# Interest Rates to 7.25% by February?



## Blank1979 (7 November 2007)

So the interest rates have just gone up by 25 points to 6.75% and pundits are already tipping another .25% in December.

So why didn't they just do 50 points today?!? Maybe because it'd be a political handout to Labor or just a plain ol' killer to the Liberals?

But, just to freak out everyone with a mortgage, myself included, some  are now tipping it'll be 7.25% by FEBRUARY! Matthew Johnson wrote it here: http://www.businessspectator.com.au..._It_may_be_725_by_February_8Q25C?OpenDocument

Very worrying indeed. What does everyone else think?


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## prawn_86 (7 November 2007)

*Re: Interest Rates to 7.25% by February!*

They generally raise rates by 25 basis points at a time in order to ease the general mortage populus into it.

If they really wanted to cut inflation they could just raise int rates by like 1.5% straight away, but the financial stress that would place on people would be too great, hence the slow rise.

Thats my take on it anyway...


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## numbercruncher (7 November 2007)

Yes even quite a few speculating 10pc variable rate in the not so distant future !!


Average mortgage is like 320k so over 600 dollars a week in interest payments, very scary indeed. Must be geting close to being more cost effective to buy a mobile home and just go on permanent holidays ? 

Good for savers though


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## ROE (7 November 2007)

Interest need to go to 20% before it affect me because I don't leverage that much.

High debt level or leverage can bring higher return
but it can probably bankrupt you as well so I take it nice and slow.


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## ROE (7 November 2007)

*Re: Interest Rates to 7.25% by February!*



prawn_86 said:


> They generally raise rates by 25 basis points at a time in order to ease the general mortage populus into it.
> 
> If they really wanted to cut inflation they could just raise int rates by like 1.5% straight away, but the financial stress that would place on people would be too great, hence the slow rise.
> 
> Thats my take on it anyway...




I actually prefer 1% rise at a time because if you put a frog into
a bow with water and slowly increase the temperature by 0.5% at a time
the frog will stay in and die but if you raise it by a few degree at a time it will jump out and survive.

Moral of the story, rise hard and fast and the one that cant handle it jump out and learn their lesson and go easy with their spending and borrowing.
rise it slowly they learn to adjust and make no attempt in changing their attitudes and spending pattern until they have no option but to go bankrupt


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## ROE (7 November 2007)

BradK said:


> Well boo hoo and good for you. People like you that kept us 20-somethings out of the market, and now skite about 'I don't leverage that much'




How do you know I'm not 20 something and do something sensible rather
borrow to the till ?

People got no one to blame but themselves for borrow more than they can handle. If you cant handle a few percentage point rise you shouldn't borrow it in the first place, talk to any decent economist or financial advisor and they tell you to leave at least 2% point in your borrowing power.

Self inflicted injury no sympathy.

PS: if you want to know when I'm in my 20s not that long ago, I can borrow 400K when interest rate at 5% but I opt to save and save and only borrow 100K to buy a cheap place and then I save and save and do up the place and not taking holiday or drive a fancy car....
what are you doing but have a go at people like me who has sensible borrowing habit and save?


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## numbercruncher (7 November 2007)

Average mortgage is 330k - so at 8.5pc over 30 yrs repayment is 585 p/w plus rates/insurance/maintenance - so about say 650p/w.

So a sensible buyer really needs to add min 2pc buffer if they wish to buy so add like another 150p/w.

So 800 pw after tax available for housing is what folks need aim for.

Smell that ?? Troubled waters ......


What will happen, average wages up or average prices down ? Or just keep immigrating cashed up buyers ?


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## Awesomandy (7 November 2007)

I'm mid 20s, and over the past few months, I've been reducing leverage as well. 

But anyway, back on topic, rates will most likely go up in December as well, and, since it would take at least a couple of months for the effects to show up in the stats, they might increase it once more after that for good measures. And that would make it 7.25%. 

Still having said that, currently, the bet is between 7.00 or 7.25 by my birthday (in Feb).


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## Rafa (7 November 2007)

*Re: Interest Rates to 7.25% by February!*



ROE said:


> I actually prefer 1% rise at a time because if you put a frog into a bow with water and slowly increase the temperature by 0.5% at a time the frog will stay in and die but if you raise it by a few degree at a time it will jump out and survive.





too true....

but the last time someone with guts raised interst rates to do that... and caused the recession we had to have, him and his party have been sent off into the wilderness branded as poor economic managers... 

the sub prime crash was the perfect chance to clean out the system, but the US feds have started slashing rates


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## BradK (7 November 2007)

Just for the record: 

I am 32, have a $200,000 mortgage on my own 3 bedroom house, and an investment property that I own outright. I have been doing build and sells since 2001 to 'get ahead' 

I am speaking on behalf of my friends, work mates and others in SOCIETY who are trapped in this cycle. 

