How did the RBA pay for it? They created the money.
The RBA argued they bought bonds, including state government bonds, to drive down term rates to stimulate the whole economy, not to finance the government. If that’s the case it’s a happy coincidence, because the amount the RBA bought in 2020 and 2021 largely matched the government’s deficits. The RBA has a mark-to-market balance sheet. So when its raises rates to perform its main function of controlling inflation, the prices of all that fixed rate debt it bought collapses.. At the end of June, the value of the RBA’s Australian dollar securities had fallen by $46 billion over 12 months leading to a loss of $36.7 billion.negative equity position
Equity is irrelevant – merely a balancing item, positive or negative – since the central bank can print or cancel money any time with the press of a button. Equity is recorded to help stakeholders who only view the world through a commercial lens.Well, to balance the balance sheet, it’s recorded as a negative liability. Two negatives make a positive, so a negative liability is effectively a pretend asset – money that could be created if needed but hasn’t been.
Go broke no, printing more debt and put it on the balance sheet hyperinflation
“It is not a failure or debunking of MMT. It is just poor policy” Current inflation caused not by printing money but too much spending - big deficits at a time of full employment. Government should take money away from someone - but POLITICS has prevented this. publicdebt
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