Election 2004 | Day 5 | Interest Rate Bullshit

While trying to distract my eyes from the image of Jennifer Hawkin's bum in a g-string, I came across an interesting opinion piece by Peter Hartcher. It deals with Howard's claims that interest rates will go up under a Latham Labor government, as he's been meeting with gypsies that can accurately predict the future by reading tea leaves. Cutting to the most interesting part in the article, Hartcher mentions this:

Howard arrived at his claim of Labor's $960 a month by taking the average prevailing mortgage interest rate during the Hawke-Keating years of 12.75 per cent, and applying it to the average new mortgage today. If you run the same exercise with the Coalition, applying the average mortgage rate under the last Coalition government of 10.78 per cent to the average new mortgage, you arrive at an increase of 3.73 percentage points over the existing average rate.

That means Howard would add $621 to the monthly payment on an average new mortgage in his next term. Besides, Howard's claim has failed the preliminary lie detector test. The stockmarket hit an all-time high on Wednesday. Investors plainly do not anticipate any serious blow-out in the deficit or any serious interest rate response.

Latham already has plans to keep interest rates down. He even signed a stupid giant cheque to illustrate the point yesterday, of which pissed the happily Murdoch-owned Daily Telegraph off. Ahh, the Daily Telegraph. Remember a few months back when they considered it front page news that Latham had once been booted off his universities' cricket team for bagging out the umpire, which happened over 23 years ago? I wonder if Howard had hair then.

Anyway, back to the point. Which was? Damn, I forgot. Oh wait, Howard's a dick.

• Foreign debt when Howard won office: $194 billion.
• Foreign debt now: $393 billion.
• Howard in 1995: "I can promise you we will follow policies which will bring down the foreign debt."

That nice statistic was courtesy of Tony Jones' interview with Howard on Lateline last night. Wait, I'm meant to be going on about interest rates here.

In closing, more stuff nicked from the Hartcher article.

...the futures market is showing that investors expect that the interest rate on 90-day bills, a proxy for official interest rates, will be 5.5 per cent a year next June. Today's rate is 5.25 per cent. Again, investors are betting real money that there will be only a very modest increase in interest rates.

What's more, the Reserve Bank publicly has told us that it expects that it will have to make this modest increase by the end of this year to contain inflationary pressures that are already building. Implicit in this is that it will be regardless of who is in power.

I'm betting the arse will fall out of our economy when/if the FTA goes through anyway.