Is a lobotomy required for RBA board membership?

I honestly don’t know what happens to these RBA guys when they walk through the door at Martin Place:

The nation’s labour market is close to the point when workers who are keen for jobs or more work are absorbed into a strengthening economy, stoking the wage inflation that is a key precondition for future interest rate hikes, said Reserve Bank of Australia board member Ian Harper.

While there is still no need to “rush” the normalisation of monetary policy towards higher official interest rates, Professor Ian Harper expressed growing confidence the economy is “on a steady track towards a recovery” forecast by the central bank and Treasury.

Professor Harper described this week’s jobs numbers – which showed the jobless rate has fallen to a four-year-low of 5.5 per cent – as a sign that the labour market’s “excess capacity is beginning to wear off”.

“We’re targeted on getting inflation back into the RBA’s target range – that will occur as wages growth begins to pick-up.

“Are we headed in that direction? Yes we are. Are we going at an appropriate pace? The bank, the board, are convinced the setting is right.

“Bluntly, at this juncture, there would be no reason to try and rush this. It’s recovering nicely and there are other reasons to do with financial stability why you wouldn’t rush.”

Rush it? Rush what? You’ll be cutting before long. What will $35 iron ore do to that happy assessment? What will a sovereign downgrade do? What about:

  • the car industry shuttering;
  • continuing capex falls;
  • a worsening gas shock;
  • the dwelling construction bust;
  • the house prices stall, and
  • immigration flooding the labour market?

Just sayin’…


  1. Ronin8317MEMBER

    Wage growth picking up? I don’t think the RBA guy believe this, however it gives cover for Morrison’s budget projection.

    • If they can do the same wand-waving with wage growth that they do for unemployment figures, then anything is possible!

  2. sydboy007MEMBER

    H&H – you will shortly receive a visit from the RBA FIRE enlightenment team. You have been chosen for a free stay at an enlightenment centre, funded by the RBA and strayan FIRE sector.

    How long will your visit be? Well that depends on how fast you can gain FIRE enlightenment.

    At a minimum you’ll need to be a FIRE-E level 3 to be safe to release back into the general community.

    A FIRE-E L3 understands and believes in the orthodoxy. You will need to go through the wall of FIRE to be a fully operating FIRE-E L3.

    Within FIRE-E L3 is the secret doctrine of the church. Members must be invited to do it, and they sign a contract of secrecy.

    No need to pack your bags…all shall be provided at the Church of FIRE enlightenment.

    • Before making a smart ass comment you should check your own intelligence sydboy.

      The FIRE sector will hate this statement. They want perpetually declining interest rates.

      Once the RBA starts normalising and we end this era of the loosest monetary policy in history and the highest property prices in history, we can start to get some proper capital allocation happening in the economy.

  3. they are political appointees……of course they have all had a lobotomy. That’s why they were appointed!

    • It would be interesting to see a register of their assets.

      How many of the RBA own multiple investment properties and thus have a vested interest in keeping the FIRE sector going?

      • DingwallMEMBER

        Mention Financials and Insurance as components of FIRE to the RBA they get confused looks – they think it means Future In Real Estate

    • Wrong again.

      Seriously, start using your brain.

      Politicians put pressure to lower interest rates.

      Harper says that in due course, the next move might actually be up.

      Your comment has no relevance.

      That is what is wrong with this country. Dumb group think.

  4. Smart chap, that Haper guy – prescient, and definitely not stuck in depressively wrong and unsupported ideology.

    So, the:
    1. Correct diagnosis of a local bull market in equities – from around current levels – can be seen to be supported ;
    2. It’s a ASX 200 6300 target in next few months, then 6800 later, and finally topping out at 7500 – 18 months later ;
    3. Property is also 18/24 months, and 15%, from the top.

    You should be buying equities and property, given the above = we in the bull market for both asset classes.

    Vastly prefer local equities to American or European = we much much better value relatively ( given the comparative outlooks and pricing) and them being ‘over-bought/over-valued/over-bullish’.

    AUD will continued to be supported by foreign buying, relatively attractive yield differentials and arranged stability in Chinese economy.

    Australia the best market – really, by far, now – to invest in.

    You’re very welcome.

  5. Dazza197MEMBER

    Listened to an interesting interview with Ben Bernanke re his time at the Feb during the GFC. In response to a question how his public statements didn’t match the panic that was going on behind the scenes, he essentially said that he saw his job of not scaring the horses (fiscal stability or some such) as being more important than being honest with the public.

    Which unfortunately means you cant believe anything they say.

    • BabundaMEMBER

      I thought the same thing. Can’t be an accident given how tightly all RBA commentary is orchestrated.

  6. What about a $300 Billion Chinese withdrawal from real estate investment via domestic capital controls ?

    This should be 1,2 and 3 on the list.

    Admittedly it is going to have a tangible impact on the FX rate – however – it will utterly destroy the domestic market. And has been noted by yourselves and other punters – the Chinese “tourist” is mainly here shopping for bricks and mortar. Will impact tourism as well.


    • They are not going to withdraw anything. Aussie property is a hedge against a Chinese downturn.

      The worse things get in China, the more rich Chinese will want to move their money to Australia and buy our houses. If you have the connections, it is easy to do via false invoicing.

      Houses that they have bought in cash can be used as collateral to buy another few homes or units. The housing boom has years left in it – expect to pay $2 million for a 2-bedder unit in a few years.

  7. Jake GittesMEMBER

    It’s obvious that at the induction sausage sizzle for new recruits they give them a data pack for Austria in 2002.

  8. Unrelated, but I was walking by the RBA a couple of days ago; there’s a homeless camp directly opposite on the other side of Martin Pl. About 100 people and an open air soup kitchen. Was shocking, and pretty ironic.

  9. You know, I’m pretty fucking sick of this pack of cunts continually sprouting the low inflation bullshit. Electricity up, gas up, rego up, health insutance up, levy this, levy that, house prices not in the mix. It seems that every single essential is rising at 5-10% a year, and yet these fucktards say inflation is low because TV’s are cheaper! Mob of muppets and the whole populace knows it deep in their bones, but haven’t gotten quite to poverty levels to say enough is enough. By the time the masses realize they have been hoodwinked it will all be to fucking late and we will be Venezuea.