As the New Zealand dollar edges towards parity with the Aussie dollar, it seems facile to treat this as some game of Transtasman arm-wrestling that yay, we’re winning. The political rhetoric is all about our economic “strength” versus their “weakness.” Yet for starters, how much of the alleged NZD strength is being driven by currency speculators feasting on the high interest rates which our Reserve Bank feels impelled to maintain in order to control our out-of-control housing market? Meaning: is this currency high a sign of genuine economic strength, or has it been steroid-driven by speculation, in both currency and housing?
Secondly, the rise against the Aussie dollar has run in parallel with a decline against the US greenback – which suggests that the source of these movements is not any across-the-board strength in New Zealand, but separate events in Australia and the US. In the case of Australia, a significant driver has been the slowdown in China, and the related decline in Chinese demand for Australia’s raw exports. Is the resultant “weakness” in Australia a good thing for us? Hardly. They’re a significant market for many New Zealand exporters.
Moreover, during the Global Financial Crisis, it was the stimulus spending (a) in China and (b) by the Rudd/Gillard government that cushioned us from the worst effects of the global downturn. Removing that cushion and being exposed to the next global downturn hardly seems a good reason for dancing in the streets. Not when the prices for our dairy exports are in decline.
Having said all that, there are a few positive signs. The decline in oil prices puts a brake on inflation, and could even enable the Reserve Bank to hold – or even lower – interest rates. Lowering them would be the real test of just how much of this inexorable drive towards Transtasman parity is being driven by genuine, entirely productive factors.
Since this seems to be a morning for speculation of various kinds, the rumour that Trade Minister Tim Groser is about to become our new UN ambassador seems pretty apt.
Having failed to win the top post at the World Trade Organisation and failed to get the Trans Pacific Partnership deal over the line, Groser clearly has the right credentials to be promoted into the biggest and cushiest failed talking shop of them all.
Given New Zealand’s historical experience with nuclear issues. maybe Groser could turn his hand to nuclear proliferation. The deal that Iran has just signed will now prohibit the Iranians from enriching and weaponising the nuclear materials they intend to use for their domestic energy needs. That leaves only one problematic nuclear-armed power in the Middle East: namely, Israel. It was Israel’s attainment of nuclear status in the 1970s that inspired Saddam Hussein’s nuclear programme – which in turn, left Iran with little option but to follow suit, given that its two enemies in the region had headed down the nuclear route. That’s how nuclear proliferation works.
Iran is now backpedalling, and Iraq never got to the point of developing WMD. So that leaves Israel. Given our temporary presence at the Security Council table and since we like to portray ourselves as pluckily independent…… will our new man in New York press the issue of Israel’s need to be de-nuked, either voluntarily or via the kind of international sanctions that the international community chose to impose on Iran?
In a grimly amusing mind exercise, Juan Cole has just written a column about what might happen to the Middle East if the UN, the US and the EU ever did treat Israel in the same way they have just treated Iran.
Aussie pop music
This morning we’re all into how terrible Australia is faring these days, so maybe we can treat this as a form of karmic retribution for the terrible pop music that Australia has regularly unleashed on the world. Don’t worry. I’m not going to link to the Little River Band, Jimmy Barnes or Air Supply. Some things are just too terrible to recall.
Instead, the two tracks below date from an even earlier period. On the side, they’re a reminder that Classic Rock has its own format rules, such that certain songs simply drop right down the memory hole. These are two such examples. Both of them were huge hits here in the early 1960s and became staples of local request sessions. I’m not saying they’re good. They’re not Courtney Barnett.
The Webb Brothers were a trio of Queensland cattle farmers who sang in their spare time, and “The Call of the Bellbird” was an unlikely smash for them in the early 1960s.
Around the same time….Kevin Shegog (1933-2000) had a memorably great name, and came from Tasmania. “One Small Photograph” was an even bigger hit in New Zealand than it was in Australia, which should serve as a warning to all of us about what can happen when we achieve more than parity.