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Thread ID: 81215	2007-07-20 20:50:00	The current NZ dollar inflation debate	Digby (677)	PC World Chat

Post ID	Timestamp	Content	User
570670	2007-07-24 05:16:00	The basic problem with investment in housing is that it is non-productive. Factories/work-places provide jobs creating goods and services. If things go well, the work expands, more people are employed, more wages are earned. A house just sits there - and consumes money. Of course we all need somewhere to live but in NZ we overcompensate. Ideally we'd all have modest houses and own/invest in productive businesses. It sounds unrealistic yet that is what happens in other countries and over decades it pays off. So true 001,your labour pals make it so easy for the small business to thrive. No compliance costs or anything that might hinder enterprise.	Cicero (40)
570671	2007-07-24 05:28:00	The basic problem with investment in housing is that it is non-productive. Factories/work-places provide jobs creating goods and services. If things go well, the work expands, more people are employed, more wages are earned. A house just sits there - and consumes money. Of course we all need somewhere to live but in NZ we overcompensate. Ideally we'd all have modest houses and own/invest in productive businesses. It sounds unrealistic yet that is what happens in other countries and over decades it pays off. Do we therefore see a "for sale" sign in Arrowtown in the future?	godfather (25)
570672	2007-07-24 05:54:00	And the bungalow in Bangladesh.	Cicero (40)
570673	2007-07-24 08:59:00	Do we therefore see a "for sale" sign in Arrowtown in the future? Eeeeerrrrrkkkkkk.........do as I say not as I do :yuck:	Winston001 (3612)
570674	2007-07-24 10:08:00	If removing tariffs means locally goods are now too expensive relative to imports, the local goods were already uncompetitive, they were just being protected from competition. There isn't any point in running inefficient industries unless they are strategic, such as the US steel industry. Sure, it creates a problem if you are working in one of these industries, so ideally it would be best to slowly reduce tariffs, but new workers shouldn't be being trained for inefficient industries. Every Western Country is exporting jobs to low wage Asian countries, the philosophy has been source everything from the lowest cost producer and to hell with the workers in ones home country. Honda Civics are no longer made in Japan Thailand is cheaper, VolksWagen Golfs come from South Africa, a variety of Holdens from Korea, Fibreglass Yachts are being made in China and imported into NZ, A significant amount of furniture manufacturing is relocating to China. Banks and IT companies have out sourced call centres and help centres to India along with tele-marketers, purely to cut costs at local employment expense. No more local Clothing or footwear Industries, but clothes etc have not got cheaper, importers and merchants are just making larger profits, and the down side is that there is a major social cost to doing this; ordinary kiwis loose their jobs and with it their chance to participate fully in the benefits of living in NZ. Full time employment is diminishing and many families are surviving on several part time jobs. I for one don't think the social cost is worth the benefit of getting so many commodities (frequently of doubtful quality) from low labour cost Asian and third world sources. Unemployment has exacerbated the racial tensions in New Zealand as the restructuring of the NZ economy due to loss of manufacturing industries has disadvantaged Maoris and Pacific Islanders, and influxes of low skilled third world immigrants has made matters worse. If we want a stable society, then all our citizens need meaningful jobs, and from my perspective, the current course of buying the cheapest is diametrically opposed to this objective. With increasing volumes of consumers goods and virtually every type of commodity being imported (even food of doubtful quality from China), the NZ farming sector has an increasingly difficult task funding this appetite for imports when nearly all their markets feature trade restrictions and protectionist practices. The bubble must burst sooner or later.	KenESmith (6287)
570675	2007-07-24 10:29:00	I'm probably showing my extreme naivety here - but there seems to me one easy solution if we only adopted a bit of creative thinking . It seems one of the really big factors in the inflationary figures is the housing market . But yet to most NZers, an investment in housing is exactly that - an investment . EG I am currently building a new house - with the aim that it will appreciate in value, I will pay it off, and that when it comes to my retirement, I can downsize, and should have a nice litle nest-egg from the excess (+ private super / savings etc as well of course) . Anyway - the point is that this is an investment - so why treat it as inflationary . If we took the housing sector out of the inflation figures, it would do two things: - Immediately drop the inflation rate Mean that you could drop the interest rate to encourage people to put money into long