Update: Since the Reserve Bank announcement this morning the Kiwi has dropped a whole cent against the $US and three quarters of a cent against the $A. Good news for exporters. Good news for all New Zealand.
Adolf started to read a spittle flecked rant by Cactus and gave up after the first paragraph.
For a more rational analysis, one could do no better than look to the governor of the Reserve Bank who had this to say when he announced today's decision to leave interest rates unchanged for the best part of a year :-
"In New Zealand, the housing market has reversed some of the decline in prices experienced over the past couple of years and a very gradual increase in household spending appears to be taking place. Government spending is also supporting activity. Business spending, however, remains weak and credit growth is very subdued."
If the governor and the finance minister took advice from Cactus and her shrieking friends from the far right, by now we would have blown our economy out of the water by overloading it with unemployed ex civil servants with no job opportunities in the private sector.
It's all to do with timing and the right time to slash the public service is when private industry is ready to soak up the drones and put them to productive work rather than simply transfer them from the public sector payroll to the WINZ payroll.
The shouters seem to ignore John Key's oft repeated statement that he does not intend to make wide ranging cuts 'during a recession.' That's the right call. The fundamentalists of the right should learn to be patient and see what happens when we actually come out of recession.
Face of the Day
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