Ahem!

http://www.smh.com.au/business/rba-lifts-rates-again-20091201-k31v.html

"JP Morgan's Chief Economist Stephen Walters agreed that the RBA may make it four rate rises in a row: "With inflation likely to creep up, and the worst in the economy having passed, there is no need to keep rates at very expansionary levels."

0/10 for economic analysis.

Welcome to Ruddflation and interest rates that will exceed the highest in the last decade.

Thanks for the rate rise . Some of us have to live on interest.
There should be another system.
Up and down its stupid.

What kind of ignorance prompts people to write about topics they have got a clue about or if they have and are qualified are completely wrong.
The fact that the USA has a multi trillion dollar budget deficit is testament to the narrow circle of Ruddite economists that think like Jed Clampet.
“Herd of a 10 dollar bill, dang even heard of a 50, but danged if I’ve heard o one o them thar million dollar ones
Quote
“Then there is the US budgetary crisis. The Great Crash and its alleviation have produced trillion-dollar deficits as far as the eye can see
.unquote
The fact that the GDP of the states is 14 trillion
Might wake a few people up to the facts that There’s a realistic limit their credibility

Very true thomas.US Govt Debt $12 trillion or more, total debt $58 trillion or $187,000.oo for every person.They cannot afford the interest let alone repay the principal.

To add insult to injury we just got the rate rise! Henry eat your words!

The really big collapse will happen next yr.The derivative bubble is said to be worth $150 trillion.They don't really know,it could be double.Pump priming or stimulus packages only delay the inevitable.

Once your currency collapses hyper-inflation sets in and that means the destruction of the real economy and jobs.

Ahh how delicious. Kevvy Swanee and Lindsay are bragging about how well they've managed the Australian economy so as to avoid the recession.
What have they left in kitty to help out the battlers when the depression arrives?

1.the roosters are coming home to roost, supply side reagonomics cut taxes stimulate growth = voodoo economics

2.friedmanite economics monetary policy the solution to everything means total reliance on interest rates leads to sledgehammer being used to crack a nut

3. reliance on floating exchange rates for automatic stabiliser means tough decisions are avoided, like the fat lazy person continuing to rely upon liposuction rather than putting the hard yards in through exercise and changing eating habits

4. ignoring current account deficits leads to asset inflation

5. ignoring levels of private sector debt and not having appropriate anti-monopoly policies means over time private debt becomes public debt

but hey the invisible hand of the free market will fix everything

why we need a cultural revolution and pillar the high priest of modern economics they will destroy us all

"

Welcome to Ruddflation and interest rates that will exceed the highest in the last decade."

shadow minister - when was the last time the cash rate was as low as 3.75%, let alone the 3% that the RBA first brought it down to? The target for the cash rate has been published for approximately the past 25 years, it has not been as low as it is today in all that time.

The official position of the RBA is that a cash rate of 5%-6% is neutral, neither expasnionary nor contractionary. This may be debatable but it is what the RBA thinks.

The RBA sets the cash rate independently of the governments spending approach.

The current rate of 3.75% is considered to be stimulatory. It will not be considered to be in the "normal" neutral range again until it has risen by another 125 basis points - 5 more consecutive rises of the size that we have seen so far.

There isn't much point talking about worrying general inflation until the cash rate has passed at least 6%.

This is why Tony Abbot's recent assertion that "every interest rate rise for the next 12 months is the result of the government's reckless spending" is such a deplorable porky. If the RBA decides that the economy is showing signs of recovery, there is no way it is going to leave the cash rate at 3%. It would consider that to be inflationary unless the economy was weak and will proceed to keep raising it as the economy recovers.

And that is exactly why they have rapidly risen from the extreme low of 3% to the still very low position of 3.75%.

Abbot most certainly understands this - he is out to score some cheap political points because he knows that such a claim will resonate with at least a few voters.

And doesn't he need some of those.