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Justis

63,615 Posts.

731

02/09/24

11:10

Post #: 75484912
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Originally posted by kingpins: ↑

Hi Mr Fish
The problem as I see it is that they are between a rock and a hard place

They need to take the political aspect out of the discussion and base their discussion on purely economic grounds

Interest rates are a blunt tool and have been used by politicians to "fix everything" when in fact apart from the emotive reaction of the public they do very little for a number of years ( Treasury's own research)

I think Keating was the first to see rates as a quick fix tool

To use rates to fix inflation the rates have to be higher than inflation and we need to have a true rate to start the calculation on that as the current rate the polies like to spread, as it is far far higher then the publised rate due to the constant adjustment of taking the "bad" figures out of the calculations

As a paper napkin test I believe my weekly costs have gone up about 300% to 400% on what they were about 5 to 6 years ago

So if inflation was put at say 15% to 18% the interest rates should be 20% and no politician would allow that to happen so the rates are adjusted to political standards not economic ones

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FYI the RBA is independent of government and their main role is to control inflation using monetary policy. While government has emergency powers to over rule decisions the RBA make they have never used those powers

Keating was critical of the RBA back in the day for not raising interest rates quick enough, RBA eventually did but it was their decision
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