The RBA, politicised conmen with a gun to the head of the Australian economy

[HurleyHepsHird]

Guess what won't bring inflation down, interest rate hikes.

Guess what will slow the economic recovery and weaken wage growth and the bargaining power of organised labour? Political appointees, many with no background in monetary policy jacking up interest rates.

 

[tandino]

Ok.

How do you get inflation down?

 

[mill204]

There was to be a review of the Reserve Banks' handling of monetary policy. Haven't noticed where it's been set in motion so far.

 

[HurleyHepsHird]

Ok.

How do you get inflation down?

Not by increasing interest rates. Especially when the cause is international oil/commodities prices.

 

[Fyfe! The Musical]

I thought it was ridiculous when they said, as late as the beginning of this year from memory, that interest rates would remain low until 2024. And their wage growth projections have been laughable.

However I don't think the RBA have much choice once the US Federal Reserve starts hiking rates, otherwise money starts to leave Australian shores and the dollar devalues quickly.

Anyway I fixed 80% of my loan for four years in April last year, expecting exactly this kind of thing to happen.

 

[Theseventhhamster]

Ok.

How do you get inflation down?

You can certainly curtail inflation by causing a recession. You can also stop a car with a brick wall.

This inflation is being imported through a supply shock. The RBA have presided over a massive asset bubble and are now reaching into first year uni textbooks to get out of the other end. It's not controversial in economist circles to think they have been pretty ******* mediocre.

 

[QuietB]

Not by increasing interest rates. Especially when the cause is international oil/commodities prices.

The cause of inflation is printing cash and dishing it out to *******s. It is that simple. And the Reserve Bank are not responsible for that.

The only reason we ever had zero interest rates was because governments refused to use fiscal policy properly to stimulate the economy. Cause Regan bullshit.

So central banks reduced rates and all this did was sustain asset bubbles - mostly housing in Australia.

Then all of a sudden the pandemic happened, a whole bunch of dickhead conservative governments everywhere realised they can just print money and hand it out to their mates. This did nothing else but put all asset bubbles into hyperdrive. And completely unsurprisingly it ended in inflation.

If you print money - you get inflation.

It has SFA to do with oil and commodity prices.

It has everything to do with creating false wealth through printing cash and fuelling asset bubbles.

 

[tandino]

Not by increasing interest rates. Especially when the cause is international oil/commodities prices.

Then how?

 

[Fyfe! The Musical]

Huge chance of a Euro currency crisis before the end of the year, whatever the RBA does is immaterial in light of that.

 

[hamohawk1]

The cause of inflation is printing cash and dishing it out to *******s. It is that simple. And the Reserve Bank are not responsible for that.

The only reason we ever had zero interest rates was because governments refused to use fiscal policy properly to stimulate the economy. Cause Regan bullshit.

So central banks reduced rates and all this did was sustain asset bubbles - mostly housing in Australia.

Then all of a sudden the pandemic happened, a whole bunch of dickhead conservative governments everywhere realised they can just print money and hand it out to their mates. This did nothing else but put all asset bubbles into hyperdrive. And completely unsurprisingly it ended in inflation.

If you print money - you get inflation.

It has SFA to do with oil and commodity prices.

It has everything to do with creating false wealth through printing cash and fuelling asset bubbles.

See this doesn't get enough attention.

Even in Aus, the Government (not an attack on the libs - labor would've done similar) pumped 100's of billions into the economy during Covid for stimulus reasons and didn't even bat an eye lid about thinking what all that money in the system means.

Resource shortages haven't helped but the first point of call is trying to cool the economy. Likely that we will head into a recession, as will many other countries around the world.

 

[Lia]

A lot of inflation is being caused by global/external factors, for example oil.

Keeping interest rates low while other countries are raising rates would tank the Australian Dollar and it would just exacerbate this problem.

 

[Evolved1]

Guess what won't bring inflation down, interest rate hikes.

Guess what will slow the economic recovery and weaken wage growth and the bargaining power of organised labour? Political appointees, many with no background in monetary policy jacking up interest rates.

Are you pretending to be an economist now?

 

[Johnny Bananas]

Not by increasing interest rates. Especially when the cause is international oil/commodities prices.

What if I told you there were multiple causes of inflation, including asset price inflation over several years? The real problem with the RBA is that they kept rates so low for so long while letting house prices go through the roof on their watch.

Political appointees, many with no background in monetary policy jacking up interest rates.

