RBA Governor Glenn Stevens view on property and inflation

[boomtown]

5. If Singapore is indeed a "gold mine" and land of great opportunity for these migrant workers, why should the migrant workers want to openly "revolt" in Singapore and to destroy their own hopes and their own land of opportunity in Singapore, in the first place, please?

That is exactly the point. The reason there is no civil unrest is because everyone is making money. If the Singapore economy takes a nasty turn for the worse (and I bloody hope it doesnt!) then PAP is in trouble.

The Chinese Communist Party in Shanghai and Beijing are also all too aware that their continued grip on power is dependent on continued growth - so long as the middle class feel they are advancing then the democracy riots of Tianamen Square will not spread to the middle classes. Heaven help the CCP if the boom goes bust though. If there is anything that keeps Wen Jiabao awake at night it is worrying about an economic slowdown. And that also explains why they are too afraid to enforce existing environmental standards.

I will be ironically amused if democracy requires a recession as a catalyst. If I had more time I would like to go and check whether you could link recessions with transitions to democracy in the Western world - ie Boston tea party, French revolution etc.

 

[Kennethkohsg]

Dear Dave99 and Boomtown,

1. Thank you for your feedback.

2. However, let us remained focussed on this thread topic, rather than to continue digress away from it.

3. I will be more than happy to discuss with you separately regarding Singapore Politics or/and other Asian countries politics, in another new thread to be newly commenced, where neccessary.

4. Suffice me to say that because of our own different social back ground and upbringing, our own social-poiitical experiences and beliefs, we will each have a different perspective of things.

5. I am presently still learning about how the Australian Economy actually functions on the ground and to what extent will the Australian Federal Govt, in particular the Australian Treasurer/Treasury works with RBA to jointly "manage" it, at this point in time.

6. For your further comments and discussion, please.

7. Thank you.

Cheers,
Kenneth KOH

 

[Kennethkohsg]

Dear All,

8. "On balance, the Board’s current assessment is that demand growth will be moderate this year."

9. " In the short term, inflation is likely to remain relatively high, but it should decline over time provided demand evolves as expected."

10. "Should demand not slow as expected, or should expectations of high ongoing inflation begin to affect wage and price setting, that outlook would need to be reviewed."

http://www.rba.gov.au/MediaReleases/2008/mr_08_09.html

Kenneth KOH

******************

1. "Announcing the decision by the bank's board to leave official interest rates unchanged at 7.25 per cent yesterday, Mr Stevens noted the risk that strong growth in resource exports could undermine the Reserve's efforts to dampen inflation and prompt another rate rise, despite the slowdown in demand evident in some figures."

2. "The comments come amid fresh evidence that Australia continues to import goods and services faster than it exports them, leading to predictions the economy almost shrank in the first quarter."

3. "Mr Steven's statement noted recent signs of slowing in the economy, including less spending and dwindling credit use. But it also highlighted the risk of strong demand and income growth flowing from the booming resources sector."

4. "In the short term, inflation is likely to remain relatively high, but it should decline over time provided demand evolves as expected.

5. "Should demand not slow as expected, or should expectations of high ongoing inflation begin to affect wage and price setting, that outlook would need to be reviewed."

http://www.brisbanetimes.com.au/new...t-little-relief/2008/06/04/1212258857897.html


6. Consequently, as far as Glenn Stevens and his RBA are concerned, 2 wild cards are

a. the risk of strong demand and income growth flowing from the booming resources sector.

b. expectations of high ongoing inflation beginning to affect wage and price setting .


7. Thus, in view of RBA's ongoing usage of its Flexible Inflation Rate Targetting Policy, the existing high inflation figure per se, is insufficient a condition to cause the RBA to further increase its official Cash Rate and Interest Rate, in the near future.

8. For your further comments and discussion, please.

9. Thank you.

Cheers,
Kenneth KOH