No doubt RBA to lift rates, economists say
Friday 6 May 2011
The central bank has made it clear a rate rise is expected in the second half of 2011 after lifting its inflation forecasts for the next two years, economists say;
http://au.finance.yahoo.com/news/No-doubt-RBA-lift-rates-aap-1999406499.html?x=0
Central bankers and economists have no idea because they do not understand what determines the price of money. The RBA were forced into yet another embarrassing back-flip because they do not set the market for interest rates - they merely follow the market (bond yield rates).
Expect the RBA to slash & burn the OCR throughout 2012 and beyond as they chase the market down (following the deflationary trend set by the US, Japan & Europe - all the way down to 0%). And having further to cut than other countries merely means that we have further to fall (in particular house prices).
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Dr. Hartley Atkinson, MD
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