June 24th, 2023Kyle’s Rant
I AM seriously concerned about the price of living and the potential recession we have on our hands, and I don’t get it.
I cast my mind back to the global financial crisis of 2007 where in America five trillion American dollars got written down and basically the American taxpayers bailed out the banks. The banks were lending too much money to what was essentially a high-risk mortgagee bracket.
The banks went on to take their bailout money, pay themselves bonuses and then go on to fight Congress, who wanted to break up the banks and reform the laws, with that bailout money. The banks won.
Of course, everybody around the world felt the pain, countries like Iceland went broke and people all over the globe did their arses in property price adjustments. So, I understand why our Reserve Bank has had to tap the brakes through its lever of putting up interest rates, but for how long?
The problem for me is that I don’t understand how the RBA can have accurate data leading to decisions around the interest rates. Seven times in 2022 and four times – so far – in 2023, with the most recent increase being this month and the next hike looking likely for July.
The data that they are working from is at least three to five months old, without fuel, food and general cost of living having been accounted for in real time. Census for example, admittedly a lot more complicated and layered look at the population, actuates and then releases its data around 10 months after its initial capture.
So how can the RBA know that we haven’t collectively had enough interest pain? We all have blind faith in this force of bureaucracy that told us to borrow as much as we can as “the interest rates won’t shift until 2024”.
How do they know our pain and are they considering the cohort of honeymoon mortgages that are coming off their sub two per cent rates. These guys locked in a three-year fixed rate in mid to late 2020 when the real estate market was red hot. They are about to enter into the real world of six per cent plus rates!
My issue comes down to people in power at the helm of the economy, making huge impactful decisions on our lives and then getting driven back to their palatial mortgage-free homes in limousines paid for by the taxpayer.
Philip Lowe – governor of the RBA and his bunch of merry men/women/they/them/people/folks – it’s hard to keep up the hotheadedness when trying to be politically correct).
But these privileged humans have virtually no accountability, they use old data as a barometer on the economy as well as revenue tracking by our largest companies, which sure as shit is not filtering down to the world of the average pleb.
Why don’t they rock up to The 5000 Club at Vic Park in Daylesford or any of our local foodbanks, charities and churches to get a measure of what is really going on?
I’ll tell you why, even if their cars could make it across our bush track underfunded excuses for roads without blowing a tyre or crashing into a lane-drifting, texting tourist.
It is because it is easier to look at the world through the 16th floor of 65 Martin Place, Sydney, backslapping and guffawing while weighing up old, outdated data and making considerations and deliberations over a long lunch and an eye-wateringly priced bottle of shiraz.
FFS RBA rant over…