I just don't like people who engage in finger pointing at the misfortune of others' mortgage situations when they can barely help it. 

Although I am savvy with my money, I, unlike Howard and Rudd, still cling to the idea that we live in a SOCIETY as CITIZENS, rather than ECONOMIC subjects divided into haves and have-nots. 

I am good with money. But my parents are NOT, and what if my daughter does not have great skills in this area? Is she a 'loser' who has to put up high mortgages and gets spoken down to whenever rates go up as if she is being called into the principals office? 

We need to think about what kind of a society we want to live in very carefully, as I think we are at the cross roads. Not really where most investors or share traders heads are at... but I'm entitled to my opinion. 

Cheers
Brad


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## BradK (7 November 2007)

I like what this guys says on www.news.com.au 

Howard is a liar. Always have been. Always will be. Why are all you Howard supporters assuming that the Labor/Rudd supporters are lazy by nature and always wanting a 'helping hand'? I'm a Labor supporter and work hard for my money and have also been financially prosperous (and no I don't give credit to the Howard government for that fact). But look at the pattern that the Howard/Costello government is steering this country towards. We're becoming more and more like America where it's great if you have the money but treated like dirt when you don't. I want my kids to grow up in an egalitarian society where people care for each others welfare and not consumed by the selfishness and the wealth race. Let's make this 'lucky country' actually deserve that tag.
Posted by: Snipes of Melbourne 2:45pm today


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## numbercruncher (7 November 2007)

your right ofcourse Brad ....

The Howard team have created a divisive society and an economy based on a hole in the ground, they certainly seem to be modeling Aus on the US, which as can be seen unfolding now is looking like a dismal failure.

Crossroads are here, something has to give.


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## nioka (7 November 2007)

BradK said:


> I am 32, have a $200,000 mortgage on my own 3 bedroom house, and an investment property that I own outright.
> Brad




A mortgage on your home doesn't allow the interest as a tax deduction whereas one on the investment property does. How come you have it that way?


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## son of baglimit (7 November 2007)

this was the 1st of 6 rises in the next 2 years.

that'll teach them for handing out tax cuts.

then its lookout below - 2002 revisited.


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## BradK (7 November 2007)

nioka said:


> A mortgage on your home doesn't allow the interest as a tax deduction whereas one on the investment property does. How come you have it that way?




Nioka, 

It was the way it turned out as I was doing build and sells and managed to buy the investment property debt free before I built my own house. 

I also had a deposit for my own house; and was advised that I could not switch to make my own house tax-deductible without a VERY good explanation to the tax department. 

Its ok, as I am currently in the middle of another build and sell project, and that will take another chunk of my personal mortgage, and will have it paid off in about 3 years at the rate I am going. 

Again, property has been good to me - but I was filthy earlier when I percieved that Roe was being disrespectful to people who, through the dream of home ownership, have got themselves into problems on the back of a government that accuses the other of rising interest rates - are we up to 10 now under this government? and 6 or 7 since his ill-concieved promise? 

Apologise if I came across as shoulder chipped or p!ssed off. 

Labor or Liberal have NOTHING to do with interest rate rises. The RBA is autonomous. 

I just cant stand the audacity of Howard and others who want to take us down the path of the Americans. It is simply not the way for Australia to go. Can someone honestly point out the benefits? I am open to be persuaded. And I mean that. 

There is an economic division in this country and it is growing. I'm sorry, but Howard MUST GO, and it would be my reward to see him lose his seat 


Cheers
Brad


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## BradK (7 November 2007)

son of baglimit said:


> this was the 1st of 6 rises in the next 2 years.
> 
> that'll teach them for handing out tax cuts.
> 
> then its lookout below - 2002 revisited.




I agree Son of Bag, 

IF politicians can be blamed its Howard and Rudd equally - $20 bucks per week for all in tax cuts! What bullsh!t. Bread and circuses, bread and circuses. 

We are about to feel a sting in this country, and because Labor will be in Government, Howard and co. will be singing that trusty old chestnut - the 17% polka. 

