I was listening tonight on the ABC re the limitation which Australia has which is the interest rate. The interest rate controls the demand side but it's the supply side where the real problem lies, largely affected by Russia. Years ago there were more controls available and utilised to more accurately control the economy. Banks had more controlled placed on them. I recall teaching about all kinds of ratios which needed to be maintained. Now they are many more freedoms although recently dishonest practices have been exposed and large fines imposed.
Fortunately, our economy doesn't have high unemployment, personal savings are high enably a good standard of living although these savings are largely held by the well-off rather than those who live more closely to the breadline.
If the RBA overshoots with the raising of interest rates, then we risk recession and rising unemployment. Certainly the interest rate was for ages able to be kept comfortably within the 2 - 4% range they aimed for, and it was quite a rapid change when suddenly inflation blew out.
This morning I was speaking with a friend re had she been alarmed at suddenly finding some of her expenditure were reaching rather high levels. She said she hadn't noticed. Food here has, of course, been adversely affected by floods, I feel very sad for those farmers losing their crops, some twice over now.
The share market barely gave a blip after the governor's interest rate increase. That says something.
With unfilled job vacancies people are being urged to move into new areas of interest to them, viz change careers, or even ask for wage increases.
Lack of supply is sending builders to the wall here, and many people losing their deposits and house dreams smashed.
All to do with demand and supply. The balance so badly affected by Russia and Ukraine....
ps Hope you are enjoying your MAY share dramatic increases. Well done to you, jo jo.
