Put Interest Rates Up, And Reform Taxes Now!

The IMF just dropped a bombshell on Australia, saying that Interest rates should be hiked even higher and the Australian governments should slash spending to avoid stoking inflation. And proper tax reform was essential as an optimal tax package for growth and equity should rely more on the GST, take pressure off personal income tax paid by workers and crack down on capital gains tax breaks.

Now, let me say the IMF has a particular free-market neo-liberal western economic spin, but their comments are pretty damming and need to be taken seriously. Yet of course the Australian polies were quick to claim the IMF somehow endorsed their current policy settings – what – read the report Albo!

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Put Interest Rates Up, And Reform Taxes Now!
Loading
/

Higher-for-Longer Interest Rate Environment is Squeezing More Borrowers

Elevated inflation means central banks may have to keep policy rates higher in a way that stretches the capacity of borrowers to repay debt said the IMF in its latest Global Financial Stability Report.

And the Bank of England warned in their latest Financial Policy Summary that simply extending the term of mortgage loans is more about protecting banks than borrowers as risks build.

The International Monetary Fund (IMF) has updated its global growth forecasts, with the world expected to grow by 3% this year and 2.9% in 2024.
The IMF tips that Australia’s real GDP growth will slow even faster, from just 1.8% this year to 1.2% in 2024.

Headwinds also confront real estate. Home mortgages, typically the largest category of household borrowing, now carry much higher interest rates than just a year ago, eroding savings and weighing on housing markets. Countries with predominantly floating rate mortgages have generally experienced larger home price declines as higher interest rates translate more quickly into mortgage payment difficulties. Australia is highly exposed as rates have moved more on a weighted basis than many other countries.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Higher-for-Longer Interest Rate Environment is Squeezing More Borrowers
Loading
/

Higher-for-Longer Interest Rate Environment is Squeezing More Borrowers

Elevated inflation means central banks may have to keep policy rates higher in a way that stretches the capacity of borrowers to repay debt said the IMF in its latest Global Financial Stability Report.

And the Bank of England warned in their latest Financial Policy Summary that simply extending the term of mortgage loans is more about protecting banks than borrowers as risks build.

The International Monetary Fund (IMF) has updated its global growth forecasts, with the world expected to grow by 3% this year and 2.9% in 2024.
The IMF tips that Australia’s real GDP growth will slow even faster, from just 1.8% this year to 1.2% in 2024.

Headwinds also confront real estate. Home mortgages, typically the largest category of household borrowing, now carry much higher interest rates than just a year ago, eroding savings and weighing on housing markets. Countries with predominantly floating rate mortgages have generally experienced larger home price declines as higher interest rates translate more quickly into mortgage payment difficulties. Australia is highly exposed as rates have moved more on a weighted basis than many other countries.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

The Weakest Growth Outlook In Decades….

The IMF says global growth is set to decline over the next few years, driven by higher interest rates and inflation; geopolitical instability and insular behaviour. So they call for action to address this.

However, on a finite planet, perpetual growth is impossible so they should be perhaps taking a different tack because growth benefits the wealthy minority whilst the majority suffer. But then this is typical neo-liberal thinking, and I would expect nothing else from the Davos mob. But it does not make it right.

We have been led to a dead end by years of growth aligned policy, and of course GDP is hardly a good measure of success. And this same thinking has bankrupted monetary policy too. Time for some fresh thinking!

Talking About An Australian Property Price Crash On The Radio! [Podcast]

This is a recording of a recent interview I gave on ABC New Radio, where I discussed the latest IMF report which highlights the risks to the Australian Property market. Australia has one of the most “misaligned” housing and rental markets in the developed world, leading to high priced land and houses.

Property prices in Australia may be as much as 50 per cent above what an average household can afford as interest rates rise, a global analysis has revealed while warning the market is at risk of a major crash as interest rates are pushed up to bring inflation under control.

We hold the prize for unaffordable housing, and rents, and the IMF believe we are due a correction. Is this likely? Will the Government save us?

