China is booming again, as are other Asian nations.
Australia, a trainee Asian nation, has begun to raise rates and its board has made the astounding statement that it would be “imprudent” to leave the official rate at the 50-year low of 3% any longer.
The obvious point is that, if 3% is imprudent, 3.25% is hardly prudent. Why the Reserve did not hike by 50 points last month is difficult to fathom.
Henry had his doubts about the strength of the economy, but virtually all of the data for the Australian economy since then has indicated strength rather than weakness.
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Brazil has joined the ranks of nations whose interest rates are likely to soon rise.
The Economist reports: “The real (Brazilian currency) has strengthened against the dollar. Brazil’s current-account deficit is widening again and is likely to continue to do so. As the economy starts to hum, many analysts expect the central bank to have to raise interest rates again.”
In the US, there are claims that the time of frugality is over.
Annie Gowen of The Washington Post presents some quite off-putting stories of shopaholics who have been holding off but are no longer able to hold out.
Chicago TV this morning has been talking about “frugality fatigue”, which it says is “good news in a bad economy”.
But others differ, including Nobel Prize-winning economist Joseph Stiglitz, who says that deflation is a bigger risk.
Housing prices are believed to be rising again, but rents are down. Since hitting a peak in December 2008, real average weekly earnings have fallen by 1.9%.
Since the end of the boom, eight million jobs have been lost and the rate of unemployment is expected to hit 10% in the next month or so.
Frugality is here to stay for many Americans.