Forum Archive Index - September 2001

["hugh webber" <hugh.webber@clear.net.nz>]

God save us from bush economists. We've had this one on Sharechat before,
several months ago. Its not even a matter of debate whether  a devaluation
improves the balance of payments.
The point is NZ exporters get more NZ dollars for the same volume of exports
so they produce and export more. NZ importers pay more NZ dollars for the
same volume of imports so they import less.
Its the reason why NZ has improved from a vast deficit in trade and in its 
balance
of payments on current account to its current position of near equilibrium - the
drop in the NZ dollar against our main trading partners.
You won't get a single advanced country economist to agree with you - maybe some
real maverick left winger like Wolfgang Rosenberg.
cheers,
Hugh

----------
> From: Jeremy <jeremy@electrosilk.net>
> To: sharechat@sharechat.co.nz
> Subject: Re: [sharechat] US Dollar
> Date: Wednesday, 19 September 2001 21:49
> 
> > dollar are not quite on the mark as we even fell against the Aus dollar.
> > But its good for the NZ economy anyway - boost for NZ exports
> > and hence all soundly based NZ economic activity. Put the
> > balance of payments on current a/c into surplus and enable us
> > to pay off some debt.
> 
> The NZ dollar drops.  Less overseas dollars come in to pay for the same
> commodities (all denominated in USD), or the same dollars come in to buy
> more commodities .  Either way, all that happens is :
> 
> . NZ looses nett value by shipping more goods at a lower price.
> . Primary producers get relatively rich.
> . The whole country gets poorer in absolute terms.
> 
> This is not a recipe for improving NZ, it is a recipe for disaster.
> 
> If NZ got off its bum and started adding value and selling rather than being
> bought at the whim of others at bargain basement prices then life would be
> grand.
> 
> Jeremy
> 
> 
> 
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