What to do now long term mortgage rates are rising

[Bob Kane]

I'm surprised that Badger & Co haven't leapt into action by now and given us the answer.
Apparently the 'bankers' just click their fingers and the money appears out of fresh air.
These 'bankers' (there's five of them) live beneath the Swiss Alps but sometimes live in New York.
They've been controlling the world's financial system for the last 500 years but don't feel too threatened by them, our Badger has got their measure and he's not playing their game any more.

[outspoken]

I can understand how printing more NZDs will cause inflation, but what is the mechanism? For example, if the Reserve Bank decides to print a further billion dollars of NZ currency, how does it get this new money out of the vault and into the economy?

In very simple layman's terms, the central bank creates new money out of thin air. It then uses this money to buy what is essentially an IOU, usually from the government. This money is credited to the bank account of the seller of the IOU. The bank can then use this money as a basis for creating more new money by increased lending.

so, greenfish, to answer your question: it gets lent out, has to be paid back + interest, or defaulted on.

[Badger]

I can understand how printing more NZDs will cause inflation, but what is the mechanism? For example, if the Reserve Bank decides to print a further billion dollars of NZ currency, how does it get this new money out of the vault and into the economy?

Outspoken is correct, and then your into bonds and treasuries area. NZ has Uradashi and Kauri bond issuances...

Banks can also pyramid new or more thin air money on top of individuals savings so $10,000 turns magically into $90,000 which is then loaned out + interest.

Heres the good bit, With out *growth* theres no way to pay off the new money created from nothing + the interest...

This is why central banks often mention they keep inflation around 3% target.Thats a 3% increase yoy. This is the stealth tax part of inflation.
Connecting the dots - this is why politicians and economists always blab on about more growth, to keep the game going...

[outspoken]

But when no-one wants to borrow it because they are already up to their eyeballs in debt or the banks just wont lend it out on favourable enough terms or you dont meet their criteria, then, they just give it out. Like Rudds $1000 cash payments in Aus, or free home grants, or helicopter bens idea of flying around with money spilling from the craft. lol, what a joke.
Problem is though, this free money still has to be paid back + interest. This comes down the track in increased taxes, utility bills, increased stealth taxes.