Rate cut coming?

[Jovial Monk]

Just as I suspected the neocon morons who make up the RBA board WERE still looking for an excuse to raise rates. Even they had to admit the dark clouds of the new Long Depression covering half the sky meant they couldn't. So they left rates unchanged.

My betting is they will cut next month. GDP has not been growing and we saw above that job ads were trending down, to be followed soon by growing unemployment. So a cut next month, 25bp to be followed in November by at least another 25 or even 50bp.

The RBA has not served us well over the last year.

[Jovial Monk]

That's that myth busted:

Spending survey busts struggling families myth

Claims that many Australians are doing it tough and households are being weighed down by the soaring cost of living no longer match up with the facts.

A comprehensive analysis of household spending by the Bureau of Statistics shows that in real terms we are richer than we were six years ago, and while we're spending more on essentials like housing and transport, we are also spending more on recreation.

The average household spent about $1,240 a week in 2010 - that is $340 more than six years earlier.

Part of that is because prices have risen - inflation was up 19 per cent - but that is compared to a 38 per cent climb in spending.

But it is also because incomes have risen 50 per cent and that suggests that although we may be paying more for goods and services, we are consuming more as well.

Ben Phillips, a principal research fellow at the National Centre for Social and Economic Modelling, says people are spending more on luxuries.

"The simple reality seems to be that people are actually doing really quite well," he said.

"The areas that people are spending more money on... we've seen internet charges up by 150 per cent, we've seen school fees up by more than double, people are spending twice as much on pay TV, they're spending 75 per cent more on restaurants.

"Many of these of course are really non-essentials, so it really does seem to be that there has been an expectations change, that people are spending more on these luxury items and that's really because their incomes are so much higher than what they were just six years ago."

http://www.abc.net.au/news/2011-09-07/h ... ed/2875106

[Jovial Monk]

Just to reinforce the above, GDP figures were released today:

GDP figures show economy back on track

Australia's economy bounced back into positive growth in the June quarter, figures released today show.

The National Accounts figures show the Australian economy grew by 1.2 per cent in the June quarter.

The figure follows a 1.2 per cent fall in the March quarter. Economists had been expecting a 1 per cent rise.

The Bureau of Statistics figures put the annual rate of economic growth at 1.4 per cent.

The figures also show that the decline in the March quarter was not as bad as thought.

Reserve Bank governor Glenn Stevens says interest rates are now likely to remain on hold for a considerable time.

He told a meeting in Perth the future is uncertain although inflation looks set to continue to rise.

Mr Stevens says the outlook for the non-resources economy is weaker than it looked a few months ago.

He says it is also unclear what impact global financial problems will have on the Australian economy, or the future of interest rates.

AUDIO: Economy grows faster than expected driven by household spending (The World Today)
The ABS says one of the major reasons for the pick-up in growth is from a rise in business inventories and household spending.

"There's pretty strong demand for energy, rents going up, also some strong contributions from recreational activities," JP Morgan economist Ben Jarman said.

But Australia's trade performance was a drag on growth because the Queensland floods are still reducing the volume of exports, even though the numbers showed Australia was receiving record prices for resources.

http://www.abc.net.au/news/2011-09-07/e ... er/2874974

I hope people here realise that people in the US, in Europe and elsewhere can only wish their countries were doing half as well as Australia? That Prime Ministers, Presidents, Treasurers and Finance Ministers would KILL for figures like this?

Anybody thinking of voting in Abbot and his clownish Treasurer and Finance Minister have rocks in their head! $70Bn black hole (be more like $120Bn in reality, our economy would soon be crap like the US with 10% unemployment! If you want to see the effect of cutting spending have a look at ireland, unemployment over 20%, youth unemployment double that and would be even worse but for increasing levels of emigration!

[Jovial Monk]

hehehehehe:

http://thehoopla.com.au/australia-stop-whingeing/

[Super Nova]

Monk,

You want a comment.

It is a good thing that Australia has a lot of dirt to dig up and send overseas. It is masking any ecconomic mismanagement.

It is good for Australia not to be in the hole the rest of the west is in. There needs to be recognition as to why Australia is not in the same hole.

Do you have a view as to why this is so?

[Jovial Monk]

Good government.

[Super Nova]

Good government.

You are funny sometimes.

[Jovial Monk]

And you are solid cement from the neck up.

Plenty of info available on the economy, govts economic management etc.

[Super Nova]

That may be true Monk.

I do believe it was the legacy left byu the Liberal government that provided the bases for the current government. If labor was in the preceeding 10 years, it would look different, don't you think? It would be worse.

[Jovial Monk]

Nope.

The idiotic Howard & Costello managed badly:

1. They fuelled a borrow-and-lend boom that popped with the GFC and now people are furiously deleveraging, hence lack of spending now

2. They cut taxes for the rich too much too often. Company tax eceipts are now, for the first time ever in our history, a major part of total tax collections by the commonwealth. What happens in a GFC? Uh huh, corporate profits and hence tax payments go down, hence the big deficits. These cuts were usnsustainable, being funded by asset sales and a mining boom which by its nature is never permanent

3. They cut funding to hospitals and universities and spent fuckall on infrastructure (Alice springs to Darwin white elephant rail line their only spend

4. Productivity went down the whole miserable 12 years they were in power.

Next time you want to debate bring some facts to the table or I will just ignore you.