In essence, by raising interest rates on credit products,
consumers and businesses are less likely to borrow funds and therefore spending decreases.
And when spending decreases, the theory is that this can slow down economic growth and inflation.
Really the RBA and LNP should not have kept Interest Rates too low for too Long.
This Pushed our already Overprices Houses,
Into Un-Sustainable levels.
Many people largest expense is Housing Rent or Mortgage.
This has Increased a lot,
some areas went up over 50% last Year alone.
And are Multiples of what they should be.
Australia hasn't had a Housing Crash like the US and most other Places have,
Due to them constantly being propped up,
By stupidly low Interest rates,
Policies such as Grants and Negative Gearing etc.
And Immigration.
When people have no money left after rent,
Coffee and other pointless shops will start to close down,
And fair enough 10 000% + mark up on a 10 cent Coffee is crazy....
That will be the start but having less $$$$ left over,
Means people spend less,
So less demand,
Which should / will reduce Inflation.
Price Gouging also needs to be looked into.
Many Builders may not have failed if it was not for the Blatant Price Gouging Occurring with Building Supplies etc.
Shops are doing it with everything from lettuce to hand sanitizer.
Food places like many Kebab shops for example,
put up their prices during the Lettuce fiasco,
And reduced their size at the same time,
Giving 50% less Value for Money.
They have refused to reduce their prices and go back to the previous bigger size,
Since then.
Many Shops are using false excuses to put and keep prices up.
Also they need to look into Supermarkets Price Gouging the Lettuce (and other things like Meat, Etc. in the first place.)
The Farmers were simply not getting paid 5 times to 20 times normal Prices for Lettuce....
Price Gouging all over the place is also driving Inflation.
Crazy High House prices,
Have also made our dollar worth less in comparison to the rest of the World,
Due to how little we get for our money here,
Which makes the Inflation Problem even worse....
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