Inflation goes out of control with lowering interest rates, increasing consumer spending, Governments running deficits and printing money, rampaging unions and imposing unnecessary additional costs on business.

Our Governments and Central Banks seem to be ignoring those past and now seemingly refuted 'facts', all in the name of prioritising and ensuring our welbeing..

What's the expected lag time between instituting these practises and their effects? My guess about 6 months.

Falling asset values, increasing interest rates (Business in the US is now 22%) locked in super and investment funds , relaxation of IR conditions, increasing Union powers and a drift towards socialist and green policies, with governments and central banks racing to inflict inflation ...
Oh I forgot inflation can also be bought under control by incresing unemployment.

And with the China 'tiger' economy in serious trouble it appears the supplies of cheap goods from China might also dry up.

I don't think I've missed anything ... have I?

...the world has gone mad ... finally

What silly free-trading and monetarist nonsense. No wonder on two counts the pseudonymous nature of the author/s. 1). So they are not held to their fantastical errors and deceptions later, and 2). So they can at least express their fawning toady identities towards the in-bred imperialist system they so obviously admire.

Citing Keynes, for example, as if that name-dropping automatically and justifiably adds some "prestige" to the piece. A degenerate snob on the record as a passionate advocate for eugenics and its genocidal lunacy - even after Auschwitz became known!

So "Henry" - tell us about the derivatives bubble i.e., its origins, purposes, size and effects. Something a bit more relevant when talking about inflation perhaps? Clown.

Mil

you already have been told the derivatives bubble originated with the abolishion of Glass-Steggall, introduction of the Community Reinvestment Act, the US Congress, sub-prime loans, Presidents Carter Clinton and Bush ... in that order and of course all overseen by the New York Regional Federal Reserve.

Haven't you got it yet?

No keith - you're into some fictitious history there. If you check, you'll find that Greenspan et al got the derivatives bubble pumping not so long after the '87 crash. Every crash since has been just a smaller bubble popping WITHIN the great monstrous one comprising the derivatives trade itself. Ask one of its faithful cultists like speculator and ex-SS toady George Soros - that is, ask him when he's not off on one of his opiate binges or working out which bit of imperialist mayhem to stir with his Fabian "internationalist" and anarcho-syndicalist mates.

So get your causality right, keith. The dot.com burst, tech wreck, sub-prime, investment bank implosions, bail-out avalanches, and the more general market meltdown now - these crashes, massive as they are in isolation, are all smaller bubbles within the massive derivatives scam of funny money/super debt that goes into the QUADRILLIONS. Therefore, even the free-trading monetarists themselves cannot distort or evade that obvious fiscal fact, even by their own slavishly dull money measures and typically fraudulent standards of rubbery accountancy and Enronian book-cooking.

I can't see the relevance of mil-observer's citing of George Soros accommodation with Nazi's in Hungary in 1944-5 and Keynes belief in eugenics as a reliable mechanism for analysing Reserve Bank deliberations on using interest rates as a mechanism for controlling inflation in Australia in 2008.
Only yesterday NAB economist Alan Oster was being asked if the Labor Government had got it wrong worrying about inflation in early 2008. Clearly Thornton and The Australian are still worried about the spectre of inflation when its obvious that the real economy of Australia has slowed and growth will be 1% at best in 2009.

Thornton is way out of step, as Crikey says today "While the Australian economy grew 0.1% in the September quarter, the non-farm data means we're already going backwards"

Billie,

You like every other commentator forgets we are still in the middle of a resources boom. Prices and volumes haven't changed recently.

Obviously the Reserve Bank got it seriously wrong with all those rate rises during the election and after. Of course Rudd and Swan were wrong to have talked up inflation earlier in the year and in 'egging on' the reserve to raise rates. Just as both have got it completely wrong with the cuts, the stimulii and state and Federal deficits.

Watch in about 6 to 12 months for that's how long it took for their stupid actions to stiffle the Australian economy. Btw that occurred well before the effects of the world recession, the following world credit crisis, the later Stock Market crashes and the Chinese Economic meltdown reached or are to reach us.

billie, you miss completely the point of my critique, which I directed against the irrelevancy of Thornton, the Reserve board, and now yourself too. So you claim that my allusions to Soros and Keynes are irrelevant, but I added them merely to emphasize how misguided and dangerous is the widespread adulation of such parasitic speculators. Malthusian eugenicists and their kin in fascist neo-Darwinians should already be deemed irrelevant in any properly democratic and human society; instead, such scum are lionized precisely because the ruling oligarchs are themselves so corrupt and perverse.

Given such degeneracy and stupidity among the supposed "leadership", how can we expect them to even properly acknowledge the real source of the disaster in the derivatives market, or to start with the proper, moral and logical corrective action i.e., writing that market's players off as bankrupt - which they are - instead of persisting with this bail-out and underwriting lunacy?

Another threat is the "reformist" lie, which claims that the usury and fraud themselves were not the problem, just that such practices were somehow "not regulated enough". We could call this BS the free-trade "harm minimization" approach, which is really a publicity approach of spin, nothing of substance in actual policy or other leadership. Obama spouted this rubbish (obviously with Sortos' hand moving his lips), and ex-Reserve boss Ian MacFarlane spewed it again just today (see: http://www.smh.com.au/news/opinion/look-beyond-greed--a-world-of-leverage-made-this/2008/12/03/1228257139387.html?page=fullpage#contentSwap).