RBA increases cash rate to 6.75%

Why have the RBA fix rates?

Why is the price of money sacred against deregulation? What is wrong with letting the market decide the interest rate. After all the sky didnt fall when the dollar was floated.

 

Hi guys,

I'm still yawning. Rate rise, rate schmise! I stand by:

Here's another great article from Shane Oliver at AMP Capital that you might be interested in that extends that argument a little bit.

http://www.amp.com.au/display/file/...filename=Australian+economy+-+OI+#37+2007.pdf

Here's some interesting insight from that article that I wasn't aware of:

Only 26% of households are directly impacted by rate rises on variable mortgage rates. 1 in 4 ain't going to spell the end of the world, nor is it going to spell a Global House Price Crash (GHPC). Sorry, couldn't help myself with that one...

Shane is still upbeat about the ASX and sees our current wobbles as just that, a small term glitch on an upwards trend. We're still in the fair value band and looking strong into 2008.

Cheers,
Michael

 

If that's your definition of fact you are an absolute idiot, Sir.

 

I am a Liberal voter, so dont have any political view to push when saying this, but I think that Labour has learned a fair bit watching the coalition's monetary policy. I seriously doubt that if/when Rudd gets in he will do things a great deal differently to how it has been done for the last 10 years. He has already stated he is an economic conservative.
Personally my main hope is that they take the good parts of the last 10 years and leave behind some of the bad parts - with the surplus available in the budget at the moment there is no reason they cant just go in and fix up forever some of the problems that have constantly plagued Australia. Forget giving everyone more tax refunds, invest it in SUSTAINABLE infrastructure and will allow Australia to continue to grow.
If Rudd is smart (and I dont think he is dumb), he would just sit on his hands at the moment and let the coalition hang itself.
Again I am a staunch liberal supporter, but the party deserves what they get after running an interest rate scare campaign at the last election, then contributing to the interest rate problem by cutting taxes so substantially.

 

Are rates high under labor because by the time they start rising, liberal have had their day and then labor get in, having to raise rates to contain inflation, by the time they get them back under control then liberal get back in?

Tim

 

Umm...unless alcohol has killed my brain cells , it was Keating that floated the dollar and at the same time removed the regulated 13.5% rate on home loans.. this lead to the AUD falling from about $1.15 USD to .70 -.80. domestic home loan rates went to 18% and we had the R word that we had to have. That is my recollection and I was a 26 yo FHB at the time. If someone has better recall I stand corrected ?

Anyway, having experienced what I have, I really laugh about people who talk about 8.5% being a high interest rate. Reminds me of that scene from Crocodile Dundee.. "Thats not a knife .....".

I know this is an investment forum with a bias toward property, but the way people talk ,and I suppose against the backdrop of all the political hoo haa at the moment, its as if people believe the RBA is on a mission to sink or swim Mr & Mrs average mortgage homeowner. The role of interest rates and the RBA is a lot wider than that narrow focus of "how much are my mortgage payments"

If your mortgage payments are "too high" then maybe you bodgied up your finance application. As I understand the major lenders add 2-3% to current interest rates when putting the numbers through their serviceability formulas. Only way you could be in deep doo doo is if you lied about the numbers and got away with it ? Oh well if so, please don't start crying on ACA etc.

 

Understand what you are saying, but I think the short answer is "nope". But I know one thing for sure if "working families" choose to flirt with krudd this time around , Malcolm Turnbull as Lib PM will have a big mess to sort out in 3 years time.