$10.4b stimulus plan -- will it raise interest rates?

[Dis]

I fully expect this inexperienced government to overcorrect now and for inflation to be an issue in 12 months time.

Interestingly this inflation will probably make houses more affordable as:
*wages increase
*house prices remain steady and
*interest rates drop.

What if:
*wages decrease
*house prices remain steady and
*interest rates rise.

Thats closer to my crystal ball prediction. My reasoning is:
- lower dollar
- increasing energy costs (long term view , not looking at short term fluctuations)
- increasing food costs

 

[Rockstar]

What if:
*wages decrease
*house prices remain steady and
*interest rates rise.

Thats closer to my crystal ball prediction. My reasoning is:
- lower dollar
- increasing energy costs (long term view , not looking at short term fluctuations)
- increasing food costs

Hi Dis,

Can you please explain why or how you think interest rates would rise when the whole of Australia is expecting them to fall?

 

[Dis]

Sorry I should have clarified.

I expect IR to fall in the short term. In the medium term I expect stagflation with wages / assets / growth stagnating (deflating), but goods and services rising due to higher input costs.

There is a great deal of talk about corporate excess. I think most of western society has been living to excess. People are going to spend more of their $ on essentials and less on doo-dads.