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Recession?

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On 02/06/2023 at 14:27, simmo said:

I think overall it does.   If you read all of it.

Not convinced - I don’t see how you can conclude it’s  “not bad at all” when the second half of the article is a list of reasons why it’s bad, (or at best inconsequential). 

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On 01/06/2023 at 20:11, HappyHeart said:

Yes and the RBA's Philip Lowe thinks housesharing is the answer to the housing crisis. 5 minutes ago they were throwing free money around and now we are paying for it and being forced to economise. 

I imagine electricity prices will be enormous in a large number of households. Even is, in the unlikely hood that prices don't rise. 

Edited by Blue Flu

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On 02/06/2023 at 17:58, HappyHeart said:

We also refinanced in 2021 and gor variabke rate 2.2 %. We are now on 5.75% i think  and had not budgeted for this as we were assured no rate rises till 2024 (when we will have sold house number 1) We currently pay 2 mortgages and I've calculated our payments are approx $1600 extra a month right now. Starting to truly feel the pinch and no disposable income at all.  Just as well we like the simple pleasures. Hopefully will have house number 1 sold by end of year for some breathing space. 

There are simply no such thing as an assurance come money and interest rates. It was more than clear that interest rates were kept far too low for far too long. Besides that we are still not being told, with clarity, just how bad things are nor how high interest rates will go up. Wishful thinking in the extreme, if people believe rates will come down towards the end of the year. I doubt next year either. 

One should keep in mind 7% was the long term average rates. Not really sustainable now with the inflated housing , at least not without a housing market crash, which incidentally should be allowed to happen if managed correctly. 

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Many people of course don't live a lavish lifestyle when interest rates are low, or take the opportunity to borrow more and more.

Lots of sensible people take the opportunity to make extra repayments and pay their debt down as much as possible. Knowing the good times would not last for ever.

People who buy new cars on credit every 3 years will never get the chance to pay down their home loans


Buy a man eat fish. The Day, Teach Man, to lifetime.      - Joe Biden.

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16 minutes ago, Blue Flu said:

There are simply no such thing as an assurance come money and interest rates. It was more than clear that interest rates were kept far too low for far too long. Besides that we are still not being told, with clarity, just how bad things are nor how high interest rates will go up. Wishful thinking in the extreme, if people believe rates will come down towards the end of the year. I doubt next year either. 

One should keep in mind 7% was the long term average rates. Not really sustainable now with the inflated housing , at least not without a housing market crash, which incidentally should be allowed to happen if managed correctly. 

The trouble is the RBA only have one tool in their tool bag - interest rates.

There is a saying that if all you have is a hammer, everything looks like a nail.

All the RBA can do to try and boost or dampen the economy is fiddle with interest rates.

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Buy a man eat fish. The Day, Teach Man, to lifetime.      - Joe Biden.

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6 minutes ago, Parley said:

The trouble is the RBA only have one tool in their tool bag - interest rates.

There is a saying that if all you have is a hammer, everything looks like a nail.

All the RBA can do to try and boost or dampen the economy is fiddle with interest rates.

That is the job of the RBA. Keeping inflation at bay. They have certainly be negligent at maintaining interest rates at too low a level for far to

long. They do claim though that housing is not part of their brief. So lets hope this extends to falling house prices and inflation remains their main task. Vested interests will attempt to influence otherwise of course. 

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18 minutes ago, Parley said:

Many people of course don't live a lavish lifestyle when interest rates are low, or take the opportunity to borrow more and more.

Lots of sensible people take the opportunity to make extra repayments and pay their debt down as much as possible. Knowing the good times would not last for ever.

People who buy new cars on credit every 3 years will never get the chance to pay down their home loans

Well stats do not support that. Australians are close to the most heavily indebted people in the world. (personal debt) There has tended to be an increasing emphasis on greed over recent decades. Little really on what is best for the nation as self centredness becomes rather entrenched. 

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The threat of recession is not unique to Australia. Taiwan is already in recession. My cousins in Mexico and America are also deathly afraid of recession too.

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Germany now in recession with France and Ireland not looking too good either.

20230605_094948.jpg

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15 hours ago, renebascossarabi said:

The threat of recession is not unique to Australia. Taiwan is already in recession. My cousins in Mexico and America are also deathly afraid of recession too.

No one claimed it was. Difference with Australia/New Zealand and a few others is the high personal debt (among highest in the world) increasing interest rate rises (some of most inflated property in the world) and increasing prices across the bard. 

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All you people have jobs, so I don't think it is a recession yet.


Buy a man eat fish. The Day, Teach Man, to lifetime.      - Joe Biden.

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5 hours ago, Blue Flu said:

No one claimed it was. Difference with Australia/New Zealand and a few others is the high personal debt (among highest in the world) increasing interest rate rises (some of most inflated property in the world) and increasing prices across the bard. 

