The
Reserve Bank of Australia is highly likely going to leave the cash rate at 2.5%
today but it is the statement that the market can't wait to read. I am sure you
are well aware the RBA wants the Aussie Dollar at 0.85c or less to the US Dollar
as this will have the impact on the economy Australia needs to balance things
out and assist in a recovery. Yes, housing prices are rampantly rising in
Sydney and the current 2.5% official cash rate is seeing some sectors of the
country benefit, but the facts remain. Unemployment is rising, national debt is
out of control, wages are too high, the cost of merely living in Australia is
ridiculous compared to the rest of the world, manufacturing is continuing to go
backwards and Australians are just simply not willing to spend or lend money at
a rate that will help right the ship. Australia is currently very unbalanced
economically and this needs to be addressed.
The RBA
has a mandate of keeping inflation between 2% and 3% and the recent quarterly
inflation figure spiked to 2.7%. Couple this with rising house prices and in a
normal balanced economy this would be a recipe for a quick interest rates rise.
Andrew Barnett provides ongoing commentary to LTG GoldRock Members each day in the GoldRock Insider Report. Learn more about his Fundamentals for Success on www.LTGGoldRock.TV
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