OZ economy can do no wrong.
#1
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Joined: Feb 2002
Location: Dream life UK....
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OZ economy can do no wrong.
Last week I said I was very sceptical that interest rates could go very high, certainly not high enough to crash the housing market.
Now look the OZ dollar hits 70 US and almost 42P, disaster for OZ vital export industry, just wondering how all the hype about rate rises is going to happen now? Rate rise = even higher dollar which the govvy does not want to wreck its export industry.
Catch 22 indeed.
Inflations come in at 2% nothing to worry about there. Wonder if this means the govvy is still game to push a rate rise which they wanted to curb credit card splurge over Xmas?
I for one dont think rates are likely to rise much at all.
Now wheres Herman, he always used to like a good chat about these matters.
Now look the OZ dollar hits 70 US and almost 42P, disaster for OZ vital export industry, just wondering how all the hype about rate rises is going to happen now? Rate rise = even higher dollar which the govvy does not want to wreck its export industry.
Catch 22 indeed.
Inflations come in at 2% nothing to worry about there. Wonder if this means the govvy is still game to push a rate rise which they wanted to curb credit card splurge over Xmas?
I for one dont think rates are likely to rise much at all.
Now wheres Herman, he always used to like a good chat about these matters.
#2
Joined: Aug 2003
Posts: 11,149
In theory rate rise decisions are taken by the RBA not the government. The rise in the dollar has taken dampened inflation but there are 2 major price rises.
The cost of building
The cost of petrol
All this is bad news for those wanting to buy land from overseas and build a house. The GBP is on a downward trend because of the increase in government borrowing. Both could have an inflationary impact and may trigger rate rises in the UK.
The below is from
http://www.smh.com.au/articles/2003/...631426626.html
The strongest business conditions and confidence in nearly a decade reignited a rally on the local sharemarket yesterday, fuelling speculation about an interest rate hike.
The ASX 200 bounced 16 points to a fresh 16-month high of 3303.7 and the All Ordinaries bounced 15.6 points to 3310.6 after Wall Street opened the trading week on a positive note.
"The domestic economy is hot to trot [and] anyone who thinks we aren't going to have a rate hike must be mad," Goldman Sachs JBWere trader Richard Coppleson said.
Business conditions and confidence surged to the highest level in nine years in the September quarter, according to the National Australia Bank survey, reinforcing the market's bullish outlook for the global economy.
The cost of building
The cost of petrol
All this is bad news for those wanting to buy land from overseas and build a house. The GBP is on a downward trend because of the increase in government borrowing. Both could have an inflationary impact and may trigger rate rises in the UK.
The below is from
http://www.smh.com.au/articles/2003/...631426626.html
The strongest business conditions and confidence in nearly a decade reignited a rally on the local sharemarket yesterday, fuelling speculation about an interest rate hike.
The ASX 200 bounced 16 points to a fresh 16-month high of 3303.7 and the All Ordinaries bounced 15.6 points to 3310.6 after Wall Street opened the trading week on a positive note.
"The domestic economy is hot to trot [and] anyone who thinks we aren't going to have a rate hike must be mad," Goldman Sachs JBWere trader Richard Coppleson said.
Business conditions and confidence surged to the highest level in nine years in the September quarter, according to the National Australia Bank survey, reinforcing the market's bullish outlook for the global economy.
#4
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Joined: Feb 2002
Location: Dream life UK....
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Watch the aritcles over the next week, OZ wont mess with its exports, been here too long, seen it before. Oz does not like .70 USA.
:scared:
:scared:
#5
Originally posted by dotty
Watch the aritcles over the next week, OZ wont mess with its exports, been here too long, seen it before. Oz does not like .70 USA.
:scared:
Watch the aritcles over the next week, OZ wont mess with its exports, been here too long, seen it before. Oz does not like .70 USA.
:scared:
#6
Senior member
Joined: Sep 2002
Location: Paris
Posts: 835
Re: OZ economy can do no wrong.
