Tag: Interest rates

Submarines or social housing?

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One of our readers commented that on the same day the media were banging on about the Federal Government’s $368 billion submarine plan, a lone SBS panel programme focused on the national housing crisis. It is tempting to compare spending on affordable housing with the capital cost of up to five nuclear-powered submarines. The Federal Government’s (annual) commitment to affordable housing (currently $1.6 billion), equates to about 13% of its annual submarine budget (ie if…

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Squeezed between inflation and interest rates

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I just happened to be reading a novel set in the Edwardian era at the same time as the media was going bonkers (again) about the Reserve Bank raising interest rates by 0.25% to 3.6%. In Louis de Bernieres’s* book, The Dust That Falls from Dreams, one of the characters is holding forth about the sudden rise in the bank rate and subsequent collapse of the share market in 1914. Hamilton McCosh, a daring entrepreneur…

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It’s a Nation, Not Just an Economy

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It’s traditional to write about economics and economists at this time of year, the end of the financial year in most jurisdictions. Publishers like to ask economists to offer their predictions for the year. The cruel editors then go back a year later and mark their score cards. Forecasts are all very well in ‘normal’ times, but few had forecast a deadly global pandemic that (so far) would infect 10.5 million people and kill 511,000….

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How deep is the financial hardship well?

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It is probably no comfort to anyone to reflect on the year when investors could get 14.95% on a bank term deposit. It was January 1991, the recession Paul Keating said we had to have. People with personal loans and credit card debt watched horrified as repayment rates went to 20% and beyond. The average variable mortgage rate rose to 17.5% at the same time. The gap between the haves and have-nots in that era…

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