Zimbabwe crisis looms over stand still

Zimbabwe crisis looms over stand still	29.09.2008

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09/29/2008		Ramadan bombings kill 32 people
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09/29/2008		Six kidnappers of desert tourists killed
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AM. yes. those things are the result of inflation. which is why interest rates must go up. i dont recall 2 years ago people complaining too much about inflation. but if spending keeps on keeping on it catches up with an economy in the end. what you describe is a result of overspending in the general economy. you mightnt personally be shopping without regard to price. but over the past two years lots have. good times never last. australians never save. if everyone saved 0.25% more then there would not need to be an interest rate rise.
Posted by: Stormin_Norman of Brisbane 5:12pm today

Geez Wayne the magnificent. in 6 months he's turned the economy around and we are now all well placed ... or wasn't ita s bad as he had said last year, or is it really bad and he's hiding it.... gee he's got the treasurers disease, guess it's Peter's fault because he forgot to disinfect the office before he left....
Posted by: BilkBrown 5:08pm today

Stormin_Norman of Brisbane- I would love to stop spending.spending on highter groceries, higher fuel prices, tolls all over the place, higer interest rates, higher cost of housing (yes even at the lower end), higher rates, higher services (electricity, gas etc), higher medical insurance.would love to be able to do it mate.just as soon as the cost of living goes down hey.
Posted by: AM 4:55pm today

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Australia`s financial situation sound, Swan says
Treasurer says mortgage defaults not at US levels
Comments come as another rates rise looks likely

TREASURER Wayne Swan has sought to reassure nervous financial markets that Australia’s economy is well placed to withstand global pressures.

In a key speech to the Parliament, Mr Swan said Australia’s circumstances were “more favourable” than overseas countries, such as the US and Britain, which have experienced serious pressures to major financial institutions.

“While we are alert to the impacts on our economy, I would point out to the House that the circumstances of our financial institutions are different from those in the US.

“While the twelve consecutive rate rises since 2002 have undoubtedly taken a toll on household budgets, we are not experiencing the same levels of mortgage defaults that are now occurring in the US.

“While it is important that we recognise the severity, duration and possible consequences of the global financial turbulence, we should also recognise that Australia’s circumstances are more favourable than those elsewhere.

“We are not in the least complacent about the circumstances of the Australian economy, but we do recognise that we have strengths on which we need to build.

Mr Swan also stressed the Government’s intention to take a hard-line on spending in the May Budget.

He said his “first objective…was the gradual moderation of inflation from the rate of “4 per cent or so which the Reserve Bank expects to see in the year to March, to within the target band”.

The speech was an unusual Parliamentary move by Mr Swan but any message of reassurance to consumers will be tested by the Reserve Bank’s latest public commentary.

Minutes of the Bank’s most recent board meeting suggest the central bank is likely to again lift interest rates, causing further pain for home owners.

Market economists now believe there is a better than even chance the Reserve Bank will increase rates in May, after the release of inflation figures.

The central bank board voted on March 5 to raise the cash rate by a quarter of a percentage point to 7.25 per cent, the highest level since July 1996.

The RBA minutes suggest a tight labour market and higher commodity prices will only fuel inflationary pressures.

"If anything, commodity prices looked stronger than previously,`` the minutes said.

"Labour market conditions had remained strong early in 2008 and reports of high capacity usage and shortages of suitable labour persisted.

"In the near term, inflation was likely to rise further in year-ended terms from its already-high level.``

But the RBA has signalled it believes inflation will probably start to recede next year.

Australian stocks were higher at noon today, with market analysts anticipating another rate cut by the US Federal Reserve later tonight.

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