The RBA has just come out with their new motto:
If you are in a hole, stop digging. If you are in a bubble don’t dare stop blowing.
Apparently, the RBA reckons that Australians are not sufficiently indebted. Having expressed concerns last year about the levels of house hold debt, watching it grow higher, it seems now that it is not a problem
It seems not sufficient that Australia has one of the highest levels of household debt to GDP in the developed world (the only ones higher have or had negative interest rates). The RBA it seems wants Australian to borrow more.
Translated into more common parlance, the RBA Assistant Governor is saying to Australian banks.
Loosen up. Chill out. Just lend willy nilly. And don’t worry if all the loans turn to crap. The Australian tax payers will bail you out. And those people who borrowed too much who are now suing you for lending them what they asked for, well, just price that in to what everyone else pays.
The eco-clerics of Martin Place have spoken. After all. The data and history is on their side because this time it is different.