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To low interest rates

  • 20-10-2009 3:00pm
    #1
    SLUSK
    Closed Accounts Posts: 1,156 ✭✭✭


    The central bank in Australia hints that it might raise its interest rates. They said such rates they have now are "possibly imprudent". Their current interest rate is 3.25% which is one of the highest interest rates among advanced economies.
    http://www.bloomberg.com/apps/news?pid=20601068&sid=aUpDojZ55u28

    I wonder how imprudent aren't the near zero interest rates that we see here in the EU and other advanced economies?

    I get the impression Australia's economy is more fundamentally sound than that of EU and USA.


Comments

  • #2
    zenmonk
    Closed Accounts Posts: 413 ✭✭zenmonk


    Well their currency has rebounded big time. I think the ECB have strongly hinted that it will be late 2010 before they will increase their rates but there seems to be an opinion that the UK may act faster than that.


  • #3
    Tricity Bendix
    Closed Accounts Posts: 2,510 ✭✭✭Tricity Bendix


    SLUSK wrote: »
    I get the impression Australia's economy is more fundamentally sound than that of EU and USA.
    Depends what you mean by fundamentally sound. In a nut shell, the Australian economy has survived so well because of the large fiscal expansion in China.


  • #4
    Senna
    Registered Users, Registered Users 2 Posts: 8,800 ✭✭✭Senna


    AFAIK Australia didn't go into recession, they lowered interest rates as a precaution.

    I still doubt the ECB will raise rates in 2010, 2011 is more likely and 4% wont be seen till 2013 at least.


  • #5
    Dannyboy83
    Registered Users Posts: 4,236 ✭✭✭Dannyboy83


    Does anyone think there will be a two tier system?

    Presumably Ireland, Portugal, Spain, Greece and Italy are still gonna be in the sh1t in 2013.
    And the Baltic countries who've pegged their currencies are definitely still gonna be in the sh1t, Latvia is nearly a failed state as is, with Lithuania and Estonia only marginally better right now.


  • #6
    Hasschu
    Registered Users Posts: 411 ✭✭Hasschu


    Australia benefited enormously from China's policy of stockpiling commodities. When the Chinese looked at their options for safeguarding their sovereign assets the US dollar did not look promising. A decision was made to diversify and to invest in commodities. Instead of buying commodity futures on the casinos known as Commodity Exchanges they actually bought physical product and had it delivered to China. Australia, Brazil, Canada and Russia were major beneficiaries of that policy.


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  • #7
    Flamed Diving
    Closed Accounts Posts: 6,609 ✭✭✭Flamed Diving


    Australia = The New Ron Paul.


  • #8
    SLUSK
    Closed Accounts Posts: 1,156 ✭✭✭SLUSK


    The central bank of Australia did yet another hike in the interest rates. With hints of even more to come shortly.


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