Monday, August 17, 2009

Export-dead recovery

Governmental exhortations for the nation to aspire to an
'export-led recovery' have been exposed again as pure
hypocrisy, so long as the Kiwi dollar remains at the mercy
of global currency speculators—a point made before in this
blog, and articulated best by Bryan Gould in his books and
opinion pieces. Rakon chairman Bryan Mogridge was on
Morning Report today bemoaning the Kiwi dollar's current
high value but lamenting even more its volatility. A year or
so ago it was about 85c to the US dollar, earlier this year it
plunged to 50c, and now it's back up at 67c. Which, as
Mogridge says, makes sensible business planning almost
impossible. Calling for something to be done about it, he
went on: 'I just don't think we can allow overseas punters
to make money playing with our currency.' This guy's no -
left-wing radical, remember, but a stalwart of the NZ
business world. As he points out, at the moment the Kiwi
dollar is the seventh most traded currency in the world!
Easy pickings for international speculators and investors
while the real New Zealand economy suffers. Yet Treasury
and the Government (the last one as much as this one) are
content to leave this outrage untouched. As long as that
remains the case, New Zealand has no real claim to be a
sovereign nation at all, let alone one spearheading an
'export-led recovery.'

By the way, Mogridge said he had 'no instant-pudding
answer' to the problem, which I find a refreshing way of
putting it, when the default observation of most analysts
and commentators to most problems is that there is no
'silver bullet' solution. More pudding, please; no bullets.

1 comment:

Giovanni said...

Meanwhile the prospect of a capital gains tax will be met, as always, with instant bullets.