Really, I guess to get to these positions you have to be safe, a "sound fellow", good in committee, able to defer to the interested parties and not worry the vested interests and so forth. In the context of a terminal debt fulled blowoff,I guess that means a man who can't see a private overseas debt of 110,500 per capita a problem or see past a numeric model with equilibrium assumptions. Or maybe I'm naive and stupid and he knows his real job is just keeping the game alive another day.
But, whatever the case there, without a doubt the following statement is the most complete and utter bullshit you have ever heard.
THE combined impact of rate cuts and the Rudd Government's stimulus packages will create an economic recovery later this year, according to the Reserve Bank, starting with a revival in housing construction.
The bank's governor, Glenn Stevens, endorsed the Government's economic strategy yesterday, saying its two economic stimulus packages would boost economic growth both this year and next.
He also said the Government's actions to guarantee both bank deposits and wholesale funding had preserved confidence in the banking system.
Appearing before the House of Representatives economics committee yesterday, Mr Stevens said the prompt actions of both the Reserve Bank and the Government would reduce the severity of the downturn.
"The path of the Australian economy is going to be considerably better than it would otherwise have been, and considerably better than a number of other countries around the world, whom we can see contracting at a very large pace," Mr Stevens said.
He disagreed with new Opposition Treasury spokesman Joe Hockey that the Government should be saving some of its ammunition in case the downturn was protracted.
"The longer you wait, the more ammunition you will end up having to use," Mr Stevens said. "These things can get a sort of self-fulfilling momentum behind them."
He raised the prospect that, having moved quickly to cut interest rates by 400 basis points since September to a 35-year low of 3.25 per cent, the Reserve Bank would stop cutting rates sooner than it had in other cycles.
"That ought to be a good thing, because you hopefully will have got ahead of things," Mr Stevens said.
He said the bank would be cutting rates further only to the extent that it received information that "tells us something genuinely new about the prospects for demand and prices over the medium term"."
The financial deregulation that successive Labor and Liberal governments introduced has led not to a better functioning economic system, but to a financial catastrophe that is still in its infancy. One of its main characteristics is obscene overinvestment in housing. Our recovery, if and when it arrives, will not be housing lead.
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