Winston Peters' teasing kiwi comments

Asked if the talks were looking at ways to make it less volatile, Winston Peters said “I think exporters would be pleased” (photo: Jerry Yelich-O'Connor)

New Zealand First leader Winston Peters has hinted the New Zealand dollar was one of the subjects discussed in his meeting with Labour this morning.

Addressing media afterwards, Mr Peters was asked if he welcomed the fact the kiwi dollar is at a four and a half month low – he responded by saying “we have the most volatile currency in the whole wide world.”

Asked if the talks were looking at ways to make it less volatile, Mr Peters says, “I think exporters would be pleased.”

“If you are an export-dependent nation, why would you go ahead with an inflated dollar?”

He would not elaborate on this point.

The New Zealand dollar has been in the NZ First leader’s crosshairs throughout the election campaign.

In a speech in New Plymouth in early July, Mr Peters said because the Reserve Bank Act is “locked in the past, with a fixation on inflation,” it has led to a “persistently overvalued dollar that has been deeply damaging to New Zealand.”

“The New Zealand dollar has been turned into a bonanza for financial speculators and traders,” he said.

“Despite the relatively small size of our economy, the New Zealand dollar is one of the most heavily traded international currencies.”

NZ First wants to broaden the mandate of Reserve Bank so there would be more downward pressure on the exchange rate.

He says the “outdated focus on inflation must be ditched” and must include critical macroeconomic factors such as the rate of growth, export growth, the value of the dollar, and employment.

Mr Peters met with National again this afternoon.


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A simplistic approach from a simplistic man:. There is more to the currency than the RBNZ policy on inflation. To try to force it down as Peters suggests brings into play the very people he blames for the current situation, financial speculators and traders.
Also its very interesting how exporters have been doing so well in the current environment. A good business adapts to the circumstances.

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Of course it does. Look at Japan. When I first went there in 1976, US$100 purchased Y33,000. Today it buys Y11,265. That's a massive increase in the Japanese exchange rate over the last 41 years. Did it stop Japan becoming the world's third-largest economy and probably it's the greatest exporter? Hell no. The exchange rate increased precisely because Japan did become the world's third-largest economy and its greatest exporter. A high exchange is a sign of a strong economy. A low exchange rate is a sign of a weak economy. So Labour and NZF want New Zealand to have a weak economy?? No surprises there.

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Ask yourself why we are the third most traded currency? Speculators are at play here?

What people forget is NZ's economy is the size of a small/medium sized city in US or China, which suggests we are venerable to being manipulated.

What export business need, and as a export nation so does NZ inc, is more stability with currency. Businesses can then plan/grow with more certainty, which would benefit NZ. The only benefactors with changes to exchange rates are the money dealers, who add nothing other than speculation and costs.

NZ needs a weighted average currency proportional to the level of bylateral trade. Bartering goods for goods, using the respective governments are the middlemen would be as good, rather than banksters who care only for their short term bonuses.

Might I suggest commentators take off their blinkers to think through the logical, rather being politically driven advocates.

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Well of course, Winston is at least right that New Zealand was once a grat country partly of course from high grade immigration from the UK, Holland, South Africa and the US far as it was allowed. He is also right that the current National Government represents and supports anything but an elite. The idea that MFAT or TV One are an elite is laughable. Its ridiculous the price of houses in Auckland is twice that of LA in middle class suburbs, Auckland is not a particulary productive part of NZ in overseas earnings from exports and tourism. The NZF policy of lower company tax is highly desirable but so too would be considerably more freedom from local government control would it be for developers to build new hotels, motels and entertainment and bar strips and to greatly limit the power of our narrow and misguided medical and police professions to restrict them. Real respect for the military would be desirable in encouraging higher standards for recruitment and promotion to offer status in terms of intellect, height and conventionality of appearance for officers and in public. Much higher salaries for military officers and the secondary teachers who teach the able half of the pupil population. Double. For the 75-80 percent who arent academic the skill training needed to be to a much higher level. Those over 15 who are seriously disruptive should be expelled and the teachers who refuse to expell them fired. That way we should cease to need the low grade immigrants that have turned the CBD into a third world gheto.
In terms of the railways the priority should be the restoration of passenger twice a day on the six main routes. Auckland- Wellington. Auckland-New Plymouth. Auckland- Wellington, Christchurch- Picton, Christchurch- W Coast and Christchurch- Dunedin- Gore- Queenstown ( Frankton) all six routes passenger trains will tow 4 spacerider wagons able to accomodate 24 drive on drive off cars. Trams will be reintroduced on many of the old Auckland routes exciting the CBD on a one way loop via Symonds Tt, Parnell Rd interlinked underground Britomart ( but not connected ) and on or parallel to the rail corridor in Kyber Pass.
The Douglas- Richardson financial structure might have temporarily avoided financial disaster but had largely been inverted with Cullen and English long maintiang the rhetoric but moving the personel and finance in the opposite direction. It stopped rail and public transport development but in reality ceased to maintain market discipline in farming and industry the structure of Fonterra as a cooperative required to take milk from any farm location and promoted by government bureaucratic and the immediate collapse of most NZ industry in 1984-1993 provided with the total lack of government interest in using or supporting the more competitive NZ Industry say Fisher Paykel or A G Price shows the failure of Douglas and Richardson.

