Not that the Reserve Bank mandarins plot such things, but they know that if they ever want to generate a rash of headlines, all they have to do is mention housing and mortgage rates.
And to really generate attention, they only have to throw in something about bank margins and profits.
The curious thing is that everyone else seems to care more about those issues than the RBA does itself.
Oh, there’s no doubting that the central bank from Governor down is red hot about the ineptitude of various governments and our need to build more housing to ameliorate an unfortunate surge in prices, but the RBA is interested in bigger fish than the housing red herring.
Assistant Governor Philip Lowe as good as said as much yesterday while fingering the importance of the likely surge in our terms of trade. As if to prove his point, media reporting of his speech tended to stress the relatively small bits that related to housing.
This is understandable as most Australians already have the majority of their wealth tied up in their home or would like to. (As a character in David Williamson’s Emerald City observed, the problem with Sydney people is that they think they know the meaning of life: waterfront property.) Yet it’s those unsung terms of trade that could be telling us much more about the boom that’s unfolding.