LesPaul, yes we are in a commodity boom. Commodity prices are high. China is consuming epic piles of our commodities because the chinese are building lots of stuff. It is not a false impression.
The only real means the RBA has of decreasing inflation is to contract the monetary base. It does this by selling its assets (normally government bonds) onto the market, in exchange for AUD. This reduces the amount of reserves banks have, which causes them to contract their credit, and increases the inter-bank interest rate. The RBA targets this interest rate. Regardless of overseas capital flows, the RBA lowering the interest rate (by selling fresh AUD onto the market) can only cause inflation.
Also, our economy is already 'ticking property'. And commodity prices are not 'being hiked'. The RBA can only control the stock of AUD, not the supply and demand for commodities.
