There was an outstanding piece from John Authers this week arguing that the Age of Credibility for Central Banks Is over as Inflation blunders have destroyed the trust that’s anchored the global financial system since the end of the gold standard.
Certainly, in Australia, the RBA has been on shaky ground for many years, including over forecasting wages growth, taking interest rates too low, and relying on household wealth to be artificially inflated by poor policy for years. But the shocking reversal from last November’s no rate rises til 2024, to todays 1.35% target cash rate, with more to come, shows just how far from credible they are – despite politicians still talking about mountains of respect. Over in New Zealand they are further up the curve, but the issues are the same. Central Bank credibility is shot.
It appears that the most likely anchor to replace central bank credibility is confidence in governments. But that is not a comforting thought.
Go to the Walk The World Universe at https://walktheworld.com.au/
My latest chat on a Friday afternoon with Journalist Tarric Brooker, covering the latest economic and financial news, courtesy of his famous slides. https://avidcom.substack.com/p/charts-that-matter-8th-july-2022
You can follow him on Twitter @AvidCommentator
Go to the Walk The World Universe at https://walktheworld.com.au/
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The RBA is beset with issues, paying money to the banks due to the Term Funding Facility, negative equity on its balance sheet, and a more rigorous review than they wanted, which given their recent failures (no cash rate rise until 2024) is warranted.
Does it retain any credibility?
Go to the Walk The World Universe at https://walktheworld.com.au/
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My latest outing with our Property Insider Edwin Almeida. We look at the latest from our Wechat chatters, the numbers, which go on rising, and the housing policies from the main parties.
Let’s face it, the rampant rise in Oil prices, is a big headache for politicians around the world, as the lift in prices is driving inflation. Just remember Oil was already on the up BEFORE Ukraine kicked off.
And if you are going to make an unpopular policy change, when better than later Friday before a holiday weekend – the good ol’ putting the trash out.
Certainly the price of Oil is a problem and it seems that any selloff in oil is only proving to be a buy-back opportunity amid one highly volatile energy market. Perhaps the most volatile ever.
Crude prices jumped almost 3% on the day and nearly 9% on the week as the market was hijacked once again by a supply scare on news that the European Union might phase in a ban on Russian oil imports.
Gains in oil were limited earlier in the day as Chinese refiners appeared set to cut crude throughput this month by about 6%. The reduction would be a scale last seen in the early days of the COVID-19 pandemic two years ago, industry sources and analysts said.
But news of the proposed EU ban on Russian oil prompted buyers to swoop in on more lots of crude futures and convinced some shorts to cover their positions as well ahead of the Good Friday holiday, which meant a longer weekend for U.S. markets.
“Heading into the long weekend, oil was vulnerable to some profit-taking, but a major pullback is still unwarranted given the supply situation and as economic slowdown concerns are still far from happening”.
Now the inflation problem is creating a series of back-flips including one relating to plans for oil and gas development on federal lands as now the Biden administration has said it has resumed plans for oil and gas development on federal lands. Granted the plan calls for the government to lease fewer acres for drilling than initially proposed, charge steeper royalties to oil and gas companies, and assess the climate impact of developing the acreage.
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
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My Friday afternoon chat with Tarric Brooker got philosophical today as we pick apart the events of the week. A number of critical issues are in play which have some potential negative impacts.
Tarric is @AvidCommentator on Twitter. His slides are at https://t.co/v1IVtBzRua
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
Well, It’s All Coming Unglued... With Tarric Brooker [Podcast]
