90 seconds at 9am: NZ$ falls as US stocks drop; Labour starts monetary policy debate

Bernard Hickey details the key news overnight in 90 seconds at 9am in association with ASB, including news the New Zealand dollar fell to 73 US cents overnight as the global appetite for risk and risky currencies like ours waned in line with a lower US stock market.

There are concerns a bubble is growing in US stocks as cheap credit is pumped into valuations that are running ahead of earnings expectations, Bloomberg reported.

Also, Asian and European stocks fell after Brazil closed a loophole for a tax on foreign investment and borrowing, which raised concerns about more capital controls, the FT.com reported.

Meanwhile back in New Zealand, Labour has started a debate on monetary policy by abandoning the 20 year political consensus that the Reserve Bank Act should not be changed. Labour wants a debate over whether the RBNZ should stick to one tool, the Official Cash Rate, that targets inflation alone.

Prime Minister John Key has rejected the call, saying Labour will talk about a mortgage levy or higher GST, Stuff reported. But I think New Zealand should be more open about a debate.

Category:

News & Politics

Tags:

• Bernard Hickey
• 90 at 9
• Labour
• monetary policy

[TheAryam1]

thanks for your post, great video.

[mexaguil]

It is quite obvious what would stop bubbles and reduce malinvestment. 100% bank reserves and free floating interest rates, that means no OCR set by one small group of fallible people. This would of course bring short term pain for long term gain.