Fed Farmers say no to printing money

The Greens claim their printing money proposal (which Labour supports, so long as the RB decides to do it, not the Govt) is to benefit exporters.

Well the group that represents more exporters in NZ than any other, Federated Farmers, have said they think the proposal is lunacy.

3 News reports:

The country’s biggest export sector is strongly opposed to the Green Party’s suggestion that the Government should print money to bring down the value of the dollar.

The agricultural sector sells most of its products overseas and Federated Farmers says printing money, known as quantitative easing, would be “incredibly bad” for New Zealand. …

The Government has rejected the idea and Federated Farmers president Bruce Wills says it would “set off an inflationary bomb that risks returning New Zealand to the dark days of double-digit interest rates”.

Mr Wills says quantitative easing should be a “break glass in case of fire” policy option.

“New Zealand is nowhere near such desperate measures because our official cash rate is 2.5 percent versus 0.5 percent in the United Kingdom, 0.25 percent in the United States and 0.10 percent in Japan.”

This is what is so bizarre about the Greens policy. Those countries which are doing QE are not doing it because they want to. They are doing it as a last resort as they can not lower their cash rate any lower.

The Greens would have New Zealand as pretty much the only developed country in the world to print money and cause inflation, as a preference rather than a last resort.