With respect to the RBA and economic experts in the daily financial newspapers and media about needing to keep interest rates on hold because the share market is showing signs of picking up then I say that basis is wrong and interest rates should drop again. Everyone seems to forget that most of the central banks the world over have had to try to repair or save the politicians who have been reckless in their promises and spending habits which has got us into this sorry mess in the first place.
In my opinion the RBA should be having a real look at all the real estate agents who are closing down to see the real picture of what is really happening in the housing market, have a look at declining job ads, have a look at the bankruptcy lists, have a look at the real unemployment figures which are not reflected in the clever Statistics played around by politicians and public circus statisticians and then tell me things are looking up and the RBA should leave interest rates on hold.
To repair the economic damage will imo require the RBA to be in a position to give some measure of guarantee that interest rates wont suddenly go up as soon as the property market starts to look healthy again, otherwise new home buyers wont want to take that high risk of getting trapped into bankruptcy.
Now to achieve any chance of offering any guarantee from the RBA that rates wont rise suddenly will require some planning and CO-OPERATION from our slippery politicians who obviously like playing loose with their promises and our tax money which in turn affects the way internal official interest rates are set. It will also require the banks to be more controlled in their own lending practices just like they been over the last couple of years. Then we might get a better overall result giving a true measure of confidence for small businesses to go forth and multiply.
For too long we have had a situation of politicians playing political and budgetry games in which the RBA is seen as a distance relative when in reality both should be working together in unison. We no longer have a true free enterprise democracy under Libs or ALP so lets just go for a controlled economy with RBA at table.
The State Governments should also be included because some of their policies designed to appease their supporters do indeed affect interest rate policies and tend to affect both inflation going up and interst rates going up and staying up longer than would normally have been the case had those First Home Buyers Grants not been offered in the first place.
One of the main problems are that most of our nations politicians are economically dumb, but politically wise does not help our nations economic health. Yes economically dumb was self evident when Christine Milne and other schose to grill Glen Stevens of RBA on issues upon which the Greens and Milne displayed very well that they were economically dumb beyound belief....but wait there is more...
