The Fight For Cash Just Got Terminally Serious!

Despite cash being legal tender in Australia, surprisingly it is legal for businesses to refuse to accept it provided that they inform consumers of their stance before any “contract” for the supply of goods or services is entered into.

The war on cash has taken an interesting turn, with the RBA being questioned by the Senate Inquiry into Regional Bank Branch closures, and claiming the use of cash had fallen, but frankly on thin and filtered evidence; while Armaguard, Australia’s only cash-in-transit business is facing the prospect of collapsing due to the claimed declining use of cash. The RBA, which regulates the payments industry and is responsible for printing money is also involved in the crisis talks.

And a social media campaign, led by the Cash is King Facebook group is calling on Aussies to withdraw and use cash next Tuesday, April 2, in protest against the shift to digital payments. The protest is aimed at showing Australia’s banks and retailers that there is still a demand for the use of cash in society. That is, if you can still find an ATM.

So, action on Tuesday to grab some cash could be an important step on the road to saving cash for All Australians who want to use it, despite pressure from the Government who is responding to huge pressure from the commercial banks. This in turn puts massive pressure on the current Senate review, who is scheduled to hold one more community hearing on Bribie Island on the 16th April. Will the committee who has laid bare the issues of branch closures and removal of cash come good or hook their final report like the earlier Royal Commission Inquiry into Financial Services, which exposed major issues through their hearings, only to turn to water in their final report and recommendations, which allowed the banks to behave business as usual. This time all eyes will be on the Senate.

http://www.martinnorth.com/

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
The Fight For Cash Just Got Terminally Serious!
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The FED Speaks After The Bell, As Inflation Holds Higher!

This is our latest weekly market update.

In a foreshortened trading week, the Dow and S&P 500 closed at new record highs on Thursday, notching its best first-quarter performance since 2009 supported by the AI boom and as the rally broadened out beyond tech amid optimism on rate cuts coming soon and data signaling a soft landing for the US economy remains within in reach. MSCI’s gauge of stocks across the globe fell very slightly. The index was up over 7% for the first quarter.

The S&P 500 benchmark index closed up 0.1 per cent to 5254.35; having touched an intraday high of 5264.85 midafternoon. The Dow advanced 0.1 per cent, losing early momentum for a run at 40,000. The Nasdaq Composite slipped 0.12 per cent.

But additional data including the core PCE inflation metric, the Federal Reserve’s preferred price measure came out on Holiday Friday. The so-called core personal consumption expenditures price index, which strips out the volatile food and energy components, increased 0.3% from the prior month, data out Friday showed. That followed a 0.5% reading in January, marking the biggest back-to-back gain in a year. Fourth-quarter core PCE inflation was revised slightly lower. The measure is up 2.8% from a year earlier, still above the Fed’s 2% target.

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
The FED Speaks After The Bell, As Inflation Holds Higher!
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Digital Tyranny Is One Step Closer!

Remember the parable of the frog, who slowly gets cooked to death, in a pot as the temperature rises – well, the same in true for Australians, as civil liberties such as the use of cash, are removed, even as the digital architecture for future control gets put in place. You can see parallels elsewhere round the world, and aligned with the agenda of several high profile non-elected bodies like the World Economic Forum – of “you will own nothing and be happy” fame.

Australia’s Digital ID Bill 2023 was initially introduced to the Senate on November 30, 2023, and has since undergone a Senate inquiry and brief consultation period before this week being pushed through the Senate without debate. Despite assurances of voluntariness and promises to simplify citizens’ lives, the Labor government has faced backlash for the lack of scrutiny given to the bill.

And there is of course the wider, story here potentially linking digital ID with Central Bank Digital Currency and Social Scores, perhaps enabling the idea peddled by the World Economic Forum and other non-elected global entities, that we the people can be better controlled in terms of what we can, say, or even purchase. So you value your privacy, liberty and the rule of law, the Digital ID Bill must be defeated, time to put pressure back on the house of representatives when the amended bill comes back.

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Digital Tyranny Is One Step Closer!
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Pressure: Retail Spending Stagnates, Despite “Growth” In Wealth!

The ABS released more data on Thursday from which we can deduce that despite some headline growth in spending thanks to the Taylor Swift events, underlying growth in retail turnover was up only 0.1 per cent in trend terms so after a period of higher volatility from November through to January, underlying spending has stagnated.

This is despite a growth in paper wealth – up which was 7.8 per cent over the past year, thanks to a large boost from rising house prices and domestic and overseas share markets. But we also saw a rise in household borrowing driven by continuing demand for housing amid strong population growth and a seasonal boost from spring housing market sales also drove household borrowing in the December quarter.

Under the hood, we see continued pressure on many households whose wages are not keeping up with living costs – inflation as I discussed yesterday remains too high, while the asset distribution across households is further distorting between the haves and have nots. Many consumers are clearly struggling under the weight of soft income growth, mortgage repayments, rents, income taxes, and overall cost-of-living pressures.

http://www.martinnorth.com/

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

Today’s post is brought to you by Ribbon Property Consultants.

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Pressure: Retail Spending Stagnates, Despite “Growth” In Wealth!
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CPI Data Says Higher For Longer, Again!

We got the latest monthly data on inflation on Wednesday, and it came in a bit below market expectations, standing at 3.4% unchanged in February and has been 3.4 per cent for three consecutive months according to the ABS. Monthly data does not cover all the categories, so results are always a bit uncertain.

