Posted by BE on March 12th, 2016
First you have to understand that I know nothing about economics. I am totally unqualified to discuss anything to do with finance. I leave that all to the brains in the organisation, one JC, to whom I have the good fortune to be married.
So you’re well within your rights, indeed you might even be well-advised, not to continue reading. Then again, you might adhere to the old precept that where ignorance is bliss ’tis folly to be wise and lend at least half an ear to what this Irish ignoramus has to say.
So (It’s imperative these days to begin every sentence with “so”!) I hear that the Governor of the Reserve Bank has cut the Official Cash Rate by .25% to 2.25%. Borrowing money has just become cheaper. This is good news for people who want to borrow money, particularly people who want to buy a house but haven’t got remotely enough money to pay for the house. I”m happy for them of course. Debt has just become cheaper and more attractive. We won’t worry too much that this debt is going to take years, possibly decades to repay. Nor will we depress those happy borrowers with the reality, gained from personal experience, that that cheap mortgage will be an albatross round your neck for all those years or decades, and that the happiest day of your life will be the day you get rid of the bloody thing. No, let joy be unconfined, the doors to the property market have just been opened a little bit wider. Read the rest of this entry »