market down 7pc since rudd got in, page-22

So the inflation inflation finally arrived on the front pages. The only question remains why it took so long to be recognised.

The Blind Fredy could see that after invasion of Iraq and failiure of US to secure Iraqi oil supplies it was only matter of time.
The oil is blood of the World economy, if the oil supply gets reduced we will all get sick. As I watched the oil price climbing towards $100 and saw prices rising around me I could not believe that nobody would dare to speak the "I" word. Reserve Bank going on about headline and underlining inflation, governmet fidling CPI basket, blaming rising food prices on El Nino, pretending that nothing serious is hapenning. Reserve Bank lost the plot, failing to lead on interest rates this monts, leaving to banks to increase the morgage rate. So instead the being the trend seter the Reserve Bank is now follower. So much for being able to control the interest rates, they have abdicated their responsibility.

Rising commodity prices were not realy inflationary, given that main buyer was Asia, mainly China and even though they had to pay more for their inputs, the goods they sold to us were stil a lot cheaper than same goods manafactured localy or in Western economy your . Our fridges and washing machines were geting cheaper, helping the government to pretend that the inflation is under control.

Bigger import bill is not inflationary providing the imported good are cheaper than localy made. Current financial crisis might bite the importers if they use borrowed money to finance their purchases and eventualy increase somewhat the price of the imported goods. That remains to be seen, the Chinese may well lend us money at low rates, to keep us buying their goods, who knows. Australia has a good credit rating. And before anybody starts screaming that Asians are stealing our jobs, we suppose to have economy stretched and at full capacity, remember? I also think that there are to many security guards, wasting everybody's time, they should go and get a proper job.

My point is that the current economic problems were made in USA - war in Iraq and greedy US banks creating the subprime crisis. No wonder the previous government kept things under the wraps.
How ironic that the cradle of capitalism messed things up so badly and the communist China will have to come to the rescue.

Brian.

We may be lucky that