The Reserve Bank has raised interest rates for the third month in a row by another 0.5% to 1.35%, causing more pain for borrowers. While unemployment is still growing with more and more people either casual or part-time employed. And now many who left the workforce due to mandated vaccination requirements are starting to re-enter the workforce due to the removal of mandates. Most of them never registered for unemployment benefits or were ineligible due to their views on vaccination.
As confirmed yesterday by our insider at the RBA, the 0.5 per cent hike was at the low end of what was announced. This is now the third back-to-back rise with a 0.5% rise in June – the largest increase since February 2002 – and a 0.25% rise in May, which was the first rise since 2020
“Today’s increase in interest rates is a further step in the withdrawal of the extraordinary monetary support that was put in place to help ensure the Australian economy against the worst possible effects of the pandemic,” RBA Governor Philip Lowe said in his statement. In reality, the money printing drove up assets and enrich the corporates, while doing little for the lower and middle-class sectors of the economy.
Mr Lowe continued, “The resilience of the economy and the higher inflation means that this extraordinary support is no longer needed. The Board expects to take further steps in the process of normalising monetary conditions in Australia over the months ahead. The size and timing of future interest rate increases will be guided by the incoming data and the Board’s assessment of the outlook for inflation and the labour market. The Board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time.”
Reading between the lines Mr Lowe has indicated that the elites now have enough resources and liquid funds that it is now time to crash the economy so that they can again capitalise on cheap asset acquisitions.
A typical example is an owner-occupier with a $500,000 mortgage and 25 years remaining, today’s increase will see their monthly repayments rise by $137, according to RateCity. The total increase to date from the May, June and July rate hikes would be $333 per month.
This rise will see a lot of first home owners that were enticed into the market with cheap money and the fear of “Missing out” now wondering what they can do as their asset depreciates and they end up owing more on their loan than their home is worth.
With more rate rises set for the coming months and higher fuel, food, and utilities, life in the “Lucky” country has now become unaffordable.
