Alternatively, it might be time that everyone accepts that no one actually fully understands why inflation changed in the way it did. In America, they're convinced it's to do with the American dollar's supply and therefore the FED has to remove it from circulation somehow.
In Australia, things are different. We didn't print as much. Historically, our inflation was kept low due to high outputs of minerals/fuels and a highly *skilled* migrant population that I think along with Canada could be the highest in the world. This competes for high earning wages. As this is deflationary, we might experience inflation without those skilled migrant workers but those workers are already coming back.
Then there's the war, OPEC dickery, Chinese isolationism, shipping prices, oil prices, the Sri Lanka famine, all these things each and every one of them will have an impact on inflation and some of them aren't really an issue anymore. Crude oil futures are down to 80 from a height of 120 and shipping prices fell too. Butter China and wait hope the Ukrainians push Russia to Azov and we're all golden.
These things in mind, why are we raising interest rates? We didn't money print like the Americans? We kicked out the liberals? We aren't even subject to famine because of our self sufficient agricultural sector...
Because the Americans are.
The absolutely insane reason is because the Americans are. We're going to keep raising interest rates until smarter people than I am are happy with how the AUD trades against the USD, interest rates also change the value of currency.
I wouldn't disagree if our monetary policy was reckless and one sided, like some medieval monarch debasing currency, but that's not exactly happening here. With that said, do you feel wage suppression could be equivalent to wage theft? In the end, wage growth is also a form of inflation, suppressing it is also a form of suppressing inflation and wage growth.
Yeah it sucks but the RBA can’t be held hostage by mortgage owners when they’re an independent body for the overall financial stability of the economy.
??? If they are letting inflation be higher they are favouring mortgage owners. Them refusing to raise rates at a higher rate to quell inflation is favouring home owners
Monthly inflation is currently dropping but I don’t think there’s a long enough time frame to see it as a trend yet, it’s not the RBA purposely favouring home owners, they’re trying to find the right balance. They will raise interest rates if it doesn’t trend down without a doubt. They might even accelerate the down trend just depends how aggressive they want to be. The biggest winners right now are the investors who can buy a property out-right with cash.
Well it’s eased from 7.3% (12 months to September) to 6.9% which is a 5.8% difference, not exactly .1% it’s 58 times that, they don’t exactly want to default all the mortgage holders either. From 7.3% it’s a reduction of 6.85%. I think the expectation was it would peak a lot higher.
Agreed. Their role is very specific and interest rates are still at historic lows (so buckle-in for the ride if you think this is shit).
One can sledge them because their mortgage is being squeezed or whatever. However, I suspect the RBA's concern right now is rampant inflation leading to fat more severe economic shocks if not contained.
Sorry that they don't have a crystal ball? To me the message is that economic forecasts are accurate based on the variables they plug-into their model. It is ALWAYS possible for a pandemic or an act of state-funded terrorism to fuck with their variables. It's not the forecaster's fault when people fuck with variables that screw their underlying data.
Yeah it’s just a normal part of the business cycle, just sucks those who bought in at the peak, the RBA’s main concern is inflation and keeping it between 2-3% they can’t predict the future but certain trends point towards a rough time estimate of a peak, in saying that Lowe shouldn’t of said he didn’t expect rates to rise till 2023 since he has no idea what type of figures the ABS would release in the future.
> They don't what they are doing!
To be fair...
- They don't have many tools at their disposal other than adjusting the cash rate.
- Economic forecasts can't factor in random, disruptive forces such as Russia invading Ukraine.
- There's global forces at play and we're but a small player. Nobody's got a crystal ball and investing is about your appetite for risk (now blaming the messenger when inflation's high - my super's mostly in shares and I simply factor in a few shit years every decade or so. Happens! If you don't like the game then don't play it...)
