the once-in-a-hundred-years mining boom was not living up to the rhetoric (read: beat-up) that it would drive the economy so hard that inflation was just about to break out everywhere. But even though they adopted a more pessimistic view in the MYEFO they maintained their obsessive mantra that a fiscal surplus was an economic imperative. The reason the "markets" and the bank economists keep being "surprised" is because they have bought into the hype about government deficits causing inflation and that the Australian economy is being excessively stimulated by the deficit in the face of the record level terms of trade. We are continually being told how much the mining sector is driving growth. The reality not often mentioned is that the growth is going overseas -- the current account is still in deficit and so the growing export income is allowing imports to grow and the overall contribution of the external sector to local GDP growth is negative. If the commentators really delved into what has been going on in the labour market -- near zero employment growth, rising labour underutilisation and no significant wages growth, then they would not be surprised at all by the moderating inflation. They would have realised that the small spike in inflation in the earlier part of 2011 was almost all down to rising agricultural prices as a consequence of the natural disasters. This time last year, surrounded by claims of the vast majority of economists noted above, I told various journalists and