Alan Kohler on the RBA, China, the AUD and interest rates

Alan Kohler has written an interesting article in Monetary policy is losing its power. His article contains a couple of interesting ideas:

• The RBA probably made a mistake in 2009-10 in increasing interest rates.
• High capital inflows, mostly for new LNG plants in Queensland are going to keep the Australian dollar high.
• Mortgage rates are unlikely to drop to where they were last time the RBA cash rate was at this level; that's because the banks are facing higher international funding costs and more competition for deposits.
• The high dollar and higher funding costs mean that monetary policy, and that means the RBA, isn't as effective as it once was. 

He concludes with:

And no-one wants to borrow anyway. Manipulating the price of credit, which is all the RBA can do, is fine when credit is in demand. Now it's like manipulating the price of beef at a vegetarians' picnic.