Reserve Bank hikes Official Cash Rate to 5.25 per cent
The Reserve Bank’s higher-than-expected Official Cash Rate hike “will push New Zealand into recession”, an economist says.
The bank today lifted the Official Cash Rate by 50 basis points to 5.25 per cent.
The 11th successive hike, it takes the rate to its highest level since December 2008.
Inflation is still too high and persistent, and employment is beyond its maximum sustainable level. The recent severe weather events in the North Island have led to higher prices for some goods and services, the RBNZ said.
BOOM!
I told you!
I predicted a 50 point rise on The Working Group on Tuesday and I predict it’ll be 50 points next time and another 50 points and then maybe, just maybe another!
Yes.
6.75!
Look, Comrades.
I appreciate the inflation peakers and the usual neoliberal straightjacket economists are all terminally optimistic that previous monetary levers can control the economic direction.
IT CAN’T!
There is a tsunami of inflation erupting around d the world as the baseline price for everything jumps as the West move just-in-time-supply chains to just-in-case supply chains.
What is exacerbating this is the war in Russia and Ukraine because both those countries are base ingredient trading powers.
Exacerbating that is a climate change environment that is interrupting the agricultural cycle as well as causing damage that can’t be repaired in time for the next extreme weather event.
Exacerbating that is the $25Trillion Central Banks printed to stave off the Global Recession which are all now propping up property and stock market bubbles in a late stage Capitalism Economic cycle.
House prices are sliding and will soon implode.
The enormous speculative debt will force first time home owners out of their homes.
Wait for the corporate banks and their begging bowls carried in on the back of homeless children begging for bail outs.
The Black Swans aren’t just circling Comrades, they’re in the uber on their way over.
Everything since 2008 has been a building speculative bubble made possible by lowest cost capitalism via China’s manufacturing work force. Those global labour supply chains have ruptured and as Central Banks are forced to continue raising rates to choke off hyper inflationary pressures, those parts of the financial world using lower interest rate dynamics to trade will implode under the weight of the debt.
Factor in how AI Chatbot is estimated to cause 300million job losses as the skill base of many are made as meaningless as knitters when the loom was invented.
The savagery of bust and boom Capitalism is coming and she be a ruthless Mofo.
With the looming economic implosion upon us, we need clear guidelines.
1: No bank bail outs except for KiwiBank – These Bank fucks led us here, fuck them a thousand times if it all goes belly up and they need bail outs! Rule one is no bank bail outs!
2: Help owner occupier first time home owners – Kiwibank should be prepared to step in and take any owner occupier first time home buyers off other banks to prevent mortgagee sales, but fuck the speculators. They should all be forced to sell.
3: No corporate bail outs. NONE!
4: Continue to fund universal services that save people real money each week: Free Public Transport, free school breakfasts & lunch, 30% stakeholder role in smashing up Supermarket Duopoly to force down prices alongside GST off food and vegetables.
5: No corporate bail outs. NONE!
…I swear to the little baby Jesus, I’m going to lose my shit if Grant starts bailing banks, speculators and corporations out while ordinary people suffer.
The Left need to be kinder to individuals and crueler to Corporations.
People will not understand why Adrian Orr, a technocrat they never voted for, is going to burn the economy to save the economy. The disconnect between ‘this is good for the nation but shit for you’ will become detached from reality in the same way the Trans debate, antivax debate and the pineapple on pizza debates have become.
For the record pineapple has to be on a pizza and anyone who disagrees is a pizza fascist.
Look folks, Economic Armageddon is a coming and we best brace for impact.
If the Left can not provide the intellectual grunt to push for Universal Left Economic Solutions, if all we can do is champion identity, then we will have failed the people.
Comrades – Your enemy isn’t a woman who says stupid shit about Trans people in a public park, your enemy are the Banks, Oil Companies, Billionaires and Property Speculators who continue to pillage this country while we are bickering over the narcissism of petty difference!
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What’s fucked up is we have huge problems and no one wants anything done about it.
First of all trans therapies shouldn’t be banned. They should have an age limit. And no penis in the girls toilet.
The government running the sin of cheapness and balanced budgets means the reserve Bank is counteracting that with printing money.
Combining the above, Covid, and the general disruption to normal worldwide logistics and just-in-time delivery, then we get food shortages.
Totally agree. I repeat my comment I put on Mr Treen’s post, not so many comment on his cogent analyses.
–There is no actual reason to keep hiking rates apart from neo liberal dogma and protecting the profits of private capital. The RB is meant to take “employment” into account not impose unemployment.
“What the”…is so many peoples reaction to the RB’s 5.25%. The NZCTU gave its usual piss weak response to this blatant attack on working class people…
https://union.org.nz/reserve-bank-should-pause-before-further-interest-rate-increase/
The twisted thing is that without an opposing ideology and political movement there will be no halt to this destruction. NZ Labour are obviously not going to provide that–as they are welded to the monetarism that set up the Reserve Bank in the first place!
