The winners and losers of quantitative easing

January 1st, 2013 at 3:00 pm by David Farrar

The Greens want NZ to print more money, on their orders. Labour wants the Reserve Bank to print more money – but on its own initiative under new targets they will set. So who are the wnners and losers from . The Telegraph reports:

Saga, the pensioner lobby group, has claimed that QE has contributed to a 9pc drop in real incomes among the over-50s since early 2008. And the Bank has conceded that the beneficiaries of QE have been the investor classes while those relying on income have suffered

So the victims of QE are pensioners and employees basically. So much for the left standing up for the working class!

So who does well out of QE?

Last year saw a resurgence of some of the biggest and best-known hedge funds in the world, according to the latest figures collected by HSBC.

Crispin Odey, the boss of Odey Asset Management, generated 26.6pc returns at the end of November, turning his flagship fund around from a heavy loss of 21pc in 2011. Lansdowne Partners, the London-based fund that correctly forecast the banking crisis in 2007, made 16pc on its $6bn equity diversified fund and 14.8pc on its global financial fund.

So QE is great for hedge funds. The currency speculators will also have a field day from speculating on exactly how many new dollars a left Government would print.

But how about aspiring home owners? Labour tells us they want more affordable housing.

The Bank has pumped £375bn of money into the economy since the start of its QE programme in 2009, while central banks in America and Japan have unleashed hundreds of billions of dollars in a radical global bid to jump-start the economy. The effect has been to boost the price of assets, from equities to houses, and reduce gilt yields, according to analysis by the Bank.

As someone who already owns a home and has a few equities, I could do very well out of QE. But couples saving for their first home are likely to get clobbered as their income will be devalued, and house prices will increase.

Tags:

48 Responses to “The winners and losers of quantitative easing”

  1. bringbackdemocracy (394 comments) says:

    New Zealanders will essentially have 4 choices come election time

    1) Economically Liberal/ Socially Liberal
    Labour,National, Greens, Mana, Alliance,Maori, ALCP

    2) Economically Liberal/ Socially Conservative
    NZ First

    3)Economically Conservative/ Socially Liberal
    Act, United, Libertarian

    4) Economically Conservative/ Socially Conservative
    Conservative party

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. David Farrar (1,855 comments) says:

    Umm, you look deranged if you put the Greens, Mana, Alliance in the same economic category as National.

    And the Conservative Party is closer to Labour with economic policy than National is.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  3. bhudson (4,734 comments) says:

    NZ First economically liberal? ACT economically conservative?

    You have them around the wrong way.

    Are you sure you have the definition of liberal correct? (It is not a designation of progressive parties, although they have tried to warp it to apply to them alone.)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  4. F E Smith (3,302 comments) says:

    I am not sure that I would call ACT economically conservative, either.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  5. Nick K (1,070 comments) says:

    NZ has only one choice next time – DON’T VOTE LABOUR, GREEN OR NZ FIRST.

    Simple.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  6. duggledog (1,359 comments) says:

    Nick K @ 4.09 pm

    +1

    (+ Mana?)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. dime (9,442 comments) says:

    “And the Conservative Party is closer to Labour with economic policy than National is.” – dont tell redbaiter. he loves the statists.

    i say lets get cracking with QE :) Dime will do well hehe

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. peterwn (3,163 comments) says:

    Quite apart from old age benefits being hit by quantitive easing (aka printing money) The value of savings and investments also take a hammering. This is especially as conventional wisdom indicates that as people get older they should gradually transfer their investments from equities (eg shares or monaged funds based on shares) to fixed interest investments (including managed funds based on fixed interest). Rampant inflation in the early 1970′s trashed many peoples’ investments such as Post Office Savings Bank investments and endowment life insurance policies.

    With any threat of ‘quantative easing’ hanging around, is it any wonder that many people will tell Bernard Hickey where to stick his advice and buy ‘bricks and mortar’ with a fat mortgage.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  9. Yoza (1,545 comments) says:

    As long as financial corporations continue to exert a disproportionate and counter-productive influence on Western economies Western governments will be forced to take increasingly drastic measures to maintain the illusion of financial stability.

