The good news about interest rates is that it appears we are at, or near, the end of the cycle of rising mortgage rates.
That’s if you can believe the words of the Reserve Bank Governor, Philip Lowe.
But of course, we can’t believe him because he’s the guy who kept telling us he wouldn’t be lifting interest rates before 2024, just months before he started lifting interest rates 10 months in a row.
That’s Philip Lowe who earns over $1 million a year and bought his Sydney home with a special cut-price loan available only to elite privileged people, so he doesn’t understand the pain he’s inflicting on households around Australia.
Meanwhile, a Canstar survey has revealed that most Australians believe that hiking interest rates is not the best way to solve the problem of high inflation.
The results of the survey confirm my general view that the average Australian is much smarter about these issues than idiot politicians, over-rated big bank economists and outrageously overpaid bureaucrats like the Reserve Bank governor Philip Lowe.
There have been many examples which support my theory that the average punter has a better understanding of issues impacting the housing market than do politicians, economists or bureaucrats.
High-profile economists, for example, generate lots of free publicity to promote their businesses and feed their egos by making forecasts about what will happen to property prices.
Constantly, invariably, they get it wrong with their forecasts, but media keeps giving them the aura of credibility.
Economists keep forecasting big price decline and it never happens.
Meanwhile, surveys of ordinary citizens indicate that most people don’t agree with the forecasts of the bloated economists and sound-bite seekers.
Economists say prices will fall and consumers say prices will rise – and, almost all of the time, the consumers are right.
But when the surveys of consumer sentiment are published, economists from the major banks will arrogantly lecture the public on why they’re wrong.
This is despite the reality that consumers are right about these things far more often than the overpaid and over-rated economists.
So now we have a survey which finds that most of the Australians polled believe the Reserve Bank is not going the right way about bringing inflation under control.
I wholeheartedly agree. Most of the major components of our high inflation rate are not elements caused by rampant consumer spending.
They are caused by external forces which have resulted in shortages, which have caused prices to rise. They’ll all things that the Federal Government has the power to address.
For example, it could reduce petrol prices by reducing the tax take and it could be proactive in fixing the shortages that afflict the building industry and which are causing construction costs to rise.
But it’s done nothing to address the components of the high inflation rate and is content to sit back and let the Reserve Bank increase the accommodation costs of most households.
So once again, the consumers of Australia have got it right, while the politicians and bureaucrats who impact our daily lives continue to get it horribly wrong.
