I think the renting class are the realists.

If the rents are too high, go live on the street or a car or at Grandmas near empty house.

I still have my post depression relations voices ringing in my ears; don’t borrow money for what you can’t obviously afford.

Housing is way way unaffordable for most people.

The graph is a classic. It points out exactly the traps. Todays interest and inflation rates still compare very favourable with the not too distant past.

The future from heron in, can only be a very rough ride for borrowers at unrealistic interest rates. Blind Freddy could work this one out many moons ago.

I am not affected by interest rates. I have owned three houses, always paying off the mortgages early - and at much, much higher rates than the current ones. I suppose I should feel sorry for the current bunch of home buyers - but, I do not. They think they know better than I do about everything, so they should be smart enough to deal with it,

But, half million dollar mortgages. Ye Gods! How can anyone be that stupid? Particularly as, unlike their parents and grandparents - whom they sneer at - they won't live frugally, start off small and save to pay off the mortgage. No. They want a rich-person's lifestyle.

Home ownership WAS always an Australian 'thing', while other in countries, particularly in Europe, people rented privately or got into abundant 'council' housing.

In Australia, renters were looked down on as second class citizens.

Well, those days are gone for good. Governments are going to have to get off their lazy arses and build public housing. And ordinary Australians are going to have to get used to the idea that there is no 'right' to home ownership and MacMansions that they cannot afford.

if the "want everything now" generation didn't get themselves locked into such insane mortgages, the cost of housing would drop to sensible prices.
Real estate agencies, Banks & above all Local Govt & Councils are the underlying cause of the high costs of everything right now because they in turn are locked in with incompetent & greedy bureaucracy exploiting just as greedy & incompetent Woke voters !

Too slow for too long. Should have hit with a 1% to start with and then 2%. Shock and awe and a statement that more could be done with even higher more brutal rate rises would give some folks cause to pause and pull back spending.

This drip, drip increase, simply extends the pain and bank profits to the Enith degree. And may need to hit 9% before it slows inflation. It's using a sledgehammer to drive tacks. And a very blunt instrument.

A better strategy would have been to drive down energy prices with determined action. And if that meant a sovietised power supply system then that should be the course we take, rather than allow offshore circumstance to decide what we do here with OUR COAL, OUR GAS, OUR POWER PLANTS AND OUR TRANSMISSION LINES.

At least what was once ours before the insanity of privatization! And should be rescinded, undone and handed back to those who built, developed and owned them. Sold out from underneath without a flagged pre-election mandate by crimson fools selling out the nation's heritage for some tenuous political outcome!

A purpose-built factory would be able to assemble one MSR thorium power plant every week using a known and proven design with all the bugs ironed out. And already done elsewhere.

We have a nuclear reactor and are getting nuclear subs. Will play host to B 25s and possible nuclear armaments.

Any real reason for not transitioning to our inevitable long term future baseload (carbon free) 24/7 power supply source has faded with our very changed circumstances and the need to do something real about climate change, now while we still have the means to make that decision for ourselves!

The time for endless prevarication and eternal, half smart, obtuse obfuscation is long past and needs to be changed for sane pragmatism!
Alan B.

My youngest daughter was wise to decide to get out of her recently built dream home after the divorce, payments were just too high for a now single mother. This was while interest rates were still extremely low.

I can't imagine why people expected interest rates to stay at rock bottom for ever, it was just not likely looking at history. Mid 80s I was getting 17% on my fixed deposits, & early 90s I was paying 14% on the bridging loan when I bought this place, before finalizing the sale of my last place. Sure the kids did not actually "live" through those times as adults paying those rates, but surely any thinking adult should have researched history before borrowing.

On public housing, I believe it is totally immoral to expect those struggling with repayments & ownership costs on their own homes to fund the less prudent into homes at much cheaper costs than themselves. Public housing rents for low income earners or welfare recipients are often less than the costs of rates, insurance & interest payments of home buyers, before any actual loan repayments are made. This is not a suitable reward for those trying to provide for their families themselves.

