There was an article in the Melbourne Age this morning (August 12, 2014) – As jobless numbers climb, RBA is perilously close to a rare mistake – that is running a theme that is increasingly being played out by the financial commentators. Basically, that monetary policy saved the world from the GFC but that central bankers may lose their resolve and hike interest rates too quickly. While I certainly do not advocate interest rates going up anywhere (that I am familiar with), what seems to be forgotten is that monetary policy is relatively useless at encouraging growth. It was fiscal policy that saved the world.