Will someone please explain to me how the Reserve Bank makes life better in Australia by putting up interest rates so that ordinary people have less money to spend?
Don't forget - every cloud has a silver lining, it takes two to tango, it's a long way to Tipperrary, a bird in the hand is worth two in the bush, and, of course blood is thicker than water but so is soup.
Perhaps cliches and platitudes are also the opiate of the people?
Hey RobE! Remember what Clark Kent (Superman) once said? No pain, no gain .......
Or put simply, it just may be a case of what my old economics professor once told us - too many $$ chasing too little goods in an economy is a very bad thing indeed. Remember Keating's jibe of a Banana Republic or Argentina's 1000% inflation rate back in the 70's or 80's? You get the idea!
Its only going to hurt those people who have borrowed megabucks ontheir houses without factoring in these rates rises.
Its going to hurt those people who "really need" a plasma and a ford territory now and put it on their AGC card.
I know people in the mortgage game and theyre amazed at the number of people who are cutting it really fine wanting to take out 100% loans for houses worth 500,000. A 0.25% rise will hurt them when you add up petrol and food prices.
But if the Reserve Bank doesnt do this, people will continue to burn the plastic and we will end up back in the 1980s again. And anyway, there are economists who think that the worst may be over (if only we'd get some rain).
Thumper.
Life is what happens to you when you're busy making other plans - J. W. Lennon
Thing is, interest rate rises don't only afftect mortgages, they affect personal and other loans and credit cards as well. It's already hard enough to pay off a credit card without an even higher interest rate on top of that. Why did we need another rate rise in such a short time?
It is quite appropriate to mention Keating in this context. He and the current Government sing from the same economic hymn book. They do not believe that the job of Government is to run the country for the benefit of the people.
I do not believe that throwing in a virgin stops the volcano from erupting because that makes "the gods" happy.
I do not believe that jacking up interest rates because that makes "the economy" happy helps Australians to lead better lives.
I suspect that increasing the rate makes it look like something serious, complicated and clever is being done.
We mugs all get a punch in the guts but nothing actually gets fixed.
Very true, Thumper! Hopefully, in time it will bring some sanity back to the overheated market. But probably not until the resources boom in Western Australia cools down abit. But with China, and now India, gulping down minerals like there's no tomorrow I guess it will take a bit more time yet. And with more wars starting all over the world, the arm factories are rubbing their hands in glee - think of the multi millon $ bonus for those war merchant executives.
On a brighter note, thank God Little Maria & Rockin' Suzie are still charging $10 entry. Plus no charges for entry to the Gully and Monash!! How do those guys do it? More like running a charity than a commercial joint! Keep it quiet before those guys start realizing the Reserve Bank has once again increased the interest rate .........
Yeah Paul, "over heated economy", "resources boom", "tooth fairy", "coke is the real thing".
Thumper, so why not ban the advertising of stuff we don't really need, like what happens with smokes.
Maybe Ford Territorys and credit cards need scary warnings on them.
How would that look? At the end of an elegantly filmed TV commercial for some expensive product comes the compulsory Government warning announcement,
"Buying things you can live without, especialy on credit, really stuffs up the economy, you dumb ordinary citizens!"
Yeah Paul, "over heated economy", "resources boom", "tooth fairy", "coke is the real thing".
Thumper, so why not ban the advertising of stuff we don't really need, like what happens with smokes.
Maybe Ford Territorys and credit cards need scary warnings on them.
How would that look? At the end of an elegantly filmed TV commercial for some expensive product comes the compulsory Government warning announcement,
"Buying things you can live without, especialy on credit, really stuffs up the economy, you dumb ordinary citizens!"
Have you seen the prices for blocks of land lately? I was shocked at the ridiculous prices people are willing to pay for tiny blocks of land 40 to 50k out of Melbourne. Developers turn a swamp into a lake, build a park next to it and lay some instant turf and get away with charging $250,000 for a 500m2 block of dirt. Make no mistake, they havent slowed down in sales.
As long as people are willing to pay that kind of money, for houses and mod-cons, life will be just that more difficult for all of us.
Warnings arent necessary. People should just stop putting up with this crap.
Thumper.
Life is what happens to you when you're busy making other plans - J. W. Lennon
I've gotta have a 4wd, a boat, holiday overseas and my house must be a minimum of 36 squares, two ensuites and a home theatre, dont forget the pool or billard room - oh did I forget to mention this is my first home and I will borrow 100% on one wage whilst my wife has our third child and then I will bitch and whinge about the government putting up interest rates by a quarter of 1 %. How dare they try and slow down the economey when we battling little aussies only owe just on one trillion (yes thats right a trillon) dollars in debt.
Coming from a dirt poor background, collecting and selling beer bottles to earn a quid for meals - yes thats right food not luxuries - I have no sympathy for any idiot that puts themselves so far in debt that a small rise in interest rates causes them hardship. This mentality of I must have it all now is what gets them into trouble not the economics. Gee I have got hot under the collar.......
there is a challenge to us all as interest rates rise and petrol price increases flow through the economy. There will inevitably be a reduction in disposable incomes which is usually spent on entertainment - sport, arts, dances, movies, gambling, eating out, etc. It is likely the audience sizes will get smaller with fewer venues willing to present entertainment. Enjoy it while you can as will get a bit tougher soon
I feel that people affected by the economy are people that dont try hard enough, you get what you work for in this world. It does not worry me if interest rates go up or petrol. The ones that are having all the kids should be made to pay, and pay big time. Everything we have is paid for, I have always said if you cant pay cash , dont get it.Still look at all the people playing the pokies, plenty of cash to spend there.
I feel that people affected by the economy are people that dont try hard enough, you get what you work for in this world. It does not worry me if interest rates go up or petrol. The ones that are having all the kids should be made to pay, and pay big time. Everything we have is paid for, I have always said if you cant pay cash , dont get it.Still look at all the people playing the pokies, plenty of cash to spend there.
What do you mean that the ones with all the kids should be made to pay big time?
Thats the kind of attitude thats causing our ageing population. We should be encouraging people to have kids not make them "pay big time".
Its those kids that are going to be spoon feeding us and wiping our faces and other body parts in the home in the future. Lets see who the burden will be then!
Thumper
Life is what happens to you when you're busy making other plans - J. W. Lennon
An interesting discussion indeed. If the people with the kids are the ones to pay most taxes should the defence budget be met only by those people who support taking action against other countries? Educating the population, whether they are young or old, is genearrly a positive thing to do in an economy so the financial 'burden', just like that of defence, needs to be shared across the population.
Yes, I agree with you Bassthumper and in particular, IanÂ’s view.
Where taxes are allocated is an issue in most Western Countries and it bewilders me at times how often the priorities are given to be so wrong.
Having said that though, with regard to our level of taxes, interest rates and other so called related economic tools, we still need to realise that living in the best country in the world comes at a price mainly due to our small population.
If we travel and want to stay in the best hotels, we have to pay for the privilegeÂ…..I still reckon the privilege of living in Australia is priced accordingly.
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