Rage Against the Bubble
This is an interesting article from the Reserve Bank of Australia on asset bubbles and monetary policy.
It is not interesting for the content, which is inaccessible to the non-quantitatively inclined, but for the topic itself.
The first sentence of the introduction reads: "In a low-inflation economy, the bursting on an asset-price bubble can have significant and long lasting-consequences, both for the economy and for the operation of monetary policy."
Really? Talk about world class arse covering!
Now let me think about this?
....and did the Reserve Bank do anything to prevent it? No. But we published this paper in June 2005 explaining that this was just about the happen...so it's not our fault....please blame the politicians.
There is a reason the Reserve Bank is independant, because unlike politicans they are supposed to be above short term politically motivated considerations.
http://www.rba.gov.au/rdp/RDP2005-04.pdf
It is not interesting for the content, which is inaccessible to the non-quantitatively inclined, but for the topic itself.
The first sentence of the introduction reads: "In a low-inflation economy, the bursting on an asset-price bubble can have significant and long lasting-consequences, both for the economy and for the operation of monetary policy."
Really? Talk about world class arse covering!
Now let me think about this?
- Are we in a low inflation economy? Yes!
- Do we have an asset bubble? Why......yes we do!
- Is it likely to burst? Um...well yes I think so!
- Is the economy going to be totally flushed down the proverbial? Absolutely!
....and did the Reserve Bank do anything to prevent it? No. But we published this paper in June 2005 explaining that this was just about the happen...so it's not our fault....please blame the politicians.
There is a reason the Reserve Bank is independant, because unlike politicans they are supposed to be above short term politically motivated considerations.
http://www.rba.gov.au/rdp/RDP2005-04.pdf
posted by Peter at 10:43 am
3 Comments:
IN A DIZZYSPAN
http://www.theaustralian.news.com.au/common/story_page/0,5744,15564477%255E643,00.html
"The economic world is changing in ways that we still do not fully comprehend," Greenspan told an audience in Beijing. In other words, he doesn't know.
The Australian property market as the "canary in the cage":
http://www.fiendbear.com/Newsletter-June%202005..htm
It is a fairly astute analogy I believe. The Australian property market was going up during the US stock market bubble. It is currently in decline, but I suspect sentiment has quite away to go down. As do prices.
Also, check out this week's cover story from The Economist:
www.economist.com
These days between bricks and bullion....I choose bullion.
Sorry the correct link to this weeks cover story is:
http://www.economist.com/printedition/displaystory.cfm?Story_ID=4079458
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