now poor Glenn Stevens has another variable thrown into the mix that is our economy.
Now it's out, no one disputes the the mining boom is over. Glenn still hangs onto a little bit of nostalgia. Remember it was on 'his' watch the the Australian terms of trade were at their highest in 140 years. Good job Glenn!!
Now you've got to earn your money.
The last several days have seen the AUD dropping as the realization that we are the tail end (or bottom) of China's economic movement has been driven home to markets.
No longer the safe haven of a week before our economy looks perilous, fragile and very very venerable to global forces.
Of course if the AUD starts dropping the reverse affects of a high AUD come into the mix.
Our fragile economy, having been kiboshed, looks to be heading for a hard landing and a weak dollar equals high unemployment, government deficits, and a general lower standard of living. Money heads out the door and our interest rates rise which brings me to Glenn's dilemma.
Should interest rates rise?
To protect our economy, raise rates that keep money flowing into the country but weakening our economy at the same time.
Nasty choice. That's why Glenn's paid the big bucks.
