The entitled Baby Boomers sweep before us, the Instagram-obsessed Gen Y and Gen Z follow us.
To rub salt into the wound, the RBA is now pushing up mortgage rates well above the 4.5 per cent their affordability was assessed on. It needs consumers to stop spending. Potentially making their mortgages delinquent is just unfortunate, collateral damage in the fight against inflation.It is the result of the ridiculous pedestal we have put monetary policy on in the era of independent central banks. Central bankers confess they have one main, but very blunt, instrument – the cash rate.
Time will largely take care of supply issues. But fiscal policy – not monetary policy – should be tightened to take care of the demand issue. If the economy needs people to spend less, then tax those who can afford it more – rather than hitting first home owners with punitive rates.
Exactly right and well put. WTAF is the Government doing leaving the Reserve Bank,who have proven their lack of prediction prowess, unattended with a chain saw in one hand and the economy in the other. Suck some money out of the economy to reduce Govt debt!! It’s obvious.
A lot has already been written. Back in the GFC. You’ve heard about adjustable rate mortgages I hope.