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So Winston's story of the day is NZ has the world's most volatile currency. That is exactly what he said. That honour belongs to Sth. Africa. Our currency is reasonably stable. Paired with Europe it fluctuates a fair bit, but that's more to do with their currency. Against the USD it is extremely stable, and overall our currency can be regarded as stable. What on earth are you on about Winston? Preparing us for a bit of Muldoon style interventionism perhaps ? God forbid.

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As I have stated many times before, very glad the RBNZ is an independent entity, especially with simplistic and moronic comments like that. If he wants exporters to do better he should stick to his knitting and provide subsidies or point them to hedging vs the NZD - sledge hammering our dollar with blunt tools even lower is the last thing anyone wants to be doing.

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Yeah Right. Independent to the Federal Reserve more like it.

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HI Richard, thanks for the cynicism! You might want to read Graham & Smith, "A brief history of monetary policy objectives and
independence in New Zealand" for some context. You can also have a perusal of the Reserve Bank Of New Zealand Act, 1989. I've provided links below so you can then come back with some original commentary after being thoroughly researched.

Have a great day! :)

Graham & Smith: https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletin...

Reserve Bank of New Zealand Act, 1989: http://www.legislation.govt.nz/act/public/1989/0157/latest/DLM199364.html

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I think he forgets that the RBNZ has basically tried to jawbone down the currency every single time there is a monetary policy statement or OCR announcement. RBNZ already look at it regardless if they are mandated to look at inflation.

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A high exchange rate is a badge of honour. Successful countries have high exchange rates, unsuccessful countries have low exchange rates. It’s really as simple as that. Does Mr Peters want us to be unsuccessful? That’s a very strange position to take.

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You are correct. Our dollar is as a company share. It's value reflects the markets view of it.
To bring the dollar down Mr NO need do no more than what he is doing now. And that is, wriggle his way into government with 7% of the vote and hold the country to ransom.

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What planet are these guys on!
Too dangerous to even be a fraction funny.
Our economy should not be used as a play thing or barmy experimentation!

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The NZD has moved from 68.7c in April this year to 75c in July and back down to 70.7c currently. Hardly a stable position.

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Within that timeframe you quoted, the USD Index (DXY) has fluctuated from 102 to 91 and is now sitting at 94. The almighty Greenback has actually fluctuated more than our little NZD!

Context is everything, eh? ;)

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This fake-news thread seems as good a place as any to discuss the fake NZ voted-for-change hypothesis

There was no vote for change. Now the full results are in, [and purely for Mr Morrison's sake], here is the election arithmetic 2017 vs 2014 wrap up.

National received 1,152,075 votes up from 1,131,501; i.e. approximately an increase of the same amount by which the NZ First votes dropped to 186,706 from 208,300. In aggregate, there’s no change there.

Likewise Maori, Act and Aotearoa Cannabis '17 votes were within few thousand of their previous election’s totals both individually and collectively.