What's the best way to fix this?

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1 minute ago, renebascossarabi said:

What's the best way to fix this?

Put up interest rates.

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Buy a man eat fish. The Day, Teach Man, to lifetime.      - Joe Biden.

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20 hours ago, simmo said:

Germany now in recession with France and Ireland not looking too good either.

20230605_094948.jpg

I was reading about this.  Things not looking good at all.  Germany's high dependency on Russia for it's energy supply is just one of the factors causing the recession.

Edited by Toots
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1 hour ago, renebascossarabi said:

What's the best way to fix this?

Don't fiddle around, making the process longer to resolve. Increase interest rates by '50 points. Inflation must be controlled as it impacts all. Allow houses to fall . There will be winners and losers, but the real estate industry should not be having undue influence on the economy . They were not complaining when interest rates were kept to low, for to long. It was obvious that those rates could not continue.

Half immigration. That fans inflation, while disguising the real economy by artificially increasing GDP.  Crack down on the numerous drug manufactures who distort the economy , by having too much cash (untaxed) in the massive black economy. This also nullifies to an extent what the rise in interest rates hope to achieve. 

Stop overseas buyers buying (many laundering) property in Australia. Enough overseas land lords and illegal activities .

Just for starters.....

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1 hour ago, Toots said:

I was reading about this.  Things not looking good at all.  Germany's high dependency on Russia for it's energy supply is just one of the factors causing the recession.

Germany has been impacted badly with rising inflation. UK is second behind them last time I looked. Both countries are enduring record numbers of immigration growth and problems akin to Australia with housing issues. 

Actually the world is in a bad way which increases the dangers of something very bad breaking out . We need to change the way we have been doing things to maintain the system as it stands.

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Another 0.25% rise. It should have been double that IMO. WE are still way behind New Zealand, USA , UK . What this means is that rates will need to go higher for longer regardless of what RBA and commenters say within Australia. men

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3 hours ago, Blue Flu said:

Another 0.25% rise. It should have been double that IMO. WE are still way behind New Zealand, USA , UK . What this means is that rates will need to go higher for longer regardless of what RBA and commenters say within Australia. men

Mark Bouris disagrees with you strongly. Rates should have been left on hold

https://www.skynews.com.au/business/finance/its-badly-timed-and-its-wrong-mark-bouris-slams-reserve-banks-decision-to-increase-the-cash-rate-to-410-per-cent/news-story/d4310746491aa707b22c7bafcca80606


Buy a man eat fish. The Day, Teach Man, to lifetime.      - Joe Biden.

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57 minutes ago, Parley said:

LOL. Did you expect something other from the industry? Thank goodness the RBA is not totally under the influence of the real estate industry. Unlike the media. Still should have been 0.5% to shock the market into slowing down. The death by a hundred cuts will just prolong the situation. Saying that though, it is unlikely rates will ever return to the low levels recently experienced. 

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On 06/06/2023 at 14:47, renebascossarabi said:

What's the best way to fix this?

Start taxing the big companies who are recording record profits through all this.

Certain forecasters have said that its the big companies driving inflation and inflation would half if profits weren’t so high.

The problem with that is the big companies are all owned by the same people and most people in power have interests in these companies so nothing will ever be done.

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On 05/06/2023 at 15:16, Parley said:

The trouble is the RBA only have one tool in their tool bag - interest rates.

There is a saying that if all you have is a hammer, everything looks like a nail.

All the RBA can do to try and boost or dampen the economy is fiddle with interest rates.

I am surprised that they didn’t increase gst but think that is going to come sooner rather than later 

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30 minutes ago, Lavers said:

Start taxing the big companies who are recording record profits through all this.

Certain forecasters have said that its the big companies driving inflation and inflation would half if profits weren’t so high.

The problem with that is the big companies are all owned by the same people and most people in power have interests in these companies so nothing will ever be done.

These big players at the top end of town fund the political parties, start hitting these and the politicians will be looking for new jobs it’s not going to happen. 

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The big players are somewhat untouchable due to reasons given above. The' system ' has changed over the decades from doing what is best for the majority of the population and towards the 'interests' of big business. A rise in GST will likely come, but not now. In times of people feeling 'the pinch' it would not be feasible to further inflate prices and further complicate interest rates. 

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4 hours ago, Lavers said:

Start taxing the big companies who are recording record profits through all this.

Certain forecasters have said that its the big companies driving inflation and inflation would half if profits weren’t so high.

The problem with that is the big companies are all owned by the same people and most people in power have interests in these companies so nothing will ever be done.

Most are owned by superannuation funds, which creates the catch-22 where the public wants their super to go up by 5-10% per annum but complains about inflation. It's the same irony of a homeowner rejoicing at their house price increasing, but then becoming upset about inflation. 
 

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