From the AFR:
“Albert Einstein is supposed to have said the definition of insanity is doing the same thing over and over again and expecting a different result,” Saul Eslake, Bank of America Merrill Lynch chief economist, said.
“I’m not accusing the RBA of being insane, but I wonder what they think they can achieve by cutting rates again.”
…”One of the causes of the Japanese [property] bubble of the late 1980s was that the Bank of Japan drove interest rates down and held them down at inappropriate levels to pursue a currency objective…The more of the housing stock that is owned by investors, the more volatile house prices could become, in both directions.”
But there is no bubble, Saul. And no need for the “fad” of macroprudential, either.