Labour received 956,184 votes up about 350k from 2014's 604,535; of which 95k clearly came from the Greens' 162,443 votes down from 257,359; and 90k were given up to the Jacinda-effect by the high spend incandescent Colin Craig led Conservatives (although some of these probably went to high spend omniscient TOP, up 62k). Another 30k came from MANA.no-dot-com.

So any change there is simply changing seats on the same side of the bus.

In effect, [and this is simplistic as voters came and went for all parties at the respective ends of life], almost 150K of Jacinda’s increase ( 43% of the increase) came from amongst the 185k increase in total valid votes to 2017's 2,591,896 from 2014's 2,405,622.

Some of these 185k "new" people voted for the first time, and others not so much voted for CHANGE, as they VOTED for a change (total valid votes cast up almost 1.1% of total enrolled).

What does all this mean?

If NZ First wants to justify the final election result as a vote for the right wing status quo, it is fully supported by the arithmetic.

Winston is right about one thing, consumer goods price inflation is no longer
a measure of anything much - as data manufacturing and logistics technology - and everyone in everyone else's markets type of competition - is smacking (margins and) prices of anything that is not scarce.

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Interesting the Colin Craig conservative vote in 2014 probably went to National in 2017. So the right vote probably fell by more than you say. Those voters were not naturally Labour in my view.

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Yes that is the alternative conclusion. There was some strategic National based voting when the Conservatives were getting close to 5%, to ensure they actually got over the line, but Rachael wrecked that, and in the end the beneficial effect was the same for National as the denominator was lowered by Conservative's discarded 4% and Nats percentage went up enough to make it the deal maker; there was the added benefit of not having to deal with Col., but that could have been simpler than what 2017 is proving.

My conclusion about where Col's votes went is premised on a possible Messiah effect and the power of advertising, Gareth's TOP was the clear big spender this year, and he is equally right wing & some might say, zaney, and committed to the concept he has the solution, the Jacinda effect got more free media than any other campaign and could be expected to have influenced the same subset of people who are so influenced, but they dont have to be exactly the same people who make up that subgroup. Its the existence of such a category that matters. ie the macro shift was from one heavily advertised minor party to another.

My analysis does not try to analyse the individual voter switches, it looks simply at the net result. eg look at this way, If NZ First had been National's coalition partner last time, and it becomes the partner this time, then that would be the unsurprising NO CHANGE result for both elections.

As we are seeing, it wasnt the deal in 2014, simply because maori, act and united proved easier to do a deal with than Winston, who has played this game more successfully than any other participant in NZ MMP.

In the long run, until the Greens work out that Winston's way is the ONLY way to play MMP, they will be a waste of a potentially valuable and viable input.

But again there is no surprise there, once rid of their unhelpful ultra left co-leader, Shaw had a blank sheet which could have been filled with say PR face of the party Lucy Lawless, #7 Chloe Swarbrick and a higher than #14 ranked Hayley Holt.

What a wasted opportunity that could have painted a brave new Green
world with people who have succeeded and been around success and who know how to influence for change.

They could have made the Jacinda effect look like a passing shower, while setting up a group of intelligent and shining female faces National would kill for (albeit they are all indeed on the paler side of Meteria).

That was the missed opportunity of this election.

Jacinda and Chloe proved NZ was, and potentially still is, ready to hear more from our daughters, but hey who cares about that alternative, lets all wait to see what Grandad thinks.

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Aside from your extraordinary statements of where votes went from which party to another and why (have you really interviewed all of the voters to justify your assumptions?), you make no allowance for population or electoral enrolment growth.

So the accurate basis for comparison is relative proportions of the total vote:

National's vote: down 3.64%

Labour's vote: up 11.77%

Green's vote: down 4.4%

Maori Party's votes: down 0.12%

ACT Party's votes: down 0.19%

TOP party's votes: up 2.4%

Now I'm not going to be so presumptuous to think I can speak on behalf of voters as to why the changes, and I haven't interviewed them all to find out. But add up the totals for change versus status quo and the answer is simple:

Status quo: all negative. total down 2.95%.

Vote for a change: up and down but overall up 8.31%

Seems a very clear result to me.

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Lack of logic there I'm afraid. The vote for National exceeded the vote for Labour and Greens combined. As Winston had no position on which side he would support, we can only look at the left and right votes. National, or the right clearly exceeded the left vote, so cannot be called a vote for change.

