Adrian Orr resigns unexpectedly & without explanation three years early. His replacement could loosen bank capital & lending rules to unleash a new pre-election mortgage war & house price boom
Given Orr was probably the last 'handbrake', many will be missing him already - and this government will have already added Orr and his policies to their 'It's all Labour's fault' game book.
As much as I despise the state owned but foreign private bank funded Reserve Bank Of New Zealand as a whole, I am a little sad to hear of the sudden resignation of its present Governor, Adrian Orr, because he has done a 'few' things along the way, like being an active supporter of keeping physical coins and notes readily available(Our only non private bank sovereign money), genuinely wanting to make housing more affordable for average income earners, that have actually been a thorn in the side of our foreign money power masters total annihilation of our nation, which could be the reason for his sudden leaving.
Maybe he got sick of swimming against the tide, being a lone citizen's security guard in a den of thieves.
The question now is what is to come, because even with Adrian Orr if he has been a bit sympathetic to his fellow citizens, the RBNZ as a whole has acted atrocious towards us, what will it be like if we get a governor with no sympathy?
Possibly irrelevant but braking with your foot still on the accelerator is a valid car racing/driving technique, but only small applications in limited circumstances
It still astounds me that banks literally magic money into existence at the click of a button. At least Orr tried to keep lending tethered in some way to material reality by making the banks hold capital.
When COVID hit Adrian Orr seemed very open to using direct monetary financing rather than a money supply work around that favoured the private banks, which Indonesia thanks to their Minister of Finance Sri Mulyani Iriwati(Should try and interview her Bernard?) did and came out without the massive increase in debilitating private bank debt others have.
Grant Robertson left the decision up to the Council of Financial Regulation. They went with printing sovereign money but used it to buy some of the loan books from private banks, to give them the liquidity to keep assisting the economy, and the government kept private bank borrowing for wage subsidies.
I would love to know if the other members of the COFR overrode Adrian Orr on using direct monetary financing?
If so I would imagine he would of found it difficult continuing to swallow his tongue in the presence of Ben Bernanke and Catherine Mann, two of the biggest high priest lecturers of the privately owned investment bank money supply model, who are this week giving a lecture at the RBNZ on the virtues of Interest Rate Inflation Targeting, that many very reputable economists around the world admit has been an abject failure, if not an outright private banking network fraud.
...and whosoever that particular scumbag should happen to be, they will be inflicted on the next (hopefully- but only through want of a credible alternative) Labour led government, since as GG appointments they are, I believe, un-dismissable.
Yes, I knew there was a procedure- not in detail, so thx for the link. I should have qualified 'un-dismissable'. However the pursuit of a particular line of thought that might be at variance with the Minister's doesn't constitute 'just cause'- otherwise Willis would have given Orr the heave-ho the day she took office instead of repeated sniping at him. Neither would it constitute 'just cause' for an incoming government in 2 years time to remove the new appointee. So harassment seems to be the preferred mode of dismissal. Wouldn't stand up in an employment tribunal- that's for sure.
Fair question, hopefully someone brainier than me can contribute to this avenue of thought.
For a price freeze to be viable, that would have to be a price freeze on everything going up the supply chain, price of goods, price of commodities to make the goods, price of raw materials & all of the labour involved & all of the transit of materials from one port of call to the next port of call etc, the costs of these will all have to be frozen. Often with price hikes it's usually a domino effect. That includes variables outside of government control, including in different jurisdictions/countries.
A price freeze might work temporarily, but not for the long term.
"...create the conditions for another 2003-to-2007-style mortgage lending boom...", yeah right; to increase the numbers of people unable to ever own a home of their own. Its all very fine for the marmite sandwich eating, sorted people.
There is more to this than just a resignation by the governor of RBNZ.
With popularity tanking and threatening to sink further,the current coalition has to do a lot if they are to win election 2026. The NZ economy is over reliant on property and when property does well ( meaning prices rise on ther back of stimulation courtesy RBNZ),the economy seems to nod in agreement with the positive vibes in the real estate sector.
Adrian Orr has been shown the door.
Keen to watch the LVR space and the OCR movements in the next few months.
A damn fine watch with my early coffee thanks.
Longer form interviews/articles are essential for educating us all.
I find most people have no nuanced knowledge of what are arguably the most important processes that govern our lives.
More please.
I think with the current Trumpquake hitting the world markets we will be grateful to Orr for making the banks increase their reserves
Certainly easy to believe Orr is gone in no small part because he was in the way of achieving the NACT dream/utter hellscape of Landlord Land.
I suspect:
- it was a much bigger dispute than settings for landlords;
- Adrian's independent-minded vision saw him clashing repeatedly with Minister Willis trying behind the scenes to assert more control;
- things came to a head in the current budget work;
- he said I'm outta here and will write my own memoir in due course;
- Minister Willis is feeling good this morning because the break fee for this cancellation was modest.
As the Guv, he certainly was a force of nature. We might well miss him before long.