Public housing rents should at least reflect the total cost of providing the housing, & not be a drag on those providing for themselves.

Graham is right – by historical standards current interest rates are not especially high, and in “real” terms (adjusting for inflation) they are significantly negative. The RBA may have reacted to emerging inflation too late, and in hindsight Lowe was wrong to suggest that rates would not rise until 2024 (though if you look at what he actually said, it was not a firm prediction and was hedged with caveats). But it had little choice but to do what it has done. And with government policy remaining significantly expansionary – both in its stated objective to raise wages growth and in persistent budget deficits and big spending promises – interest rates may need to stay higher for longer if inflation is to be tamed.

The RBA puts the interest rates up to curb inflation. The rates will have to go up even higher to curb people going into lifelong debt that they don't seem to realise that they cannot afford. 'Free' money and Socialism is really beginning to bite at last. And, since Morrison adopted Socialist money policies, and Dutton just stares like a loon, it's up to people themselves to straighten themselves out. Politics will not help.

Kudos Graham Young

Who set the inflation rate at 2.3% for Australia. RBA P Lowe is not original. Quote from Adept Economics : In 2023, central banks worldwide are continuing to increase interest rates because inflation still remains higher than inflation targets – i.e. a 2-3% target in Australia and 2% targets in the US and UK. The RBA lifted the cash rate to 3.35% on 7 February and, on 1 February, the Federal Reserve announced a Federal Funds rate increase of 25 basis points to the 4.5% to 4.75% range... And more rate rises are expected.

All just insidious & criminal manipulation !

What is the function of the Reserve Bank, Lowe and his bunch of cronies, bankers and economists. They have one overriding responsibility, and that is to ensure monetary policy acts in a way to return the maximum profits possible to Capitalism. You ask; Why does the Reserve Bank Board wants to keep inflation in the range of 2% to 3%, there is a very simple answer, that's the ideal level of forced inflation that will return the highest possible profit margins to big business, high inflation leads to uncontrolled costs. reducing profits, very low inflation leads to stagnation, and again unacceptably low profit, an abysmal situation. The Reserve Bank has no concern for workers and their insignificant problems of stagnant wages, inflation and high interest rates etc. These workers must pay the price and carry the can if profits are to be maximised. What other use are the working class, other than to serve Capitalism?

You got to love the way the elected government of the people, both Coalition and Labor ,cringe whenever asked about the functions of the all powerful Reserve Bank, Phil Lowe is GOD to these political flunkies, they go to great lengths to stress the total independence of this bunch of un-elected traitors!

I suspect that Paul1405 got his beliefs from Marx's Das Capital. Next he'll be talking about the "rate of exploitation of the workers" rather than rate of return in more mainstream economics theories.

CM,

You suspect wrong, I got it from the 'Book of Reality' I'm telling you what is so. If there is a philosophy that agrees with me then so be it. You like to label others with tags like "Communist". In the past you've branded me as such. If you disagree with what I say;

The Reserve Bank through its Board has one overriding responsibility, and that is to ensure monetary policy acts in a way to return the maximum profits possible to Capitalism.

If you disagree with that statement tell me that's not so, and you believe the overriding function of the Reserve Bank Board is something else? I don't want your economics theories, I just want facts, I'm all ears, fire away!

Maybe you believe the 'Million Dollar Man' and his bunch of cronies are really concerned about the "little people" the ones I called workers.

http://developingeconomics.org/2021/03/17/monetary-policy-is-ultimately-based-on-a-theory-of-money-a-marxist-critique-of-mmt/

Theories of money

Regarding the ontology of money, for neo-Chartalists, money is a unit of account legally determined by public authorities to measure mutual debt obligations within a community (Tcherneva, 2016). Following Keynes’ famous remark, MMT understands “modern money” as essentially the same “…for some four thousand years at least.” (Keynes 1930:4, quoted in Wray, 2014:15). For us, this approach erases the historical specificity of money, and therefore of capitalism.