People are going to start losing homes in numbers very shortly. Some serious suffering is going to occur among middle class people who typically Bennie bash and look down on food banks and Marae assistance–well cancel those gym memberships folks and meet your MSD case manager! Maybe stand up for yourselves for once rather than expect it to be handed to you like WWF and the Govt. second tier COVID benefit.
The significant worry is that right opportunism will kick in and Natzos will gain office on fake populist empathy for those affected, and then like Trump will do absolutely nothing about it, in fact make things much worse by freezing minimum wage, shrinking the state, etc. etc.
The question is who is going to lead the charge against bail outs for the lead capitalists? Hint: voting Nashnull is not the answer.
We still need massive and i mean massive enough stimulus to run a jobs/welfare programme for all. The longer we take to solve each crises. The greater the stimulus required.
Agree 100% on this analysis Bomber!
Except the Pineapple on a pizza….cooked Pineapple is an abomination of nature!
But whatever floats your boat.
Inflation is a scourge on the poor for obvious reasons. it was created by cheap money (i.e. near zero interest rates, which made the cost of taking loans a no-brainer). This was massively exacerbated by the “free” money handed out like candy by the govt due to Jacinda’s ridiculous lockdowns (that solved exactly nothing but told millions of NZers they weren’t actually “essential”). This can only really be solved by doing the opposite, i.e. making money worth something again by high interest rates (which will force a reduction in spending money you/govt don’t have).
Not too sure if you noticed, but wages and benefit didnt go up at all when inflation was down. Nor there was much in the way of health services or social housing.
We need a bit of inflation to keep things ticking over, and to ensure that NZer dont have their purchasing power held down by rich pricks like you
What about the money the banks borrowed from overseas where the money printing is in the trillions, not billions like here? You only need to compare the increased property values to the amount of QE here to see that it is a global problem.
You did Martyn, you said 50 basis points and you were right. Maria Slade and Damien Grant – not so much.
Love me some Damien Grant, though Martyn definitely has bragging rights here! =)
You were right, Martyn. It is unfortunate but true.
Banks ought to raise their requirements for customers wanting to obtain mortgages. Otherwise any recession with a slump in the property sector, as forecasted for this year, will be worse.
Anyone purchasing a house under Key’s false economy gets what they fucking deserve. Who borrows at 1.5% for a house that is over inflated by double the GV when anyone with any common sense knows there’s only one-way interest rates can go from 1.5%?
Yep Bomber, I thought your estimate was OTT on TWG but you have proved us all wrong. Miind you, that was before I read one of Bernard Hickey’s pieces on inflation in NZ.
If you havent seen it he has a graph on what’s making up inflation in NZ. In 2022, it was at least 50% (maybe a bit more) of additional profit followed by a similar increase in wages.
Not surprised, as in our own business we were seeing this from the middle of 2021 onwards. We genuinely needed to put the costs up because every supplier price (nationally and internationally) went up by, in most cases, a lot. We held off and then noticed that our few main competitors had already put their prices up so much that we were able to put our prices up by more than we expected to and still bring in lots of business by staying healthily below the others on price.
So very definitely there is a lot of price gouging going on but I think the OCR is not helping because it is the wrong tool in what is still quite a tight labour market.
The Reserve Bank is the enemy of the working people, and first home owners.
They pulled this shite back before. The economy would be rip roaring,and then Brash, Bollard and Wheeler would put the breaks on when it looked like working people would get a share of the spoils.
I agree. I remember the Ruth Richardson era too, and the successive smacks it gave to working class families nation wide.
“your enemy are the Banks, Oil Companies, Billionaires and Property Speculators who continue to pillage this country while we are bickering over the narcissism of petty difference!” Bullseye!!
During my enforced 3 year stay here, I very quickly came to the realisation that the joke wasn’t actually a joke, and the neighbors dog did come over and got his balls back…
” pineapple has to be on a pizza and anyone who disagrees is a pizza fascist”……
Btw… I am doing you the courtesy of informing you that I’ve already called the authorities…
Orr lit the fire, Robertson applied the accelerant and now Orr is trying to put out the economic fire by pissing on it.
Economic management New Zimbabwe style by the Beavis and Butthead of global finance.
https://www.nzherald.co.nz/business/scarbro-construction-employed-60-now-in-liquidation-work-stops-on-five-sites/Y4NG6XL65JEBZLS3XXA6QLMCLY/
Expect more construction cos to fall this year as banks tighten the screws on the private sector.
The RB and the Government are just puppets for international capital, and they have decided that now is a good time to demolish any pretence of democracy remaining in the world.
Things will improve some day. I have a letter from PostBank (Remember them) saying they will drop the interest rate on my debt of 125,000 from 11.250% down to 10.500% and the repayment amounts will drop too.
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