"The RBA goes all in as the global trend towards deflation intensifies. "
Menta, not so fast. Evidence shows that we have been living through an extended period of deflation for products more likely to be consumed by the wealthier eg computers, tv's, cars and inflation with respect to goods and particularly services which absorb a greater relative amount of average people's disposable income. How co-incidental and convenient.
This is the product of a captured system which seeks to limit the gains of a less abundant capitalism to an inner circle. IMO, this has been the game all along. Cormann acknowledged that lower wages were an integral part of the government's economic strategy. It generates inequality over time which, if your goal is a subservient workforce, works a treat.
Now the game amps up. The RBA moves aggressively on QE, strip mining savings accounts and ensuring that the financial rentseekers are placed at the front of the queue. The resulting Cantillon Effect will enrich those who get the money first ie. the banks then large investors then smaller. At which point asset price levels have adjusted upwards for the man in the street. He who is closest in line to the QE makes the greatest profits while the rest of us will be paying the newly inflated asset prices which result.
Its a dream world for the monied rentseeker sidling up to the government teat. Super gains from asset inflation, price deflation of the goods they consume, negative real interest rates, and an ostensibly low CPI which hold wages on the canvas. Once again, how co-incidental and convenient.
The inequality this will generate can hardly be seen as an unintentional outcome with the RBA stuck in a box with little alternative given an ideological government's bloody-minded fiscal approach.
