Increases In Rates Are Not Logic Based
  • 3 December 2016

Increases In Rates Are Not Logic Based

Post the US election any excuse is good enough which means our banking monopoly is going to grab the Trump victory as an excuse to push up rates in Australia.  Why? Because they can and there is no one governing Australia.

Our elected members of parliament are too busy hurling insults at each other and arguing over much more important stuff such as backpackers, same sex marriage and name calling.

Increases in Rates are not logic based

Their plan is to follow Westpac's lead and push up rates a fraction this year.  They will test that our MPs are asleep and not interested and then look towards doing two more in early 2017.

Why am I not fixing? Our huge underemployment at 10 per cent is now well over three times that of America.  America, with its huge population, has fewer people looking for full-time employment than Australia.  America is well governed.  Australia has no government.  Who is governing Australia? We have three legs of government.  We have the RBA doing what it wants, run by a bureaucrat.  We have APRA doing what it wants, run by a bureaucrat. And we have a banking monopoly run by the Commonwealth Bank.

In the US, on top of low unemployment of 4% and falling, they have massive construction starts.  In Australia APRA's success has seen construction starts at a six-year low and rising construction unemployment.  Who elected APRA Chairman Byres?

Now if you ran a monopoly what would you do? Screw the consumer!

So we have an underemployment problem.  We have APRA causing construction unemployment despite RBA, two years before that, championing construction employment to replace mining employment!

Go figure the logic between these two, yet now they are holding hands.


** Why am I not fixing?** 

Because these increases in rates are not logic based.  The GDP minus resource exports, which don't feed into consumer pockets anyway, were found to be falling.  Shock horror, this might cause our MP's to get out of the play pit and actually do their jobs of looking after the economy, which means you and me.

Then someone is going to wake up that the banks have been abusing their monopoly power since Rudd and have only since then, not passed on rate drops in full but pocketed them.

The fear that the Trump expansion in the US is going to suck all the funds in leaving Australia scrambling more and more to get money is the false monopoly's cry.  It simply can't happen.  Trump is two months away from being installed.  Passing laws and getting infrastructure started is a long long process.  This squeeze on money supply into America cannot start without at least nine month's delay.  So the banks are running a phony scare campaign that is getting legs in the media but not in reality.

What do you think?


Kevin Young

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