Comments

David Thompson Posted:
So very, very true. It beggars belief that we consider ourselves to be a developed nation when so much of our economy is based on selling milk powder or logs. BTW, I own a Plinius amplifier (my second) that drives a set of Theophany speakers.
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David Thompson Posted:
A robust but sobering report. It concerns me that confidence is rising, yet sales and exports are down and "manufacturers and exporters are still lagging behind other sectors". Surely we should wait until we're earning more money before we start spending more?
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siemens Posted:
Yes true! The only thing that will never die in this world is the nature and its science behind it. Great post.
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Kieran Ormandy Posted:
Thanks for the question Steven, Germany has seen increases in manufacturing employment since 2009, and Switzerland has had stable manufacturing employment between 2006 – 2011, even in the face of ongoing Euro-zone issues. Korea has seen increases in manufacturing employment since 2008 and Israel experienced large increases since 1998, while being stable over the last 4 years. Singapore has had increases in manufacturing employment over the last two years. These countries all value their manufacturing sectors and work to protect them, this is reflected in the above numbers and their performance through the GFC. Note data around the above examples was sourced from OECD labour market stats.
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John Walley Posted:
Point one: you should have no doubt what our Association says publically represent the views of our members. Point two: we don’t knee jerk responses, if you trace back our comments around NZPower you will see them link all the way back to our research in 2004 and 2005. All that material is fully linked from our comments above. Point three: you will note our comments on major users, sadly the same advantage does not accrue to smaller industrial users. The perverse incentives of the LRMC approach in all this are well known. Point four: the NZMEA is not like any other Association in New Zealand we admit only manufacturers and exporters into membership, and our public expressions are the views of that restricted membership.
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23/8/11

Why are currency interventions not supported?


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Scott Sumner looks at how the dollar devaluation in the United States in the 1930s was unpopular among many groups at the time and draws some comparisons with todays mixed opinions in an article for Seeking Alpha.

Some parallels can also be drawn for New Zealand.

"Matt Yglesias notes that the financial community was strongly opposed to dollar devaluation in 1933, despite the fact that most businesses benefited from the policy."

"The dollar devaluation policy was strongly supported by stock investors, and also some manufacturers. It was opposed by the American Federation of Labor. Keynes initially supported the policy, but later turned against it went he felt FDR had gone too far. Irving Fisher, who’s now often seen as being to the right of Keynes, supported it throughout 1933. Right wing populist Father Coughlin was a strong supporter of FDR’s policy, whereas a number of FDR’s advisers resigned in protest."

Sumner points out there are large splits in opinion today as well, and that:

"There are good reasons for this. Monetary stimulus has (greatly overrated) implications for the distribution of income. But it also has non-zero sum effects that reasonable people can interpret differently. In my view the non-zero-sum effects of monetary stimulus right now are so large and positive that even savers would benefit as a class (albeit not in every single case.)"



tags: dollar devaluation, exchange rate

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