Friday, March 12, 2004

Playing with money

Much wailing and gnashing of teeth on the right about the Reserve Bank's request for the power to intervene in the currency market. The standard dogma seems to be "it's against mainstream economic thinking" (which is why so many other countries - including our major trading partners Australia and Japan - do it), and "it won't work". Actually, I'm quite partial to the second argument - we are a small economic player, and just don't have the money to play this sort of game. On the other hand, by simply saying that we might, we've achieved what we wanted anyway. It makes for an excellent bluffing strategy, and our hysterical business press only enhances its efficacy.

Antipodean Journal also has an interesting analysis of this as a fundamental move away from the autism of Rogernomics...