Forum Archive Index - March 2000

["John Stockley" <HOMEWARE@xtra.co.nz>]

If I didn't live in New Zealand, I'd believe you !

John


----- Original Message -----
From: RIL <RIL99_99@yahoo.co.uk>
To: <sharechat@sharechat.co.nz>
Sent: Wednesday, March 15, 2000 10:31 PM
Subject: [sharechat] Macro-economic issues


> 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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