Australia may have the world’s most incompetent central bank

Cannot be sure since I don’t watch them all, but it’s gotta be a contender. Look at this from today’s AFR: RBA’s Lowe flags ‘extended period’ of low rates.

Speaking at the annual Australian Business Economists Anika Foundation lunch in Sydney, Dr Lowe also said the RBA board “is prepared to provide additional support by easing monetary policy” if growth in economic demand “is not sufficient” to lift inflation “in a reasonable timeframe”….

“It is highly unlikely that we will be contemplating higher interest rates until we are confident that inflation will return to around the midpoint of the target range,” Dr Lowe said.

So they don’t know that low interest rates slow economic growth. They’re not alone, but it would be nice if they were at least aware this is potentially a genuine consequence of keeping rates artificially low. But that isn’t even the issue. Their problem is that the inflation rate is too low!

This is unreal. They are trying to get the level of money demand to rise to create more inflation. Go on, explain your reasoning, if you can. Real demand will never rise since real supply, the basis of demand, will never rise with such policies in place. Do these people know anything?

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