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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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9/11/12

Is RBA printing money to weaken dollar?


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A UBS report shows there is evidence to suggest Reserve Bank of Australia could be printing money to weaken the Australian Dollar.

Link to The Age article here.

Written by Clancy Yeates - 07/11/2012

Is RBA printing money to weaken dollar? 

"A surge in foreign deposits with the Reserve Bank has sparked claims it may be printing money, in an attempt to take the heat out of the Australian dollar.

Central bank purchases of Australian dollars are seen as one reason for its strength, with up to 23 of the official institutions from around the globe including the currency in their portfolios.

In research published on Wednesday, UBS strategist Gareth Berry said there was “compelling” evidence to suggest the RBA had taken the unusual step of meeting central bank demand in direct off-market transactions, which would dampen the currency’s strength.

In the three months October, foreign central banks’ deposits at the Reserve have jumped by $848 million to more than $2 billion, the highest since early 2009. At the same time, the Reserve has lifted its foreign exchange reserves by almost exactly the same amount.

Mr Berry said these trends suggested the bank was effectively “printing” new Aussie dollars and supplying them to foreign central banks, which were then keeping the Aussie dollars on deposit at the RBA.

This would satisfy foreign central banks’ demand for Aussie dollars without forcing them to buy currency on the open foreign exchange market, where the dollar’s value is set.

‘‘The Reserve Bank of Australia may have recently begun printing Australian dollars to satisfy overseas currency demand from foreign central banks,’’ Mr Berry said, adding that the evidence was not conclusive.

‘‘If this is a genuine policy innovation, then it takes the RBA into uncharted territory.’’

While the Reserve does not comment on market intervention issues such as this, it has repeatedly tried to talk down the dollar in recent months.

On Tuesday it said the dollar was ‘‘higher than might have been expected, given the observed decline in export prices and the weaker global outlook,” but its decision to hold rates moved the currency higher.

The chief economist at HSBC and former RBA staffer, Paul Bloxham, also said there was a form of intervention occurring in the market, which was likely to continue while the dollar was causing serious problems for export industries."


 



tags: currency, rba

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