Too late, she cried...

So the CPI came out yesterday and showed a whopping 3.9% increase for the year. Some of you may remember my call for the last rise to be 50 bpt instead of the 25 bpt that we got. The RBA however believe that they are untouchable.

The background - The RBA is charged with the duty of maintaining inflation at a long-term average of between 2 and 3 percent. Now I don't know about you, but if I only had one aim in my job, and missed it by around 56% (being 3.9 when I was aiming for 2.5), I don't think my employers would be overly impressed. But yet, everybody tries to tell me they are doing a wonderful job and apply the following nonsense arguements.

1. It's a long-term average so it can go outside the range from time to time - Why bother having a board. The long-term average will always settle around 2 to 3 percent. It is there one stated aim to keep it there but they failed. It is similar to failing a subject at school and then trying to argue to your parents that at least your long-term average is a pass.

2. You have to look at the underlying inflation rate and take out volatile items like petrol and bananas - Crap! inflation is inflation. It is based on an average basket of goods being purchased by an average consumer, you cannot just pick and choose items as you like. If prices rise, it is because of supply and demand which is what you lot are meant to be looking after.

3. It would hurt to east coast too much to raise rates just to look after a booming WA - It is the reserve bank of Australia people, not just the bank of Sydney. I am quite certain that any rate rises in the past were not viewed in the context of how Perth would suffer when the East coast was flying.

I think that the RBA will move another 25 bpt in November, but again, they are missing the point....literally!