You know it's bunkum
- because we told you -
Editor in Chief and syndicating columnist
F Stop Fitzgerald
RBA EXPOSED AGAIN AND AGAIN
July 6th 2008
The inflation remedy we had to have a few months ago has been tossed out the window.
in July I told you the Reserve Bank was nuts putting up interest rates when Australian's were already suffering from the pain of high petrol prices. I said then that the RBA was one of the key forces driving inflation because the high interest rates were contributing to increases in housing prices and rents.
Inflation is as high as it was then - maybe higher, if I could just find that figure; hang on a minute will you while I shuffle my papers; just carry on amongst yourselves for a while will you, it's here somewhere ...
The Reserve Bank has not been bought to account for first the strength of the Australian dollar and now it's current weakness. Mug punters were mightily aggrieved to find out that people overseas were borrowing money for a couple of percent in Japan and America and depositing it in Australian banks for 8%. Money for nothing and cheques for free.
In the meantime the banks gave it out willy nilly to fund the purchase of homes and plasma screens
The cracks are appearing in the Governments economic strategy.
Kindergarten Kev and his sidekick have rushed in and blown half the budget surplus that a few months ago was so precious; not delivered yet, mind you, you'll have to wait until December. And where will it go. Down the slot, up against the wall and into the Christmas stocking.
The money designed to be invested has been blown away by a panicky government.
This government has got panic written all over it, coupled with inexperience.
But they're not the only ones to blame. Successive governments have failed to put together a strong economic management team involving the big players. When questioned about the RBA's role in the meltdown panic, the Prime Minister's response was very muted.
The worst thing Costello ever did was pass off the role of interest rate management to the Reserve Bank.
In the meantime the rest of us are going to have to work a few more years and wait until the share market comes back.
PS Just wait a couple of weeks until people start spending the extra money that's in their pay packets courtesy the Rod Laver Government. It won't take long for it all to end up in the black hole outside 65 Martin Place.