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Green Party co-leader Russel Norman started a heated debate on Sunday when he issuedsome solutions to address the high value of the New Zealand dollar, including introducing quantitative easing (QE).
The United States Federal Reserve is up to QEIII, where it is printing about $US40 billion ($NZ49 billion) a month to buy financial assets such as government bonds, thereby freeing up more money in the system to be spent on other things.
The latest QE programme is on top of the $US2.3 trillion the Fed has spent since 2008 on keeping the US economy afloat.
Freeing up of money is seen by the Fed as a way of stimulating the moribund US economy as already its interest rates are close to zero.
Since the global financial crisis (GFC), both the Bank of England and the Fed have used QE to try to revive consumer spending and economic growth.
Dr Norman is suggesting the Reserve Bank of New Zealand should create credit to be used to buy earthquake recovery bonds which would be set aside for the rebuilding of Christchurch. The credit could also be used to replenish the Natural Disaster Fund as the nation's safety net in the event of future natural disasters.
The term printing money has been coined in the media as a way of describing the influx of credit into the financial sector.
In reality, for the New Zealand Reserve Bank, the so-called printing would be done with the press of a button on a computer keyboard.
Dr Norman said international experience had been that QE took place in stages, with the central bank monitoring the effects of each round and determining whether further rounds were warranted, and of what scale. The Green Party would leave it to the expertise of the Reserve Bank to determine scale and timing of QE rounds.
Since the GFC, New Zealand's major trading partners had engaged in large-scale measures that had devalued their currencies, he said.
"Our productive sector has been the first casualty and, along with it, any chance of securing our long-term prosperity.
"The UK, USA, Japan and the European Union have deserted traditional monetary policy tools in favour of successive rounds of quantitative easing."
New Zealand could no longer afford to be a pacifist in a currency war, Dr Norman said.
Craigs Investment Partners broker Peter McIntyre said it was true that the US and UK had been printing money to buy financial assets to stabilise their financial systems and to keep interest rates low.
However, they were left with few options with their interest rates already at record lows.
For New Zealand to introduce QE, it would have to buy government bonds and the easing would achieve very little in the long term.
"Putting money into the system would create a 'sugar rush' but it would quickly wear off.
"When would they stop buying?"
Having a high dollar was not a necessarily bad thing. It stabilised inflation, kept import costs low - important when it came to things like oil and gas prices - and kept the financial system stable, Mr McIntyre said.
On the other side, printing money was an inflation risk that would eventually eat into the savings of New Zealanders, cause higher mortgage prices and higher costs.
"You can't have it both ways.
"While the $US40 billion a month being pushed into the US economy by the Fed seems a lot of money, the US had a $US15 trillion economy compared to New Zealand's $NZ202 billion one," he said.
QE was introduced in the US as unemployment soared above 10% and the country was caught up in a mortgage default crisis.
"The US has the world's biggest economy. It is important to have it stabilised. Our economy is not at that stage."
Mr McIntyre said no-one appeared to have thought of what happened to the extra money flooding around the system from governments buying up bonds when the financial crisis eased.
Governments could either sell the bonds back into the market or hold them until maturity and take a loss, he said.
Prime Minister John Key was dismissive of Dr Norman's suggestion.
"If printing money made you rich, Zimbabwe would be the richest country on the planet, and it's not," he told TVNZ's Breakfast.
Increasing money supply would increase inflation, which meant interest rates, mortgage rates and business costs would go up.
"It means the cost of everything you buy would go up. It means the price of petrol and the likes would go up. So yes, it might bring your currency down, it might be a by-product of that, but at quite a cost to the rest of the consumers."
It might work in a place like Spain, but New Zealand did not have a crisis, Mr Key said.
"They could create a crisis for us, but we don't currently have one."
What is quantitative easing?
Usually, central banks try to raise the amount of lending and activity in the economy indirectly by cutting interest rates.
Lower interest rates encourage people to spend, not save. But when interest rates can go no lower, a central bank's only option is to pump money into the economy directly. That is quantitative easing (QE).
The central bank does this buy buying assets - usually government bonds - using money it has simply created out of thin air.
The institutions selling those bonds - either commercial banks or other financial businesses - will then have "new money" in their accounts, which then boosts the money supply.
The increased demand for the government bonds pushed up their value, making them more expensive to buy. They become a less attractive investment. That means that companies who sold the bonds might use the proceeds to invest in other companies or lend to individuals, rather than buying more of the bonds.
The hope is that with banks, pension funds and financial firms now more enthusiastic about lending to companies and individuals, the interest rates they charge fall and more money is spent and the economy is boosted.