Righto, so when called out on something that has happened that you said wouldn't happen, you race to find evidence of something that hasn't yet happened so you can say it will never happen. Until it does.
You don't seem to learn.
How's the NZ economy looking? Still hard to get a tradesman to come round to your place, because they are all so busy?
If things are going so well, why is the Reserve Bank Guvnor now dropping his nuts and going ga-ga over extreme intervensionist monetary policy.
Governor Adrian Orr says the Reserve Bank is considering unconventional monetary policy options more deeply. This could involve negative interest rates, or even printing money to buy bonds or to give as handouts to New Zealanders, Marc Daalder reports.
The Reserve Bank's announcement on Wednesday that it was cutting the Official Cash Rate (OCR) by 0.5 percent to one percent was met with surprise from economists. At a press conference after the decision went public, RBNZ Governor Adrian Orr responded to concern that the big cut left him little wiggle room for future cuts.
In response, Orr confirmed that the Reserve Bank is actively investigating the possibility of turning to unconventional measures like quantitative easing (inventing money to buy Government bonds and other assets) or a negative OCR. "We are well-advanced on that work," he said. "We would be negligent not to do the work around how we might do negative interest rates, how we might do asset purchases, how we might do other forms of intervention."
Using such tools would mean the Reserve Bank would be engaging in a kind of quasi-fiscal policy. "Some of it is fiscal policy operated through a monetary institution," Orr said.
Economists have already urged the Government to do more on fiscal stimulus as monetary policy alone struggles to make a difference. If it did go down this route, the Reserve Bank would not open up its processes to more public consultation or more formal collaboration with the Government or Parliament, Orr said.
