Rumoured at one point to be the highest paid central banker in the world, Glenn Stevens, has been reappointed as governor of the RBA. As his second three year term commences, we would like to petition Governor Stevens in respect of the following items which we believe must be addressed urgently:
1. The mining boom is over. Stop twisting monetary policy to suit this bloated sector and start to focus on the ailing real economy.
2. Admit the obvious and stop ignoring the currency war. It is foolish to maintain one's head above the parapet. All central banks are engaged in debasing their currencies. The textbook has been ripped up and it is now beggar-thy-neighbour policies. Ignore this at your peril - the high AUD is hollowing out the economy.
3. Accept that Australia is flooded in hot money which will withdraw in a hurry when yields return to normal. Reread point 2 in respect of the high AUD.
4. Prepare for vaporisation of the banking system. The safety in conservatism of the banking system is a myth (and that means the liquidity facility will be used for solvency).
5. Taking account of conditions in Australia and observing overseas, true inflation is much higher than official figures and should be dealt with accordingly. Australian's purchasing power is soon to erode and quickly.
That's five big points to tackle Glenn. If you have others, please comment or send an email to email@example.com