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Location: Economy
Discussion: Be Creative with monetary policy - dont hit young families first
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 apollocreed2008 |
Be Creative with monetary policy - dont hit young families first
Feb 27 2008, 9:52 PM EST Instead of using the blunt, inequitable, and slow tool of raising interest rates to tackle inflation the RBA could be creative. Here are a few ideas to start, the RBA could* 1) require the banks to cut credit card limits from their huge limits (am I the only one that been suprised by those letters in the mail?) why not cut credit card limits by 20% for a few months to take some steam out of the economy? 2) Increase the minimum month payment amount from 5%-30% again this will target freewheeling high consumers first and struggling families last. 3) get rid of these interest free for 3 years deals on TV's and other big dollar consumer items. These are just my first 3 practical ideas, I'll post more later. In trying tto manage demand in the Economy why not target the flat screen TV buyers first instead of targeting those trying to put a roof over their kids head? * Remember the banks get to enjoy the system we taxpayers pay for, (i.e. a lender of last resort in the RBA, a fractional reserve system, banking licenses, a country with a rule of law etc etc) so they can and should be regulated for the good of society. If they dont like having a social responsibility they are welcome to go and try and earn similar profits in Rawanda. 32 out of 43 found this valuable. Do you? |
 trgh |
RE: Be Creative with monetary policy - dont hit young families first
Feb 27 2008, 10:41 PM EST Yes, the RBA activities should not only be regulated for the good of society, but audited also! At the risk of becoming monotonous, remember they are NOT a government department and have never been audited. It is in their Charter to do their best for the welfare of the Australian people. Evidence shows that their blunt instrument of adjusting Interest Rates is not beneficial, but detremental to our wellbeing. (how much kerosene does it take to put out a fire?) 0 out of 3 found this valuable. Do you? |
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Anonymous |
RE: Be Creative with monetary policy - dont hit young families first
Feb 29 2008, 1:39 AM EST "Yes, the RBA activities should not only be regulated for the good of society, but audited also!"It is regulated. It has been instructed by parliament to keep inflation low. If it fails the governor gets the chop. It is doing what it has been told to do by parliament. It publishes regular accounts. All profits it makes are paid to the Australian government. It gives the parliament regular updates. I don't think we should have a central bank. However as far as central banks go our is one of the best in the world. Vastly better than the US federal reserve. Nearly as good as the New Zealand Reserve Bank. 0 out of 2 found this valuable. Do you? |
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trgh |
RE: Be Creative with monetary policy - dont hit young families first
Mar 2 2008, 3:52 PM EST Dear Anonymous. I have been accused in this wiki for living in la la land. Welcome. What are you saying - that the RBA is keeping inflation low by raising interest rates? Where is the common sense in this statement? It seems that economic babble-talk has convinced you that black is white (sometimes). I don't profess to be an expert in economics, but some things are obvious - even to little men like me. 0 out of 1 found this valuable. Do you? |
 dra_red |
RE: Be Creative with monetary policy - dont hit young families first
Mar 10 2008, 4:02 PM EDT hi trgh, I am sure that interest rates can be used to check inflation. The fact that most of the developed world uses this technique suggests that most of the economists believe this is a tried and true method. You would need an excellent understanding of economics and a strong argument to shake the belief that this is a flawed method to control inflation. For me, it makes intuitive sense. An increase in the currency to value ratio results in a reassessment of the value of goods with a general upward trend being the norm. Taking money out of the system ie spending of general consumers, takes away the inflationary pressure. I will have to add to this at a later stage. cheers, Dale 1 out of 2 found this valuable. Do you? |