Stephen Koukoulas has been described as “One of the most articulate economists in Australia” : https://thekouk.com/testimonials.html
Stephen has also spent 10 years as a Senior Economist and Chief Economist of Citibank Australia and Chief Strategist at TD Securities in Sydney. Between 1999 and 2001 he was The Australian Financial Review’s Economics Analyst.
On Twitter last month, he tweeted :
RBA needs to be hauled before Parliament to explain its failures – inflation is too low, growth too low, unemployment too high, wages too low, interest rates too high RBA has read the economy about as well as I read ancient sanskrit – i.e., NFI
RBA needs to be hauled before Parliament to explain its failures – inflation is too low, growth too low, unemployment too high, wages too low, interest rates too high
RBA has read the economy about as well as I read ancient sanskrit – i.e., NFI
— Stephen Koukoulas (@TheKouk) March 22, 2018
We have our own Economist in house, none other than Kevin Young himself!
With 40+ years experience in property and Australia’s most successful residential real estate property investor has previously said as far back as 2015:
I’m Kevin Young and I’m not happy. RBA are at it again. They raised rates when we had 4.3% unemployment and they killed it. It went up 50%, so we’re now sitting on 6.5. What are they doing now to the construction industry? They said, “We need construction to replace the jobs lost in the mining sector.”
That happened. Investors flooded into the market to take them up on their offer. Whoa! They’ve changed their mind now, too many investors who are mum and dad’s. They completely are ignorant of the fact that mum and dad’s buy only completed stock, not off the ground.
There was talk of us losing our AAA rating so the RBA rushed out with a statement that if we lost our triple-A rating everything would be ok. Wrong, wrong, wrong RBA – again!! As you can see from our placards back in 2009 instead of raising rates to 4.75% the RBA then should have taken advice to lower them 2.25%.
This would have kept unemployment at 4.3% instead of seeing it rise 50% and sitting there. So RBA wrong again. If we lose the AAA rating, the low cost of funding our deficit will be gone; it will rise. All subsequent loans throughout the community will rise.
Readers will note that the RBA soon had the reputation of “too little, too late”. It proved very quick to raise rates just when they should have been lowering. I have a list of all of the mistakes that the RBA have made. Once I printed them out the document came to over 2 meters long!!
“The big banks in Australia are already the most profitable in the world with their profit equating to a staggering 2.9% of GDP, making Australian banks effectively the most profitable in the world. That means 2.9% of every $100 earned in Australia ends up as bank pre-tax profit, compared to the US and UK at $1.2 and 90 cents per cent respectively,” Young said.
Young also lambasted the RBA, saying the decision of the Bank of England to cut rates to 0.25% showed the RBA’s interest rate setting of 1.25% was “an international joke”.
Up until now our predictions have been far better than those of the Reserve Bank. I am now convinced it is a Redundant Bank of Australia, a failed experiment of the Howard Government.
The chart below is exciting in that it shows the focus of the RBA has been on “containing inflation”. It proves the RBA, egged on by successive Prime Ministers, has been fighting the wrong battle! High inflation was a problem – was!
I think you get the point!
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