Reserve = Rothschild
The Reserve Bank of Australia really does want Aussies poorer
As the evidence of a slowing Australian economy mounts, Governor Michele Bullock quietly told journalists the RBA wants Australians to be poorer. Nobody seemed to notice except Michael Pascoe.
The problem with reporting a speech by the Reserve Bank Governor is that everyone tends to run the most obvious angle – “some people will have to sell their houses!” – or the preferred political angle – “RBA v Chalmers fight!” – as no journalist wants to be seen as missing the day’s big headline.
Unfortunately, this means the main news can be missed, and something that is not news and is entirely obvious – that some people have to sell their houses – dominates coverage.
That is what happened last week when Governor Bullock delivered the annual Anika Foundation speech and took questions. She made two important statements that nobody seemed to pick up and a third that only one journalist reported.
For mine, the real headline was that the RBA wants Australians to be poorer; to have a lower standard of living than they currently have. Think about that – average Australian living standards have been going backwards for two years, but the RBA thinks they’re still too high and wants them down.
That is what follows from the Governor’s answer to a question about the preceding day’s pitiful GDP growth numbers – COVID aside, the weakest growth since the early 1990s recession. Hugh Riminton asked why the bank wasn’t softening its interest rate predictions, given that household consumption had come in significantly lower than the RBA forecast.
“In simple terms, Hugh, it’s the difference between growth rates and levels,” Ms Bullock replied.
Get it? To translate into English: Sure growth is miserable, negative on a per capita basis, but the level of consumption is still too high. We want you to have less, to be poorer. Or, in the Governor’s own words:
“It’s true that the growth rate of GDP has slowed. GDP itself was around where we forecast it would be, but the components were a little different. Consumption was a little softer. However, part of monetary policy’s job has been to try and slow the growth of the economy because the level of demand for goods and services in the economy is higher than the ability of the economy to supply those goods and services.
“So there’s still a gap there. So even though it’s slowing, we still have this gap. Part of that is because the supply side of the economy isn’t performing as well and productivity is part of that. Part of it is that demand was so strong coming out of the pandemic that its level is still above the ability of the economy to supply the goods and services.
“That’s why inflation is still there. So I understand why people would think that as things are slowing, that should be a reason to lower interest rates.
But we need to see the results in inflation before we can do that.
https://michaelwest.com.au/the-reserve-bank-of-australia-really-does-want-aussies-poorer/