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NZ looks to emulate the Swedish approach.

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NZ looks to emulate the Swedish approach.

Postby erolz66 » Wed Sep 09, 2020 7:13 pm

On negative interest rates that is.

https://www.bloomberg.com/news/articles ... rest-rates

As New Zealand’s central bank prepares plans for taking interest rates negative to support its recession-hit economy, Sweden’s experience is emerging as the most relevant guide.


No sign yet of the UK looking to also follow this route, though the current governor of BoE has said 'it remains in the toolbox'. I live in hope
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Re: NZ looks to emulate the Swedish approach.

Postby Get Real! » Wed Sep 09, 2020 7:15 pm

You got Guido excited there for a second! :lol:
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Re: NZ looks to emulate the Swedish approach.

Postby Pyrpolizer » Wed Sep 09, 2020 8:58 pm

erolz66 wrote: I live in hope


i read your "hope" link and for a moment I thought I was reading a Robin Hood post. :lol:
To his credit he was the first one who enlightened us in this forum about the issue.
Not totally correct though as it has been verified by what happened to the banks in RoC.
But let's not divert this topic to another issue.

Why do you think negative interest rates might be good for the UK?
What will be the effects to the City's Stock markets?
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Re: NZ looks to emulate the Swedish approach.

Postby erolz66 » Wed Sep 09, 2020 9:15 pm

Pyrpolizer wrote:Why do you think negative interest rates might be good for the UK?
What will be the effects to the City's Stock markets?


I do not know if negative interests rates will be good for us or not to be honest. They would be good for me in the UK, in that my already insanely cheap borrowing will get even cheaper. Co-Op bank will be paying me a contribution towards the £10pm fixed cost of this card and the more I borrow the more they will pay towards this. More generally as far as I understand Sweden's use of such negative rates, it was to increase inflation. I think there is a correlation between how much inflation there is and the value of a crypto currency that is 'inflation proof'. All pretty selfish stuff I admit.
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Re: NZ looks to emulate the Swedish approach.

Postby Pyrpolizer » Wed Sep 09, 2020 10:59 pm

erolz66 wrote:
Pyrpolizer wrote:Why do you think negative interest rates might be good for the UK?
What will be the effects to the City's Stock markets?


I do not know if negative interests rates will be good for us or not to be honest. They would be good for me in the UK, in that my already insanely cheap borrowing will get even cheaper. Co-Op bank will be paying me a contribution towards the £10pm fixed cost of this card and the more I borrow the more they will pay towards this. More generally as far as I understand Sweden's use of such negative rates, it was to increase inflation. I think there is a correlation between how much inflation there is and the value of a crypto currency that is 'inflation proof'. All pretty selfish stuff I admit.



The statistical data it provides in support of the argument that "mortgage rates fell - inflation rose" actually shows that there's no definite relation between the two. However there 's a definite relation between inflation rate and Benchmark rate which boosts iflation the closer it gets to zero or sub zero.
But that's normal.... no rocket science about it.

In any case negative interest rates apply on deposits only. It just indicates that the Banks have too much money deposited (for which they pay interest) and don't get enough interest from loans to balance out. I think the article says somewhere that they reached a 1 to 1 ratio.

Negative interest rates is a call to people to stop depositing/saving and start investing or spending their money.
Investing will increase the prices of real estate, spending will increase the prices of commodities.
In both cases inflation will rise, but at the same time boost the economy.

i wonder what's new for them.
They already tried a sub zero Benchmark rate and they know the results.
They big question is whether together with the rise of the inflation they got a boost of their economy, or whether money just flew out of the country to foreign Banks.
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Re: NZ looks to emulate the Swedish approach.

Postby erolz66 » Wed Sep 09, 2020 11:52 pm

At one level just the idea of a bank paying me to borrow on a credit card 'amuses' me. It is so juxtaposed with the deep rooted cognitive notions in my head that I have re banks and credit cards, that it does something in my head, in a similar way that some jokes do. Hence the 'amusement'.
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Re: NZ looks to emulate the Swedish approach.

Postby Paphitis » Thu Sep 10, 2020 2:44 am

I think we are all going to emulate Sweden soon. Yes, NZ and Australia are looking at the Swedish model right now. Not just about interest rates.

NZ was one of the countries that went in hard and they achieved great results. Australia went even harder. also with great results.

