Comments on: Sharp slowdown is further off than the RBA thinks

By: Andrew J Smith

Andrew J Smith — Thu, 01 Jan 1970 10:00:00 +0000

Australian national obsession through investment, via debt, in bricks and mortar (with houses becoming bigger), and assumed future capital gains. Surely there are more useful investments for Australia that do not tie people down on the mortgage treadmill (or at least smaller higher density development). Then again keeps borrowers obedient in the workplace versus those without mortgages who must be experiencing schadenfreude after listening to all those god awful boring conversations about the value of other peoples’ homes.

By: Andrew

Andrew — Thu, 01 Jan 1970 10:00:00 +0000

I agree with Jeebus that I can’t help thinking the political bleating about rates comes from the fact that we have converted mortage holders into some kind of national victims in need of protection from the harsh realities of debt. I am sorry for those currently peering out at the world from within the bubble, but I’m not sorry enough to put up with high inflation and a 0.58 cent dollar again. It hasn’t been rewarding to save or invest in this country for some time, and we can’t keep pretending forever that granite top sinks in the Eastern suburbs are actually the economy.

By: jeebus

jeebus — Thu, 01 Jan 1970 10:00:00 +0000

It seems the biggest impact has been to grind the property industry to a halt. Will the debt circus continue, or is Australia about to follow its US, UK, NZ, and Spanish counterparts into a property collapse?

By: Frederic L

Frederic L — Thu, 01 Jan 1970 10:00:00 +0000

This article is very good. It is about time someone went public on the fact that there really should not be any cut in rates at least until next year.
Did the RBA not say inflation will not drop to the top of their target of 2-3% until 2010. That is over 18 months away. The RBA target may as well be 4-5% for the next 2 years. What is going on? There might as well not be a target band.
Last quarter, GDP rose more than expected. What does that say? We have had at least 7 years of strong growth and relatively cheap credit, now we have 3 months of not as strong data, and everyone panicks.
The moment the media rip into this issue, the more it is magnified beyond proportion. One must also ask how can we rely on "consumer and business confidence" as key economic data. What people think and what people do, clearly, are different things. Does it matter what Joe Blogs thinks? NO. All that matters is what he does.
We also must realise that the AUS consumer appears to be quite smart. Sure, according to the RBA, they can pull their heads in, but they can also start spending again as quickly as they stopped. All this is, the cut in rates, is a sign to not worry about your spending levels too much, just have a 3 month break, and things will be back to normal again.
This is a joke. Really. People need to toughen up, and be responsible for themselves. This is a democracy; we have freedom and the right to personal autonomy - with that comes RESPONSIBILITY. You can't think you'll get bailed out all the time - 1 day, you won't. Inflation is rising globally, and what is not fixed now will need to be fixed sooner or later. See Marc Faber.
We need to wake up and get out of the lie we are creating.