Brad


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## numbercruncher (7 November 2007)

Despite so many people actually needing the tax cuts to offset spiralling living costs it really needs to be spent on infrastructure, Hospitals, Education, Broadband, Water, Aging population, Renewable energy etc ... we really are walking towards that bananna republic.

I vote for no tax cuts and fix the country. Hopefully who ever gets in will break the pledge and actually do it


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## BradK (7 November 2007)

I agree - keep my tax cut.

I'm actually thinking of running for the House myself. Have you seen the size of those indexed pensions!?!?!?! 

Oh, and if I can help my electorate in any way, I'll try that as well. But no guarantees. 

Geeessshhh


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## Kauri (7 November 2007)

BradK said:


> I agree Son of Bag,
> 
> 
> We are about to feel a sting in this country, and because Labor will be in Government, Howard and co. will be singing that trusty old chestnut - the 17% polka.
> ...




 Never forget ...The Right Honourable John Howard (federal treasurer in 1982 under Fraser when interest rates peaked at 22%) ..I hear tell he dances a mean Polka himself..  :beat: 
Cheers
..........Kauri


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## Flying Fish (7 November 2007)

Kauri said:


> Never forget ...The Right Honourable John Howard (federal treasurer in 1982 under Fraser when interest rates peaked at 22%) ..I hear tell he dances a mean Polka himself..  :beat:
> Cheers
> ..........Kauri




Those were the good old days. Jut throw your money in the bank and watch it grow


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## Surly (7 November 2007)

BradK said:


> Just for the record:
> 
> I am 32, have a $200,000 mortgage on my own 3 bedroom house, and an investment property that I own outright. I have been doing build and sells since 2001 to 'get ahead'
> 
> ...




Sounds like you are doing well Brad. Out of interest how many of your family and friends have you farmed into the buy and sells to help you both out?

cheers
Surly


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## BradK (7 November 2007)

Surly, 

I did the first few by myself, but the current project is actually with a brother in law to help him and his new wife raise a deposit for their new home. 

My two brother in laws are also throwing in together now, and we are all working out quickly about synergy. 

I guess the future will be families helping each other out out of necessity rather than just a good idea. 

Welcome to John Howard's Australia 

Brad


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## son of baglimit (7 November 2007)

i wonder, i just wonder, how many of these poor folk with mortgages about to explode their dreams ever, ever considered that interest rates DO GO UP.....its not always 5 point something, 6 point something or 7 point something...........when i bought my first house, rates were coming down from their 17% highs of the late 80s, but were threatening to charge up again. so what did i do - i budgeted for 16% rates before i jumped into the home owning game. thankfully, rates soon dropped again, and kept dropping to those 5 point something rates. now did i use this time to enjoy the extra freedom that extra spare cash brings - NO - i pumped the mortgage harder, cos it was never gonna stay that way - surely - but hey it nearly did.......till the last 2 years. 
well mortgage is paid now, but i wonder how many of these poor folk EVER considered what rates would be 2,3,4,5,10 years AFTER they began the jump into home ownership....somehow many did not id say. they grabbed onto the dream, borrowed to the max (cos the banks etc let them) using the home buyers grant as a deposit, fully furnished the place in "only the best for me'' brands so they could spruik to friends etc, and then as rates remained low, thought "gee i CAN afford that investment property costing whatever hundred thousand dollars, cos mr bank said i could.......again no thought to ''what if rates go higher?"............and now we have the dilemma.....poor mr and/or ms average, on 1 or 2 incomes, trying to pay just the interest on 2 properties, a margin loan for their share portfolio full of ''great tips"..... and crying foul, cos its not their fault, its howards, or rudds, or glenn stevens, or the merkans, or china, or whoever but THEM.

who do i blame...........a current affair/today tonight, for one night they show some twit who has borrowed against the increased value of their rental properties that now number 15 and keep buying more and more, the next they show some poor down & out getting evicted cos they cant pay the bills, who is more than happy to blame everyone else but themselves.

the great australian dream isnt the problem, its the ''i want it too'' attitude of so many out there. 

rant over


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## BradK (7 November 2007)

Fair rant S of B. 

It is an extremely difficult issue in my opinion, and not one where you can blame or tar everyone with the same brush. 

The banks have a lot to answer for, as does Howard with his promise at the last election to the gullible who continue to think there is any DIRECT relatoinship between the government of the day and interest rates. 

Interest rate rises will cause a lot of pain out there, and contribute to the general drift between a two-tiered society. 

