Can someone help me connect some dots?
Aussie inflation will not stop going up until the world prices oil in a more stable currency other than the US dollar (Euro or Sterling?)
If transport costs (petrol) are causing food inflation and it appears that the price of oil is going to keep on rising, that can only be bad for Aussie interest rates.
The US Fed seems to be injecting more US dollars into the system which deflates the dollar and increases the cost of oil, which leads to higher prices at the petrol pump which leads to higher prices at the supermarket which leads to higher interest rates.
I know its simplistic but
a) Will the world shove off the US dollar to pay for oil and choose something more appropriate?
b) Are interest rates an ineffective tool to control inflation in this context?