secondly, the expectation of bad performance in NZ is gaining momentum.
People are selling stocks and converting NZD to stable currencies. I
believe the dollar will not therefore stabilise or increase. Thus
interest rates will rise further soon. 

This will hit the market badly. And so on.

Brash and his university mates will have to get used to the idea of the
NZD down at 40 US cents or so because that is where it is heading. ie
its truer value.

We are talking 25 pence here folks.

My advice; get your money offshore either by buying NZ listed Aussie
stocks and shunting or by buying US or pounds. Nothing will stop an
economic event whose time has come.

Better still if you have a skill come to England. The grass really is
greener.

Please fault my logic. If you don't get out, in 10 years you will have
to explain to your kids why you can't afford to travel overseas. No one
blamed the passengers for jumping off the Titanic before it went beneath
the waves.

Don't say that RIL didn't warn you. Once again; NZ can not survive
globalisation.

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