Wages Breakout versus Imagination Land

Once-were-inflation-warrior turned inflation capitulationist ‘Henry Thornton’ concedes:

if wages begin to surge, all bets will be off and the bank will need to hit the economy with additional rate rises until people demanding wage increases get the message.

If you like record-breaking growth rates in the labour price index, then you are probably going to love next week’s March quarter release.

Meanwhile, over in Imagination Land:

BRENDAN NELSON will today challenge Labor’s first budget a week before its release by claiming there was no need for spending cuts because Australia’s inflation crisis was “imaginary” and “a complete charade”.

posted on 06 May 2008 by skirchner in Economics, Financial Markets, Politics

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