You have misdiagnosed the problem, mhaze. The patient does not have cancer.

The primary cause of the inflation is a breakdown in global trade due to the war in Ukraine. Without Russia supplying the oil, gas and timber it used to, the prices of those commodities soared.

Raising interest rates is at best an inefficient "medicine". When demand is high it's fairly effective, but currently the demand has been hit hard by the previous interest rate rises, and there's not much more further rises can do in that regard. They do help by lifting our dollar's short term value (at the expense of its long term value) but they also adversely affect production, as they discourage business investment.

BTW I don't think anyone expected the lockdowns would be consequence free; merely that the consequences of Covid running rampant would be worse.

Smoking reduces your fitness. So does Covid. So does the wrong medicine!

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Josephus,
'Tis not a matter of getting rid of the Reserve Bankers; it's more a case of wanting to stop them going feral like they did in the Gillard era when they actively sabotaged the economy.

There are worrying signs it's happening again, particularly with the last rate rise when there were strong indications that inflation's already peaked.

This is a recipe for out-of-control inflation.
Josephus,
Is the present situation any different ? Just about every bureaucrat is guilty of gross mismanagement of the economy & greedy citizens are complicit !

The wring of hands and gnashing of teeth by some who believe there is no other way is typical. The likes of Lowe and his board takes the usual capitalistic approach in attempting to remedy economic problems within their "free market" economy. The "solution' according to the gurus of Capitalism, always involves a painful penalty being imposed on the ordinary people, with resultant hardship through economic sanctions, brought on by the cutting of incomes with real wage reductions, cost penalties and increased unemployment.

Aidan wrote: "The primary cause of the inflation is a breakdown in global trade due to the war in Ukraine. "

Well that is just rubbish. Its just a made up excuse to try to hide the fact that inflation was caused by the increase in money supply as a result of the quantitative easing that was required to make the lockdowns acceptable to the public. Those who, like yourself, fell for the who Modern Monetary Theory (the unlimited credit card malarkey) need to try to find some other reason to explain why the entirely foreseeable results of the slack fiscal policies occurred.

The fact is that inflation was already rising and out of control long before the war occurred eg (http://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/mar-quarter-2023); and the outbreak of the war had no effect on the trajectory of the rise. But governments the world over have tried to deflect by blaming the entirely foreseeable results of their reckless spending on something else. I'm sure they'll be pleased that at least some people have fallen for their deflection.

Aidan wrote: "Without Russia supplying the oil, gas and timber it used to, the prices of those commodities soared."

While its true that oil prices rose for a short time after the invasion, they quickly fell once people realised that oil supplies weren't being affected. Prices were the same in August 2022 as they were in February 2022 when Putin invaded. But why did inflation persist? Oil prices are now significantly lower than they were in February 2022. Likewise natural gas prices are way below where they were in Feb'22. Why hasn't inflation also fallen if it was caused by the temporary price rises? Why? Because the rise in inflation has nothing to do with these purported commodity price increases. That's just an assertion to hide the real cause.

Governments fell in love with the idea of not having to adhere to spending limits and thus splurged both before, during and after the covid lockdowns. Warnings that ignoring monetary policy would end in tears were ignored when they weren't being ridiculed. Those who pushed the open ended credit card malarkey won't accept they've been proven to be hopelessly wrong and will continue to scratch around for any excuse irrespective of how historically inaccurate it may be.

Aidan wrote: "Raising interest rates is at best an inefficient "medicine"."
Equally Paul complains of that he doesn't like the solution without offering any alternative.

Raise interest rates is inefficient. But its the only tool available just as chemotherapy is less than optimal but still the only option. In years gone by, authorities could have also turned to fiscal policies to combat inflation...that is, they could have run budget surpluses to cool demand. (indeed I recall Aidan once telling me that that is what governments would do if inflation occurred!!)But that option is no longer available following the inane spending policies of the last decade.

Raising interest rates isn't optimal, isn't pleasant and causes untold hardship. But there is no other remedy. Its that or just let inflation rage in the hope that things will resolve down the track.

You've got to smile at those who rage against the interest rate rises but have no other 'solution'. For them, the cancer is preferred to the solution.

I always find it funny when intellectual pygmies try and describe economics.

Very basically, Inflation is caused by too much spending from the government and/or consumers. Inflation can be controlled either by government self-control or by reducing the propensity of consumers to spend.

The RBA's most crucial function is to ensure that inflation is under control. When a government is incapable of self-control such as all labor governments and spends like a drunken sailor, the RBA has to step in and raise interest rates. This forces consumers to spend more on financing debt and less on purchasing things. This is not capitalism or socialism this is pure economics which is politically agnostic.

The high inflation rate/cost of living/energy prices are all linked to Labor incompetence.