Originally posted by dotty
Last week I said I was very sceptical that interest rates could go very high, certainly not high enough to crash the housing market.
Now look the OZ dollar hits 70 US and almost 42P, disaster for OZ vital export industry, just wondering how all the hype about rate rises is going to happen now? Rate rise = even higher dollar which the govvy does not want to wreck its export industry.
Catch 22 indeed.
Inflations come in at 2% nothing to worry about there. Wonder if this means the govvy is still game to push a rate rise which they wanted to curb credit card splurge over Xmas?
I for one dont think rates are likely to rise much at all.
Now wheres Herman, he always used to like a good chat about these matters.
Last week I said I was very sceptical that interest rates could go very high, certainly not high enough to crash the housing market.
Now look the OZ dollar hits 70 US and almost 42P, disaster for OZ vital export industry, just wondering how all the hype about rate rises is going to happen now? Rate rise = even higher dollar which the govvy does not want to wreck its export industry.
Catch 22 indeed.
Inflations come in at 2% nothing to worry about there. Wonder if this means the govvy is still game to push a rate rise which they wanted to curb credit card splurge over Xmas?
I for one dont think rates are likely to rise much at all.
Now wheres Herman, he always used to like a good chat about these matters.
The housing market booms have been fantastic for the governments of both the UK and Australia. Its masked the underlying employment weakness in both economies and has led to bumper stamp duty revenues. They have a very strong incentive to keep that going as long as possible and are likely to be reluctant to be the cause of bursting the housing market bubble. However, they need to stem the outflow of corporate funds to developing nations, which is contributing to higher private sector unemployment and forcing the governments to run deficits to fund increased public sector employment. Increasing interest rates might help keep corporate funds onshore.
So lots of variables and I suspect that if the housing market(s) fizzle out naturally as a result of affordability constraints and cyclical improvements in equity markets, then the Bank(s) may feel that the benefits of increasing interest rates on corporate investment outweigh further negative impacts on the housing market.......
#7
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Posts: n/a
Originally posted by mr mover
Why dont you admit it Dotty as an importer of worthless ideas , you dont like .70 aus /$1us, I lived here when it was ,1for1, and we still survived, VERY NICELY THANK YOU............. MM
Why dont you admit it Dotty as an importer of worthless ideas , you dont like .70 aus /$1us, I lived here when it was ,1for1, and we still survived, VERY NICELY THANK YOU............. MM
TennisOz
#8
Originally posted by tennisoz
Yeah, I've seen it all before - moved to the UK and got £1 for A$1.33; since seen the dollar plummet to just over A$3.00 to the pound (great for saving our £'s in Oz) and has now 'recovered' to around A$2.40 to the pound (not so good for when we sell our house here and move back). Posts from a few days ago were suggesting the dollar might strengthen further to around $2.20 to the pound next year.
TennisOz
Yeah, I've seen it all before - moved to the UK and got £1 for A$1.33; since seen the dollar plummet to just over A$3.00 to the pound (great for saving our £'s in Oz) and has now 'recovered' to around A$2.40 to the pound (not so good for when we sell our house here and move back). Posts from a few days ago were suggesting the dollar might strengthen further to around $2.20 to the pound next year.
TennisOz
#9
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Joined: Feb 2002
Location: Dream life UK....
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Originally posted by mr mover
Why dont you admit it Dotty as an importer of worthless ideas , you dont like .70 aus /$1us, I lived here when it was ,1for1, and we still survived, VERY NICELY THANK YOU............. MM
Why dont you admit it Dotty as an importer of worthless ideas , you dont like .70 aus /$1us, I lived here when it was ,1for1, and we still survived, VERY NICELY THANK YOU............. MM
You really are getting too sad for words. You dont even understand why the OZ dollar getting stronger is brilliant for me, for heavens sake at least think before you write.
Go and stalk someone else for a change.
#10
Joined: Aug 2003
Posts: 11,149
Re: OZ economy can do no wrong.
