example of damage which rba can cause, page-25

Excess demand comes from an intertemporal mismatch between demand and supply. Interest rates are precisely the necessary tool to help balance this mismatch. I am glad our RBA realises this unlike the past actions of the FED.

Those who argue that rates don't dampen food and oil inflation are wrong. Take a look at our exchage rate. Compared to the $US, the prices which we are measuring these things, our currency has risen significantly. Our higher rates have help this rise and have dampened the oil price rise.