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The Forum > Article Comments > Inflation keeps Reserve on edge > Comments

Inflation keeps Reserve on edge : Comments

By Henry Thornton, published 5/12/2006

The RBA will likely put rates on hold tomorrow, but the focus will remain on inflation well into 2007.

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I find it hard to believe that the "Henry Thornton" mob would go to so much trouble in jotting down what most of us already know simply to take a parting shot at Kevin Rudd in their final few words. Everybody knows that Henry Thornton is extremely pro Howard and associated with media that offers us a continous diatribe against the Labor Government. Sorry "Henry" but no prize for that little effort.
Posted by Wildcat, Tuesday, 5 December 2006 9:34:01 AM
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Think you're missing the forest there Wildcat, the HTs are laying down chaff to confuse. Australian interest rates will continue to broadly follow US rates, which given the plunging value of US$ are on the way up. HT and the bank economists who do so much quacking on our TVs are working hard to maintain the illusion that Howard & MacFarlane have some control over such trends, lest everybody realise how far up the creek we are and bale out before they do.

True, govt can and does fiddle inflation statistics, and has shown great enthusiasm for doling out ultra-cheap credit to their dear chums in the banks (in turn popular with the dumber parts of the electorate), but those are one way tricks and China and the oil exporters (the only folk with any REAL cash) aren't buying our debt like they used to.

Anybody in variable-rate debt is in deep deep doodoo, as are all our superannuation funds, gambled as they are on stockmarket hype and crooked accounting. Thats the forest this dead wood article from HT exists to hide.
Posted by Liam, Tuesday, 5 December 2006 9:03:03 PM
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Dear Wildcat. Did you see my Blog yesterday? Not so pro-Howard as you claim we are, and some sound advice on economic policy for Kevin Rudd.

http://www.henrythornton.com/blog.asp?blog_id=740
Posted by HenryThornton, Wednesday, 6 December 2006 1:09:42 PM
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Liam makes agood point, interest rates will follow US rate but why?
In simple terms because we need to borrow to pay interrest on a mountain debt. We have acumulated this debt over the last 32 years of continual current account deficits and we are even running a current account deficit of about $52,000,000,000 per year in the peak of a "minimg boom". Our "prosperity" is the result of a perverse affect of this CAD, that is it makes available a mountain of Australian Doller credit and lures individuals into accepting part of this interest payment burden and causes inflation. But the portion of the CAD that we cannot cover by sale of assets must be borrowd on the world stage at world interrest rates and we are running out of saleable assets.
A question for Wildcat, what are the differences between the Labor and Liberal parties? I perceive that the differences lie only in personalities not in policies.
Posted by brightspark, Sunday, 31 December 2006 2:15:05 AM
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