Ive recently been told that the probability of rates down rather than up is more likely due to the increase of oil prices. I remember not very long ago paying in the .80 per litre and now at leats 1.00 per litre. this is costing me on average an extra 15 – 20 per week,
Im interested in your situations and predictions.
Situation = same as your freedomfinder!!!
Prediction = crystal ball is in getting repaired!!!I believe in dealing with the present as best I can, you know the adage “when given lemons, make lemonade” sort of mindset!!! Worrying causes ulcers, and premature aging; and my preference is for neither!!!
Jo [tongue]
Hi FF,
An article in Melbourne Age 12 months ago said (in summary) “According to Michael Workman (Senior Economist – Commonwealth Bank) a 10-cent-a-litre price rise over a whole year had the same effect on the economy as a 0.25 percentage point interest rate rise by the Reserve Bank.”
“When interest rates rise it only affects people with debt, but when petrol prices rise it affects everybody.”
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
freedomfighter,
Oil/petrol is only one aspect of a decision to raise IR’s- it’s only one item in the basket of goods (and services) that measure the CPI:
“the inflation measure took into account 100,000 price readings from 11 categories: food, alcohol and tobacco, clothing and footwear, housing, household furnishings supplies and services, health, transportation, communication, recreation, education and miscellaneous.”
http://www.smh.com.au/articles/2002/05/11/1021002403223.html
Note that during the housing boom, inflation remained low, even though housing prices had experienced significant “inflation”. Products and services are weighted, so it may be that whilst oil prices have risen… the cost of fruit and vegetables has reduced- go figure.
It is suggested by many that IR’s will increase in December. Consumer spending and other measures, such as Australia’s current account deficit, could lead to monetary policy tightening aka IR rises.
Here’s a decent article on factors that lead to IR rises/changes:
http://moneymanager.smh.com.au/articles/2004/08/11/1092102486267.html
kay henry
Originally posted by kay henry:whilst oil prices have risen… the cost of fruit and vegetables has reduced– go figure.
They have??? [blink]
I believe the article said:
suburbs close to Sydney Markets had lower fruit and vegetable prices.
tsk, Monopoly. The article was from 2002, and I posted it so that people could see how the CPI is calculated.
I actually said:
“Products and services are weighted, so it may be that whilst oil prices have risen… the cost of fruit and vegetables has reduced- go figure.”
I was suggesting that now, while oil may rise, other goods and services might be cheaper.
kay henry
Fair enough, I shall consider myseld “tsked” [biggrin]
However……if oil prices rise, surely even you, wouldn’t be fool enough to ASSUME that produce prices will be less, after all, vehicles used to transport the produce from the growers to the supermarket (or for that matter ANY product requiring transportation from A to
will escalate accordingly wouldn’t you agree???? [blink]Jo
freedomfighter,
It is suggested that if you spend the extra $15-$20 a week on petrol, you won’t be spending it elsewhere- opportunity cost, I guess… it all balances out.
You asked about people’s situations… I walk everywhere and my car sits in its little cage. I used to commute- an hour and a half to work each way- by car or train… and then I moved closer to my workplace, so now I walk there. The train tickets or petrol were costing me more than actually moving close to my workplace- in terms of money and time.
Maybe you can ride a bicycle, freedom :o)
kay henry
will escalate accordingly wouldn’t you agree???? [blink]You must be logged in to reply to this topic. If you don't have an account, you can register here.
