Forum Archive Index - February 2004

["Callum t" <callum00@hotmail.com>]

some options, though only considered whilest ignoring the flow on affects

1. drop interest rate to 0.01% like US. That would get rid of people seeking interest rates(i.e. they would take money out of NZ, increasing the supply of NZD, thereby in the short term possibly putting downward pressure on NZD

2. ignore the bad effects of inflation and turn the printing press to full speed, printing money would result in a. increased supply of NZD b. increased inflation. both would generally put down pressure on NZD.

3. buy back bonds, increasing the money supply

etc, but of course these are extreme examples and would cause violent volatility and  flow on effects, I would assume that Cullen, has he any sence, was considering the first 2 options, maybe...

regards
Callum Thomas

http://www.moneyquestions.co.nz

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