Welcome to John Howard's Australia 

Brad


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## robots (7 November 2007)

hello,

john howard's australia is awesome,

tell me one thing wrong about it?

thankyou

robots


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## BradK (7 November 2007)

Oh Robots, 

I dont know... ask Dr. Haneef and one of the 90% fall in foreign doctors who refuse to come here now, which hurts our hospitals even further. 

Oh wait - that is probably Labor state governments... 

Australia is GREAT if you are white! 

Cheers
Brad


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## Flying Fish (7 November 2007)

BradK said:


> Fair rant S of B.
> 
> It is an extremely difficult issue in my opinion, and not one where you can blame or tar everyone with the same brush.
> 
> ...




Oh come off it. o you really belive any governement of this country can control the world economy. He just got lucky at the right time. doesn't matter what jokers are in power, they are all muppets


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## BradK (7 November 2007)

Flying fish,

On the contrary, I do NOT believe that Howard can control the world economy nor any other leader - especially not Bob Brown :

Which is my point exactly. You are GULLIBLE if you believe Howard's claim to keep interest rates lower at the 2004 election. And gullible the electorate was. 

Howard has been given a GIFT in the resources boom - but the architect of the Australian economy was Keating. 

You can start abusing me now. But, read economic history and weep. 

Cheers
Brad


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## Flying Fish (7 November 2007)

BradK said:


> Flying fish,
> 
> On the contrary, I do NOT believe that Howard can control the world economy nor any other leader - especially not Bob Brown :
> 
> ...




lol you surely gest. so he is now to blame for are upcoming woes and people will adore him.

bring on 17% + it'll sort the whimps out from the boozers


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## damorgs (7 November 2007)

BradK said:


> Oh Robots,
> 
> I dont know... ask Dr. Haneef and one of the 90% fall in foreign doctors who refuse to come here now, which hurts our hospitals even further.
> 
> ...




Am i mistaken, or wasn't Dr.Haneef kicked out of our country for planning terrorist acts? Then didn't he re-apply for a VISA and got rejected? He WANTS to come back into the country.The way you are making it out it's like he had a choice? 

I think the whole D&G about the liberal government is a bit old. I think both parties talk crap and their promises are empty. We have all established that you are a labour supporter, let everyone else make up their mind.

Darren.


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## BradK (7 November 2007)

Yes Darren, 

You are mistaken. 

a) I am not a Labor supporter - but I am not a Green's or Howard supporter either. 

b) I think the most truthful comment out of this election has come from Peter Costello - "If Rudd or Howard were any closer, they'd have to ask Jeanette for permission" 

I am a citizen who is sick of politicians in our country for the reasons outlined in the next paragraph. 

Dr. Haneef. Putting aside political partisanship for a moment - was he? wasn't he? - three words - RULE OF LAW. Let's put that back into the centre of civic life - just ask Pakistani judges right now. 

Brad


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## nioka (7 November 2007)

robots said:


> hello,
> 
> john howard's australia is awesome,
> 
> ...



I'd like to answer your request but the list is too long for me now and I would not like to sort just one out except to say it is NOT John Howard's Australia. He only thinks it is.


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## hangseng (7 November 2007)

ROE said:


> Interest need to go to 20% before it affect me because I don't leverage that much.
> 
> High debt level or leverage can bring higher return
> but it can probably bankrupt you as well so I take it nice and slow.




Exactly 

I also plan well ahead, I have 3 mortgages and all on fixed interest so once again this has no affect on me at all. I do feel for those without the understanding that get caught in the cycle though. 

I accept my rental returns will increase and part of why I invest, but landlords need to be mindful of excessive increases. People will begin to hurt, don't add to the pain with greed.


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## Shane Baker (7 November 2007)

Kauri said:


> Never forget ...The Right Honourable John Howard (federal treasurer in 1982 under Fraser when interest rates peaked at 22%) ..I hear tell he dances a mean Polka himself..  :beat:
> Cheers
> ..........Kauri




I think you'll find they were short term money market rates. From memory the long term (read home loan) rates were closer to 15% at the time.


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## glenn_r (7 November 2007)

So you think me too and his Union buddies will keep interest rates down, what is their policy on reducing rates, adding to the costs of employing people??

IMHO rate rises are a normal organic part of the economic cycle and it appears the "I want it now and pay later" generation will be in for a financial lesson.

When I bought my first house in 1983, I had to come up with at least a 20% deposit and have a proven savings history with the lender also before they would even talk to me about a loan, nowadays they lend 110% to anyone who walks in off the street.


