what nonsense, the driver of the hot economic is not domestic consumption but the external shock from the resources boom. it is leading to a strongly appreciating dollar that in bringing in the carry trade, we are seeing asset inflation and inflationary pressures from skills shortages driving up wages. reducing fiscal expenditure will only exascerbate the two speed economy. we need to embrace institutional monetary stabilisation policy rather than using instrument monetary stabilisation policies.

But alas the scientologists of economics are in control if only we could out them

From what I have seen, I doubt that anybody understands the issues, We haven't got a politician who understands anything, their intelligence is deplorable. The Bank interest rates stem mainly today from the grab for higher obscene salaries. The proper way to ensure the ceasing of this grab, is to get a treasurer who is not an idiot, one with the required intelligence and integrity - We haven't had one for 45 years. Harold Holt had the right attitude, he put a 66.6% tax on obscene incomes, on what would have been about $450,000 today. The only thing he had missing, was a higher tax free level of about $30,000 today, for wage earners and keep the take down to the 30% of GDP needed. With that tax, our economy would have a great revival and so would the living conditions of our workers, small business and pensioners and retirees. Unfortunately we have to have politicians with intelligence and integrity, but what we have got, are only interested in increasing their salary, retiring benefits and perks, with trying to hold a high spot in the peoples memory.

Fiscal and monetary policy are complicated stuff...

As for interest rates...makes good sense. Thanks, Saul.

Makes you wonder why the banks would increase their lending rates so much - it is bad PR for them. You would think that with the current political situation that the banks would try to not make themselves such a big target. Concern about ATM and account fees has been brewing for a long time already.

Unless the banks have something up their sleeves...

http://currentglobalperceptions.blogpost.com/

Saul Eastlake has lost my support too.He is all about the big end of town who have raped our economies and now want to do it again. http://secretofoz.com/

Lets put it another way Arjay. Saul actually understands the
big end of town, how it functions and why. He also understands
the fundamentals of banking.

That is quite different to the small end of town, where many
simply can't grasp the fundamentals. So we have conspiracy theories,
rumour, emotional rhetoric and other claptrap, as people try to
get rid of their frustrations, so grasp at mythical straws.

Ah well, at least it makes them feel better, so it does serve some
purpose

Yabby,what you and Saul don't realise is that too many parasites kill the host.They cannot suck blood from a corpse for very long.