hb -
An ad surrounded by an article, but still worth reading in its entirety.
worldnetdaily.com
"..."The New Zealand dollar
The world's weakest currency since Jan. 1, 2000 -- not counting units issued by Afghanistan, the Congo and surprisingly few other places that are currently in that class -- has been the New Zealand dollar. It started down from a recent high of about 70 cents U.S. in 1996, drifting down to about US$0.50 this time last year (at which time it became a genuine bargain), then collapsing a further 25 percent to its current level of US$0.40. It's actually been as low as 38.5 cents. I consider this a true anomaly. It's at once a superb speculative opportunity and a great means to diversify some assets out of the grossly overpriced U.S. dollar.
Why has the kiwi fallen so far? Part of it is simply the strength of the U.S. dollar, which is up against every other unit in the world. Part of it has been the weakness for wool, meat, dairy, timber and other basic commodities in recent years. The world has needed fewer NZ dollars to acquire the main things the country produces.
A big part of it over the last year is surely the socialist government that was elected there last November. These are not just an ordinary bunch of knuckleheads going through usual drill about stealing from the rich and giving to the poor, or even the old-style cloth cap-wearing, working man's socialists. These people are very New Class, with academic backgrounds, which means they're totally divorced from both "the people" and reality. The kiwi crash corresponds more closely to their election than anything else I can think of.
A currency is, in many ways, tantamount to stock in the government that issues it; when you look at who these people are and what they've done since their election it's easy to see why the kiwi dollar has cratered.
They've raised the top marginal tax rate, starting at NZ$60,000, from 33 percent to 39 percent. Despite predictions this would result in minimal (NZ$100-200 million) increased revenue, but be devastating to the economy, the government went ahead in an overtly envy-driven effort to hurt the rich. As it turns out, the net increase in tax revenue has been close to nil, but the country is in a nasty domestic recession.
NZ has long had government health programs (along with Sweden, it was the first country in the world to adopt Fabian socialism as a national policy, over 100 years ago now). One of them is that anyone in the country who suffers an injury gets care at taxpayers' expense. Unfortunately, during the free-market revolution of the '80s, this program wasn't abolished, only privatized. It's now been renationalized and costs have magically increased by scores of millions.
NZ has always had a strong union movement, at once corrupting the workers, bedeviling capitalists and helping to slowly impoverish the country. The revolution of the '80s abolished a lot of ridiculous work rules and union monopoly practices, but the new government has re-instituted collective bargaining. Among other (numerous) provisions, the new law requires employers to open up their books to union bosses in order to help them determine whether companies can "afford" pay raises. It also eliminates any trial period should an employee be hired, and requires a two-week period in which, if a job offer is made, the employer must make good, although the employee may accept or reject it at will.
Under NZ's parliamentary system, these people may or may not stay in office until their term expires in November 2002 but, since they're ideologically driven, they'll continue to do their worst until then. ..."
Regards, Don |
