It looks almost certain the withdrawal of the bank gurantees will result in higher funding costs from overseas.
If the government tries bashing the banks into not raising rates independently, the banks will (as they did last year) will tell Swan they have no choice but to stop lending as business will simply not be profitable.
Of course the banks won't even pay lip service to Swan and hike as they see fit. They aren't charities, they are anwerable to shareholders first and foremost (especially at a time when bank share price will come under pressure).
All the while, if inflation proves problematic, the RBA will hike adding more pain to the trauma.
Juding from the writing style of this Terry Ryder spruiker, I swear he remindes me a lot of a couple of posters here.
