John Armstrong: Cullen threat fails to halt dollar dash

John Armstrong: Cullen threat fails to halt dollar dashMichael Cullen has committed heresy in the Temple of Monetary Policy. For that he will be surely crucified by the high priests of ideological purity who believe nothing should come between the Reserve Bank and its never-ending… [NZ Politics]

We all know now what the Money Market guru's think of Cullen and Bollard. In case you hadn't worked it out, they think the two of them are chumps, in fact no better than chimpanzees at the zoo flinging poo. They can be safely ignored.

This is good and its bad. Its good that the empty threats aren't being heeded and bad because between the two of them they are royally screwing us all and they don't even know why. These is the perils of having a failed history lecturer running the economy.?

[quote]Cullen's radical, unexpected and uncharacteristic departure from the status quo has largely failed to impress financial analysts, economists and fellow politicians, although some will welcome him opening a debate on whether anti-inflation policy should be cast in stone.

That criticism might have been worth sustaining had the gamble paid off and the dollar fallen. But "Mrs Watanabe" – Cullen's mythical Japanese housewife investing heavily in high interest New Zealand bonds – was not listening to his warning. The markets ignored him because they do not think he is serious.

Among the voting public, yet another failed gambit to shift the dollar will be added to the ledger determining which of the two major parties is best at managing the economy. That is essentially what is at stake here politically. And the stakes are huge.[/quote]

Cullen is out of his depth now, in fact he would be out of his depth in a carpark puddle, when things were cruising along swimmingly he could pretend that he knew what he was doing, now the shit is hitting the proverbial fan he has been found wanting. He has gambled and lost. He still denies that it his profligate government spending that is essentially fuelling inflation. he will still be denying that when he gets the sack from She who must be obeyed.