Wednesday, November 07, 2007

Election rate hike

“The Reserve Bank [Australia] has made history, weighing into the politically-charged federal election campaign by raising interest rates to their highest in a decade.

In a widely anticipated move, the bank lifted the official cash rate by 0.25 percentage points to 6.75 per cent this morning - the first time it has moved rates during an election campaign.”

The Howard government are still campaigning on an illusory ‘economic management’ program. Illusory because they really don’t have much pull on the economic side, relying largely on fiscal policy to steer the ship.

They are trotting out dubious historical figures to attack Labor, but they are increasingly questionable when looking at Howard’s record now:

“The increase will add $67 a month to repayments on a $400,000 loan, bringing to $395 the cumulative impact of six interest rate rises since the last election, when the Coalition campaigned on a promise to keep rates low.” SMH

The Australian dollar punched through 93 US cents after the announcement of today's rate rise. A strong Aussie dollar is not what the doctor prescribes for our economy, based as it is on resource exports. Fortunately China is committed to its resource imports programme, but we still compete with other countries in this field.

Speaking of China, now I’m back in business I will be back on the Chinese dragons tail in the next day or two.


D.K. Raed said...

We should be raising our fed interest rates, too. It's been artificially suppressed for quite some time now. Won't help the US $ though, we are being creamed in the foreign mrkts. Good time to come visit U.S.!?!

Cartledge said...

I read today that the US doesn't even count food and energy prices in the cost of living figures. I guess if you don't see it it don't exist.