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## robots (7 November 2007)

nioka said:


> I'd like to answer your request but the list is too long for me now and I would not like to sort just one out except to say it is NOT John Howard's Australia. He only thinks it is.




hello,

yes understand,

please tell what is wrong with AUS? 

more than likely it will be embarrassing when you do write the list and observe how trivial those items are

thankyou
robots


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## chops_a_must (7 November 2007)

robots said:


> hello,
> 
> yes understand,
> 
> ...




Yeah, agreeing to illegally invade a sovereign country is incredibly trivial.


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## Smurf1976 (7 November 2007)

BradK said:


> Just for the record:
> 
> I am 32, have a $200,000 mortgage on my own 3 bedroom house, and an investment property that I own outright. I have been doing build and sells since 2001 to 'get ahead'
> 
> ...



Totally agreed.

But do you acknowledge the practical reality that it is the boom in house prices that has caused the situation? 

The sooner we go back to thinking of a house as a place to live and stop worrying about its value the better off we'll be as a society. Bread, milk or meat go up and most consider that to be a bad thing. It's no different when house prices go up - it's not good in the long term even though it creates a spectactular boom in the short term. 

Tomorrow has now arrived and it's time to pay (with increasing amounts of interest) for the boom. Some profited but ordinary families just wanting a roof over their heads aren't among them. 

Sadly, I think inflation (_wage_ inflation) will be the only way out of this mess. Just remember to blame not the unions but loose credit when it comes. That's what fuelled this mess - too much easy credit. The unions etc would be quite justified in wanting wages to catch up and odds are they'll push for that no matter who wins the election. And if unemployment stays low they'll get it.

My best guess is we're about to see some serious inflation worldwide over the next decade no matter who is in government either here or overseas.


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## Smurf1976 (7 November 2007)

glenn_r said:


> When I bought my first house in 1983, I had to come up with at least a 20% deposit and have a proven savings history with the lender also before they would even talk to me about a loan, nowadays they lend 110% to anyone who walks in off the street.



That is precisely what we need to go back to. There were sound reasons why banks didn't lend 110, 120 etc % and didn't lend to those with no savings record.


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## nioka (7 November 2007)

robots said:


> hello,
> 
> yes understand,
> 
> ...




List;
1. Having recently spent a couple on months in hospital following a boat explosion I can assure you our hospitals leave a lot to be desired. Following the accident I went to the local hospital where the doctor decided he could not do much for me. I was transferred to a base hospital where I got the same result. I was then transferred by helicopter to Brisbane where I waited in cas for a couple of hours before being seen by a doctor. That was 12 hrs after the accident.
 I was not too bad off compared to others I saw during my stay in the burns ward. At on stage one of the surgeons told me that my stay may have been 2 weeks less had they had some equipment they have been trying to get funds for. In the end I was discharged early and in a hurry because someone else needed the bed.
 I have friends who have waited for 2 years for a hip replacement. I know a pensioner who has a mouth full of rotten teeth and is told to wait a year or so for any treatment apart from emergency extractions.
 I could go on and on these are examples. I look after myself with top level health insurance. Those that can't afford it are in deep !!!. Even with top level insurance if the doctors and beds aren't there you are in just as much trouble.
2. Australia's debt. All the government has done to get rid of Government debt is to either sell valuable assets (our assets-we paid for) or transfer the debt to the private sector. Each month we have to sell another aussie icon to help finance it.
3. Howard took us to an illegal war on a LIE. A war that can't be won.
4. Howard introduced gun laws that disarmed the country but still left the crims have guns.
5. Howard has the average working man working hard to compete with third world wages and is trying to drive them even harder.
6. Howard lied about the GST. Remember he said it was dead in the water and would not be revisited.
7. Howard lied about the boat people.
8. National infrastructure. Falling behind. A disgrace.
9. Education. Falling behind. Also a disgrace.
10.etc etc. ( They are there if you really need more convincing.)
Are any of these trivial?


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## numbercruncher (7 November 2007)

11/



> A GROWING culture of secrecy, defensiveness and mutual mistrust within government is whittling away press freedom in Australia and denying the public access to crucial information.
> 
> A major report into freedom of speech has condemned governments across the nation for imposing unprecedented levels of secrecy on the flow of public information.




http://www.theaustralian.news.com.au/story/0,25197,22709757-7582,00.html

our Government hiding its evil plans from the public is one of the scariest.


