Why the RBA should ditch its dogmatic belief in free markets
The RBA is hostage to offshore central bank policies and the only way out is to ditch its rigid free market beliefs that limit its activity to setting rates. At some point the RBA will need to realise that cutting cash rates is a weak tool in a world where real interest rates do not exist. The rest of the world is operating on a completely ridiculous interest rate mechanism, with zero rates in America, negative rates in Europe, and rates well below the inflation rate in Japan. The RBA needs to think about other mechanisms and the Australian Government must co-ordinate its fiscal policy. We believe there are four key things the RBA and the Government should consider. (VIEW LINK)
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