Robert Jones Makes Sense
Thank God for Sir Robert Jones! If you'd heard him on National Radio after 4pm today, you'd know he'd take issue with me thanking God. I'm really doing that just to annoy him, just in case he happens to pass by this blog - as unlikely as that may seem.
To the point...
He thinks that interest rates ought to have been left alone. That it's none of the Reserve Bank's Governer's business what people spend their money on, and that if Bollard just did nothing the market would be self-correcting, and the type of hand wringing going on now has been going on for the past 150 years if you look back through old newspapers (which he did). Oh, and if we want certainty - lets change over to a Marxist economy and get it over and done with.
What I've never been able to understand, and maybe someone can help me out here, WHY is the antidote to inflation higher interest rates? Hello! My mortgage is suffering serious inflation right now, I have less money to pay the damn thing off faster because all the extra money is going into higher interest. Most of it is fixed (80%), but the rest is floating so that if I had extra money I could park it there and negate my interest. I'm not borrowing more against the value of my house, I don't have a plasma screen tv and don't intend on getting one. Why is the inflation on my mortgage not bothering Bollard???