I see even Prime Minister Julia Gillard can no longer resist doing what she’s not supposed to do, i.e. advise the Reserve Bank of Australia to cut the cash rate – just as I’ve been suggesting since 2005.
Inflation’s hasn’t been the problem, guys! Mind you, it will be eventually [..... and how!]
Now that you’re at it, make the rentiers pay their way, Julia!
They are an untapped horn of plenty–more than one-third of the economy–the answer to all your revenue prayers.
3 Comments
Reducing the interest rate is like a drug.. The hit is great, but soon enough you need another, and another… and in the end you suffer for it.
So you’re saying high interest rates are a good thing, Chris? For whom? They won’t curb the real estate bubble: it’s started correcting itself.
High interest rates are a good thing for anyone who isn’t a rentier.
The current real estate drops are due to uncertainty; the market is spooked. Nothing’s quite right. An Interest rate drop now is as likely to reduce confidence as it is to increase it.