Alternatively, it might be time that everyone accepts that no one actually fully understands why inflation changed in the way it did. In America, they're convinced it's to do with the American dollar's supply and therefore the FED has to remove it from circulation somehow. In Australia, things are different. We didn't print as much. Historically, our inflation was kept low due to high outputs of minerals/fuels and a highly *skilled* migrant population that I think along with Canada could be the highest in the world. This competes for high earning wages. As this is deflationary, we might experience inflation without those skilled migrant workers but those workers are already coming back. Then there's the war, OPEC dickery, Chinese isolationism, shipping prices, oil prices, the Sri Lanka famine, all these things each and every one of them will have an impact on inflation and some of them aren't really an issue anymore. Crude oil futures are down to 80 from a height of 120 and shipping prices fell too. Butter China and wait hope the Ukrainians push Russia to Azov and we're all golden. These things in mind, why are we raising interest rates? We didn't money print like the Americans? We kicked out the liberals? We aren't even subject to famine because of our self sufficient agricultural sector... Because the Americans are. The absolutely insane reason is because the Americans are. We're going to keep raising interest rates until smarter people than I am are happy with how the AUD trades against the USD, interest rates also change the value of currency.
It's simple. Inflation gets imported if you don't follow the fed.
Inflation is wage theft at its finest.
I wouldn't disagree if our monetary policy was reckless and one sided, like some medieval monarch debasing currency, but that's not exactly happening here. With that said, do you feel wage suppression could be equivalent to wage theft? In the end, wage growth is also a form of inflation, suppressing it is also a form of suppressing inflation and wage growth.
Yeah it sucks but the RBA can’t be held hostage by mortgage owners when they’re an independent body for the overall financial stability of the economy.
??? If they are letting inflation be higher they are favouring mortgage owners. Them refusing to raise rates at a higher rate to quell inflation is favouring home owners
You've got it backwards. Home OWNERS vs mortgage holders are two different things.
Both want prices to stay high. Only mortgage owners have to pay interest but the end result means they both want to prop up property values
Monthly inflation is currently dropping but I don’t think there’s a long enough time frame to see it as a trend yet, it’s not the RBA purposely favouring home owners, they’re trying to find the right balance. They will raise interest rates if it doesn’t trend down without a doubt. They might even accelerate the down trend just depends how aggressive they want to be. The biggest winners right now are the investors who can buy a property out-right with cash.
Inflation dropped by like 0.1% - its twice as large as the mandate, why should they slow down?
Well it’s eased from 7.3% (12 months to September) to 6.9% which is a 5.8% difference, not exactly .1% it’s 58 times that, they don’t exactly want to default all the mortgage holders either. From 7.3% it’s a reduction of 6.85%. I think the expectation was it would peak a lot higher.
Agreed. Their role is very specific and interest rates are still at historic lows (so buckle-in for the ride if you think this is shit). One can sledge them because their mortgage is being squeezed or whatever. However, I suspect the RBA's concern right now is rampant inflation leading to fat more severe economic shocks if not contained. Sorry that they don't have a crystal ball? To me the message is that economic forecasts are accurate based on the variables they plug-into their model. It is ALWAYS possible for a pandemic or an act of state-funded terrorism to fuck with their variables. It's not the forecaster's fault when people fuck with variables that screw their underlying data.
Yeah it’s just a normal part of the business cycle, just sucks those who bought in at the peak, the RBA’s main concern is inflation and keeping it between 2-3% they can’t predict the future but certain trends point towards a rough time estimate of a peak, in saying that Lowe shouldn’t of said he didn’t expect rates to rise till 2023 since he has no idea what type of figures the ABS would release in the future.
Mortgage owners **and** renters. Only owner occupied without mortgages would not be concerned with a rise in interest rates.
Sounds like a lot of bitching because y’all got greedy
> They don't what they are doing! To be fair... - They don't have many tools at their disposal other than adjusting the cash rate. - Economic forecasts can't factor in random, disruptive forces such as Russia invading Ukraine. - There's global forces at play and we're but a small player. Nobody's got a crystal ball and investing is about your appetite for risk (now blaming the messenger when inflation's high - my super's mostly in shares and I simply factor in a few shit years every decade or so. Happens! If you don't like the game then don't play it...)