The Reserve Bank Governor has taken too long to tap the brakes on the cash rate, with his preferred measure of inflation now firmly outside the target 2 to 3% range. He was so sure inflation was under control that he scolded traders for pricing in rate hikes, and now the debate is May or June and how much. Some borrowers who took Philip Lowe’s repeated comments about cash rates not rising until 2024 at face value will be forced to pay the price for not locking in a fix of around 2 per cent last year.

The negatives for the market just keep piling up... this week’s downgrades of global growth forecasts by the IMF, a result of 20-year high inflation, the end of free money, the rise of autocratic powers, increasing geopolitical risks in the Pacific, a Chinese-colonised world where globalisation is reduced through supply line restrictions, soaring energy prices, all of the above, plus both sides of Australian politics handing out stimulatory spending that defies the aims of tighter monetary policy.

I agree with Marks which is why I don’t make frequent market forecasts in these pages but I broke my rule in December 2021 when I stated:

But while I argue that anyone with a long-term investment horizon should remain significantly invested in equities, I am starting to be somewhat underweight equities myself because I personally believe that the equity market is going to decline quite a lot sometime in 2022.

The saying goes, the first casualty of war is the truth, but we also know that the first winner in elections is hypocrisy. Both sides are at fault, with petty point-scoring and a fear of saying anything too meaty that might risk an alienation of a voting block. Answers and counteranswers on taxes, cashless credit cars, visas, Medicare, energy costs, climate change and wages. The media feeds the farce by publishing numbers and promises without much critical examination.

When Scott Morrison said this the hypocrisy meter crossed the red line:

“The Labor Party is scaring the pensioners about something that is a total, total lie.”