In contrast, Marxists consider that the full development of money occurs only under capitalist conditions. Marx (1976) certainly acknowledged the fact that money emerged in pre-capitalist societies. But money did so at the point of mercantile contact between societies, as an external imposition and not as an internal result of the social relationships proper to those societies. Unlike capitalism, these internal relations were organized on the basis of direct personal dependence bonds (Marx, 1986). The products of labor did not take the form of commodities systematically and regularly, while social reproduction did not depend on generalized mercantile exchange, and thus on money.

Paul1405 said "Maybe you believe the 'Million Dollar Man' and his bunch of cronies are really concerned about the "little people" the ones I called workers."

Answer- As others have said Communists don't love the "little people" they hate the rich- all in the name of love and equality. If you care about the "little people" you should want "little communities" as Alexis de Tocqueville talked about in his book- but Paul1405 doesn't seem to (care about little people)- and Paul1405 doesn't seem to (care about little communities). Of course little communities occasionally need to interact with the world- on their terms of course- and this is where hierarchy applies. There needs to be a balance between security and risk between stability and change- of course there are always those who want to interfere with others lives- like the communists- justifying ideological bigoted genocide under the auspices of a "just war" against "false consciousness".

Where my bias ends your bias doesn't begin.

CM,

I asked for your opinion and I got drivel. I don't much care what Mr Tocqueville writes in his book. I don't care if Mr Kaynes made famous remarks in the year dot. No, I care about people and what is so, and what affects them, and what can done to make their lives better, be it Capitalism then its good, be it Communism then it is also good.

You say I hate rich people, not so I hate no one. I judge you to hate 1.4 billion Chinese people for no other reason than they want a better life for themselves, but not under your accepted conditions. So who is the real hater?

BTW, if you are going to bore me with your drivel then please keep it short, it saves you time writing it, and more importantly it saves me time reading it.

There is such a thing as cause and effect. Communist causes lead to certain effects and it's not making peoples lives better.
100 million dead under Communism and we still haven't been able to dig up the graves in 100 years- so the figures are probably much higher.

No political system is perfect- but Locke was wrong- a world wide Liberal Democratic order won't be fair or equal- that doesn't mean that democratic principles are always wrong- balance and context is important. Governmental structures high in the hierarchy need to be limited in scope by the borders of the structures below and by principles that recognize the dangers of too much scope. Humans have never lived at the scale of today- it is new- and we will fail- but more so if we fail to recognize our mistakes

CM,

Not sure what you mean by "under Communism", are you referring to the failed Czarist Russia which gave way to a totalitarian regime led by the dictator Joseph Stalin?

As a side, I watched a program on SBS which to me highlighted the similarities between the rise of Hitler in Germany, and the rise of Trump in America. The program was about nothing more than the political rise of Hitler, but I did see Trump in Hitler, Hitler with his "Make Germany great again" and Trump with his "Make America great again" slogans and other parallels. Do you see similarities there?

I don't remember Trump implementing death camps but the late 30's and 40's were a different time- may be difficult to compare. The tools available today to manage dissenters are much more powerful than those available then so it's much less necessary to use raw fear to keep peace- but the outcome is somewhat the same- people have less power of their own lives. Everything in the universe is in a sense similar to everything else both bridges and diamonds both contain atoms- they are both built for strength- and in a sense the strength is derived from the same source- however a bridge is not a diamond. Sometimes it's helpful to draw a common relationship between phenomena and there are variables that seem to have some consistency with respect to the result.

100 million dead under communism- for equality and fairness.

Marie Curie taught Polish which was banned under Russian Communist rule in blacked out rooms- under the theory that different languages are a form of class warfare- she never called herself a woke feminist as far as I'm aware

This is probably a good reason not to watch SBS (or the ABC) or fund it through the public tax system- seems to be more propaganda than information- and the public knows it. Hobbes talked about having to have a mandate for government activity- it seems that the SBS is trying to "wag the dog". It's sort of expected that politicians will have "a view" but they fund their operations through donations.

The SBS seems worse than the ABC.

