|
At its meeting today, the Board decided to leave the cash rate unchanged at 4.75%.
Australia has 20 years of sustained annual growth; this is almost unprecedented in developed countries.
The alignment with the US economy no longer exists to the extent that it once did. In fact the last two recessions that the US suffered, the technology bust in 2001 and the Sub Prime Mortgage crash in 2008 had a minimal real effect on the Australian economy.
Whilst we all may boast 'free market economies' that is not true, strong fiscal regulation occurs in most markets. It is the strength of this regulation that has allowed Australian banks to have very few default problems and so have remained very profitable.
What happens in the US is still of interest to the news media in Australia. The problems in Europe also gain some media attention.
These events will always attract comments from 'experts', who seem to thrive on the negative publicity.
Sometimes they can be well meaning, our past history has shown that we have been heavily influenced by events in Europe and in particular USA.
Recent history however has shown that we no longer have that strong link to those economies.
The unfortunate outcome however is to cause consumers to be wary of investing. This has in some degree caused the slowing of the economy in Australia.
However the fundamental strength is still there. Australia is being seen as a safe investment market by overseas investors.
"The future is uncertain, but it always is. What we know is that, as we move into that future, whatever it holds, we do so:
- with our terms of trade at a record high;
- with more jobs in the economy than ever before, and with 95 out of every 100 people seeking work in a job;
- with our banks sound, our financial system stable and our sovereign credit respected globally; and
- with the capacity for macroeconomic policy to respond sensibly to events, appropriately guided by well-established frameworks' RBA Statement.
|
