Australian Broker forum is the place for positive industry interaction and welcomes your professional and informed opinion.

​Fed taper announcement good news for brokers

Notify me of new replies via email
Australian Broker | 20 Dec 2013, 07:00 AM Agree 0
The US Federal Government has announced it will wind-back its stimulus program, bringing optimism to the Australian housing market.
  • Patrick | 20 Dec 2013, 09:05 AM Agree 0
    With lower A$ the cost of petrol goes up and just like an interest rate rise this flows through to everything. How exactly is this good for OZ.
  • Brisbane Broker | 20 Dec 2013, 11:12 AM Agree 0
    Patrick, you are right. Once A$ goes down prices on everything will start going up and that inflation will start increasing. Can someone explain me in plain English how this is going to be good for us??????
  • Giles | 20 Dec 2013, 11:47 AM Agree 0
    How the Aust Govts & opposition has sat on its hands the last 10 years focussed on political fighting and letting the $Aus go so high is TREASON. Other govts rolled out programs to actively reduce their currency, whilst we bent over to sign up one sided free trade agreements and overly promote foreign buyouts of Aust businesses and property. Govt's all around the world worked to lower their currency in order to effectively steal Australian jobs and industries with us priced out of business. Australians will be paying heavily over the next 10 years whilst we rebuild the non-mining areas of the economy. Many tens of thousands of Aussie jobs are lost forever. Yes a lower $Aud means more expensive petrol, expensive overseas holidays and you will have to pay more for your BMW, but at last our farmers, manufacturers, tourism, service, foreign education and construction industries can start to claw back lost ground. The record forecast Aus Federal Govt deficits show that revenues have collapsed due to our faltering economy. Our housing industry is the only economic bright light, as long as enough people keep their jobs to afford their mortgages.
    Abbott needs to ensure his decisions are focussed on rebuilding the economy and finances instead of being expensive pet political projects.

    PS. It doesn't matter what price petrol is if you don't have a job to pay for it.
  • Broker | 20 Dec 2013, 01:26 PM Agree 0
    Spot on Giles , the Gillard and Rudd governments did about 15 years of reckless economic damage in 6 years of complete mismanagement and incompetence.

    The clever country has is in so many ways acted like dummies, and for that we will all be paying the price for a long time yet.

  • economist | 20 Dec 2013, 02:04 PM Agree 0
    The Government did not 'let the AUD' rise over the past 10 years. The health of the Australian Economy, fueled by the resources boom, combined with the decline of other economies in the GFC, caused our dollar to appreciate naturally by market forces. Australia has always had a 'free floating currency', and believe or not, so do most Western economies. As someone who has studied and trades Foreign Exchange, I am opposed to any intervention as all it does is cause more problems down the track.

    A falling Australian Dollar does cause everything we import to become more expensive, this includes televisions, cars, petrol etc etc etc. It also makes our exports cheaper on the global market, so a falling AUD will help our exporters. The net result is less money leaving Australia, and more coming in. If our wheat and wool farmers all suddenly get an improvement in profits (due only to the fall in the AUD), then this will follow through the economy in an effect known as the multiplier, and stimulate GDP growth domestically.

    Yes it will result in inflation, but how is that bad for the mortgage industry? Inflation means prices go up, this includes the price of property. Correct me if I'm wrong, but higher prices mean bigger loans, which mean more money, higher prices also means more equity which makes refinancing and equity release strategies easier. There you have it, Inflation is good.
  • Australia the lucky country | 28 Dec 2013, 09:36 AM Agree 0
    Get rid of Veda, thousands of people out of work struggling to pay bills and reporting people for not paying them on time, lucky country what lucky country. These people are being screwed over constantly jobs, taxes, paying for medical because of the influx of immigration and immigration ringing companies telling them they have to take on these people including government departments and origin paying for homes and imploying them with a life time garentee of a job Australians don't even get this why is your electricity bill so high
  • Giles | 06 Jan 2014, 10:41 AM Agree 0
    We can sit back and enjoy a bit of inflation, but too much inflation is very bad indeed. Remember the Keating era when he jacked up interest rates to 17% - 18% to slow down rampant inflation. The A$ was FIXED and then FLOATED in Dec 1983. The general view is that having a floating has been good and mostly protected our economy. To think that OECD Govt's don't "influence" their floating currency up and down is naïve. The Reserve Bank buys & sells $A daily to help smooth the exchange rate from fluctuations and make it more attractive. Major overseas govt's manipulate their floating currency in major ways to our detriment. With the mining boom over the past 10 years powering our economy, why did Gillard/Rudd embark on such a massive spending campaign to boost our economy. The Govt could have saved many many Billions of dollars, and let the Reserve Bank lower interest rates which would have lowered the $A to protect the rest of the economy and boosted housing. The massive govt spending, and resulting high interest rates and high $A have decimated the non-mining sectors AND govt finances due to collapsed revenues and taxes.
    For an example of how to manage a resource boom, Norway is a shining example. By keeping the Oil profits in $US and in offshore managed funds so it didn't over value their currency. When the North Sea Oil runs out for Norway, they will have managed investments worth Trillions to pay dividends back to the Norway for ever, as well as a healthy economy. We completely sold out.
Post a reply