Episode 20 of my - Podcast - Letter from The Cape - is now available.…
Episode 18 of my – Podcast – Letter from The Cape – is now available. Coming today from Kyoto, Japan
In this episode, I discuss the coincidence of record retail bank profits and the 13 rate hikes from the Reserve Bank of Australia. The two outcomes are directly linked and RBA interest rate increases have increased the capacity of the major banks to record massive profit gains at the expense of the low-income borrowers. The RBA is deliberately transferring wealth from poor to rich in Australia under the pretext of fighting inflation but the major drivers of the current inflationary pressures are not sensitive to interest rate changes anyway, except rents and the rate hikes are, in that case, causing the inflation. I argue that the Bank of Japan has demonstrated the correct path to dealing with the inflation.