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The Forum > Article Comments > Telling the RBA like it is > Comments

Telling the RBA like it is : Comments

By David Collyer, published 6/9/2012

Property is bubbling towards a bust.

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That's better, Arjay. Stick to real-world issues.

>>The banking system is also being irresponsible in giving enormous loans to young people with little or no deposit.This policy continues to over-inflate house prices and put these people in unnecessary debt.<<

I suspect the Banks are less irresponsible today than they were, say, five years ago, but yes, you are absolutely correct to say that irresponsible lending has been occurring. Some of the stories that are emerging from the "no-docs, lo-docs" scene are entirely reprehensible. Nevertheless, they are still only a small fraction of the market, so are unlikely to unduly destabilize the system.

>>The other issues are one of Govt policy who restrict the supply of land to maximise their taxes.Also the taxes/charges on developers restrict the supply of dwellings<<

I'm not entirely sure how you work out that this is a good way for a government to maximize its tax base. Surely, the more land they release, the more dwellings, the greater their revenue catchment area. Same goes for the various taxes on the development itself - surely this is also counterproductive, tax-wise? But it is nevertheless a problem, as you quite rightly say.

>>The RBA can and should create at least 3% of our new money to equal inflation + growth.The private banks can create another 3% via fractional reserve banking.Why borrow from foreign private banks who just create it from nothing anyway?<<

Oh dear, you spoilt the new image, by venturing into territory that is outside your field of understanding. Leaving aside for a moment your mantra about creating "new money to equal inflation + growth", which I thought we had agreed is a nonsense proposition... what is your problem with borrowing from foreign private Banks?

If they are, as you put it, "creating it from nothing anyway", wouldn't that be their problem, not ours?
Posted by Pericles, Wednesday, 12 September 2012 11:11:38 AM
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