    Replacing falling wages, as a consequence of de-industrialising through off-shoring, with easy credit has created societies reliant on increasing debt to maintain living standards with no real prospect of repaying that debt. As workers shift their income, from buying products to servicing debt, greater pressure is bought to bear on the producers and retailers of tangible goods resulting in fewer jobs in the area of production and sales; the consequence of which is greater unemployment and lower-wages.

    The most obvious consequence for New Zealand when considering UK/US QE has been the relative depreciation of those currencies against the NZ$, making our manufactured exports so much more expensive. I think the likes of Russell Norman calling for QE in New Zealand could feel justified in doing so on the grounds that it will allow our manufactured exports to maintain a competitive edge in an increasingly fickle market, whereas the US/UK quantitative easing is an attempt to provide liquidity in financial environments which would otherwise be frozen by massive defaulting on debt.

    It would be interesting to hear someone on this blog offering a viable alternative to Russell Norman’s suggestion, the status quo has been quite effective at destroying the manufacturing export sector.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  10. SPC (5,392 comments) says:

    The QE may have “contributed” to a fall in real incomes of 9% amongst those over 50

    But it assesses the acttual amount is 1.5% – it concludes that the over 50s would be 1.5 per cent better off had it not been for QE.

    1.5% is the impact – this over 4 years.

    And then there those under 50 investing for the longer term whose savings are now higher than they would have been.

    Then there are those jobs have been secured by QE etc.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. SPC (5,392 comments) says:

    In New Zealand having the OCR lowered down to 2.5% has also resulted in older people (generally with historic savings generating interest income) having lower real income than there would have been if the OCR was at a higher level it was in 2008.

    Of course everyone younger paying off a mortgage is better off.

    QE is the stimulous applied when the OCR cannot go any lower. Or it is applied to take care of an off the book expense – such as financing the Christchurch rebuild or rebuilding the Earthquake Fund

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  12. pq (728 comments) says:

    I will be campaigning toward Greypower to make sure they are aware [ which they are] what a disaster a Green/ NZ First/ Labour Govt would be.
    We need to twist Winston’s arm so far up his back that he screams with realisation that older people will not allow a lunatic
    Green Labour money print.
    Unless NZFirst can give some assurance here they will lose thousands of voters.
    Absolute total war on Greens

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  13. Paulus (2,502 comments) says:

    pq

    Greypower is a political grouping of the very elderly who rely upon Winston to tell them what is good for them.
    They have become a politically motivated rabble by the beliefs of their socialist minded leaders also.
    Part of the “me too” grouping – “I am owed”.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  14. Yoza (1,545 comments) says:

    The older generation have contributed more to this country than the seedy three piece suit imports that extract millions in bonuses and salary packages, more than any group it is foreign corporations who are over represented in the …” “me too” grouping – “I am owed”

    The most reasonable course of action, which would have the greatest positive effect on the incomes of those who built this country and now live on fixed incomes, would be to scrap GST and introduce a more progressive tax regime placing the greatest burden on that parasitic corporate set that pours so much effort into ‘strip-mining our economy’.

    Quantitative easing is the least of the worries of those who have built this country’s infrastructure, they would be more concerned with the price of food, electricity and the future prospects of their children, grandchildren and great grandchildren. This current government and their Labour Party contemporaries seem more intent on serving the profit grubbing motives of a predominantly foreign corporate over-class who blackmail this country into submission through organisations like the IMF, the World Bank and the WTO.

    It is those business-class mercenaries who act in the interests of foreign capital that are the biggest threat to the welfare of our elderly, not quantitative easing.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  15. hinamanu (2,352 comments) says:

    @Yoza

    Awesum post

    Unfortunately everyone’s in denial, have no idea of high frequency algorithm trading or derivatives which only became possible since the repeal of Glass Steagal by the financial bankster terrorists. No one on here even understands the conspiracy of Libor rate rigging perpetrated by Barclays. Also completely ignorant that Timothy Geitner sent an email to Barclay’s telling them to tone down their financial terroism instead of reporting them to the FBI which should have had him imprisoned immediately

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  16. hinamanu (2,352 comments) says:

    ‘In New Zealand having the OCR lowered down to 2.5% has also resulted in older people (generally with historic savings generating interest income) having lower real income than there would have been if the OCR was at a higher level it was in 2008. ‘