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Talking About An Australian Property Price Crash On The Radio! [Podcast]
Loading
/

Talking About An Australian Property Price Crash On The Radio!

This is a recording of a recent interview I gave on ABC New Radio, where I discussed the latest IMF report which highlights the risks to the Australian Property market. Australia has one of the most “misaligned” housing and rental markets in the developed world, leading to high priced land and houses.

Property prices in Australia may be as much as 50 per cent above what an average household can afford as interest rates rise, a global analysis has revealed while warning the market is at risk of a major crash as interest rates are pushed up to bring inflation under control.

We hold the prize for unaffordable housing, and rents, and the IMF believe we are due a correction. Is this likely? Will the Government save us?

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

An Outside In View Of New Zealand Housing

New Zealand Housing makes an interesting case study, given the Central Bank there started lifting rates last year, following a strong period of credit driven price growth.

Now the IMF has reported on the state of play, and they highlight the risks in the system. https://www.imf.org/en/Countries/NZL

In its latest review of the New Zealand economy, the IMF has had a close and detailed look at the housing market. The housing market they say constitutes a risk in view of borrowers’ vulnerability to rising mortgage rates, high household debt, and banks’ exposure to housing.

The IMF says that financial stability risks from a sharp downturn in the housing market are limited given high bank capitalisation, “but pockets of vulnerability, particularly amongst recent borrowers, may exist”.

“More broadly, there is likely to be a larger impact on consumption through wealth and sentiment effects. In a scenario of a marked housing correction, macroeconomic policy support may be needed to avoid second round effects and a pronounced downturn.”

Go to the Walk The World Universe at https://walktheworld.com.au/

“Lets Create Yet More Money”: Says The IMF [Podcast]

This past year or so has seen a massive creation of liquidity across the world as Central Banks ramped up their Quantitative easing programes and Governments threw money into the mix in an attempt to revive economic momentum, inflation and preserve the unstable financial system. There is of course no simple way back, and currently the main impact appears to be asset inflation across stocks and property, while the real economy languishes, even as debt climbs.

But now the IMF wants to join the FIAT party – FIAT meaning “Let it Be” or created from nothing using allocating special drawing rights (SDR) to augment instantaneously the international reserves of its members. They claim this would significantly benefit poorer countries and help build confidence at a time of global crisis, dramatically demonstrating international cooperation. But it is pure Neo-liberalism…

CONTENTS
0:00 Start
0:40 Introduction
1:16 IMF Joins the Fiat Party
2:00 Special Drawing Rights
3:12 IMF Statement $650 Billion SDR Allocation
10:20 The History of SDR’s And How They Work
21:35 PRGT Australia Contributes $500 million
22:05 SDR Accounting
24:50 Pros and Cons
27:22 My Conclusions

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
"Lets Create Yet More Money": Says The IMF [Podcast]
Loading
/

“Lets Create Yet More Money”: Says The IMF

This past year or so has seen a massive creation of liquidity across the world as Central Banks ramped up their Quantitative easing programes and Governments threw money into the mix in an attempt to revive economic momentum, inflation and preserve the unstable financial system. There is of course no simple way back, and currently the main impact appears to be asset inflation across stocks and property, while the real economy languishes, even as debt climbs.

But now the IMF wants to join the FIAT party – FIAT meaning “Let it Be” or created from nothing using allocating special drawing rights (SDR) to augment instantaneously the international reserves of its members. They claim this would significantly benefit poorer countries and help build confidence at a time of global crisis, dramatically demonstrating international cooperation. But it is pure Neo-liberalism…

CONTENTS
0:00 Start
0:40 Introduction
1:16 IMF Joins the Fiat Party
2:00 Special Drawing Rights
3:12 IMF Statement $650 Billion SDR Allocation
10:20 The History of SDR’s And How They Work
21:35 PRGT Australia Contributes $500 million
22:05 SDR Accounting
24:50 Pros and Cons
27:22 My Conclusions

Go to the Walk The World Universe at https://walktheworld.com.au/