Go Back  British Expats > Living & Moving Abroad > Australia
Reload this Page >

OZ economy can do no wrong.

OZ economy can do no wrong.

Old Oct 22nd 2003, 7:42 am
  #1  
BE Forum Addict
Thread Starter
 
Joined: Feb 2002
Location: Dream life UK....
Posts: 2,912
dotty is on a distinguished road
Default 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.
dotty is offline  
Old Oct 22nd 2003, 7:50 am
  #2  
 
Joined: Aug 2003
Posts: 11,149
bondipom is an unknown quantity at this point
Default

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.
bondipom is offline  
Old Oct 22nd 2003, 8:29 am
  #3  
 
Joined: Aug 2003
Posts: 11,149
bondipom is an unknown quantity at this point
Default

http://news.bbc.co.uk/1/hi/business/3203217.stm

Here is some more good news for you all.
bondipom is offline  
Old Oct 22nd 2003, 8:41 am
  #4  
BE Forum Addict
Thread Starter
 
Joined: Feb 2002
Location: Dream life UK....
Posts: 2,912
dotty is on a distinguished road
Default

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:
dotty is offline  
Old Oct 22nd 2003, 8:49 am
  #5  
Banned
 
mr mover's Avatar
 
Joined: Apr 2003
Location: Angle vale Sth Australia
Posts: 5,353
mr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond repute
Default

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:
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
mr mover is offline  
Old Oct 22nd 2003, 8:53 am
  #6  
Senior member
 
Joined: Sep 2002
Location: Paris
Posts: 835
Herman has much to be proud ofHerman has much to be proud ofHerman has much to be proud ofHerman has much to be proud ofHerman has much to be proud ofHerman has much to be proud ofHerman has much to be proud ofHerman has much to be proud ofHerman has much to be proud ofHerman has much to be proud ofHerman has much to be proud of
Default 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.
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.......
Herman is offline  
Old Oct 22nd 2003, 8:58 am
  #7  
tennisoz
Guest
 
Posts: n/a
Default

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
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
 
Old Oct 22nd 2003, 9:04 am
  #8  
Banned
 
mr mover's Avatar
 
Joined: Apr 2003
Location: Angle vale Sth Australia
Posts: 5,353
mr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond repute
Default

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
the boom/bust cycle continues , who,s controlling it ?? who doe,s it CONTROL.................... MM
mr mover is offline  
Old Oct 22nd 2003, 9:11 am
  #9  
BE Forum Addict
Thread Starter
 
Joined: Feb 2002
Location: Dream life UK....
Posts: 2,912
dotty is on a distinguished road
Default

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
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.
dotty is offline  
Old Oct 22nd 2003, 9:18 am
  #10  
 
Joined: Aug 2003
Posts: 11,149
bondipom is an unknown quantity at this point
Default 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.......
I agree with you on the housing market fizzling out due to affordability and low rental yields.

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.
bondipom is offline  
Old Oct 22nd 2003, 9:18 am
  #11  
Banned
 
mr mover's Avatar
 
Joined: Apr 2003
Location: Angle vale Sth Australia
Posts: 5,353
mr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond reputemr mover has a reputation beyond repute
Default

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.
YES i do dotty ,because we will be looking for cheaper ,alternatives.................... MM
mr mover is offline  
Old Oct 22nd 2003, 9:19 am
  #12  
BE Enthusiast
 
GetMeOutOfHere's Avatar
 
Joined: May 2003
Location: Exit UK 23rd Mar 2004, arriving in NZ 29th Mar (stop off LA Disney)
Posts: 385
GetMeOutOfHere is an unknown quantity at this point
Default 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.......
Spot on with you perception of how weak the underlying Private sector really is. Uk for instance is looking at up to £50billion deficit by 2006, to fund the New Labour projects wasteful splurge in the Public sector. Public sector is a massive drain on whereas Private sector creates the real wealth. This crazy economic policy can not continue without serious consequences...
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:
GetMeOutOfHere is offline  
Old Oct 22nd 2003, 9:31 am
  #13  
BE Forum Addict
Thread Starter
 
Joined: Feb 2002
Location: Dream life UK....
Posts: 2,912
dotty is on a distinguished road
Default 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
dotty is offline  
Old Oct 22nd 2003, 9:35 am
  #14  
 
Joined: Aug 2003
Posts: 11,149
bondipom is an unknown quantity at this point
Default 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
Give me some Cyclone swell. Perfect conditions but where are the waves?
bondipom is offline  
Old Oct 22nd 2003, 9:46 am
  #15  
 
Joined: Aug 2003
Posts: 11,149
bondipom is an unknown quantity at this point
Default

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:
For reasons not to be too worried about high exchange rates check out the link below. If you work for an importing company like I do the rates are good a thing.

http://www.mises.org/fullarticle.asp...c+Growth&id=61
bondipom is offline  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.