Editorials 11 June 2010

June 11th, 2010 at 3:00 pm by David Farrar

The Herald talks OCR:

Money markets expect this tightening by way of small steps to prompt an official rate of 4 or 4.25 per cent by this time next year, and further increases to about 5 per cent by the end of 2011.

We should not, says Governor Alan Bollard, expect the rate to rise as far as the 8.25 per cent peak of the previous cycle.

Hopefully not, but several things could knock the ship off course. One is rising inflation, the central bank’s core concern.

I think the OCR will increase beyond 5%.

The Press also talks OCR:

Now, however, as recovery begins to look more robust here and among New Zealand’s main trading partners, the central bank must consider again the prospect that inflation will spike outside its target 1 to 3 per cent range. The move yesterday was modest – only a quarter of a percentage point – but it is an indication that the bank is determined to keep inflation expectations under control.

Some manufacturers and exporters have suggested that moving now on is premature. Manufacturers and exporters, like politicians and indeed all borrowers, never welcome interest rate rises, but the criticism in this case is unwarranted. The under Alan Bollard has hardly been hawkish on inflation. A sign of this is the fact that, in an effort to balance competing forces during the boom years, the bank allowed inflation to nudge outside its prescribed limits three times in the space of six years. At the moment, inflation in the future is a possibility.

I still think the range should be 0% to 2%, so a midpoint of 1% is targeted.

The Press focuses on the Foreshore & Seabed negotiations:

Last year, the Government announced it wanted to restore the right of Maori to seek customary title in court, and acknowledge the foreshore and seabed not already in private title as public domain. It held nationwide hui, with Treaty Negotiations Minister Chris Finlayson at each one. Though that impressed Maori, they did not like the “public domain” concept. They want ownership in iwi hands, the foreshore and seabed being inalienable.

Again I remind people that the Court of Appeal merely said that an Iwi could try and claim title in court, not that they would get it. They also said one would have to show unbroken usage since 1840. That is a world of difference away from saying Iwi own the entire foreshore & seabed.

What the Maori Party thinks at this point is not clear – it definitely wants the Foreshore and Seabed Act repealed but might be having to weigh up pleasing the ILG against pleasing an increasingly implacable prime minister.

As Mr Key found over the Tuhoe/Urewera matter, it is hard to placate Maori without upsetting many Pakeha or to ameliorate Pakeha fears without upsetting many Maori. He might have to reluctantly accept that the Foreshore and Seabed Act has to stay on the books.

That is an option. Another is to simply repeal the FSA and let Iwi test their claims in court.

And the ODT chides :

The jury appears to be out on the exact state of mind of the North Korean dictator Kim Jong-il, variously regarded when healthy as either cunning like a fox, borderline mad or just pathologically nasty.

It is rumoured that he suffered a destabilising stroke some 18 months ago and, at 68, is ailing. Consequently, the world’s only hereditary communist dictatorship seems to be gearing up for succession to the “Dear Leader”.

Cuba is looking hereditary also. Ironic that communism was meant to be a fight against inherited privilege.

Had there been serious evidence anywhere else in the world that a submarine of one sovereign nation had arbitrarily sunk a warship of another, in what appears to be an entirely unprovoked incident, the clamour for retaliation or justice would have been deafening.

This is my concern. You reward North Korea for being well mad.

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11 Responses to “Editorials 11 June 2010”

  1. Redbaiter (13,197 comments) says:

    “You reward North Korea for being well mad.”

    Exactly. Imagine the outcry if the Isrealis had torpedoed an Iranian warship.

    The lack of attention given to the Nth Korean attack is a conspiracy of silence that proves the Western mainstream media is largely a propaganda tool of the left.

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  2. billyborker (1,102 comments) says:

    Still waiting to any actual, you know, proof, that North Korea HAS torpedoes, let alone used one or more of them.

    Its a beat up for Russell to beat off to.

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  3. billyborker (1,102 comments) says:

    Cuba is looking hereditary also. Ironic that communism was meant to be a fight against inherited privilege.

    Cuba and North Korea are to communism as Tim Grosser is to restraint.

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  4. krazykiwi (9,189 comments) says:

    Now, however, as recovery begins to look more robust here and among New Zealand’s main trading partners, the central bank must consider again the prospect that inflation will spike outside its target 1 to 3 per cent range.

    Recovery? The RB have said that the ETS will add 0.4% to inflation, and energy companies have been factoring this into their rates for the last 6-9months. So I’ll pay more for energy (even hydro/geo generated energy – go figure), more for living costs, and then when 0.4% helps force the OCR up I’ll pay more on my mortgage.

    Meanwhile National borrows a billion more each month because it lacks the spine to reform the bloated state sector. What a crock of shit.

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  5. andretti (127 comments) says:

    Heard Alexander from BNZ saying yesterday that we in in a recovery,what a load of crap.Take out govt spending then look at the figures,economy down .2-.4%.Bad news coming soon for the Ausy housing bubble (next few weeks i would say).
    Check out all the short selling going on mainly the 4 big banks.With the trouble in Europe and UK/USA then possibly China,we are in for a wild ride till the years end.NZ in recovery bullshit I say.

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  6. Swiftman the infidel (329 comments) says:

    ‘Cuba is looking hereditary also. Ironic that communism was meant to be a fight against inherited privilege.’

    Communism was never about fighting against inherited privilege. That’s the lie that was sold to ignorant peasants. Communism is all about creating a new class of robber-barons.

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  7. Bevan (3,965 comments) says:

    This is my concern. You reward North Korea for being well mad.

    The problem is that the North have enough artillery aimed at Seoul to level the city within an hour. If I recall correctly 10,000 pieces.

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  8. adam2314 (377 comments) says:

    Kim Jong il is on the way out..

    His son has not been schooled or accepted into the political arena of North Korea..

    The sinking of the South Korean Naval ship is being seen by many; as a shot fired by one of the many internal factions wanting to take over after Kims soon to be announced death.

    The North Korean people are waking up to the crap that they have been fed for so long…
    Thus making it even more difficult for whom ever takes over..

    May you live in interesting times :-))

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  9. Jcw (97 comments) says:

    @ Billyborker, not sure if you were simply being facetious but North Korea is known to sell the CHT-02D torpedo on international weapons markets, ergo it has torpedos.

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  10. Scorpio (396 comments) says:

    Regarding the Foreshore and Seabed Act, I would like to see it repealed and Maori given back the right to go to court. The only downside to this is that they will end up in out Supreme Court – and I just don’t have confidence that they will rule strictly on the letter of the law and not be activist. If Clark & Co had not raced into legislating, it would have gone to the Law Lords in London – a more independent system.

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  11. Mattb (4 comments) says:

    Fascinating BBC program about North Korea the other morning now on Youtube. http://www.youtube.com/watch?v=j9aLCpQ-pNo
    They’re going to struggle as technology improves and their ability to stop info getting into the country diminishes. North Koreas website is a laugh in a very sad way. Ironic that they have a website but their own people can’t access it. http://www.kcna.co.jp/index-e.htm
    When the country collapses it could be a very messy ending. China may have to take over what’s left of the place.

    Matt

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