Interest Rate Hikes Are Likely
?The decline in the exchange rate from its highs a year ago will assist in achieving balanced growth in the economy, but less so than previously as a result of the rise over the past few months. The exchange rate remains high by historical standards.?
This comment form the Reserve Bank Of Australia chief Glen Stevens is their sneaky and underhanded way f telling people that any likely moves for interest rates is going to be UP!
Theres a lot of factors which impact interest rates, and no matter how many economists and specialists and financial advisers you speak to, they will all have their own ideas on what creates movements up or down.
So perhaps my comments my be incorrect! But ? what if?
What if I am right and too many investors are buying properties for rental purposes and wealth creation. That drives property prices higher.
The labour market in Australia is decimated nearly every other day with more job losses and closures, without the balance of job creation meeting demand. Who is going to pay all those unemployment benefits? The lonely tax payer!
The RBA says the strength of the Aussie Dollar remaining high ? poor little battler ? is doing damage to the local economy. Thats true! Imports cost less, so less likely to have manufacturing locally when it can be brought in more cost-effectively and sold here rather than made here. Auto industry and fruit industry are testament to that.
A higher value dollar means less tourism to this country. After all, what else do we have apart from overeducated unemployed youth who have trouble finding jobs and can?t get experience because there is no work and their father just got laid off.
Ah yes, the double speak in the message belies the hidden truth of future increases which they will say, they alluded to just months ago. But you may have missed it it because it didn?t actually say that very succinctly!
The art of effective speaking! Yes Minister!