Tuesday, November 3, 2009

Interest rates soar .25%... again

During the Melbourne Cup transmission there was an announcement that the Reserve Bank of Australia had decided to increase interest rates by .25%.

In the announcement was the message that some people may need counselling because of the soaring interest rate rises.

Don't people factor in a certain amount of interest rate rises when they take out a loan? Isn't that what a sensible person would do, calculate the amount they can pay back comfortably, factoring in rate rises (particularly if interest rates are at a 22 year low), and deciding what they can afford to borrow?

Please, tell me I'm correct in this assumption.


Wand said...

The reserve bank's setting interest rates is a crude control for inflation in the economy. I seem to remember that the bank was given a charter some years ago to manage inflation in the economy, i.e., to keep it within a certain bandwidth. I forget what the range is (too lazy to look it up) but the Reserve is responding to the economy in knee jerk reactions (that's as I see it).

Now just wait for the ETS with significant cost increases across everything in the economy (that's if the ETS gets up). Now picture the Reserve trying to dampen inflation by increasing interest rates to counter the effect of the ETS. That would be compounding stupidity with stupidity. On the topic of stupidity, I listened to Turnbull being interviewed by Alan Jones yesterday. It's worth listening to to understand how totally incompetent and useless he is. With him the Libs are stuffed and my vote will be finding other candidates.

Now do people need counselling? Possibly if they voted for the Canberra mob - otherwise bah - it's just the usual MSM beatup - the victim mentality with people not responsible for their own actions.

O/T - I was censored at Blair's by suggesting Mustafa Shag on his Names game. And I didn't even link to some pictures here or here. Still, I suppose you know the story behind Mustafa. (Say I do like the name of the store owner -- funny that name)

Some people just don't have a sense of humour.

That's enough ranting for one night.

kae said...

A workmate observed that if they needed counselling for a .25% rise they're probably in way over their heads.

I listened to the Jones/Turnbull interview...

Turnbull really said... well, not much at all, did he?

Poor Alan Jones, totally frustrated with the nothing he got from Turnbull.

Egg said...

Re Mustafa Shag: surely, the prophet saw that one coming?