SYDNEY – The Reserve Bank of Australia has today raised the cash rate to 4.35 per cent in what economists are describing as a bold and innovative attempt to lower petrol prices in Tehran by making it harder for a single mum in Logan to afford her home loan.
In a statement issued from a board room with no visible windows the RBA explained that while the current inflation surge is being driven almost entirely by an oil shock linked to the Iran war the most effective way to address this is to punish people who have never been to Iran and do not own oil.
“The cash rate is a precision instrument” said RBA Deputy Governor for Vibes Compliance Dr Phil Ledger. “It cannot stop a missile. It cannot bring a barrel of crude to market. What it can do is make sure the bloke who drives a ute to a worksite in Caboolture has to choose between diesel and dinner. That is the lever we have. And we are pulling it. Repeatedly.”
The decision was carried 8 to 1. The dissenting board member reportedly preferred to hold at 4.10 per cent and was last seen being escorted out of the building while muttering something about supply-side shocks.
Dr Ledger confirmed the new monetary strategy operates on a simple principle. If Australians stop spending money in shops then shop owners will have to sack staff. The newly unemployed will then stop buying petrol. Lower demand for petrol in Brisbane will eventually filter through global oil markets and pressure OPEC+ members to reconsider their pricing. Asked roughly how long this transmission mechanism takes Dr Ledger said the modelling suggests “between 18 months and the heat death of the universe.”
The RBA acknowledged that 40 per cent of major bank profits already come from home loans and that approximately $920 of the average monthly mortgage repayment is now pure bank profit. A spokesperson described this as “an unfortunate coincidence” and “completely unrelated to anything we did today (this year) or in any of the three rate hikes preceding this one.”
Reactions across the country have been mixed. In remote communities where petrol is already $3.40 a litre and there is no mortgage market to speak of locals were puzzled to learn the RBA had been “fighting inflation” for them. “Eya” said one Elder in Tennant Creek “you reckon they want me to drive less? I drive 400km for groceries. What am I gonna cut back on… the existing?”
Treasurer’s office responded by releasing a graph showing inflation will fall as soon as enough Australians are too unemployed to buy anything. The graph was widely shared. The graph was also upside down.
Dr Ledger closed the press conference by gesturing toward a giant brass thermometer mounted on the wall labelled “Vibes-O-Meter”. The needle was hovering at 97 and climbing. “When this gets to 100” he said, “we hike again. When it gets to 110 the economy is officially in recovery.”
A reporter asked what happens at 120. Dr Ledger smiled and said the RBA does not comment on hypotheticals.
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