The RBA is a paid propagandist for the immigration-led, labour market expansion economic model.
This means it must lie about the wage-suppressing effects of immigration or voters will demand the model (some might say scam) is shut down.
But even the best liar occasionally lets slip the truth, and yesterday’s SoMP is a great example.
In it, the RBA goes to great pains to warn that Trumpian anti-immigration policies will lift wage growth. Nine times.
It even goes so far as to warn of a stock market crash; the prospect is so terrifying.
A repricing of riskier assets could also occur if restrictive immigration policies have a larger-than-expected effect on US population growth, labour supply and inflation, given the potential to affect the outlook for US interest rates.
But when it comes to the Australian section on wages, immigration is not mentioned once.
To repeat, in the SoMP, the short summaries of the US economy are stuffed with hysterical warnings about the impact on wages of lower immigration.
Meanwhile, in the Australian economy section, which is a Biblical palavering, immigration is never mentioned.
To put this into perspective, US immigration in 2023 was 0.8% of the population (including illegals).
While Australian immigration was 3% of the population in the same year.
These trends have continued, more or less, since.
The only way this unparalleled cognitive dissonance is possible is through active censorship.
So what, you might say! At least it’s not a racist!
The problem is that even though immigration is systematically cancelled from the RBA’s consciousness, it continues to exist in the real economy, so how can the former understand the latter?
It can’t, and that is why it cannot forecast wages nor, therefore, inflation.
A year ago, the SoMP predicted WPI ending 2024 at 3.7%. It then raised it in May to 3.8%.
It ended the year at 3.2% and is in free fall with the annualised quarterly growth at 2.8%.
The Australian labour market is not tight. It is loose. Wages are screaming it, but the RBA’s selective deafness can’t hear it.
