MAN Financial chief economist Dr Frank Shostak has a warning for investors. The Reserve Bank’s monetary policy is “out of control” and that means inflation is heading up, interest rates are set to rise and the share market is only being supported by excessive money supply.
He believes the Reserve Bank uses incorrect definitions of inflation and even money itself. As a result, he says, the bank is actually causing inflation, rather than combating it. “
The Reserve Bank claims that it does not print money, but merely accommodates demand, but printing money is exactly what it is doing,” Shostak told The Australian in Sydney this week.
