Remember rate rises are used by the rba to stop inflation boiling over. With such low interest rates and quite a few heavily geared owners and investors. How many rises will it take to take inflation back into there bands. Not many I would hazard a guess. Personally while called a bull, I believe lower interest rates aren't that good for the economy. As 1 retiree's don't have a reasonable rate to invest safely and take more risks to earn a reasonable amount of return. 2 is discourages people from saving. 3 it encourages people to borrow and pay more for basic housing, add a new car in there and new furniture. These sort of times will see rates low for a long time as any quick move back to say 8 % will see the economy contract and cause trouble. I think it's imperative to see rates rise ASAP as the economy can bear it. Also I would like banks to show all clients how much the need to have if rates go to 9%. While cheap credit is good when used to grow the economy new housing business and such. I do not see a healthier Australia lowing people to borrow more for existing housing as thing is counterintuitive to the stimulation lower rates should bring.
