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The Forum > Article Comments > Reserve to move on interest rates ... but danger looms > Comments

Reserve to move on interest rates ... but danger looms : Comments

By Henry Thornton, published 2/2/2010

The reality facing the Reserve Bank is that inflation is too high for comfort as economic recovery gathers strength.

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I had hoped that the author is correct and interest rates would approach realistic levels this year...but no increase.
It looks like the banks are going to screw the economy for every last cent and then fail in spectacular fashion, leading to more taxpayer funded industrial welfare.
Remember the individuals involved have suffered no consequences and still enjoy the profit skimming advantages they always have. There has been no de-leveraging, and Mortgage funds are trading whilst insolvent (Many $M in frozen funds. Inability to pay due debts=insolvency).
Bank's profits are entirely illusionary: they create no wealth! Yet the salaries are completely, obscenely, *way* too high. Incomes like these are usually reserved for criminals, and in most cases this is close to reality for company execs and the board member boys club.
There is no longer any talk of "free market" ideology when it comes to bank regulation; this is reserved for genuine welfare recipients.
We need to re-organise the economy to encourage wealth production (R&D, manufacturing, efficient services) and discourage bean-counting, middlemen and general profiteering. It would help if we stopped wasting billions on "the war on drugs" and made church businesses pay tax like everyone else (all charities would still be tax free, just stop the profits going to corrupting (...sorry "lobbying") government.
The real future though will be with value-added high tech industries and an efficient system for the basics: housing, water, food, medicine, education, travel, clothing. Banking should stay in the background as basic infrastructure: simple, cheap and safe.
Posted by Ozandy, Wednesday, 3 February 2010 12:27:00 PM
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