Government job is not monetary policy, that is the RBA job, they have the task of expand and contract money supply...
Government job is fiscal policy, how they spend and collect money....
The government sets the monetary policy, while the RBA enacts the mechanical aspects of the policy to make the change to rates.
Hallelujah! Someone actually notes that only a minority of Australians have home loans. To listen to the politicians, one would imagine that 99% of the electorate have massive and crippling home loans, such is the diatribe directed toward the banks if they fail to pass on full interest rate cuts by the Reserve Bank.I'm a little intrigued by the whole issue of the supposed benefit to the economy by cutting interest rates to mortgagees. The theory is that more money will be put into people's pockets and that they will spend it, helping the retail sector and some local manufacturers to the domestic market. The last two interest cuts were largely ineffective in that regard, and what is often ignored is the fact that it is only a minority of people in this country that have a home loan. When the interest rate is cut, the majority of people do not benefit, it seems.
Wayne Swan is an idiot.
Him and Joe Hockey together don't even rate as a real treasurer's backside.
It's just too depressing to think about.
He might be a nice guy and all, but economically, there's less clout there than in a wet one dollar Monopoly note.I'm watching Hockey on Lateline right now and he's just useless. What's worse is that when compared to Swan he seems like a fat version of Adam Smith.
But I did notice today Ubank went from 6.11% to 5.91% for 6month deposits.
Thanks Wayne, the banks did drop their rates. LOL,LOL
Government job is not monetary policy, that is the RBA job, they have the task of expand and contract money supply...
Frankly
My view is that no interest rate cut is a message to banks
Can't wait for more choice.
You maybe correct. However I will quote you an extract from "Trading the Sharemarket the ASX way."
"What causes interest rates to change?
Interest rate management is called monetary policy. One of the purposes of monetary policy as used by the Reserve Bank of Australia (RBA) is to control inflation. While the government sets the objectives of monetary policy, it is the RBA that enacts the mechanical aspects of the policy to change interest rates".
The basic objective of the RBA is contained in the Reserve Bank Act 1959(Cth). The act gives the RBA the responsibility of achieving price stability and promoting the economic prosperity and welfare of Australians.
NEW YORK (CNNMoney) -- Mortgage rates continued to plunge to new lows this week, with interest rates on the 15-year fixed rate mortgage dipping below 3% for the first time on record.
Hallelujah! Someone actually notes that only a minority of Australians have home loans. To listen to the politicians, one would imagine that 99% of the electorate have massive and crippling home loans, such is the diatribe directed toward the banks if they fail to pass on full interest rate cuts by the Reserve Bank.
Far more people have money in savings accounts, but we never, ever hear about the benefits to this majority of interest rates remaining reasonably high.
Imo David Murray was right today when he accused the government of political interference in bank business. Swan is way overstepping his role.
FYI - More households have Mortgages than households who dont ....
So to say the Minority of Australians have Home loans maybe Technically correct its terribly misleading.
But I did notice today Ubank went from 6.11% to 5.91% for 6month deposits.
Thanks Wayne, the banks did drop their rates. LOL,LOL
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