{"id":18781,"date":"2016-03-12T17:27:29","date_gmt":"2016-03-12T22:27:29","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18781"},"modified":"2016-03-12T17:27:29","modified_gmt":"2016-03-12T22:27:29","slug":"norways-interest-rate-conundrum","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18781","title":{"rendered":"Norway\u2019s Interest Rate Conundrum"},"content":{"rendered":"

Norway\u2019s Interest Rate Conundrum<\/a><\/h3>\n
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Current Situation\u00a0<\/strong><\/p>\n

The ECB recently\u00a0stimulated more than expected<\/a>, cutting rates by five basis points and expanding\u00a0 quantitative easing. It is already expected that Norges Bank (The Norwegian Central Bank) will cut rates next week, seeing\u00a0accelerating inflation as temporary<\/a>. They have a\u00a02.5% inflation target mandate\u00a0<\/a>\u201cover time,\u201d giving them lee-way. They see demand falling off while the local economy, driven by exports, recovering. Therefore, they feel that they can cut rates. My previous articles\u00a0challenged the assumptions\u00a0<\/a>that the oil sector will recover, showing that new technology reduces long term prices below offshore break-even points, and exports can make up the difference, illustrating that key sectors, like fishing, can be replicated in Canada, Maine, Russia and Japan.<\/p>\n

We are experiencing 1970\u2019s style stagflation, coming from the supply side, not demand. Prices are going up because Norges Bank continues to destroy the Norwegian Krone, turning it into the Nordic Peso. This is where they are \u201chiding\u201d the damage to save rest of the economy. For example, housing prices will rise in NOK but fall in USD or gold (universal commodity) terms. It\u2019s a shell game, leading to long term decline or even worse, an unexpected period of elevated inflation, requiring a rapid rise in interest rates.\u00a0 Housing remains at risk in this situation (Norway does not have 30 year fixed loans, most people float monthly).<\/p>\n

I am in no position to stop them from making trips to Thailand, fruit from Spain and iPhones from California more expensive, but at least I can share my knowledge with others.<\/p>\n

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The dashboard, above, lines up key figures, showing how low rates drive inflation, gradually eroding public wealth. It is important to notice that inflation is much higher than interest paid at the bank, punishing responsible behavior. A person\u2019s savings diminishes over time in terms of purchasing power.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Norway\u2019s Interest Rate Conundrum Current Situation\u00a0 The ECB recently\u00a0stimulated more than expected, cutting rates by five basis points and expanding\u00a0 quantitative easing. It is already expected that Norges Bank (The Norwegian Central Bank) will cut rates next week, seeing\u00a0accelerating inflation as temporary. They have a\u00a02.5% inflation target mandate\u00a0\u201cover time,\u201d giving them lee-way. They see demand […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,3575,6038,366,2340,7600,452,534,954,8019,1241,659,662,668,1264,3303,4114,824,9878,4318],"class_list":["post-18781","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-deficit-spending","tag-fixed","tag-global-economy","tag-housing-market","tag-housing-prices","tag-japan","tag-monetary-policy","tag-money-supply","tag-norges-bank","tag-norway","tag-purchasing-power","tag-quantitative-easing","tag-real-estate","tag-recession","tag-stagflation","tag-transparency","tag-unemployment","tag-unemployment-insurance","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18781"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18781\/revisions"}],"predecessor-version":[{"id":18782,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18781\/revisions\/18782"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}