But just to be clear, prices are still rising faster than the RBA’s target, and while the data is volatile, there is clearly more to do to get to band. Also, I believe real inflation as experienced by many households are significantly higher than the official numbers. When excluding volatile items, the annual rise eased to 3.9% from January’s 4.1%, still well above the RBA’s 2-3% target band. Annual inflation excluding volatile items has continued to slow over the last 14 months from a high of 7.2 per cent in December 2022.

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
CPI Data Says Higher For Longer, Again!
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No Hope And Massive Debt Is Not A Good Recipe For The Future!

BlackRock co-founder and CEO Larry Fink, in his annual letter to shareholders has rattled some important cages, even if you can see self-interest shining through.

He highlights a couple of not necessarily unrelated issues. First, he is frightened by the US public debt situation, and second he warns of a looming “retirement crisis” facing the US and called on baby boomers to help younger generations save enough for their own futures.

Young people “have lost trust in older generations,” Fink wrote. “The burden is on us to get it back. And maybe investing for their long-term goals, including retirement, isn’t such a bad place to begin.”

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
No Hope And Massive Debt Is Not A Good Recipe For The Future!
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DFA Live Q&A HD Replay: Fixing Housing After The Hijack: With Cameron Murray

This is an edited version of a live discussion with Cameron K. Murray, Author of The Great Housing Hijack which reveals how vested interests pull the strings on the property market in Australia, and offers a solution for genuinely affordable housing for those who need it.

With 120,000 people homeless each night and one in five low-income private renters spending more than half their income on rent, it is clear Australia urgently needs a housing policy change.

For anyone who wants to truly understand the housing market in Australia, The Great Housing Hijack is essential reading. Drawing on the best housing policies around the world, Murray shows how Australia could create a genuinely affordable housing program without compromising the interests of existing property owners.

Murray argues that even if more housing were built, the average household would not end up spending any less on housing.

Murray proposes bypassing the private market altogether with a scheme called HouseMate. The federal government would buy or repurpose land, build homes, then sell them at a discounted price to Australians who do not own property.

Perhaps the most controversial argument in The Great Housing Hijack is that planning and zoning rules do not change how much new housing is built, just the location.

Join the debate – you can ask a question live.

https://www.fresheconomicthinking.com/

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
DFA Live Q&A HD Replay: Fixing Housing After The Hijack: With Cameron Murray
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Its Edwin’s Monday Evening Property Rant!

Another important discussion with Edwin Almeida, our property insider. Not only has the price of coco tripled ahead of Easter, but listings are down, despite more property investors listing, while the gap between property demand and supply widens, as more migrants seek to buy.

https://www.ribbonproperty.com.au/

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Today’s post is brought to you by Ribbon Property Consultants.

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Its Edwin's Monday Evening Property Rant!
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RBA Admits Around 175,000 Mortgaged Households Have A Cash Flow Problem!

Last week has turned out to be an important one in terms of household finances and mortgage rates. The RBA this week said households are generally weathering the record run of interest rate rises but one in twenty owner occupied mortgage holders are in a dire financial position because of the higher interest rates and cost-of-living increases.

On average, debt servicing costs have risen about 30-60% since the RBA started hiking its cash rate in May 2022. That said, less than 1% of all housing loans were 90 or more days in arrears, through loans with payments overdue for less than 90 days have “continued to tick up gradually” and are expected to continue to increase in part because of weak household consumption.

Despite the trajectory of interest rates, on-going strength in the labour market enables most people to keep up with rising debt repayment levels, the Reserve Bank said in its quarterly financial stability report. These challenges would intensify if economic conditions were to deteriorate by more than expected or if inflation is more persistent than forecast in the out of date RBA’s February Statement.

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
RBA Admits Around 175,000 Mortgaged Households Have A Cash Flow Problem!
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Uncomfortable Highs And Wonky Data Says Brace, Brace, Brace…

In this week’s market update as normal, we will start in the US, cross to Europe, Asia and end in Australia, and cover the key points in Oil, Gold and Crypto. My aim is to try to integrate the main themes of the week, and point forward to what may happen next.

There were a few main themes, first some key markets are touching all-time highs even if on Friday many markets took a breather, driven by profit-taking after a week of record-setting advances which were fuelled by a series of dovish central bank signals. The US dollar struggled to extend a gain as U.S. yields ticked lower.

But Central banks are still watching for greater certainty on inflation trends, and there is building speculation that the neural interest rate is higher than expected. In addition, the fuzziness in the data flows continues – a problem for central bankers who want to be data dependent, perhaps too data dependent.

The U.S. central bank sharply upgraded its outlook for growth in 2024, and Thursday’s data suggested the U.S. economy remained on solid footing after the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, while sales of previously owned homes increased by the most in a year in February. This suggests the Fed doesn’t need to be in any hurry to cut rates going forward.

Investors in the coming week will be watching Friday’s personal consumption expenditures price index that will offer the latest read on inflation. The end of the first quarter also could prompt volatility as fund managers adjust their portfolios.

Investors in the coming week will be watching Friday’s personal consumption expenditures price index that will offer the latest read on inflation. The end of the first quarter also could prompt volatility as fund managers adjust their portfolios.

Its worth noting that overall, the ASX 200, excluding resources, currently trades at 18.5 times forward earnings, which is 40 per cent above its long-run average of 13.5 times, but 12 per cent above the previous peak in May 2007, just before the global financial crisis. And no, this is not just about Commonwealth Bank being at record highs. The median stock on the ASX is also trading at a P/E multiple well above its long-term average.

http://www.martinnorth.com/

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Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Uncomfortable Highs And Wonky Data Says Brace, Brace, Brace…
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