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## hangseng (7 November 2007)

nioka said:


> List;
> 1. Having recently spent a couple on months in hospital following a boat explosion I can assure you our hospitals leave a lot to be desired. Following the accident I went to the local hospital where the doctor decided he could not do much for me. I was transferred to a base hospital where I got the same result. I was then transferred by helicopter to Brisbane where I waited in cas for a couple of hours before being seen by a doctor. That was 12 hrs after the accident.
> I was not too bad off compared to others I saw during my stay in the burns ward. At on stage one of the surgeons told me that my stay may have been 2 weeks less had they had some equipment they have been trying to get funds for. In the end I was discharged early and in a hurry because someone else needed the bed.
> I have friends who have waited for 2 years for a hip replacement. I know a pensioner who has a mouth full of rotten teeth and is told to wait a year or so for any treatment apart from emergency extractions.
> ...




Highly subjective individual views that you are completely entitled to. Care to quantify any of the above or do they remain subjective?


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## nioka (8 November 2007)

hangseng said:


> Highly subjective individual views that you are completely entitled to. Care to quantify any of the above or do they remain subjective?



They are not just individual views as they are views shared by many people I associate with. If you research (as you would do any other investment, and consider the subject of the election as an investment in the future) you probably will prove the facts.


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## ithatheekret (8 November 2007)

I was thinking more along the lines of 7% by Dec/Jan , a hesistated pause then 7.25% by March or April , but for business lending I see 7.25% next month , well that's the indication I get out of the 90 day bill moves .

Credit invoices are still piling up , what with Christmas around the corner , all our fantastic bits of plastic revved up , ...... the RB board will probably drink a few more than the normal couple of bottles by the next meeting


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## son of baglimit (20 November 2007)

son of baglimit said:


> the great australian dream isnt the problem, its the ''i want it too'' attitude of so many out there.





more information to add to my rant of several weeks ago.....have a good read of these articles.


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## Tysonboss1 (22 November 2007)

numbercruncher said:


> Yes even quite a few speculating 10pc variable rate in the not so distant future !!
> 
> Good for savers though




Are talking about the official interest rate or homeloan interest rate.

because I don't think the offial interest rate will be near 10% any time soon.


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## Kauri (5 December 2007)

Asexpected no rise today, but what is welcome is the change and added transparency going forward..



> The RBA will in future announce the policy meeting result on the same day as the meeting, they will issue a statement after each meeting, regardless of the result and will start issuing policy meeting minutes.




Cheers
.........Kauri


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## chops_a_must (5 December 2007)

Kauri said:


> Asexpected no rise today, but what is welcome is the change and added transparency going forward..
> 
> 
> 
> ...




Bonds and bank bills are going haywire. One to keep an eye on.


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## Kauri (5 December 2007)

chops_a_must said:


> Bonds and bank bills are going haywire. One to keep an eye on.



Hi Chops
 Maybe getting ready for the GDP figures in 1/2 hour??? 
Cheers
.........Kauri


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## The Mint Man (5 December 2007)

I dont think we will see 7.25 by Feb.


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## Awesomandy (5 December 2007)

The Mint Man said:


> I dont think we will see 7.25 by Feb.




I don't think they meet in January, so the chance of 7.25 by Feb is very remote. However, given my observations at the shopping mall last weekend, I would definitely put rates up if I was in the Reserve Bank.


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## ithatheekret (5 December 2007)

A prudent pause , with no agenda , just watching intently , that's the RSB .

But that does not rule out 7%  next year .

Our economies circumstance and that of China and the US are completely different . The grasping to goods and service sectors is a worry though , they are offshoots to the main stimulus catalyst . Too easy to fudge data with and no real jobs are created at the rate required . We are supplying economies that produce and support service sector bubbles at home...... nutz .

The UK will have to drop rates , but the economy there is bound to the local consumer and the tweaked up trading house infrastructure .

We will see rate rises , mainly due to infrastructure spending that has come too late , to see the boom years this time round . Fortunately China has only scraped its coastal area and India is still yet to get the engine warmed up .

As their demand rises to a unison , then costs will be seen to rise across the board for the products that use ores or fossil fuels like coal , that will be seen as a production and productivity essentials .

All we have seen to date this month is book squaring , the annual Christmas run up for the greenback and sell off in metals , completely cyclical events enshrined by the service sectors ..........

The RSB doesn't buy into that story , it just watches the cost blowouts caused by the sector and reacts as needed .


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