RBA Watch: Finally the spotlight is turning towards the RBA


An issue of long standing concern to the Glass Pyramid is the role of the RBA within the Australian structure of economic management.

It is great to see one of the superior writers at Business Spectator and a former employee of the RBA show signs of really warming to this topic.  In an interesting post Callam Pickering discusses the recent speech made by the Governor contrasting the US and Australian economies and ruminates on whether the RBA may have a culture problem.

“…I know from personal experience that the RBA is rarely open to counter-views; unless you hold a management position your opinions are neither sought out nor taken seriously. The bank also rarely hires externally, creating a sense of group-think within lower and middle management.


The RBA is awash with talented people with towering intellects — economists who were more than capable of recognising the structural shifts at play across the Australian economy. Rather than playing the ‘human nature’ card, perhaps Stevens should be looking at how the internal culture at the RBA undermined monetary policy…”


The Glass Pyramid, always eager to help out anyone who is drawing attention to fundamental problems in our economy, offered some support Continue reading

Selling Australia: Toll – Another $6.5B worth of Oz Assets sold


Mr Hockey announced on Thursday that he had given a big green tick to the $6.5B transfer of ownership of Toll Holdings to Japan Post (a Japanese government company).

This deal has been in the pipeline for a few weeks and The Australian gave the negotiations a nice bit of swoony Mills and Boon coverage back in February.

“..But by the third week of January, the Toll board had received a non-binding indicative offer which contained the magical number which became music to Horsburgh, Kruger and the board’s ears…”

No doubt Mr Robb supports this deal as he can barely rest between stitching up capital flow facilitation deals (aka FTAs) that make it even easier for our trade rivals to export capital , acquire ownership of Australian assets and in doing so inflate the relative exchange rates and maintain their competitive trade advantage in their relationship with Australia.

Why capital flow facilitation deals?

The misleading description given to these agreements is Free Trade Agreement and it is misleading because Continue reading

TECS – We need HECS for Trades


We have heard a lot over the last few months about the HECS system and $100,000 degrees.  While that debate has been very important it has overshadowed the urgent need for reform of the model we use for trade training.

A TECS – Trade Education Contribution Scheme – would address, what we have never really come to grips with – an effective replacement for the long standing, but now thoroughly defunct, traditional master indentured apprentice model.  Plus it would be relatively simple to implement.

The traditional master apprentice model of trade training was only viable with a system of indentured labour to ensure that the master’s investment was worthwhile. In return for being trained the apprentice would contract to provide labour to the master for a fixed period. Continue reading

The Oz Economy – The future is bright if……….

To read the original version of this comment in the original context at Macrobusiness.com.au click this link. (link maybe locked – but there is a free trial available)

While the woeful performance of the Treasurer (Q&A Monday Exhibit 1), the generally incoherent ramblings from the government on economics and the often opportunistic “small target” mutterings of the ALP, are a major cause of despair for anyone with an interest in the economic future of Australia, there are some reasons to remain on the sunny side of the street .

The Glass Pyramid remains optimistic for the future and it does not involve the government picking winners or fortune tellers looking for the next ‘big thing’ in the remains of a pot of Earl Grey.   Continue reading

Peter Martin gives Hockey an undeserved break on unlocking super for housing


In a strange article, the usually pretty reliable Peter Martin, gives Joe a break over the plan that has been floated, and to varying degrees supported by Mr Hockey, to allow home buyers to access some of their super to buy their dream.

Mr Martin says it is a good idea because private home ownership is a good thing (and it is).  He even goes so far as to state Continue reading

QandA: Tony Jones talks about fiscal policy with Mr Hockey without looking embarassed

To read the original version of this comment in the original context at Macrobusiness.com.au click this link. (link may be locked – but there is a free trial available)

One thing interesting about Q and A last night was Tony Jones’ somewhat provocative questioning of Joe Hockey about fiscal policy as a method of stimulating the economy if monetary policy and cutting interest rates no longer work.

While Mr Jones did not dwell on the point, it was almost as though he Continue reading

NSW Election Special – Assets from the Attic


The NSW election is in full swing!

It is getting hard to control excitement levels in the glorious Emerald City as the buzz of the democratic process infects everyone with dazed expressions of what might be bliss. Citizens when shopping, catching a bus or cleaning their teeth barely go a minute without assessing the policies and competing promises of the candidates for high office.

One of the issues that is proving to be a soft spot for the ever congenial Premier Mike Baird is the assurance that all the goodies he is promising to dispense will cost the taxpayer nothing  – beyond flogging off some dusty uncool public assets he found in the attic.

Poor Mike is perturbed to find  that a fair chunk of the public are starting to wise Continue reading

The special sauce of the Oz economy: “Household Debt” breaks through to the mainstream.

To read the original version of this comment in the original context at Business Spectator click this link. (link may be locked – but there is a free trial available)

First it was Mr Gittin’s noting hints from the RBA that monetary policy may be out of gas, now Mr Kohler, star of Business Spectator and the ABC is giving some attention to the issue of Australia’s amazing mountain of household debt.

While it is great that FINALLY the issue of the explosion in Australian household debt over the last 17 years is getting some coverage by the elder generation, it is not exactly new news.

The Australian economic model since the late 1990s has had two components. Continue reading

Hey Joe ! – Expensive first homes? Attack of the BANANAs

To read the original version of this comment in the original context at Macrobusiness.com.au click this link. (link may be locked – but there is a free trial available)

From the archives – 6 March 2014

New Discovery 31 March 2015 – “The Heritage BANANA”

A particular introduced tropical fruit is one of the most important reasons house prices in Australia have gone mad….

Australia is very fertile ground for a range of different BANANA (build absolutely nothing anywhere near anyone) varieties and over the last few years they have been running wild.

Here are a few of the most active strains.


The Green BANANA doesn’t want anything to be built Continue reading

Australian banks see no problems with the House Price Ponzi

To read the original version of this comment in the original context at Macrobusiness.com.au click this link. (link may be locked – but there is a free trial available)



The Australian Bankers Association produces research that claims that a fundamental part (rising house prices) of an economic model, whereby they get to ‘create’ money with a trailing commission attached, is not presenting any risk to the national economy.

My goodness, wonders will never cease.    Smells like a tag team effort with the RBA paper yesterday explaining that household debt is nooooooothing to worry about as the asset rich who benefit most from the ponzi are best placed to ride out any hiccups.

If private banks wish to continue the fraudulent practice of fractional or zero reserve banking the very least they could do is Continue reading