In economics they talk about leading and lagging indicators and Germany's situation in the 1890's to the 1930's saw much violent change through it's neighbouring nations and war and society. Germany was home to the Holy Roman Empire previously and could be seen as the continuation of the Roman Empire itself- something that raises the ire of other competing cultures over recorded history. The Roman Empire and Holy Roman Empire were confederations in a sense- allowing allies to govern in their own right within a light touch sandpit/ framework.
The rise of Christianity could be seen as a Hebrew conspiracy to undermine the Roman Empire- competition between the Catholic Church and the Hebrew culture is nothing new- the question is how should the resources be distributed between the cultures for peace. But there is never peace. We are all doomed to live our lives in battle- but we should try to smell the roses.

In a sense the US is similar.

Those that don't like this system can choose to work within or without the system.

Totalitarian Communism on the other hand is less light touch- they want to interfere with everything from the top down- just like woke and socialists- down to the individual level- they what to revise history- destroy tradition- because they believe that culture is a cancer.

I'm sure that originally Lenin was a nice guy that just believed in justice and was angry about the killing of his traitorous brother- but he went down the rabbit hole. Stalin was just trying to climb the ladder of power in a badly structured system. And that's the point- the British system while imperfect has developed over a long period of time learned from it's failures and changed according to the situation- but if the ruler is twisted it's hard to measure well- and the ruler is always twisted- but some are twisted more than others.

Communism as do other leftist wokeist ideologies have some unrecoverable failures. Not everyone is equal even if you try to make them equal, they don't want to be equal, they don't want to work together with the rest of society for a common goal- they don't want stability. Not everything is fair- but some societies are more fair than others- if people can vote with their feet then people can move to where they are happy. Societies that balance the right things will be more successful than those that don't. Success is measured differently- there is evolutionary success, productive success, scientific success, artistic success, etc, etc.

Globalized Totalitarianism will destroy the incubators of culture- will destroy language and ethnicities- there is no where to run to- but they call traditionalists racist- they are not allowed to protect their culture or identity or genetic uniqueness or hereditary chain- essentially their existence

CM,

I wasn't talking about death camps, on gaining power Hitler was far more extreme than Trump. Mechanisms in place prevented Hitler type extremism from developing under Trump. I'm talking about the two men's rise to power, the similarities between both. Given the respective political conditions exiting in each case they are remarkably similar. Hitlers political failure in 1929 then his return in 1932. Hitlers manipulation of the conservative right, the conservative rights attitude to Hitler, somewhat simmilar to the Trump experience. Trump like Hitler totally vilified his political enemies to the extreme. Both had a penchant for fanfare, mass gatherings etc, both given to crass nationalism as a means of manipulation through speeches and Hitler ran for the time modern political campaign as did Trump. Hitler and Trump both condoned political violence. Hitler had old Hindenburg, Trump has Old Biben, all Trump needs is a 'zweifinger' moustache and his act will be complete.

BTW; I don't consider the Soviet Union a true Communist state. The deaths there were brought about by an extreme totalitarian regime led by a evil dictator in Joseph Stalin. Why do you call Stalin a Communist, because he said so, I could say; "I'm the King of England" but it doesn't make it so. Anyway, I see no value in Communism, when compared to our moderate leaning Liberal Democracy.

It should be a "Surprise no one, it turns out it is actually BIG BUSINESS pushing up prices for record profits that is driving the cost-of-living crisis, according to new research."

"Every time the economy weakens, working Australians are told to tighten their purse strings, cut back on luxuries and, if they aren’t getting paid enough, just find a better job. But is it wages causing the current crisis? Instead of wages, we need to be looking at MEGA CORPORATE PROFITS" (My capitals)

Add in the pair of Tory reprobates, ScumO' and Friedbrain pouring a trillion dollars of debt onto suffering ordinary Australians as they splashed billions in cash to their mates down at the Big End of Town. No wonder there is high inflation and workers incomes are going backwards!

