Is the RBA lying about commodity prices or just inept?

I recently illustrated how awful the Australian Treasury’s record of forecasting commodity prices has been:

Today let’s take a look at the RBA via it Statement of Monetary Policy, the last of which was released Friday:

I’ve left out 2012 because the RBA does some weird stuff with its indexing and log scales but it was the same story. As you can see, the RBA’s record is no different to that of Treasury, that is, it is hopelessly optimistic. Indeed, it appears to be worse. As it has continued missing its forecasts the Bank seems to have retreated, belligerently, into repeating the same failed outlook of an imminent flattening out in the terms of trade only a lot further down each time.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.