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Rubbish. The Maori Party and ACT supported the Nats in Government, so should be included with them. TOP's establishment was a clear call for change. NZF's vote actually went down but clearly wasn't a vote for the Bats.
It's time you moved on from your FPP thinking and desperately trying to find some sort of justification for your right wing preferences.

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Hard to think of a strong economy with a weak currency. A weak currency is a subsidy to exporters and an impost to importers and those who buy their products.

Mind you a weak dollar also means the peasants cant do overseas travel which is good for the elites not having smelly peasants at the airports and clogging up ones overseas favourite tourist spots.

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I'd prepare for the good old days when I first started travelling overseas on business in the 70s.

It was handy having a Dad as a bank manager. He could get me US dollars to supplement the $25 a day I was allowed to take out of the country.

It was the difference between a reasonable hotel meal or KFC or McDonalds mind you they were treats not yet available to Kiwis.

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Sigh... the Mr I know it all, and I alone will fix it for the country and people,and I alone know how to run this country properly ( by taking it back 30 years) ..Sounds familiar - there is another one across the vast ocean. And the non too discerning voters who put him in this position will rue that day when the economy takes a downturn ...

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Labour in the first instance and then the Greens put him in this position .

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No. The lack of total support for the Right put him in this position.

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The lack of total support for the right (National and Act) exceeded the lack of total support for the left. (Greens and Act) And I'm a mathematician of note. You've probably heard of me. I used to work on triangles.

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Don't worry about these comments as they are only Winston having fun

He is too lazy once in government to do anything as his experience with Don Brash proved !

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There is no need to get bitter until he snatches power from you. Until then it would behoove you to pretend to be grateful of his consideration, otherwise it is good bye National.

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Exporters may well be pleased (or not) but what about all those Mums and Das and the kids who like to take an overseas holiday occasionally? It's going to cost them a lot more for them to do that if the exchange rate drops. So too will the cost of cars, petrol, imported food, imported building materials, TVs, Netflix, stuff brought on Amazon or from ASOS, all will cost more. Where is that money going to come from? Sounds very inflationary to me!

Does anybody really think we were better off (or remember being better off) back at the turn of the century when 40 US cents brought $1 NZD, or 30p brought $1 NZD? No, I didn't think so.

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Have you forgotten it is export companies that bring in exchange and jobs for local people. Without these jobs, no one would be having any overseas holidays. Money is nothing more than a manipulating tool control by the few, whos sole focus has been to accummulate more of it at the expense of most others.

How do you think China has developed in recent times? Exporting, using cheap labour (which is another way of lowering your currency) to gain a competitive advantage. US companies and their past governments have been stupid enough to move the manufacturing/export jobs there, only to find their citizens/customers no longer have decent paying jobs to pay taxes locally. God knows how they expect to pay their bills in the future?

Globalisation been nothing more than a con job, that benefits a few in the short term, leaving the rest to be modern day slaves in the long term. If thats what you want Steve, keep advocating your short term ideology and start praying you wont be exposed to the social unrest of the masses.

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Actually Germany and China both do currency manipulation. Germany simply joined the Euro. Due to the Euro also being used by basket case countries like Greece, no worries about the Euro ever becoming overvalued. Both countries understand that a lower currency is the best help for their exporters.

The government needs to use the surplus to repay government debt. And sort out the RMA. So that money entering the housing market will instead get spent on building more houses. Instead of causing surges in values that also cause surges in mortgage debt, but without anything to show for that debt.

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Winston dodging and weaving a crooked path through the minefield ... that's Winston.

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No one will know until peters decides the public are getting restless and should make a decision....then and only then will it all play out as he has decreed.
All the fun lays ahead.

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The fun may well lie ahead. It certainly won't lay ahead.

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Mr. Peters is quoted as saying that NZ is an export nation, but NZ imports more than it exports ...

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Many exporters use imported ingredients, so their cost of production would rise, if the dollar was somehow managed lower. And his aged voters desperately want better interest rates in the bank: a lower dollar would hit his support base squarely in the pocket. Winston, like Muldoon, should stay away from finance. Period.

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