term saving (housing) . The flow on effect is to immediately lower the NZ$ which would encourage exporters . More jobs . More economic strength . No doubt this argument has to be flawed because otherwise it actually makes sense - doesn't it? Although house prices will usually go up over time, in the short term properties don't always go up in price . Look at the USA where house prices have dropped, also Australia house prices have been relatively static in recent years . Because house prices have gone up so much in the last few years, I wouldn't expect them to go up at the same levels . House prices over 50 years tend to rise at the same level as inflation . Remember that your house is only as much as someone else is willing to pay for it(or can afford to pay for it) at the time you are selling it . Personally I wouldn't put all my money into property, as there are peaks and lows with property markets . Money should be spread across all types of investments . If you are building a house, you are unlikely to see any payoff from your investment for at least 10 years, although this depends on the type of house you are building and the quality of components . Much of the rise in value is based on the actual land value, rather than the building .	robbyp (2751)
570676	2007-07-25 09:41:00	Do nothing. Don't raise nor drop the OCR. If you raise it, injects foreign investment and there goes inflation and the rate itself. If you drop it, you discourage foreign investment and that's not good for the long term for NZ. NZ domestically is relative a poor country with its reliance in the welfare protective society. Pple talk about NZ Made, yes, that is the ideal solution but if that is not possible then foreign injection is the next best solution - providing innovation for NZ , jobs, cutting NZ weflare cost for the govt to spend on other stuff, looking at Singapore - the size of Lake Taupo - about the same population as NZ but its so much richer - 80% foreign owned. Dropping the OCR, disposable income increases and pple in NZ as their status, loves to spend, buy cars, houses and stuff so inflation goes up and so does the rate to attract investment/savings. NZ is on a roll with its low unemployment rate which access to money their own to spend with or borrow should not be an issue to pump inflation up. I think NZ cannot compete with countries like Thailand, Vietnam and China for their costs. These days if you buy a $3,000 or $4,000 digital camera its made in Thailand. The $6,000 ones may be made in Japan of the same brand. NZ needs to be innovative and target the upper market such as Ice Breaker or such as Fisher and Paykel where running costs is not an issue. While NZ has a substantial dairy industry, the few core reason to rely on is reputation,with the business cost in NZ without the reputation attribute it may find difficulty to compete with the rest of the world. Ie.. NZ shouldn't compete in the cars market or in the sandals market or making clothing. The Reserve Bank lost $1.8B just like that by govt intervention to control the NZD. The NZD just went back up in a matter of hours. $1.8B would of been very useful for NZ.	Nomad (952)
570677	2007-07-25 11:16:00	Do nothing . Don't raise nor drop the OCR . If you raise it, injects foreign investment and there goes inflation and the rate itself . It will be raised a 0 . 25% tomorrow . All currencies have been going up against the $US, so it isn't totally related to higher interest rates . It is really only exporters to the US and Japan that are hurting with the high value of the dollar against the US and Nippon . Our main export market is Australia, and the $NZ hasn't risen that much compared to $AUS I think NZ cannot compete with countries like Thailand, Vietnam and China for their costs . These days if you buy a $3,000 or $4,000 digital camera its made in Thailand . The $6,000 ones may be made in Japan of the same brand . Are you sure you have got your prices right? I don't know of many cameras that are that price these days . NZ needs to be innovative and target the upper market such as Ice Breaker or such as Fisher and Paykel where running costs is not an issue . Ice breaker aren't a good example, as they make all their clothes in China . They do charge over the top, which is solely due to the brand and merino material, but it isn't really a brand that is known that well outside of NZ . We had UK friends who had never heard of it, and were amazed at the price they charged . The Reserve Bank lost $1 . 8B just like that by govt intervention to control the NZD . The NZD just went back up in a matter of hours . $1 . 8B would of been very useful for NZ . They haven't lost anything . When the NZ dollar drops, or the US dollar rises, they will probably make that money back and more .	robbyp (2751)
570678	2007-07-25 11:45:00	Let the damn thing float where it wants and damn the whingers. Will make my holiday to Oz all the cheaper anyway.	Twelvevolts (5457)
570679	2007-07-25 12:02:00	Nikon D200, possibly Canon 5D made in Thailand et al about $3500. Nikon D2x/D2hs ~$6000. Canon 1Ds ~$9000. Without lenses.	Nomad (952)
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