The State of Victoria went out of control. Probably the hardest in the world aside from Chy-na, and they had a second wave because their contact tracing wasn't any good and because of Government stuff ups at many levels.

NZ PM isn't as out there as someone tried to tell me the other day. She is doing a reasonable job. And she isn't radical. Very mainstream and down the line it would appear.

Which is more than can be said about Victoria.

I think Sweden is by far the most sensible way of living with COVID. nd we are going to have to learn to live with it for some time without shutting down livelihoods, and the economy.
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Re: NZ looks to emulate the Swedish approach.

Postby erolz66 » Thu Sep 10, 2020 8:28 am

Paphitis wrote:NZ PM isn't as out there as someone tried to tell me the other day. She is doing a reasonable job. And she isn't radical. Very mainstream and down the line it would appear./quote]

So which way do you think the referendum on legalising the recreational use of cannabis is going to go ? Of course it was already legalised for medicinal use withing days of Labour coming to power. Or the referendum on assisted suicide ? What do you think about the replacing of GDP as metric used to judge progress in NZ with the Livings Standards Framework (LSF), a set of well-being measures that include cultural identity, environment, income and consumption, and social connections ? All "Very mainstream and down the line" according to you. Guess you will be supporting such 'reasonable,mainstream non radical' moves in Oz then ?

Paphitis wrote:I think Sweden is by far the most sensible way of living with COVID. nd we are going to have to learn to live with it for some time without shutting down livelihoods, and the economy.


Yeah because when you have to date achieved a death rate per head of population over a hundred times lower than Sweden, at comparable or less impact on GDP growth, the only sensible thing to do would be to abandon what you have done to date and copy Sweden. I think we have different understandings as to what 'sensible' actually means.

Anyway my predictions for upcoming votes in NZ.

Election - Labour landslide.
Assisted suicide - will pass.
Recreational cannabis - too close to call. Whatever way it goes it will be within a % or 2 either way.
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Re: NZ looks to emulate the Swedish approach.

Postby Paphitis » Thu Sep 10, 2020 8:55 am

erolz66 wrote:
Paphitis wrote:NZ PM isn't as out there as someone tried to tell me the other day. She is doing a reasonable job. And she isn't radical. Very mainstream and down the line it would appear./quote]

So which way do you think the referendum on legalising the recreational use of cannabis is going to go ? Of course it was already legalised for medicinal use withing days of Labour coming to power. Or the referendum on assisted suicide ? What do you think about the replacing of GDP as metric used to judge progress in NZ with the Livings Standards Framework (LSF), a set of well-being measures that include cultural identity, environment, income and consumption, and social connections ? All "Very mainstream and down the line" according to you. Guess you will be supporting such 'reasonable,mainstream non radical' moves in Oz then ?

Paphitis wrote:I think Sweden is by far the most sensible way of living with COVID. nd we are going to have to learn to live with it for some time without shutting down livelihoods, and the economy.


Yeah because when you have to date achieved a death rate per head of population over a hundred times lower than Sweden, at comparable or less impact on GDP growth, the only sensible thing to do would be to abandon what you have done to date and copy Sweden. I think we have different understandings as to what 'sensible' actually means.

Anyway my predictions for upcoming votes in NZ.

Election - Labour landslide.
Assisted suicide - will pass.
Recreational cannabis - too close to call. Whatever way it goes it will be within a % or 2 either way.


You forget one thing.

The Swedish model is being adopted by Cyprus and Greece and virtually every country in Europe. That is all the endorsement the Swedish model can get.

People will die from this. Or they will die with it. Either way, the world needs to do what is practical for the majority of people, open the economy and isolate the sick and elderly who are most vulnerable.

Taking the approach which Australia has taken does reduce community transmission but it has a big cost to people, their mental health and livelihoods. It also trampled on freedoms and sets a dangerous precedent.

And what is further interesting is that the State with the toughest restrictions and most stringent isolations has the most COVID cases and the most death. Which means restrictions and isolation do not work as much as we are told they do.

It now comes down to social distancing, hygiene, and also contact tracing. If these are done well, case numbers will be lower.
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Re: NZ looks to emulate the Swedish approach.

Postby Pyrpolizer » Thu Sep 10, 2020 4:42 pm

Paphitis wrote:
The Swedish model is being adopted by Cyprus and Greece and virtually every country in Europe. That is all the endorsement the Swedish model can get.

.


What??? :roll:
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