    A direct result of the financial terrorist banksters at the Reserve Bank of which every western nation has to manipulate currencies. The fight against inflation is a complete lie

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  17. krazykiwi (9,189 comments) says:

    Starved of comedy? Grab some popcorn, and read some Yoza. His laboured hatred of ‘business-class mercenaries’ and ‘foreign capital’, and his thinly disguised envy of other people’s wealth, delivered fresh from a Stalin-era time capsule makes for some great hilarity.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  18. pq (728 comments) says:

    Paulus (1,411) Says:
    January 2nd, 2013 at 12:58 pm
    pq

    Greypower is a political grouping of the very elderly who rely upon Winston to tell them what is good for them.
    They have become a politically motivated rabble by the beliefs of their socialist minded leaders also.
    Part of the “me too” grouping – “I am owed”.

    Paulus
    I have a short time to change all this. Especially short since I spend time overseas.
    I have made it clear elsewhere, and I do now, that I will campaign to make sure that my compatriots know
    what is happening.
    I will require guarantee from Peters that there will be no Labour coalition.
    If not the end for Winnie
    paulscottfilms@yahoo.co.nz

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  19. SPC (5,392 comments) says:

    pq, what is worse for someone reliant on investment returns payable in interest income (as the retired more generally are)

    1. low OCR and interest rates because there is no growth in the economy
    2. inflation not reflected in higher interest rates

    QE offshore is not responsible for the virtually zero interest rates of the Fed Reserve or the Bank of England, they are a consequence of them.

    QE of the type used in Europe and the USA causes increased asset values – this is done to protect banks as they seek to meet the new Basel capitalisation standards. Old people with savings are as dependent on these banks remaining solvent as anyone else.

    Old people such as in Grey Power are not ignorant of these facts, even if you are.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  20. Yoza (1,545 comments) says:

    The move away from industrial capitalism and into financial capitalism has created a situation where the main driver of the economic system is increasing debt. With industrial capitalism the surplus is generally reinvested to increasing production through modernising plants, up-skilling workforces, research and development and the like. Financial capitalism, on the other-hand, requires increasing levels of debt to keep the money-go-round spinning; generally, the only place financial institutions have to invest their surplus is through creating more debt.

    “Industrial capitalism was based on increasing production and expanding markets. Industrialists were supposed to use their profits to build more factories, buy more machinery and hire more labor. But this is not what happens under finance capitalism. Banks lend out their receipt of interest, fees and penalties (which now yield credit card companies as much as interest) in new loans.

    The problem is that income used to pay debts cannot simultaneously be used to buy the goods and services that labor produces. So when wages and living standards do not rise, how are producers to sell – unless they find new markets abroad? The gains have been siphoned off by finance. And the financial dynamic ends up in austerity.

    And to make matters worse, it is not the fat that is cut. The fat is the financial sector. What is cut is the bone: the industrial sector. So when writers refer to a post-industrial economy led by the banks, they imply deindustrialization. And for you it means unemployment and lower wages.”http://michael-hudson.com/2012/04/productivity-the-miracle-of-compound-interest-and-poverty/

    We witnessed the ultimate consequence of the financial capitalist paradigm in 2008 with the GFC; a crisis that has not gone away, but been allowed to sputter along through elected representatives being coerced into using tax-payer funds

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  21. Yoza (1,545 comments) says:

    to keep the global casino open.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  22. Yoza (1,545 comments) says:

    I don’t understand why this hasn’t been more widely reported (well I do, but I will feign confused naivety for dramatic effect): An audit of the US Federal Reserve revealed they had spent $16 trillion dollars bailing out banks, both in the US and abroad, from 2008 to 2010!

    http://theintelhub.com/2012/09/02/audit-of-the-federal-reserve-reveals-16-trillion-in-secret-bailouts/

    “Ben Bernanke (pictured to the right), Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets.”

