#monetarypolicy

RBA is the new axe on climate change.

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The RBA can barely manage interest rates so where does it get off babbling on about how climate change is going to maim the economy? Stay in your lane!  Even worse the speech based its assertions on the prophecies of the IPCC and BOM, two of many organizations which have been caught red handed manipulating climate data. CM thought the science was settled? If so, what is the point of so many climate bodies fiddling the figures? Why can’t the RBA open its ‘assess all risk’ lens? Wouldn’t data malfeasance constitute a red flag in the RBA’s internal analysis? Clearly not.

While the RBA is there to manage risk, why doesn’t it try evidence based research? Perhaps try look at the debate on both sides of the argument rather than follow an ideology because it feels the need to virtue signal by joining the herd.

Well if the economy collapses under its watch they can blame a drought, a flood and a bushfire rather than poor stewardship of monetary policy. Maybe the RBA might look at the perilous financial state our main banks find themselves in. Maybe the bank managements being attacked in the Royal Commission can blame climate change for the sudden hot blooded mistakes they made.

What a farce.

Some interesting reading

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John Mauldin has put together a few interesting pieces over the weekend. Some of the select quotes from Thoughts from the frontline:

Money Velocity (which CM wrote about in 2016):

velocity of money, which is continuing to fall, as it has for almost 20 years…So it is somewhat disturbing to see velocity now at its lowest point since 1949, and at levels associated with the Great Depression.”

Income Disparity:

Note that it is the 95th percentile of workers that has received the bulk of the increase in wages. The bottom 50% is either down or basically flat since 1979. Even the 70th percentile didn’t do all that well.

Budget Deficits:

Over the last half-century, higher deficits have been associated with recessions. After recessions end, the deficit shrinks, and occasionally we get a surplus. That’s not happening this time. Deficits are growing even without a recession…but in the next recession tax revenues will fall, and spending will increase enough to not only swell the annual deficit but also to add north of $2 trillion to the national debt each year. We’re using up our breathing room, and that will be a problem – sooner or later.

Monetary Policy:

Ominously, you can see from Grant’s labels (In the above chart) with arrows that peak yields tended to correspond with crises. If the current breakout persists, it is probably going to get its own label, and I bet we won’t like it.

Nothing to see here?