This news is actually available on the MSM, as this post is based on a ‘News.com.au’ article. I just wanted to make some personal comments relating to information not in the news.
Firstly, I want to criticise the RBA (Reserve Bank of Australia), who may or may not know what they are doing, but they certainly have an inefficient, even dangerous system of national financial controls. Using a ‘sledgehammer to break nuts’ by increasing rates until eventually the system begins to crash due to overshoot, is hardly clever. This is followed by reducing interest rates, after it is too late, until the pendulum swings the other way, again too far, and unwanted inflation and possibly ‘over’ employment puts power back into the unions hands.
Secondly, I wish to criticise the politicians in accepting substantial pay rises, even if starting 2012, when the peoples’ economy is unwell. Today’s disaster report would have embarrassed them if published in the same week! Being cynical, as usual, I wonder if a deliberate time separation has been arranged?
Thirdly, back to the RBA. The Australian economy generally has a dual “personality”. Industrial booms occur and create a rosy financial picture, resulting in pressure on interest rates. Meanwhile other sectors may be quite unaffected or even be experiencing downturns. Not sufficient to ripple the national book-keeping figures but sufficient for a rate increase to have devastating effects.
Fourthly, not always a factor, but at times shortages create price increases. Because the item(s) happen to be included in a list purporting to be typical family needs, used to monitor inflation trends, they artificially bump up the deemed inflation rate and influence interest rate movements. This, of course, is absurd! Nothing to do with inflation. (Remember bananas due to a bad weather season?).
Fifthly, because of these disparities, the crude controls and the destructive end results, it should be the highest priority to separate general public house mortgage financing from the vagaries of interest rate increases due to inappropriate financial pressures.
Lastly, how robust really is our Australian economy? This unexpected downturn in Christmas shopping activity, (perhaps partly due to internet on-line sales), the projected loss of jobs, suggest that we may be not so robust. In addition, serious claims have been made about the alleged safeness of our banks , reference this recent post -(https://tgrule.wordpress.com/2011/12/07/financial-perfect-storm-slams-aussie-banks/ ).
I understand that the author of these claims is considered by the authorities to be of dubious credentials, I believe this is because of his being a ‘thorn in their side’. However, truths are truths, if they actually are! The messenger should not be shot for his part, although it is common practice.
It is not to be in any way certain about this question of our banks and their ‘derivatives’, but it would surely be wise to consider that the MSM and government may not always tell us the truth.
An extract from the News.com article:
AUSTRALIA is on the brink of an unemployment catastrophe, with up to 100,000 jobs set to be slashed in the months after Christmas.
Westpac chief economist Bill Evans, one of the few economists who correctly predicted a rate cut in November, said lead indicators pointed to a very weak employment growth next year.
“We would expect the unemployment rate to edge up to 5.75 over the next six months,” Mr Evans warned.
“But on the flipside, the Reserve Bank would have to cut the cash rate by at least half a per cent to counter (the job losses).”
The comments come as top research firm CoreData suggested the number of unemployed people in Australia will jump by nearly 106,000 next year, assuming the labour force grows at its current rate and the unemployment rate rose to 5.75 per cent, as predicted.
CoreData boss Andrew Inwood said the problem would be felt nationwide.
“One in five Australians now think they are going to lose their jobs in the next 12 months,” Mr Inwood said.
“That’s particularly true in all industries outside finance and mining. Interestingly, our research has found levels of Australian confidence in the economy for the first quarter of 2012 is looking to be roughly the same as it was at the height of the global financial crisis.”
Richard Deniss, executive director of The Australia Institute last night echoed Mr Evans’ views, saying mass layoffs were expected in the retail industry.
“The tourism industry and retail sector are being hit very hard by the high dollar and, while mining is booming, it doesn’t employ too many people,” Mr Deniss said.
“The problem is retail doesn’t make a lot of money but employs a lot of people.”
Read the article here. (From the ‘Optus Zoo home page)
- Australia on the brink of jobs crisis (heraldsun.com.au)
- Australia | Youth unemployment: a two-speed divide? (skillsinfo.wordpress.com)
- More RBA Cuts to Come, Depending on the Euro Crisis (ibtimes.com)