    “The list of institutions that received the most money from the Federal Reserve can be found on page 131of the GAO Audit and are as follows.(.http://www.scribd.com/doc/60553686/GAO-Fed-Investigation#outer_page_144)
    Citigroup: $2.5 trillion ($2,500,000,000,000)
    Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
    Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
    Bank of America: $1.344 trillion ($1,344,000,000,000)
    Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
    Bear Sterns: $853 billion ($853,000,000,000)
    Goldman Sachs: $814 billion ($814,000,000,000)
    Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
    JP Morgan Chase: $391 billion ($391,000,000,000)
    Deutsche Bank (Germany): $354 billion ($354,000,000,000)
    UBS (Switzerland): $287 billion ($287,000,000,000)
    Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
    Lehman Brothers: $183 billion ($183,000,000,000)
    Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
    BNP Paribas (France): $175 billion ($175,000,000,000)
    and many many more including banks in Belgium of all places”

    Although I imagine there are any number of people here who would fob off this Government Audit Office audit as Stalin era propaganda dreamed up to promote envy of the super rich among the ‘huddled masses’.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  23. Yoza (1,545 comments) says:

    “Government Audit Office” should be Government Accountability Office.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  24. pq (728 comments) says:

    SPC (1,769) Says:
    January 2nd, 2013 at 11:31 pm
    pq, what is worse for someone reliant on investment returns payable in interest income (as the retired more generally are)

    1. low OCR and interest rates because there is no growth in the economy
    2. inflation not reflected in higher interest rates
    QE offshore is not responsible for the virtually zero interest rates of the Fed Reserve or the Bank of England, they are a consequence of them.
    QE of the type used in Europe and the USA causes increased asset values – this is done to protect banks as they seek to meet the new Basel capitalisation standards. Old people with savings are as dependent on these banks remaining solvent as anyone else.
    Old people such as in Grey Power are not ignorant of these facts, even if you are.”

    end of SPC comment.

    Who knows, if Grey power people are agreeable to QE then thats fine. But I doubt it. I will find out soon.
    Normally I wouldn’t join, Greypower but this issue is important .
    So too is the NZ First Winston position.
    I am not voting for someone I would wish to vote for, if he won’t tell me which side of the divide he is on.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  25. burt (7,820 comments) says:

    As always the lefties sell the Sizzle and not the steak. It sounds great that we can just print more money so we can have more money – and sadly the lovers of other peoples money will buy the line that it’s good for them….

    As always with the redistribution and policies of envy game – the speculators get richer and the same people who vote for these polices get hammered….

    Lefties – being conned by their own leaders ! How surprising ….

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  26. CharlieBrown (909 comments) says:

    bringbackdemocracy – you are obviously an economic illiterate. In fact, are you just plain stupid? Go into your browser and go onto wikipedia and look up the term liberalism. There is only one party you can vote for that is liberal all round and that is the libertarians.

    So let me correct your statement:

    1) Economically Liberal/ Socially Liberal
    Libertarians

    2) Nationalist / socialist / Socially Conservative
    NZ First

    3)Conservative all round
    Conservative party

    4) Economically liberal, socially conservative
    John Banks

    5) Parties with mixed liberal and conservative policies
    All the rest

    It is a common misconception that the left are liberal. All the parties (bar john banks) in parliament want some form of advertising restrictions on things they don’t like which is completely opposite to being liberal. Being liberal means believing in liberty, and by restricting what people can do by passing regulations you are restricting peoples liberty. Most parties want drugs to be outlawed, that is not liberal. The left want to restrict the individual choices of consumers, that is not liberal.

    As for quantitative easing, it is ideas promoted by the left to benefit the rich and smart. Like most policies promoted by the dumb(left), it actually makes things worse in the medium to long term for their voters.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  27. SPC (5,392 comments) says:

    The left in charge of the central banks in Japan, USA (began while Bush was President), Europe, Switzerland and the UK?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  28. burt (7,820 comments) says:

    CharlieBrown

    Like most policies promoted by the dumb(left), it actually makes things worse in the medium to long term for their voters.

    Their leaders know this is true, but their lust for power makes them think nothing of screwing their supporters to achieve office via their doomed to fail (but appealing to dim-bulbs) ideology ….

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  29. CharlieBrown (909 comments) says:

    Yoza – Check this page out:
    http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita

    You will notice that all of the countries in the top 30 are heavily dependent on trade. You will also notice that nearly all of them have increasingly moved into financial capitalism. Most of what you say is a load of tosh.

