Matt Nolan critiques the Green’s ‘quantitative easing’ policy on the grounds that it is actually a ‘stealth tax’ (via the resulting inflation) to pay for the Christchurch rebuild, and that our high exchange rate is a signal pointing to deeper problems in the economy, so policies fixating on the exchange rate are missing the point.
I don’t have the energy to read the Wikipedia article on Quantitative Easing so I can pretend to be an expert on it. I’m just glad Matt’s points are more substantive than the ‘OMG printing money = funny-money’ arguments I expected on this issue. (Our money is already almost all ‘funny-money’.)
I suspect the Green’s reply to Matt’s second point would be that the ‘signal’ that the exchange rate is sending us is that most of our trading partners are devaluing their currencies and using that cash to speculate on (amongst other things) the New Zealand dollar, and that this is driving it up and killing our export industry. To paraphrase Trotsky, New Zealand might not be interested in a currency war, but a currency war is interested in us.
National has ruled out such a policy – you wonder if English even got to offer his opinion before Joyce vetoed it – so we’re at least two years away from this policy being relevant. It’ll be interesting to see if other countries implementing quantitative easing have suffered the dreaded, much prophesised hyper-inflation by then.