Given Orr was probably the last 'handbrake', many will be missing him already - and this government will have already added Orr and his policies to their 'It's all Labour's fault' game book.
As much as I despise the state owned but foreign private bank funded Reserve Bank Of New Zealand as a whole, I am a little sad to hear of the sudden resignation of its present Governor, Adrian Orr, because he has done a 'few' things along the way, like being an active supporter of keeping physical coins and notes readily available(Our only non private bank sovereign money), genuinely wanting to make housing more affordable for average income earners, that have actually been a thorn in the side of our foreign money power masters total annihilation of our nation, which could be the reason for his sudden leaving.
Maybe he got sick of swimming against the tide, being a lone citizen's security guard in a den of thieves.
The question now is what is to come, because even with Adrian Orr if he has been a bit sympathetic to his fellow citizens, the RBNZ as a whole has acted atrocious towards us, what will it be like if we get a governor with no sympathy?
Possibly irrelevant but braking with your foot still on the accelerator is a valid car racing/driving technique, but only small applications in limited circumstances
Stig Blomqvist!
It still astounds me that banks literally magic money into existence at the click of a button. At least Orr tried to keep lending tethered in some way to material reality by making the banks hold capital.
When COVID hit Adrian Orr seemed very open to using direct monetary financing rather than a money supply work around that favoured the private banks, which Indonesia thanks to their Minister of Finance Sri Mulyani Iriwati(Should try and interview her Bernard?) did and came out without the massive increase in debilitating private bank debt others have.
Grant Robertson left the decision up to the Council of Financial Regulation. They went with printing sovereign money but used it to buy some of the loan books from private banks, to give them the liquidity to keep assisting the economy, and the government kept private bank borrowing for wage subsidies.
I would love to know if the other members of the COFR overrode Adrian Orr on using direct monetary financing?
If so I would imagine he would of found it difficult continuing to swallow his tongue in the presence of Ben Bernanke and Catherine Mann, two of the biggest high priest lecturers of the privately owned investment bank money supply model, who are this week giving a lecture at the RBNZ on the virtues of Interest Rate Inflation Targeting, that many very reputable economists around the world admit has been an abject failure, if not an outright private banking network fraud.
https://www.rbnz.govt.nz/news-and-events/our-korero-speaking-and-engagement-programme/35-years-of-flexible-inflation-targeting?utm_source=Reserve+Bank+of+New+Zealand&utm_campaign=52131e54df-Economic+conference+advisory+6-7+March&utm_medium=email&utm_term=0_-52131e54df-25505365
So house buyers have to have 20% deposit to protect the bank in case things go south but the banks only need to have 10% skin in the game?
Bernard, I'm betting Willis had someone lined up for Adrian's job pre-election.
It was a fantastic interview and incredibly enlightening. Thank you Craig and Bernard.
...and whosoever that particular scumbag should happen to be, they will be inflicted on the next (hopefully- but only through want of a credible alternative) Labour led government, since as GG appointments they are, I believe, un-dismissable.
ss90-93 of the Reserve Bank Act provides for removal of the Governor. To summarise, must be by the GG after consultation with the Minister and AG, for just cause (https://www.legislation.govt.nz/act/public/2021/0031/latest/LMS293924.html defines just cause).
Yes, I knew there was a procedure- not in detail, so thx for the link. I should have qualified 'un-dismissable'. However the pursuit of a particular line of thought that might be at variance with the Minister's doesn't constitute 'just cause'- otherwise Willis would have given Orr the heave-ho the day she took office instead of repeated sniping at him. Neither would it constitute 'just cause' for an incoming government in 2 years time to remove the new appointee. So harassment seems to be the preferred mode of dismissal. Wouldn't stand up in an employment tribunal- that's for sure.
I thought the same thing too Annie,
I really enjoyed this Korero guys! Very informative.
So utterly depressing.
Instead of increasing interest rates to stem inflation why can’t a government just put a freeze on prices and wages?
Fair question, hopefully someone brainier than me can contribute to this avenue of thought.
For a price freeze to be viable, that would have to be a price freeze on everything going up the supply chain, price of goods, price of commodities to make the goods, price of raw materials & all of the labour involved & all of the transit of materials from one port of call to the next port of call etc, the costs of these will all have to be frozen. Often with price hikes it's usually a domino effect. That includes variables outside of government control, including in different jurisdictions/countries.
A price freeze might work temporarily, but not for the long term.
But surely the same applies to increasing interest rates
"...create the conditions for another 2003-to-2007-style mortgage lending boom...", yeah right; to increase the numbers of people unable to ever own a home of their own. Its all very fine for the marmite sandwich eating, sorted people.
There is more to this than just a resignation by the governor of RBNZ.
With popularity tanking and threatening to sink further,the current coalition has to do a lot if they are to win election 2026. The NZ economy is over reliant on property and when property does well ( meaning prices rise on ther back of stimulation courtesy RBNZ),the economy seems to nod in agreement with the positive vibes in the real estate sector.
Adrian Orr has been shown the door.
Keen to watch the LVR space and the OCR movements in the next few months.