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John Key and the things he does not want you to know:

Part 1, the attack on the NZ dollar in 1987

by travellerev
August 2008
It seems more and more people find their way to this post. If you think this post merits attention please give the link to anyone you know with a computer or alternatively print it out and share it with family, friends and colleagues. if you care to repint it out please make sure you print out the sources too to make sure people will take it seriously. Sources are the NZ Federal Reserve, the Authorised Unauthorised Biography of John Key in the NZ Herald, the Sunday Star Times, and the online New York Times Archives.  The links in this article and the update will guide you to the relevant web pages. Thank you.

"Oh what a tangled web we weave, When first we practice to deceive."
Sir Walter Scott

(More proof of the 1988 Andrew Krieger timeline and the discrepancies with John Key’s timeline)

I took me a while but I finally had the time to read through the 15 page unauthorised Biography of John Key published in the New Zealand Herald of 19 July.  It made for very interesting reading indeed.

As was to be predicted the editorial painted a picture of John Key as a squeaky clean, hard-working and driven man with a big heart. We are told that he is a good family man and was a good son to his mother whom he called everyday while working abroad. He miraculously avoided to be involved in the NZ dollar attack in 1987 by Andrew Krieger although he worked with him. He did not muck up during the Asian crisis whatever that may mean and was appalled at the level of risk Merrill Lynch, his former boss had taken on with Financial products now causing the subprime crisis. Lucky for him he again escaped involvement because those financial product were only developed in 2004-2005. He has worked in London, Australia and Singapore and again he has avoided another not so nice association; the sewer that is Wall street, New York from whence all the bad news about the subprime crisis seems to originate.

We, so we are told, have nothing to fear from this honest hard working man who, after becoming financially independent through his own hard slog, came home to fulfil his childhood dream: To lead this country to the greatness he feels it deserves.

That’s nice, I feel a whole lot better now… but wait I have this strange nagging feeling that just won’t go away. Something isn’t quite right. It sits uncomfortable in the back of my head as I try to get my thoughts straight. I decide to go back to earlier interviews and reread them to see if I can get a handle on that uncomfortable nagging.


In the autumn of 1987 Andrew Krieger, the Global head of the Foreign Exchange of the Bankers Trust New York launched a brutal and spectacular attack on the New Zealand dollar. He thought that the dollar was overvalued and bet that the dollar would fall. In order to force the dollar down he started to sell NZ dollars in such huge amounts that the dollar indeed fell in the order of 5% to 10% depending on whose version you believe. He bet such a huge amount of money on the fall of the NZ $ (again depending on who you believe anywhere between $ 600 million to $ 1 billion) and as such he became a legend in the financing world.

The attack was so spectacular that the Federal Reserve had to contact the Bankers Trust to inquire why the bank seemed so hell-bent on creating instability  in the currency. The risks were huge to the NZ economy and could easily have caused a massive economic setback and distress for the NZ population.

So it is not hard to understand that John Key who after all has come back to do “good” for New Zealanders is more than eager to distance himself from this episode of Foreign exchange history. It would not come across as very nice if it turned out he was involved in the predatorial attack on the NZ dollar that could have cost a lot of his prospective voters their livelihoods.

In the NZH editorial for the first time we learn the year in which John Key went to work for the Bankers trust. In fact it is mentioned two times. The NZH article states that John Key went to work for the Bankers Trust in 1988 and Andrew Krieger made his attack in the autumn of 1987. In fact the article goes as far as saying that:

As the record book shows, when Krieger made his most famous speculative raid on the kiwi in 1987, Key had yet to start at Bankers Trust. Krieger believed the kiwi was over-valued and bet on a fall, selling hundreds of millions of dollars at a time, and once pushing the price of the kiwi down 5 per cent in a day, and eventually, he claims in his book, The Money Bazaar, helped begin a fall in the value of the New Zealand dollar. The strategy was to rebuy when the kiwi bottomed out at 59c.
The Reserve Bank was alarmed but the crisis passed. Key was not at BT during Krieger’s spectacular raid, but when he began running the dealing room at BT in 1988 he dealt with the New York-based American, a relationship he was comfortable with. He told the Sunday Star Times earlier this year, that Krieger “was a very intelligent guy.”
Key’s then-boss, Gavin Walker, points out that working with Krieger was part of the job. “Managing that relationship on behalf of the dealing room was part of John’s responsibilities. He knew everything Krieger was executing on our desk.”

