naivety or stupidity or both for the rba, page-5

Inflation and asset bubbles are not necessarily synonymous. However, I do agree there are no real signs of inflation and an asset bubble getting out of hand at this stage. We are still in the middle of a huge debt and credit implosion phase, which is placing a lid over any inflationary forces. The question is what happens when that lid is removed even slightly? Will the inflation genie escape and wreak havoc? Hard to say. I suspect the RBA is just being cautious, but true to their past performance they always get it wrong.