Deflation?..........You better read this

[Mega]

Er......not it would seem down under:-

http://www.theaustralian.news.com.au...99-601,00.html

Mike

[metalman]

Re: Deflation?..........You better read this

Er......not it would seem down under:-

http://www.theaustralian.news.com.au...99-601,00.html

Mike

ha, ha! you suckers who owe foreign debt in other countries' currencies... cut spending to reduce deficits... economy shrinks... less money to pay debts. don't cut spending to reduce deficits... but interest rates rise... economy shrinks... less money to pay debts. either way, you're screwed!

[GRG55]

Re: Deflation?..........You better read this

ha, ha! you suckers who owe foreign debt in other countries' currencies... cut spending to reduce deficits... economy shrinks... less money to pay debts. don't cut spending to reduce deficits... but interest rates rise... economy shrinks... less money to pay debts. either way, you're screwed!

Mega: The article is a hilarious read [in a perverse sort of way]...good find.

THE Rudd government is preparing voters for a series of interest rate hikes ahead of the next federal election as money markets expect official rates to rise by almost 1 per cent within the next 12 months.

Kevin Rudd has warned that higher interest rates were inevitable over the next 18 months, while Finance Minister Lindsay Tanner has said another round of spending cuts would be required to ensure the budget returned to surplus.

But the government is not ready to call an end to the downturn, and will press ahead with the remainder of its $77 billion stimulus program to guard against a spike in unemployment.

"We have to rein in spending, we have to get the budget into surplus as quickly as we can, but not at the expense of jobs or the overall economy," Mr Tanner said yesterday.

Labor appears willing to risk having fiscal and monetary policy run in opposite directions while the economy stabilises...

Let me see if I have this right..."we have to rein in spending" while we "press ahead with..." SPENDING!

I remember the "Outback Oracle" repeatedly telling us about Australia's current account deficits. I suppose the rock-and-a-hard-place they are in is a direct consequence of FIRE economics...

[marvenger]

Re: Deflation?..........You better read this

its got little to do with inflation and a lot to do with keeping the foreign money flowing in.

[sunskyfan]

Re: Deflation?..........You better read this

I agree. This is not about inflation.

[rjwjr]

Re: Deflation?..........You better read this

its got little to do with inflation and a lot to do with keeping the foreign money flowing in.

Since the US is unlikely to follow suit (for risk of hurting employment, filling green shoots, etc), then isn't the Aussie currency likely to strengthen against the US dollar as a result?

With this announcement and the recent GDP increase reported by China the Aussie dollar looks like a good investment to me.

[marvenger]

Re: Deflation?..........You better read this

yep, until its not though, outback oracle will be right eventually, the debt accumulation is unsustainable. if commodity prices hold up for a while it can go on for a while longer i think. Australia better hope for inflation and a strong China, otherwise we'll be in for a shit storm far worse than US once our Gov ammo is out and resources aren't such a strong backing.

[nero3]

Re: Deflation?..........You better read this

ha, ha! you suckers who owe foreign debt in other countries' currencies... cut spending to reduce deficits... economy shrinks... less money to pay debts. don't cut spending to reduce deficits... but interest rates rise... economy shrinks... less money to pay debts. either way, you're screwed!

That's like in 1980-1982, however..Now the dollar have been going lower and lower, while inflation here is also going higher and higher.

Back then, the dollar was just going up and up.