So that’s settled then, John Key did not work for the Bankers Trust when Andrew Krieger attacked the currency.

... See, this is where the nagging started again and I went back through my notes on John Key’s career. This is what I found:
Andrew Krieger left the Bankers trust of New York in February of 1988.

I remembered Googling Andrew Krieger when I started my research on John Key (I have done research on Labour as well, I like to know who makes the big desicions in the country I’m living in) and up turned an interesting article in the New York Times about Andrew Krieger and his currency manipulations. It turns out that Andrew Krieger left the Bankers trust to work for George Soros after he only got paid a paltry $ 3 mill. as a reward for the fact that he made some $ 300 mill. in profits as a result of his attack on the NZ $.

The NZH goes on to say:
In 1988, Key was on the verge of leaving Elders, unshackling himself from a three-year contract after agreeing to three months’ “gardening leave” before taking up his new job at Bankers Trust, newly established in New Zealand.

This means that in order for him to be able to start working for the Bankers trust John Key had to wait three months before starting in order for Elders to keep their customers and prevent customer poaching ["Restraint of Trade" clause in Key's employment contract, as is usual in this type of industry. Bron].  If this is so then there is a problem.

If Andrew Krieger left the Bankers Trust in February 1988 and John Key had to wait three months before starting to work for the Bankers trust then, even if those three months started on the 1 of January 1988, he would not have been able to work with Andrew Krieger as a customer because Andrew Krieger was no longer working for the Bankers Trust. In fact he would have missed Andrew Krieger by four to seven weeks.

In fact Andrew Krieger went to work for George Soros in a senior management position from April until June 1988 and left the currency trading altogether until he made a return in the year 1990.

In an interview with John Key in the Sunday star
He formed what was to be a lucrative relationship with 32-year-old currency trader Andy Krieger, based at Bankers Trust in New York, who began putting hundreds of millions of dollars of business through Key’s dealing room.

The same article states that Andrew Krieger was working for the Bankers Trust while doing business with John Key:
While Key can’t remember whether he actually executed some of the sells for Krieger’s 1987 speculative play on the kiwi [NZ$], the timing suggests he did not. But Krieger continued his high-rolling punts on the Kiwi dollar after his big win, often placing $50m buy or sell orders with Key and his dealing room. The huge flow of business from Krieger and others at Bankers Trust in New York soon turned the local branch into the number one dealing room in New Zealand, cementing Key’s success and fattening his bonus packets.

While this could be a one-off mistake made by the journalists who wrote the article, the quotes leaves no doubt that John Key was taking big orders from Andrew Krieger:
Key remembers getting a call from Krieger soon after he started at Bankers Trust. The New York trader’s first question was about New Zealand’s GDP and money supply.

“It was really the management of that relationship on behalf of the dealing room that John had responsibility for,” says Gavin Walker, former chief executive of Bankers Trust in New Zealand. “He knew everything that was going on in terms of the orders that Krieger was executing on our desk.”

This leaves me with several questions:
  • If Andrew Krieger had already done the dastardly raid on our currency then why does he call a total new comer in the bank about the state of the our currency?
  • If John Key arrives at the Bankers Trust some time after Andrew Krieger has left than why does the article describe John Key as taking big orders from Andrew Krieger and others from the Bankers trust?
  • And if John Key arrived after Andrew Krieger left the Bankers Trust then why is Gavin Walker the former chief executive of Bankers Trust NZ quoted as saying:  “It was really the management of that relationship on behalf of the dealing room that John had responsibility for.” ?

