Yes We Have No Bananas

If there's one thing I definitely do not understand, it's economics.  Shortly the RBA will be meeting to decide whether or not to put up interest rates.  One of the main causes for concern apparently is that the price of fruit, bananas being the most quoted example, has gone up dramatically following last year's Queensland floods.

Now I get that part.  I can understand that if 70% of a state was underwater, less fruit is grown and because demand can therefore not be met, prices go up. 

What I don't understand is how making me pay an extra $20 a week on my mortgage is going to solve that problem.  My paying an extra $20 doesn't suddenly make all the water go away and the trees come back.  There's still a shortage of fruit.   

Now perhaps, for some people, that extra mortgage payment suddenly means that they'll stop buying fruit and therefore the demand and price will drop but in my opinion there is no rationality to that argument.  Those people who want to buy fruit and can still afford it are still going to do so.  The rest of us just think about the good times when we could afford fruit.  We've already stopped adding to the demand side of the equation. 

No wonder they call it "The Dismal Science".

But the real kicker?  Other than the extra mortgage repayments?  I don't even like bananas!