Maybe there's someone out there who can explain in simple terms some basic economic principles to me. We are in a resources boom. Consumer spending is up, debt levels are at an all time high, unemployment at an all time low, the dollar is .88 cents to the greenback, the economy is booming and an election is looming so why, please tell me why, would the Reserve Bank put up interest rates! We're at a point of all time prosperity by Australian terms but mortagees are defaulting, housing has slumped, credit card and mortgage debt is unrealistic and the hope of the Australian dream - owning your little 500sqm block of land with an eve-less house and no room for a dog - is becoming a fading reality. Surely if things are prosperous, the population benefits but I just don't get it. Who's pockets are being lined? Not mine that's for sure.
When I bought my first home, interest rates were 16% and we had a further 'first home buyers' loan which was government sponsored for 12%. Inflation was at 7% and the country was so close to being fucked it wasn't funny. Vegetables were cheap, meat was cheap, services were cheap. Today, we're paying 7.5% tops in mortgage interest . . .things are good. OK broccoli is expensive today $7.00 a kilo for the smelly florette, but most people don't like broccoli. Meat is unaffordable - for a country that has survived on the sheep's back, lamb is more expensive than lobster and I bought two Atlantic Salmon tails for DrummerBoy and I tonight at $26.00 a kilo. Farmed locally in Tasmania! WTF? The drought has broken or so we're told so why, oh why are things so expensive and why the need to charge us more. It's enough to make me embrace socialism to be honest.
My income - generous by most standards (but sadly single) is considered the average. Fuck knows how people on less than me survive. I really need to bone up on economics because it seems the more prosperous the country gets, the more the individual pays and I'm jack of it quite frankly. I can't be placated with tax cuts that will see $6.0o a week show in my net income and a social security system that doesn't consider superannuation an 'asset' in their assets test. (sorry retirees) Just as things seem to be going good - the 'economists' preach doom and gloom and spoil it. So if you can explain to me why in one of the most prosperous nations of the world, interest rates might rise . . I'm ready to listen.