It can be debated that the journalists Gillian Tett and Ruth Laugesen were confused about a timeline but it becomes harder to believe that both John Key and Gavin Walker would be mistaken about telephone calls or John Key’s function in the dealing room. If John Key remembers receiving a telephone call from Krieger wanting information about the currency it is very likely this has happened and if Walker says that the management of the relation with Krieger was John Keys job than it most likely was.

Now this is where the NZH article can bring some form of verification. Surely the three experienced journalists, Eugene BinghamCarroll du Chateau and Paula Oliver who were tasked with writing and researching the article would have checked, checked and double checked the timeline they so proudly presented on the website of the NZH.

But again they reiterate the same confused timeline: John Key arrived sometime in 1988 and began a trading relationship with Andrew Krieger the New York based trader. Again Gavin Walker is quoted as saying that it was John Key’s job to deal with Krieger, who by then was long gone from the Bankers trust...

Andrew Krieger started his own consultancy business for several years and according to the man himself he left Soros very quickly because he felt he was in a rut doing the same crazy hours and he felt like spending more time with his family, so the old fire wasn’t burning any more.  And yet we are told in two seperate interviews that managing the huge amounts of money Krieger, at the Bankers Trust was selling and buying [ibid] was John Key’s main job at the Bankers Trust NZ.

My conclusion has to be as follows:

John Key and Krieger have clearly worked together as money traders.

This is confirmed in two interviews.

The NZH would have the least reason to maintain these ties since it still puts Andrew Krieger and John Key together as currency traders, while the focus of this part of the article was to allow John Key to distance himself from the biggest attack on the NZ dollar in the history of New Zealand.

It is confirmed by John Key himself and by his then boss Gavin Walker. Since Andrew Krieger according to the New York Times left in February of 1988 and according to Andrew Krieger he even left earlier, then it is impossible for John Key and Andrew Krieger to have done the alleged dealing in 1988.

John Key according to himself left Elders in 1988 and he had to wait three months before he could begin at the Bankers Trust making trading with Andrew Krieger as a Bankers Trust banker impossible.

Andrew Krieger left the currency trading market in June 1988 after a three month stint as a senior portfolio manager for Soros, in all probablity not dealing himself but managing his junior portfolio managers.

We don’t know when exactly John Key started to work for the Bankers Trust but even if the three month period started on the 1st of January 1988 he would still have missed Andrew Krieger at the Bankers Trust and the relationship as both John Key and Gavin Walker describe it would not have been possible.

Since both men adamantly describe such a relationship in two different articles, one written by two journalists and the other by three journalist who should have been able between the lot of them spot the error in the timeline, I can only draw one conclusion:
  • John Key worked with Andrew Krieger and indeed managed his account but he did not do so in 1988. 

Whether by design, omission or a faulty memory John Key and Gavin Walker gave correct information when talking about John Key and Andrew Krieger’s relationship but since 1988 was impossible, they must have given incorrect information about the period in which this took place.

John Key and Andrew Krieger can only have worked together in 1987 thus putting John Key firmly in the traders chair on the other side of the telephone line to the Bankers Trust New York where Andrew Krieger was giving orders in what was to be the biggest attack on the New Zealand currency putting tens of thousands of New Zealand jobs and incomes at risk.


Last updated 01:34 03/02/2008
John Selkirk, Dominion Post

He used to work hand in glove with the foreign bankers who led raids on the New Zealand dollar. Now John Key a man who has spent most of his career out of the public gaze wants to run the economy.

In a special report, London's Financial Times and the NZ Sunday Star-Times shed new light on Key's former life as a London currency trader.

John Key wants to be running New Zealand by the end of the year because, like all other politicians, "I believe the future of our country can be really great."

But 20 years ago, he worked closely with a famed currency trader who mounted a brutal speculative attack on the Kiwi dollar. The attack, which has entered forex (foreign exchange) trading legend for its scale, audacity and profitability, prompted the Reserve Bank alarm that the currency would collapse...