Originally posted by Herman
Its got me stumped!
The housing market booms have been fantastic for the governments of both the UK and Australia. Its masked the underlying employment weakness in both economies and has led to bumper stamp duty revenues. They have a very strong incentive to keep that going as long as possible and are likely to be reluctant to be the cause of bursting the housing market bubble. However, they need to stem the outflow of corporate funds to developing nations, which is contributing to higher private sector unemployment and forcing the governments to run deficits to fund increased public sector employment. Increasing interest rates might help keep corporate funds onshore.
So lots of variables and I suspect that if the housing market(s) fizzle out naturally as a result of affordability constraints and cyclical improvements in equity markets, then the Bank(s) may feel that the benefits of increasing interest rates on corporate investment outweigh further negative impacts on the housing market.......
Its got me stumped!
The housing market booms have been fantastic for the governments of both the UK and Australia. Its masked the underlying employment weakness in both economies and has led to bumper stamp duty revenues. They have a very strong incentive to keep that going as long as possible and are likely to be reluctant to be the cause of bursting the housing market bubble. However, they need to stem the outflow of corporate funds to developing nations, which is contributing to higher private sector unemployment and forcing the governments to run deficits to fund increased public sector employment. Increasing interest rates might help keep corporate funds onshore.
So lots of variables and I suspect that if the housing market(s) fizzle out naturally as a result of affordability constraints and cyclical improvements in equity markets, then the Bank(s) may feel that the benefits of increasing interest rates on corporate investment outweigh further negative impacts on the housing market.......
Stopping the flow of funds only makes matters worse and panics the markets. Why shouldn't the developing nations be given the equal chance for Australian investment as other markets. There will be temporary higher unemployment and life will be made tougher but that is the way of the markets. Not many countries have fought it successfully.
More trade is a win win situation whether it is in the services or other markets. International markets are dog eat dog and Australia has to be fit to survive. Protection is not the answer as it leads to lazy fat business that is a leach on Australia.
The government has no control over interest rates as they are set independantly to maintain inflation. All the government can do short term is too keep the coffers in the black.
#11
Originally posted by dotty
Duh
You really are getting too sad for words. You dont even understand why the OZ dollar getting stronger is brilliant for me, for heavens sake at least think before you write.
Go and stalk someone else for a change.
Duh
You really are getting too sad for words. You dont even understand why the OZ dollar getting stronger is brilliant for me, for heavens sake at least think before you write.
Go and stalk someone else for a change.
#12
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Joined: May 2003
Location: Exit UK 23rd Mar 2004, arriving in NZ 29th Mar (stop off LA Disney)
Posts: 385
Re: OZ economy can do no wrong.
Originally posted by Herman
Its got me stumped!
The housing market booms have been fantastic for the governments of both the UK and Australia. Its masked the underlying employment weakness in both economies and has led to bumper stamp duty revenues. They have a very strong incentive to keep that going as long as possible and are likely to be reluctant to be the cause of bursting the housing market bubble. However, they need to stem the outflow of corporate funds to developing nations, which is contributing to higher private sector unemployment and forcing the governments to run deficits to fund increased public sector employment. Increasing interest rates might help keep corporate funds onshore.
So lots of variables and I suspect that if the housing market(s) fizzle out naturally as a result of affordability constraints and cyclical improvements in equity markets, then the Bank(s) may feel that the benefits of increasing interest rates on corporate investment outweigh further negative impacts on the housing market.......
Its got me stumped!
The housing market booms have been fantastic for the governments of both the UK and Australia. Its masked the underlying employment weakness in both economies and has led to bumper stamp duty revenues. They have a very strong incentive to keep that going as long as possible and are likely to be reluctant to be the cause of bursting the housing market bubble. However, they need to stem the outflow of corporate funds to developing nations, which is contributing to higher private sector unemployment and forcing the governments to run deficits to fund increased public sector employment. Increasing interest rates might help keep corporate funds onshore.