Philip Lowe has worked at the RBA for 40 years. Michele Bullock has worked there for 35 years. Luci Ellis and Christopher Kent have worked there for 30 years. That's a majority of the executive. Who specifically are you calling a political appointee and what's your evidence for the claim?

 

[HurleyHepsHird]

What if I told you there were multiple causes of inflation, including asset price inflation over several years? The real problem with the RBA is that they kept rates so low for so long while letting house prices go through the roof on their watch.


Philip Lowe has worked at the RBA for 40 years. Michele Bullock has worked there for 35 years. Luci Ellis and Christopher Kent have worked there for 30 years. That's a majority of the executive. Who specifically are you calling a political appointee and what's your evidence for the claim?

Well it turns out I was 100% correct.

Commodities prices and corporate profiteering are the drivers of current inflation which cannot be controlled for using interest rate rises.

Rising corporate profits major factor in Australia’s escalating inflation, report finds

Wage growth is at record low levels, while the profit share is at a near-record share of GDP, according to analysis from the Australia Institute

www.theguardian.com

 

[Johnny Bananas]

Well it turns out I was 100% correct.

Commodities prices and corporate profiteering are the drivers of current inflation which cannot be controlled for using interest rate rises.

Rising corporate profits major factor in Australia’s escalating inflation, report finds

Wage growth is at record low levels, while the profit share is at a near-record share of GDP, according to analysis from the Australia Institute

www.theguardian.com

Lolwut? You didn't mention corporate profiteering at all. You said it was due to commodity prices, despite the article suggesting 60% of the inflation is due to corporate profiteering.

 

[HurleyHepsHird]

Slowing the economy and hurting the purchasing power of consumers via interest rate rises is a way to blunt wage increases at the bottom end Johnny Bananas , but it has no effect on international commodities markets.

Which makes the rate rises an open and transparent political project.

 

[HurleyHepsHird]

Lolwut? You didn't mention corporate profiteering at all. You said it was due to commodity prices, despite the article suggesting 60% of the inflation is due to corporate profiteering.

You dullard, read what has been the primary driver of corporate profiteering on the international market.

A spike in yields from increased commodities prices.

 

[Taylor]

Is it corporate profiteering when supply is constrained and demand is high?

The world cancelled orders in a flash two years ago and then piled the orders in, so those who pay more get it first.

Blaming companies for that is how politicians shift the focus from their spending and closing down economies

 

[Johnny Bananas]

You dullard, read what has been the primary driver of corporate profiteering on the international market.

A spike in yields from increased commodities prices.

Are you trying to claim profiteering is mostly practised by the commodities sector and not others? The economy is much bigger than just commodities producers.

 

[Brad Goodman]

Being so combative isn't especially endearing.

 

[Seeds]

Slowing the economy and hurting the purchasing power of consumers via interest rate rises is a way to blunt wage increases at the bottom end Johnny Bananas , but it has no effect on international commodities markets.

Which makes the rate rises an open and transparent political project.

Dude lefties want interest rate rises to kill the housing market. The housing market has gone through the roof because interest rates have fallen dramatically over 15 years.

the problem with those business leaders put on the rba board, rather than economists, is they kept rates too low to help the business sector and should of increased them much earlier. Thats what the review is about. Why did they keep them so low.

 

[Seeds]

Slowing the economy and hurting the purchasing power of consumers via interest rate rises is a way to blunt wage increases at the bottom end Johnny Bananas , but it has no effect on international commodities markets.

Which makes the rate rises an open and transparent political project.

Lol. Politicians always want interest rates lower. Not higher.

the reason we have independent central banks is because politicians could not be trusted to increase rates when they needed to.

And then they appointed business leaders to the board to lower interest rates from the inside.

Interest rates are too effing low.

 

[QuietB]

Lol. Politicians always want interest rates lower. Not higher.

the reason we have independent central banks is because politicians could not be trusted to increase rates when they needed to.

And then they appointed business leaders to the board to lower interest rates from the inside.

Interest rates are too effing low.

Australia has SFA control over their own interest rates.

 

[Seeds]

Australia has SFA control over their own interest rates.

Our macro economy is influenced by global factors like all countries. But we have influence over our interest rates within a band. We very easily could of had policy rates another 1-2% points higher. Would of given us a stronger dollar and less imported inflation if we did.

 

[Baltimore Jack]

It will be interesting to see what the proposed review of the RBA comes up with