Without a doubt all the economic stimulus washing around muddies the water and I reckon you are right in saying that we won’t have a clear idea where the global economy is heading until governments ease up on the spending.

But when will that happen I wonder? I guess in Australia the money will keep flowing until Rudd gets a second term, in the UK the government there needs to toss money about to try and avoid being wiped out at the next election and in the U.S. I reckon President Obama can’t do anything too drastic with the mid term elections coming up. China also seems keen to keep spending while here in sunny Japan the government is talking about easing up on the stimulus measures but will they?

So I guess 2010 in general looks like another year of spending and debt as far as G20 economies are concerned.

As for the RBA and interest rates, I think you may be right in saying that Glenn Stevens was also trying to send a message to Rudd & Swan about government spending. But will Kevvy and Swanny even understand the message?

My take on it all is that there is so much government stimulus washing around the world, it’s difficult to know how much real demand there is. And I don’t think we’ll really have an answer to that until the stimulus packages start to wear off a little bit more. But then again, I think governments around the world are worried that there isn’t that much underlying demand. Hence the near universal calls to ‘keep the stimulus going to support jobs’ or whatever it is Swannie likes to say. So I think the political spin on it all is actually hindering at the moment. Time for governments to step back a bit and see if the bike will stay upright without the training wheels.

It’s interesting that the RBA is raising rates and I suspect that you’re right in that it is about keeping the housing bubble somewhat in check. But I also think that Stevo wanted to send a message to Kevvie and Swannie that they’d probably spent enough and to think about pulling up a little.