One way of beating cost of living issues is to buy a 3 month supply of durable food items- if it really is just bloody minded profiteering "MEGA CORPORATE PROFITS" (which even Adam Smith criticized) keeping the prices high you'd think that after a few months of people moving to durable goods the suppliers would back off due to losses. In order to make more profit you need to keep prices and sales high- very difficult to do if the customers have an alternative- and they usually do.

Paul1405 said-

"Add in the pair of Tory reprobates, ScumO' and Friedbrain pouring a trillion dollars of debt onto suffering ordinary Australians as they splashed billions in cash to their mates down at the Big End of Town. No wonder there is high inflation and workers incomes are going backwards!"

I suppose woke communists and assorted reprobates are always going to call Tory's especially dry blue Tory's as reprobates in order to demonize them politically- very hateful. There seems to be an allusion to the Corona debt here- it seems that many of the Traditionalist public- those that the Left call far right- actually thought all along that lock downs were a stupid idea for just the reason that it would create debt- now of course we are paying for it- we told you so- now the left want to blame their opposition for the resulting debt repayments.

The debt was created by those put out of work by lockdowns and increased costs of production due to shortages and unreliable labour- not so much from Liberal Party mates perhaps. It might be interesting to do a study of voting habits of those in the medical sector to see whether it's likely that they were complicit in subverting the Corona response- there seem to be a lot of medical errors- they get paid more if the crisis is extended through overtime- reprehensible if so to hold up the whole nation. The Liberal Party offered to send in the Army to help but the states refused

Classic communist tactics- create a problem then blame the opposition for it- false flag operations.

CM, you've lost me with this.

"One way of beating cost of living issues is to buy a 3 month supply of durable food items"

Now that is a ridiculous suggestion, battling Australians are finding it hard enough to meet rising mortgage and rent payments, with a wage decline of 4% and Big Business pushing up prices, battlers don't have thousands in surplus cash to buy a 3 month supply of food items. Maybe you are suggesting these poor folk buy on credit supplied by greedy banks at 25% interest!

What's very hateful is to burden the workers of this country with a trillion dollars of never ending debt! people like Gerry Harvey pocketing a personal $12 million, to pay executive bonus and add to the bottom line. Big Business QANTAS $600 million, just announced a half year profit of one billion dollars!

"The debt was created by", a bunch of Tory reprobates splashing the cash to their mates down at The Big End of Town, leaving the poor Aussie taxpayer to carry the can for the next 50 years! With nothing to show for it!

CM

"Classic communist tactics- create a problem then blame the opposition for it- false flag operations."

What a load of rubbish, there's no Communism in what we have been discussing. Get your head out of the clouds with references to the ghosts of the past, like this Smith bloke, dead, gone, never to return, history. Get down to the practical nitty-gritty of what can be done in the present. What we need is a new order with real people dealing with the real problems of this World. I see a place for controlled Capitalism with a liberal mix of Socialism to create a fair and just society for all. No need to make references to Communism and me, I unequivocally believe Communism doesn't work in a practical sense. It sounds good in theory, but wont work in practice, and unlike you I believe in the practical, and not some theory from the past.

Communists hate in the name of love.

Thanks Graham Young for the article- good graph.

The unemployment rate as I understand has been corrupted by political influence over the way it's defined.

GY said "The economic dog chased its tail for almost a decade until 1982, with the biggest winners being highly-geared speculators."

Ans- Yes there also seems to be a lot of recent speculation in the property market- similar to the 70's and 80's- with high gearing. But immigration has in the past been used to let property rise to even higher plateaus.

The 'Million Dollar Man' and his bunch of Wally's that make up the Reserve Bank Board, should be A-holed forthwith, the sooner the better! Labor should replace these incompetent freeloaders with true representatives of the people! The problem with Labor is they don't have the BALLS!

Australians keep carrying the can for Big Business, here's another example, while ordinary Aussies battle to make ends meet, Woodside Energy announces a record profit of US$5.23 billion. $9 billion Australian! Where is a super profits tax? Labor grow some BALLS!