So lots of variables and I suspect that if the housing market(s) fizzle out naturally as a result of affordability constraints and cyclical improvements in equity markets, then the Bank(s) may feel that the benefits of increasing interest rates on corporate investment outweigh further negative impacts on the housing market.......
Spot on also with the big push thats is on for big corporates exporting industry & jobs to Asia and Eastern Europe, personal experience of this, and its going to gather pace, can only lead to higher unemployment in the Private sector, which is going to stop people spending money & borrowing and therefore when that interest rate rise happens its going to lead to a fall in house prices...the inevitable is only being delayed, the predicted 2004 crash is looking even more real:scared:
#13
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Re: OZ economy can do no wrong.
Thanks Herman, hope your still enjoying London.
Any New Zealanders out there like to comment on their market? Nobody seems to discuss its future on the board, strange any reason?
My main problem with these housing busts is that the media predicts them for years before they happen and thousands get burnt while waiting for the price to drop!!
We have a 2001 magazine on our coffee table, it goes on about how the house prices were unsustatinable on the Sunshine Coast. It's so hideous, that was the start of the boom, we signed a contract resting on that magazine for $185,000 house (little rental is now worth $450.000). Sydney supposed to have been crashng for years. London, umm now theres one crash I am really keen to see, but I dont think it will happen, even tho I would love it if it did!
Its like cyclones here they predict one every year, still waiting
Any New Zealanders out there like to comment on their market? Nobody seems to discuss its future on the board, strange any reason?
My main problem with these housing busts is that the media predicts them for years before they happen and thousands get burnt while waiting for the price to drop!!
We have a 2001 magazine on our coffee table, it goes on about how the house prices were unsustatinable on the Sunshine Coast. It's so hideous, that was the start of the boom, we signed a contract resting on that magazine for $185,000 house (little rental is now worth $450.000). Sydney supposed to have been crashng for years. London, umm now theres one crash I am really keen to see, but I dont think it will happen, even tho I would love it if it did!
Its like cyclones here they predict one every year, still waiting
#14
Joined: Aug 2003
Posts: 11,149
Re: OZ economy can do no wrong.
Originally posted by dotty
Thanks Herman, hope your still enjoying London.
Any New Zealanders out there like to comment on their market? Nobody seems to discuss its future on the board, strange any reason?
My main problem with these housing busts is that the media predicts them for years before they happen and thousands get burnt while waiting for the price to drop!!
We have a 2001 magazine on our coffee table, it goes on about how the house prices were unsustatinable on the Sunshine Coast. It's so hideous, that was the start of the boom, we signed a contract resting on that magazine for $185,000 house (little rental is now worth $450.000). Sydney supposed to have been crashng for years. London, umm now theres one crash I am really keen to see, but I dont think it will happen, even tho I would love it if it did!
Its like cyclones here they predict one every year, still waiting
Thanks Herman, hope your still enjoying London.
Any New Zealanders out there like to comment on their market? Nobody seems to discuss its future on the board, strange any reason?
My main problem with these housing busts is that the media predicts them for years before they happen and thousands get burnt while waiting for the price to drop!!
We have a 2001 magazine on our coffee table, it goes on about how the house prices were unsustatinable on the Sunshine Coast. It's so hideous, that was the start of the boom, we signed a contract resting on that magazine for $185,000 house (little rental is now worth $450.000). Sydney supposed to have been crashng for years. London, umm now theres one crash I am really keen to see, but I dont think it will happen, even tho I would love it if it did!
Its like cyclones here they predict one every year, still waiting
#15
Joined: Aug 2003
Posts: 11,149
Originally posted by dotty
Watch the aritcles over the next week, OZ wont mess with its exports, been here too long, seen it before. Oz does not like .70 USA.
:scared:
Watch the aritcles over the next week, OZ wont mess with its exports, been here too long, seen it before. Oz does not like .70 USA.
:scared:
http://www.mises.org/fullarticle.asp...c+Growth&id=61