Nerfonomics

Flow-Rider

Burner
Media are just hyping things up ATM, it will be people that just got into the market or have borrowed huge amounts that will feel it. The average loan for owner occupier in Qld is about 520K, a bit more serious in NSW with 800K.
 

mas2

Likes Bikes and Dirt
Question Time
If other countries keep raising their rates why wont AUS reflect what is happening in other countries too and keep rising for the rest of the year? Surely we are all following a similar trajectory?
What are the ramifications if we dont raise and others do?

For example NZ started raising Oct last year and is at 2.5% now.
USA started raising in Mar and has hit 2.5% now.
But Aus has only just hit 1.85%.
 

rockmoose

Eats Squid
Question Time
If other countries keep raising their rates why wont AUS reflect what is happening in other countries too and keep rising for the rest of the year? Surely we are all following a similar trajectory?
What are the ramifications if we dont raise and others do?

For example NZ started raising Oct last year and is at 2.5% now.
USA started raising in Mar and has hit 2.5% now.
But Aus has only just hit 1.85%.
A wise man once said "It's not a race".
 

Flow-Rider

Burner
Question Time
If other countries keep raising their rates why wont AUS reflect what is happening in other countries too and keep rising for the rest of the year? Surely we are all following a similar trajectory?
What are the ramifications if we dont raise and others do?

For example NZ started raising Oct last year and is at 2.5% now.
USA started raising in Mar and has hit 2.5% now.
But Aus has only just hit 1.85%.
Have a look at what happened in Turkey for the extreme inflation, not solely the cause of inflation from not increasing interest rates though, the European war has some responsibility there.
 

Freediver

Likes Bikes and Dirt
Question Time
If other countries keep raising their rates why wont AUS reflect what is happening in other countries too and keep rising for the rest of the year? Surely we are all following a similar trajectory?
What are the ramifications if we dont raise and others do?

For example NZ started raising Oct last year and is at 2.5% now.
USA started raising in Mar and has hit 2.5% now.
But Aus has only just hit 1.85%.
My understanding is it would make the dollar rise when oversees demand for loans increases which makes exports uncompetative / worth less while money leaves the country to go where it can earn more.
 

Calvin27

Eats Squid
what's there to add at this point?
Just 50bps :)

My understanding is it would make the dollar rise when oversees demand for loans increases which makes exports uncompetative / worth less while money leaves the country to go where it can earn more.
I don't buy the exports are less competitive narrative. I mean within reason, but most of our exports are solid because they have relatively inelastic demand.

Our top exports:
  • Iron ore. Not exactly a secret that our ore grades are much better than elsewhere and they still our stuff to 'lace' the crap stuff to. Mayb it might be affected a bit but the demand is the bigger driver here. China buids and we are good, if they don't we are stuffed.
  • Coal. Enough said. Already most countries are trying to get rid of it. We should probably stop selling it but in any case it's still one of the cheapest energy sources so unless our money really goes nuts, then yeah this one will be ok.
  • Education. Yep dead. Currency isn't going to change that.
  • Gas. Hahahahaha. Unless you want to buy discount russia gas, this one is in high demand.
  • Gold. Stable af.
  • Meat. Demand still high as. I'd argue premium product compare to the US junk too.
  • Petrol. LOL!
List goes on. We have one of the cheapest and highest quality minerals like copper and alumina, we are the leading wool producer, chinese folk aren't going to stop buying penfolds kunungah hill for fiddy strayan just because last month it was forty...
 
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K.C.

Likes Dirt
we export petroleum?:eek: legit did not know that's a thing.
i thought we mainly import from Singapore refinery,
is ours more high quality, sell it at higher price and import shitty grade from elsewhere?
 

Squidfayce

Eats Squid
Question Time
If other countries keep raising their rates why wont AUS reflect what is happening in other countries too and keep rising for the rest of the year? Surely we are all following a similar trajectory?
What are the ramifications if we dont raise and others do?

For example NZ started raising Oct last year and is at 2.5% now.
USA started raising in Mar and has hit 2.5% now.
But Aus has only just hit 1.85%.
Don't assume that all these economies are the same with the same inflationary pressures. At a macro level all seems similar, but when you get to to the granular level there are material differences.
 

Squidfayce

Eats Squid
China buids and we are good, if they don't we are stuffed.
I think you're a little behind (about 8-12 months) on china's property development crisis. Property development accounted for ~30% of china's GDP. Since a while ago their biggest developers have been been going bust with sky high debt and credit to fuel the industry has been clamped down on by the CCP causing a bit of a shitstorm locally and globally.
 
@Squidfayce in regards to my comment that I believe the RBA will leave it alone, that was in regards to the near future ie next month or two, just to see the impact of the rises they have implemented.

As I understand it, 3% is the cash rate the RBA believes causes the least amount of pain to the economy (as a whole), if one accepts that price changes (growth or decline) are inevitable.

Add on the banks cost of funds and margin and you are looking at mortgage interest rates of 6.5% give or take.

What is shit in this situation is that inflation is being driven in part by factors that aren’t related to cash sloshing around in the system. Fuel, food, building supplies have been rising due to reduced supply. But it doesn’t matter, inflation is inflation and if it isn’t kept in a box the economy could become a Turkey.

As an aside, unemployment is regarded as part of the way to regulate inflation.
 

Squidfayce

Eats Squid
to meet their target cash rate by the end of the year (i think they mentioned 2.3 or 2.5 or something), they would need to implement more rises. Of course they have the option not to based on outcomes, but i wouldn't bank on them not doing it. Remember they dont meet in January, so i thin theyl be looking to put a bow on it in December and let it run for two months
 

link1896

Is not a gynaecologist but will look at your fork
And once we back the USA to the hilt over Pelosi's visit, well, get ready for more china sanctions.
if you had to choose between slowly phased in pain, or massive pain at once, you'd take the former.

I'm already going out of my way to make all my personal purchases exclude anything form China as an experiment to see if it can be achieved
 

Squidfayce

Eats Squid
I'm already going out of my way to make all my personal purchases exclude anything form China as an experiment to see if it can be achieved
you have to apply that thinking retrospectively too. Ie no phone, computer or other electronics for you otherwise you're a pussy :p

But in all seriousness, how will you tell if components of what you want to buy were manufactured in china or not if the item youre buying is not manufactured in china? or you just gonna go half arsed at it and look only at the main label?
 

Flow-Rider

Burner
you have to apply that thinking retrospectively too. Ie no phone, computer or other electronics for you otherwise you're a pussy :p

But in all seriousness, how will you tell if components of what you want to buy were manufactured in china or not if the item youre buying is not manufactured in china? or you just gonna go half arsed at it and look only at the main label?
How many products in Australia are made from Chinese machinery or have internal parts made there? Even in the mining game, they use Chinese steel for the structures.
 
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