Interest rates

[Matabele]

Can any of you banking geniuses explain to this economist why we are being told it is inevitable that interest rates are going to go up next week?

Interest rates are used to reign in consumer and business confidence and therefore inflation caused by optimistic pressure.

Do the fat cats on $250,000+ wages not realise that the current inflationary pressure is not caused by optimism but by uncontrolled high prices on two essential staples - oil and food.

So if people already have less disposable income because of higher prices what sense is there in leaving them with less in the form of higher interest repayments?

Huh, huh, huh??????

 

[Guest]

Inflation is also currently being caused by a skills shortage which is increasing the wages of the jobs in demand.

A lot is being caused by the minerals boom and there are just not ebough people particularly in WA to fill the vacant jobs.

Why would someone work in McDonalds in WA when they can earn $70-$80k pa for working in the mines doing basically a labouring job.

 

[Matabele]

WA is a minor part of the economy - all things considered. The powerhouse states have been sluggish for quite a while already and they're also the ones with the highest levels of household debt.

Go figure.

 

[Fluffy]

labor must be in government because rates cant rise under howard

 

[Fro]

That would be Labor I assume Fluff??

 

[PJ]

it would have to be becasue there aint much 'labour' involved in government....

 

[byso]

Who knows Flusfter, If your pin up boy Latham was PM we could be staring at 12% rates

 

[Fluffy]

yes true - but its more likely we wouldnt

but at the rate little johnny is going we will be at 12% soon so dont worry

 

[Matabele]

At the rate Johnny's going he's flirting with a cataclysmic collapse of the economy - starting from next Tuesday's rise.

 

[The Gronk]

I thought when they calculated the inflation rate tey took into account the things that were out of kilter like oil and bananas, and then averaged....so it looks like there is more to it.

Maybe government pork-barrelling has been the problem?

 

[Guest]

If rates rise next tuesday then it will be a classic case of the cardigan set at the reserve bank being so out of touch with reality and the real world.

Maybe it is a push by big business to force farmers off the land so the big corporations can come in and buy large tracks of land at bargin prices?

They will also be able to buy large amounts of houses in battlersville because i can tell you there are more and more mortgagee sales erevy day especially in the western suburbs.

I suppose that it could be worse. We could have the mufti as governor of the reserve bank. Then we would be really screwed

 

[Jatz Crackers]

Run for the hills..........hello banana republic.

 

[Matabele]

We won't be a banana republic this time - they're too expensive!

Interesting that our Treasurer thinks the mineral boom is over:

http://www.smh.com.au/news/national/mining-boom-over-costello/2006/10/31/1162278141451.html

 

[Fluffy]

hmmm - in which case the economy really is stuffed

however from what i see and hear about the need for people in my profession in the mines still increasing id have to say its still going well

 

[Matabele]

So the knobs are going to go ahead and rise them today despiute several states already recording zero or negative growth and business confidence at record lows.

Get ready you cotton wool protected Gen Y mob. Let's see how you cope with a recession to knock your starry eyed and unrealistic optimism.

 

[Fluffy]

ill cope fine - but im in a good position - others will be hit hard.

It does help me out in that i want to enter the property market in the near future and the rate rise keeps prices tumbling, lower than 3.5 years ago in the areas im looking at

 

[Fluffy]

Im so glad little johnny got voted in to make sure interest rate rises wont occur - 8 in a row now isnt it?

 

[Canteen Worker]

Bottom line is that Johnny takes the credit when they are low and blames externals when they rise.

It is an independent board of the reserve bank that makes these decisions but don't tell the punters that.

 

[Fluffy]

Dont forget the instant results he got taking over 10 years ago but now he needs time to make things work - could it possibly be these things take time and he rode Keatings wave early and now things are falling apart because the labor policies are no longer in effect?