Book Reviews | Gordon Campbell | News Flashes | Scoop Features | Scoop Video | Strange & Bizarre | Search

 


Kiwi Dollar Plunges To 15 Year Lows

As the NZ Dollar hits 15 year lows against the US dollar and foreign investors shun NZ government securities, Malaysia's Prime Minister, Dr Mahathir Mohamad, has taken a swipe at the Group of Eight countries accusing them of forming an exclusive economic club. John Howard reports.

The New Zealand dollar has fallen to 15-year lows against the US dollar, as concern about our economic outlook is contrasted with the better prospects for the American economy. This morning our dollar was trading at under 44 cents US, its weakest level since March 1985. It also went below $AUS 76 cents.

Meanwhile, foreign holdings of New Zealand government securities have fallen to their lowest level since mid-1994 and are well off their 1997 peak.

Bond holdings were 37.1 per cent as at July, down from 53.4 per cent in July 1999. And foreign holdings of treasury bills are at 15.5 per cent, down from 17 per cent a year ago.

It's all a matter of risk and return. If we look at the kind of yield we can pick up on triple A-rated non-governments' in the US, why would we bother with the currency risk and other risks and uncertainties involved in the New Zealand market.

There isn't a compelling reason to hold New Zealand bonds in what has been a bear market, both in interest rate and currency terms.

In the US their Treasury is paying off the federal government's debt at an astonishing pace as the federal surplus widens. US debt is down $US 565 billion since March 1997. There are only $630 billion in long bonds - the equivalent of a mere 5 per cent of the value of the S & P 500.

Official projections suggest the US government might be debt free by 2010

But it seems the US success is coming at a high price to others.

Malaysian Prime Minister, Dr Mahathir Mohamad, has accused the Group of Eight (G8) countries of forming an exclusive economic club.

The G8 consists of the US, Canada, Japan, Germany, France, Italy, Britain and Russia.

Addressing more than 400 political, business and labour leaders attending a four-day conference in Mozambique, Dr Mahathir, the only Asian leader attending, urged developing countries to unite and fight for their concerns in the G8 forums.

"In this club of theirs, they (G8) discuss international affairs including economic affairs, and they make decisions which affect the whole world....but very often the decisions are to the detriment of weaker nations," he said

" If this goes on much longer the poorer countries will suffer, therefore, we need to work on how we can empower ourselves."

Dr Mahathir threw down the gauntlet accusing the United States and developed European nations of forcing Japan to revalue its yen so that its products would be more expensive and less competitive in their markets.

" But because Malaysia had yen-denominated debts, it was forced to pay twice as much in local currency to pay off the loans," he said.

"In other words, the decision of the G8 to solve their problem has resulted in Malaysia paying a very high price and that is because we are not empowered, we cannot join the G8 club."

"We cannot even give our opinion." Dr Mahathir said.

In June the US Federal Reserve said "The Committee believes the risks continue to be weighted mainly towards conditions that may generate heightened inflation pressures in the foreseeable future."

The problem is that New Zealand and other small countries can't do a damn thing about it. The "system" simply needs changing - and quickly.

© Scoop Media

 
 
 
 
 
Top Scoops Headlines

 

Werewolf: Living With Rio’s Olympic Ruins

Mariana Cavalcanti Critics of the Olympic project can point a discernible pattern in the delivery of Olympics-related urban interventions: the belated but rushed inaugurations of faulty and/or unfinished infrastructures... More>>

Live Blog On Now: Open Source//Open Society Conference

The second annual Open Source Open Society Conference is a 2 day event taking place on 22-23 August 2016 at Michael Fowler Centre in Wellington… Scoop is hosting a live blog summarising the key points of this exciting conference. More>>

ALSO:

Buildup:

Gordon Campbell: On The Politicising Of The War On Drugs In Sport

It hasn’t been much fun at all to see how “war on drugs in sport” has become a proxy version of the Cold War, fixated on Russia. This weekend’s banning of the Russian long jumper Darya Klishina took that fixation to fresh extremes. More>>

ALSO:

Binoy Kampmark: Kevin Rudd’s Failed UN Secretary General Bid

Few sights are sadder in international diplomacy than seeing an aging figure desperate for honours. In a desperate effort to net them, he scurries around, cultivating, prodding, wishing to be noted. Finally, such an honour is netted, in all likelihood just to shut that overly keen individual up. More>>

Open Source / Open Society: The Scoop Foundation - An Open Model For NZ Media

Access to accurate, relevant and timely information is a crucial aspect of an open and transparent society. However, in our digital society information is in a state of flux with every aspect of its creation, delivery and consumption undergoing profound redefinition... More>>

Keeping Out The Vote: Gordon Campbell On The US Elections

I’ll focus here on just two ways that dis-enfranchisement is currently occurring in the US: (a) by the rigging of the boundary lines for voter districts and (b) by demanding elaborate photo IDs before people are allowed to cast their vote. More>>

Ramzy Baroud: Being Black Palestinian - Solidarity As A Welcome Pathology

It should come as no surprise that the loudest international solidarity that accompanied the continued spate of the killing of Black Americans comes from Palestine; that books have already been written and published by Palestinians about the plight of their Black brethren. In fact, that solidarity is mutual. More>>

ALSO:


Get More From Scoop

 
 
 
 
 
 
 
Top Scoops
Search Scoop  
 
 
Powered by Vodafone
NZ independent news