The RBNZ announced today that it was raising the OCR by 50 basis points to 2.0%.
This was the rate increase the markets were expecting.
What they failed to mention is that this is still a highly stimulatory rate.
It will, in our opinion, do little to tame the raging inflation that now exists in the New Zealand economy.
This inflation will continue to hit both the poor and also savers through low returns on deposits.
It's the government's fault as well.
They're throwing money around like drunken sailors which is contributing to inflation.
The RBNZ needs to ignore the reasons for inflation and get it down pronto.
Given their track record of stupidity and gutlessness it's highly unlikely to happen any time soon.
The Governor earns more than three times the Federal Reserve Chairman and he and the committee are next to useless.
They've blown up a massive bubble in real estate and they won't be wanting that to pop because many of the decision makers own multiple properties.
They're looking great financially for retirement.
So poverty beckons for significant chunks of New Zealand’s population.
Many will leave.
And who can blame them.
This govt is stuck between a rock and a hard place. The only way to get votes now is by spending large. But then that's what caused the problem in the first place - the only way out is to blame the wars and maybe distract us with a new pandemic