Interest rates are too low already so the rate cut is a waste of...

Interest rates are too low already so the rate cut is a waste of time as far as stimulating the moribund economy on the eastern seaboard and SA.

What we need is capital controls to stop the inflow of spec money into our bonds and property etc so that our exchange rate can fall to a level that is sustainable with economic activity outside of the still booming minerals sector.

The Swiss and Brazil introduced currency controls because hot money was flooding in because they were perceived as safehavens and this was ruining their export competitiveness and import competing industries.

All we are doing by cutting interest rates to such low levels is introducing more economic distortions and punishing savers.

The Ozzi consumer needs to reduce their borrowings just like the US consumer has been doing (or rather been forced into doing by defaulting on their loans).

I guess we will continue doing dumb things so long as we keep dumb governments in place.

loki (also feeling a bit dumb today).