Key's relentless climb to the top has been well documented. He started his career in forex in 1985 with Elders Merchant Finance in Wellington. It was the year the New Zealand dollar was floated, putting him in at the ground floor for profits from what became one of the world's hottest currencies for speculators.

These were heady times, and the "kiwi" was a new, small and untested currency, vulnerable to the vast washes of capital circling the globe. The Reserve Bank was unsure how much volatility the kiwi could withstand.

Key proved a successful "price maker", setting Elders' price for the kiwi from moment to moment, and attracting large flows of orders to buy and sell. He was headhunted by Bankers Trust to head their 30-strong dealing room in Auckland in 1988. Sources say Key was soon earning $1m each year in salary and bonuses, more than 30 times the average wage at the time.

He formed what was to be a lucrative relationship with 32-year-old currency trader Andy Krieger, based at Bankers Trust in New York, who began putting hundreds of millions of dollars of business through Key's dealing room.

Krieger was the man who a few months earlier had entered forex legend with a massive speculative raid on the kiwi. As Krieger later explained in his book The Money Bazaar, he believed the kiwi was overvalued, and began betting on a fall, selling the New Zealand dollar heavily. Once the currency had found what he believed to be a floor, he bought again at a much lower price, making a profit on the transaction.

This is standard stuff, but Krieger staked so much on the bet, it was said to be more than the entire money supply of New Zealand. And the size of his sell orders, hundreds of millions of dollars at a time, allied with the relative scarcity of New Zealand currency in circulation, meant he was able to push the kiwi down.

The "play" sent the kiwi plunging 5% in a single day. Krieger claims he helped trigger a fall in the New Zealand dollar against the US currency from 66c to 59c, before getting out with his profits. In a 2004 article The Economist listed Krieger's speculative attack as one of the best financial trades in history.

Krieger's outrageous bet made hundreds of millions of dollars for Bankers Trust, but in New Zealand, Reserve Bank officials were alarmed by the yo-yoing of the dollar.

"The bank was concerned whether the relatively fledgling foreign exchange market might be damaged with negative consequences for the economy," a former senior Reserve Bank official told the Sunday Star-Times.

"It appeared to us there was a person taking positions in the New Zealand dollar, probably with a view to collapsing the currency at some point, or at least making it drop sharply," he said.

What happened next is the stuff of forex lore. Traders around the world still delight in retelling the story of the trader who frightened a government of a New Zealand politician ringing Krieger's bosses in New York to yell, "get the f--- off our currency, you little f---er!" This is seen as the worst thing a government could have done. A government must never show fear it only convinces traders they are on to a sure bet.

A phone call was made, but it may not have been quite as colourful as the legend. The finance minister of the day, Sir Roger Douglas, says he never made a call. But the Reserve Bank official clearly remembers staff taking the unusual step of ringing New York, asking why Bankers Trust "seemed hellbent on creating instability in New Zealand by the activities of this dealer".

So what does Key think of the swaggering trader seen by the Reserve Bank as a threat to the national interest? Asked if he admired Krieger at the time, Key says, "yes, I think at the time, yes, he was a very intelligent guy.

"He was a pioneer, in the sense he was one of the few people in the world who understood the options market before it was really established. He blazed a trail and that gave him a strategic advantage early on."

Key says he does not believe a moral issue arises for the traders who make these speculative attacks on currencies, or for the dealing rooms that carry out their orders. "I don't really see it as a judgemental business. You're simply executing orders for people.

For full article please go to:


This episode of current affairs show Close Up offers a fascinating portrait of 80s job du jour: foreign exchange dealer. The intrepid reporter heads into "the pit" (trading room) and chronicles the working life of a senior 'forex' dealer, 25-year-old squash-playing accountancy graduate, John Key. The "smiling assassin" (and future Prime Minister) is a now-familiar calm and earnest presence amongst the young cowboys playing for fortunes and Porsches in the heady pre-sharemarket crash world: "they're like addicts who eat, breathe and sleep foreign exchange dealing".
Here we go.... into the 'snake pit'  : (


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