RBA clueless as to how monetary policy works. In 1985 Paul Keating lifted government capital controls. This meant that private banks were no longer restricted as to how much money they could borrow from offshore banks and what they used it for. The private banks had $8 billion in foreign debt in 1985. By 2008 they had $800 billion in foreign debt. This lifted house prices from 4 times average earnings to around 12 times average earnings. Banks now lend 70% to Households (consumption) and only 30