rates up, page-33

  1. 3,935 Posts.
    re: rates up. but rates still too low. rabbitoh When the price of the SAME house doubles in 3 years, the reality is that it is not worth any more, but rather the purchasing power of the currency has fallen.

    This is the real measure of inflation.

    The purpose of the Reserve Bank is to maintain purchasing power in our currency. They do this by preventing inflation to exceed productivity.

    The Reserve has preferred to remove from the inflation measure, those elements it wants to ignore. In this case, home prices.

    Real infaltion has been running at about 25%.

    Either house prices must fall or incomes must rise.

    There will soon be a Basic Wage increase of about $30.00 pw. This will feed through every price immediately and inflation will jump.

    Expect many interest rate increases and lots of pain for those in debt.
 
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