Launching a Class Action Against the RBA

My inbox is still melting from last week’s column on interest rates!
 
It seems that right now everyone wants to stomp on RBA Governor Philip Lowe’s spectacles.
 
One of my readers was so ‘alpaca angry’ that he’s actually talking to his lawyer about launching a class action against Phil and his funky bunch of bureaucrats.
 
Here’s what he said…
 
Launching a Class Action Against the RBA
 
Hi Scott,
 
Why is there no class action being taken out against Philip Lowe and the RBA? How can the head of the RBA make unequivocal statements (not predictions) that interest rates will not rise until 2024 and then wash his hands and take no responsibility for the trauma (financial and mentally) his words have caused? Thousands of people, myself included, proceeded to purchase property based on these statements and are now in serious financial stress. To my mind, Philip Lowe’s statements were grossly negligent and have caused serious financial stress to thousands of hardworking Australians.

I have contacted my lawyer to investigate what options are available, but I am surprised that I have not heard of any legal action. I will willingly join in any class action that might be looming. What are your thoughts?

Ben
 
So I have a couple of thoughts.
 
First, Philip Lowe deserves to be benched.
 
He is, after all, one of our most powerful and highest-paid officials, and he stuffed up right royally.
 
(And, in doing so, ‘the Guv’ actually proved something I’ve said for years in this column: no one can predict where interest rates are going … even the bloke who sets them!)

Yet what he doesn’t deserve is the ugly media pile-on that’s happening right now. Apparently, there are paparazzi camping out at his home. What juicy pic are they thinking they’ll get? A snap of Old Filthy doing his morning sudoku over a cuppa on his porch?
 
However I agree with you: as taxpayers we should hold our highly paid (unelected!) officials accountable.
 
But while we’re talking about accountability, Ben … where is yours?
 
Did you really base a significant long-term financial decision on a relatively short-term prediction from the Reserve Bank?
 
And did you even read the published RBA statements before you went in paws and all?
 
If you had, you’d have realised there was incredible uncertainty around Covid, and that the global economy was in a state of flux (which is why Phil should have known to put his crystal ball away).
 
Instead, what most people did was listen to the pundits in the media who took Phil’s soundbite and shouted it from the rooftops. The same people who are now calling for his head. It’s not financial advice, it’s financial porn, plain and simple.
 
Look, no one put a gun to your head and told you to borrow too much money when interest rates were at their lowest levels in recorded history. I’ve written about this every week for the last decade, mate! So sorry, Ben, but I won’t be joining your pity party.
 
 Tread Your Own Path!