Glenn Stevens, Governor of the Reserve Bank of Australia, meets Clarke and Dawe and responds to criticism from union leader Paul Howes.
BRYAN DAWE: Mr Howes says the Reserve Bank has the wrong interest rate policy and fears for job in industry.
JOHN CLARKE: Does he? Does he say why?
BRYAN DAWE: He says the cost of Australian goods are too high.
JOHN CLARKE: Is the term “cost of labour” used at any point in his no-doubt-penetrating analysis of what the adults are thinking about in the other room?…..
via 7.30 – ABC.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
I would have quoted this bit:
BRYAN DAWE: You’re welcome. Mr Howes’ argument is that by failing to lower interest rates you’re sending jobs overseas.
JOHN CLARKE: That’s not an argument, that’s finger pointing. Mr Howes might know what he’s talking about in other areas, but he makes quite a common error here in assuming that if you lower interest rates, Brian, you reduce upward pressure on the exchange rate. What very often happens if you lower interest rates is that people spend more, and ultimately you’ve got to put interest rates up.