TJ, don't forget the influence of the mighty Kiwi$ driving the US$, yen and yuan [and also-ran euro, not to mention droughted Oz$]. NZ$ interest rates are set to rise again next week. And again once more in a month or so apparently [soothsayers say]. In which case, the relative positions in New Zealand of:
House and land prices
NZ$ exchange rate borrowed from Japanese housewives
Salaries and wages
Trade deficits
Rents
Interest rates
Taxation amount
Taxation laws
Pension plans
Retirement hopes
Welfare promises
Life expectations
Hope
will be further out of whack with each other. Meaning somebody is going to get whacked, plenty good.
If I had a button handy, saying "Push here for a dirty great short of the NZ$ in favour of yen", I think I would push it. Thrice.
NZ$ now at world-record high against the Mighty, but now diminished, US$. That's since the Go-d standard was ditched in favour of the Go- standard by the USA = President Nixon, that illustrious leader of freedom, hope, peace, light, harmony, ... no, wait, he of the drunken bombing of Cambodians and mass killing in Vietnam.
NZ$ now also at a substantial peak against the yen.
I noted that yesterday, 1 Pound = 2 US$.
I remember in about 1987, or maybe it was 1986, there were "parity parties" planned in the financial districts of London. Which never happened because the pound pulled out of its dive and the USD eased the pressure. Now, against the COW's main partner, the USD has halved in value in that time.
Note that the UK has also been very busy in financial relativity theory so the move in real terms is very much more. For example, see how many 2007 Pounds are needed to buy a part of Coronation Street and compare that with how many were needed for the same stack of bricks 20 years ago. Hmmm, 20 years!!?? What the?? Where did they go?!!!~~
A lot has happened in those 20 years. I think something else will happen this year.
My experience, over many decades now, is that when the going gets tough, the government robs the savers to bribe the disaffected debtors, impecunious needy, and indigent misanthropes.
Robbing people takes some care as they are not all disarmed and some are virulently aggressive.
Fortunately, financial relativity theory is something that few people understand or are even aware exists. So, the government will do as is traditional, from time immemorial and certainly back to my ancestral homeland mises.org Helengrad will mandate the mandat to replace the shriveled [literally - it's quite funny what they have done with our coins] decimal currency first minted 10 July 1967.
When it was first introduced, I was willing to work for 2 hours to earn $1. Now, a coffee at Latteland costs me 8 hours work in nominal dollars [if I had tucked some 50c coins under my mattress and kept them to buy coffee in 2007]. 8 hours work would be worth [for the same job] about $160 in today's money.
Financial relativity theory calculations can be tricky, especially when near event horizons, but I think that means my 2007-issue 50c coins, which are about half the diameter they were in 1967, [and since volume, and therefore mass, and weight, in our relatively stable gravitational relativity theory situation is on a cubic basis], are far too big. To match financial cosmos inflationary processes, the 50c coin should now be about the size of a farthing, and coloured brown.
If my 1967 50c piece was made of gold, instead of NZ Political Promises and electoral stupidity, then to pay for a coffee today, I would need a tiny replica of that 50c piece. A very small replica.
The coffee costs $4 today, so that's a 40x increase. That's just on one a year over those 40 years. I hope Hayes, also born on 10 July, doesn't devalue like that, but increases in value. So far, so good.
I won't bother calculating the actual correct relative sizes of the coins because that's history, like the ownership of Taiwan when the Maoris went adventuring further afield to acquire more empty land, leaving their parents to guard it against the depredations from the warring terrestrial tribes for thousands of kilometres to the west, northwest and southwest. But a 40th of the mass would be a little coin.
What matters is where we go from here. Near event horizons, things get much more interesting than in the more equable climes of the late 1960s when the gold standard was standard and the hint of inflation near 5% was a great fear tantamount to catastrophe.
Even the turbulent carless days of the oil price quadruplings and 10% inflation rates year in year out and interest rates nearer 20% were not as exciting as event horizons and financial relativity theory near, at, and inside those.
I don't know where we are going, but we are on our way.
I have some ideas of where we might end up. I don't think NZ$ being the world's reserve currency is on the cards. Nor the US$. Nor the yen. Nor the yuan. The Q is where it's at. But that's not ready yet.
Meanwhile, I'd better go find that button. In most measures, I'm short the NZ$ [QCOM = short NZ$, Livedoor = short NZ$, Zenbu = short NZ$, Globalstar = short everything, maybe including me]. Spot of US$ cash. No debt.
Brace position...
Mqurice |
