Runaway train for a currency.
It's my belief that we are looking at a runaway train for the NZD. Until one of three things happens I do not see this slowing down. Ranging in order of probability this would include a) Japan raises its interest rates in a marked effort to slow their monetary growth. b) The US dollar breaks below .80 on the USDX and there is a massive repatriation of USD from foreign private bond holders. or c) New Zealand defaults on its obligations.

I don't really see Japan raising its rates though. They are the USD patsy and trying to absorb insane levels of monetisation being operated by the US Fed. Nor do I see NZ defaulting. Not with their new best friend, Exxon, moving into town. I am wondering if and when the US Military will start making plans to expand their Antarctic facilities and ask to locate additional "support" materiel and personnel in ChCh or Dunedin.

I think it is possible that we will see the interest rates (OCR) in New Zealand go up which will result in a greater surge in the NZD/USD by way of the Yen. The NZD/JPY chart shows some modest technical weakness in the MACD over the past three weeks, but I think we are seeing an new surge on the rumor that the OCR may rise. If it does not rise then things will get interesting. If Bollard wanted to be extra-special he would take a "do nothing" approach and leave rates unchanged.

On the other hand it could be that a lowering of the OCR will re-ignite the housing market as a by product of needing to sluice all that extra money into the private sector through home loans and the magic of fractional-reserve banking and the foolish belief that "safe as houses" has any real meaning when the bank is holding title to the property.

This is an exciting time.