...is now above $0.80 despite a current account deficit in the neighborhood of 10% and repeated efforts by the RBNZ to talk the Kiwi down and despite recent Kiwi selling by RBNZ.What does this say about the US dollar?
Wikinvest Wire
Monday, July 23, 2007
The Sickly Kiwi...
...is now above $0.80 despite a current account deficit in the neighborhood of 10% and repeated efforts by the RBNZ to talk the Kiwi down and despite recent Kiwi selling by RBNZ.What does this say about the US dollar?
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5 comments:
Momentum money in the carry trade. What's not to love? As more players try to clip high rates in NZ, it forces the currency up. When it forces the NZ economy to slow, the central bank will stop tightening, and the Kiwi will begin a long tumble.
But yes, you are right. It implies nothing good about our US dollar.
Maybe it means we soon can use it to wipe our b***?? Sorry for the language, but with our government under so much debt and its citizen too, plus FED is printing out money like Kinko on steroid, where do you think dollar is headed? I mean I get no joy seeing our dollar keep going down, we are the one who are using it and it keeps shrinking...
And one more thing. With USD falling, look around us, everything has gone up so much price wise. Real Estate, commodity of all sorts, food, energy. Pretty much cost of living has gone up through the roof and look at wages, have they been keeping up the pace? Here in Souther California, making 6 digits is nothing! After 43% tax (roughly) and 8.25% sales tax on almost everything (except food, but still 8.25% when you go out and eat and they expect a 15% to 20% tips??), that's less then 50% left. With house mortgage (1 million dollar house here get you only around 3,000 to 3,500 square feet of space.), car/house/health insurance, gas, food, misc expenditure (oh, good luck if you have couple of kids, they sure will drain you dry), you got nothing left in your pocket!
And you know what stock market says? We are not bullish enough for a correction, everything is great! Too many bearish people around! How can you be bullish with increase cost of living while wage not going up much??
The Economist July 21st issue on pg 72 2/3 page article "Buttonwood Vanishing vigilantes"|"Why the markets may be undermining central banks" talks specifically abut the difficulties Latvia, Iceland and New Zealand central banks are having with controlling their exchange rates. Conclusion: if central banks have this much trouble controlling a boom they will most likely be just as ineffective in controlling the bust when it happens.
Link to Economist article
http://www.economist.com/finance/displaystory.cfm?story_id=9516621
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