Forum Archive Index - December 2000

["Jeremy" <jeremy@electrosilk.net>]

> I would have hoped for greater economic literacy in this forum,

Hell no!  We're talking about punters on NZ shares here :-)

> The lower the NZ $ then the lower the price to travellers from
> overseas to take a holiday here including the airfare to them of getting
> here.

Umm  They pay for the fare in US dollars and fly in planes being paid off in
US dollars and running on fuel priced in US dollars.  What's the NZ dollar
gotta do with it ?

> There is currently a promising export led expansion in NZ which is also
> starting to correct our balance of payments problem - its actually due
> to the lower NZ $ and not to exogenous independent magic.

The exact mentality that leads NZ to be a third world backwater!

You are basically saying it is too hard to create demand for goods by adding
value, so let's create demand by dropping the dollar.  Then all the people
who have NZ based costs can get rich and everyone else can go hang.  This
argument has been around for just about forever and has seen farmers and
agrobusiness people become *relatively* wealthy and everyone else get
poorer.  In fact everyone has become poorer, just some have become poorer
than others.

NZ needs to get off its bum and start adding real value to what it produces
and start creating demand for its goods rather than the lay-down-misere it
has being doing so successfully all these years.

If you want to see demand driven exports relative to NZ, look at the Korean
war.  The world demand for wool was never higher, NZ got a whole heap of
cash and the NZ pound rose mightily.  If you can create external demand for
value added products (or even primary produce) you will get an net gain in
wealth and an nicely rising dollar.  You don't need a war to do it, just a
determination to add value and sell rather than lay back and wait for
pennies to be thrown to you.

Jeremy



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