Search results

I'd say the new economics has started when the Feds printed money from thin air by the trillions to get out of the Great Recession of 2008-09. The most unconventional monetary policy ever done. You can blame them for the super low rates we are in for a considerable period of time below 5%. And...

Well when there are plenty of new jobs to absorb the increasing population, coupled with wages increasing way above inflation, that could happen. In other words, dream on! One of the RBA's legal obligations under the Reserve Bank Act 1959 is to help achieve Full Employment. And they only have...

I won't care about the 70s as I was not born yet and the AUD was not yet in free float. As to 2011-2015 we all know what happened. Unemployment rate went even higher, (now 6%) while the RBA cash rate went even lower (now 2%). Just plot it in the graph above and you will see. Anybody thinks...

That is not my problem. :p Reading graphs with inverted RHS is not rocket science. As you can see there's a nice actual relationship between rates and unemployment.

:rolleyes: I strongly suggest a refresher course in Basic Economic Principles. :rolleyes:

Still that doesn't translate to 10-18% rates in th next decade. At most, 5%. Stagnant GDP = low rates. And possibly even zero rates and QE (if you even know how that works in the new world). Indeed the good old Howard days are over. Which incidentally was a period of high rates. LoL.

Does not compute. A collapsing Aust economy does not jibe with rising rates, while there's no budget to stimulate. AUD may fall but with so much supply of commodities and goods, we know what that does to supply demand equilibrium.

Guess what. Today's cash rate is even lower than during the GFC. How could that be? LoL. I suggest people should understand how global capital markets work. Just because you had 15% interest rates in the old days, doesn't mean we'll get back to the old days. We are in a New Normal.

Of course you think in the next 10 years we will have budget surpluses and another major mining boom. :rolleyes: There's only one reason rates go up: Inflation. Nowhere is this seen ... We are overproducing commodities and goods, and once the Feds and ECB unwind the QE in next 10 years, we all...

Can someone please remind me why rates were very high in the past? And can someone please tell me if the same economic conditions will make a repeat appearance?

Trust me. We won't have RBA rates going up to 5% in the next 10 years. They will only raise rates if we have a whopping economic growth and huge inflation. No one in their right mind would expect these conditions to happen in the next decade. In fact the risk is for it to fall...