    Making taxes more progressive is not only unfair and immoral, but as money is fluid it results in more money leaving those economies. Progressive income taxes make higher earners pay proportionally more of their income in tax, making the rewards for harder and smarter working lower.

    The fairest thing would be to abolish income taxes and have a flat and comprehensive GST. It would encourage people to save (a big imbalance in NZ), it would greatly reduce the size of the tax industry which is freaking huge, and it would make big spenders pay more which is argubly fairer.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  30. burt (7,820 comments) says:

    CharlieBrown

    But progressive taxes are such an easy policies of envy sell for self serving lefties… Their voters actually seem to believe that it’s fair to make some people pay disproportionate taxes to support them – they fact the high earners avoid the punishment and the burden falls onto low-middle earners to support the low-middle earners is something we just shouldn’t talk about ….

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  31. SPC (5,392 comments) says:

    CB, the biggest spending is on property – there is no GST on property. Your tax regime would result in a further boom in property prices – all financed by either saving offshore or QE channelled through Oz owned banks. Our offshore debt would spiral to new record levels.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  32. burt (7,820 comments) says:

    SPC

    Yes yes, under 9 years of Labour with very low “rich prick” thresholds for progressive taxation we didn’t have a property price boom …. Doooh !

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  33. SPC (5,392 comments) says:

    burt, keep up.

    The topic was how to encourage more saving and less spending. The main spending is on property. GST does not apply on property. So a tax take reliant on GST does nothing to reduce speculation on property – higher net income (no income tax) would result in more capacity to service debt to buy a home.

    The past boom in property prices is related to access to borrowed money to speculate with. The credit expansion begun in 2001 in the USA. Anything that increases ability to service debt only further fuels the speculation – whether it is lower taxes or lower mortgage rates.

    If the goal is to reduce spending – as CB said tax changes should, then GST does not cover the main spend on property.

    PS The only way to do it is to restrict bank lending to value – require higher deposits.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  34. burt (7,820 comments) says:

    SPC

    Sorry, when CharlieBrown said;

    The fairest thing would be to abolish income taxes and have a flat and comprehensive GST.

    I though he/she was suggesting that we overhaul the tax system and abolish income tax and have a comprehensive GST system…

    I missed the bit where we kept status quo on GST (must already be as comprehensive as it can be I guess) and continues to just reap taxes where easy and popular from rich pricks to satisfy the policy of envy desires of the lefties in their quest to look like they are doing something positive while actually just being popular.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  35. SPC (5,392 comments) says:

    burt, popularity of government policy is the aim of democracy. It’s called consent.

    Our GST is already at a uniform or flat rate (most around the world have varying rates – lower for food etc), ours is already called comprehensive.

    I suspect CB uses the term flat and comprehensive to divert attention from the fact that his suggested tax reform would involve INCREASING the GST rate to over 30%.

    Anyone proposing including finance, house purchases and rent in GST would simply say so.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  36. burt (7,820 comments) says:

    SPC

    It’s possible you are assuming too much…

    The problem is bigger than can be described in a few sentences – I assumed that CharlieBrown was talking about reform rather than tinkering. He/She also said ;

    It would encourage people to save (a big imbalance in NZ), it would greatly reduce the size of the tax industry which is freaking huge, and it would make big spenders pay more which is argubly fairer.

    Which to me implied significant shifts in fiscal policy – perhaps I got it wrong – hopefully CharlieBrown will be back and clarify.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  37. CharlieBrown (909 comments) says:

    Burt and SPC – by comprehensive I mean fully comprehensive, no exclusions. If you have 10 million dollars in the bank and earn 5% interest then that 500 k is tax free, but the moment you spend that 500K on anything, whether it be a new car or house or a purchase of foreign currency, you pay gst. So Burt is correct as I was talking about reform.

    I worked on IT projects for the PIE tax regime and I know that in IT spending alone, there were 10s of millions of dollars spent just for our clients. I know that the FDR tax regime is so rediculously complex that there are also millions of dollars spent on costs there. I think it is safe to assume that tenfold as much money is spent on accountants for this as there is on IT. There must be billions spent yearly on administering our tax systems. Now consider the costs associated around PAYE?

    And SPC, I never once suggested a 30% GST. As you must be able to tell by my opinions, I would obvsiously suggest to cut government spending drastically too.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  38. CharlieBrown (909 comments) says:

    I should correct myself, when I say GST I actually mean the more generic term “consumption tax”.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  39. SPC (5,392 comments) says:

    CB, is using “untaxed” income/money to own assets through shares consumption?

    It is always the loopholes … in your scenario the difference between unspent money and its allocation into investment as a spending on consuming ownership – to facilitate speculation on rising capital value.

    Here it becomes a form of acquisition of assets tax, rather than an assets tax or CGT.

    Alternatively leaving income untaxed if it is spent on share ownership would only create a stockmarket bubble in place of a property bubble.

    PS I presume you would end tax on company profits.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  40. SPC (5,392 comments) says:

    And companies would pay consumption tax on their spending.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  41. SPC (5,392 comments) says:

    What about wage payments? Consumption tax as payroll tax?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  42. CharlieBrown (909 comments) says:

    I’m no tax expert but from what I know consumption taxes are only levied on the sale of a good or service to its final end user. That would obviously mean companies don’t pay tax on payroll – doesn’t take a genious to work that out. And yes, a consumption tax would mean an end to company tax as a companies revenue goes to its shareholders who ultimately spend it.

    There are obviously intricacies to be delt with but it is definitely far less complex than todays bohemoth system.

    And you could argue that a stock market bubble is preferrable to a housing bubble as a stock market bubble only affects people who chose to get involved in the stock market, whereas a housing bubble affects everybody who wants to live in a house.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  43. Johnboy (14,998 comments) says:

    Governments in NZ bribe their way into power by appealing to the the lowest social denominator.

    Franchise should only be given to folks with net worth of at least a mil or two then we would get a government that would advance the wealth of this sad little burg instead of one that has to get useless mouths to vote for it to get into power! :)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  44. hinamanu (2,352 comments) says:

    ‘And you could argue that a stock market bubble is preferrable to a housing bubble as a stock market bubble only affects people who chose to get involved in the stock market, whereas a housing bubble affects everybody who wants to live in a house.’

    That would be the surface argument but how does the Reserve Bank manipulate so the entire economy is affected.

    This is a major reason Iran is under NATO/US scrutiny because it has no Reserve Bank. I would be willing to bet Iraq and Libya had none either.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  45. CharlieBrown (909 comments) says:

    I think Iran is under scrutiny because it isan islamic theocracy and it actively pushes for countries to adopt its style of government. Plus its anti-israel and anti-USA (evidenced by its kidnapping of american citizens). Iran does have a central bank too, its just not very effective due to its governments fiscal policy.

    The reserve bank exerts its influence using monetary policy, IE, controlling the supply of NZD. Monetary policy, much like fiscal policy, becomes far less effective the more you dick around with it and make it more complex.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  46. Johnboy (14,998 comments) says:

    I wonder if North Korea has a central bank? :)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  47. burt (7,820 comments) says:

    A central bank’s role somewhat changes when a government starts printing money in an attempt to solve the economic misery of socialism. Guess freshly printed money is still ‘someone else s” money so it’s an appealing option for socialists.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  48. SPC (5,392 comments) says:

    “The list of institutions that received the most money from the Federal Reserve

    Citigroup: $2.5 trillion ($2,500,000,000,000)
    Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
    Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
    Bank of America: $1.344 trillion ($1,344,000,000,000)
    Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
    Bear Sterns: $853 billion ($853,000,000,000)
    Goldman Sachs: $814 billion ($814,000,000,000)
    Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
    JP Morgan Chase: $391 billion ($391,000,000,000)
    Deutsche Bank (Germany): $354 billion ($354,000,000,000)
    UBS (Switzerland): $287 billion ($287,000,000,000)
    Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
    Lehman Brothers: $183 billion ($183,000,000,000)
    Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
    BNP Paribas (France): $175 billion ($175,000,000,000)”

    http://www.scribd.com/doc/60553686/GAO-Fed-Investigation#outer_page_144

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote

Leave a Reply

You must be logged in to post a comment.