Why rates have no further to fall

Well Stephen, your argument is plausable and i rarely believe what the bank economists put out into the public arena as imo its just meant to get a reaction from people to get them fixing the deposits for longer periods. After all why would banks give their real opinions to the general public or are they obligued to do so? I dont think so.
The RBA uses plenty of spin and secret language talk to get the desired results and so do the banks. So on this basis you could be right, but imo busunesses need lower rates and not be scared into thinking rates will start to rise and if they do rise I would blame the ALP surplus lie (Why rates have no further to fall, January 22).

While domestic economic condition and inflation is one thing, the international conditions are another totally different beast.
The recent few years in the wake of GFC indicates that the conventional wisdom or policy prescription is no longer the best approach, not just for the big players but also for Australia.
There is no ending to the quantitative easing policies in the US, EU or Japan as the last just embarked on this path under its new government.
In such an international environment, your analysis appears completely out of kilt with what the best policy really should be based on real world cases as opposed to the inapplicable conventional thinking at the moment.
One should never be mechanical in thinking and must know the limit of a particular line of thinking and adopt the best even it may mean you have to break with the tradition.
In this occasion, you seem to have fallen into the trap that most economists do in most of the time. (Why rates have no further to fall, January 22).

While central banks print there is no need to lower rates. (Why rates have no further to fall, January 22).
This new money is free. We could even get to the point whereby a central bank pays bankers to take the new money. That is when the central bank prints, loans it to the bankers at 1% and governments borrow it from the bankers at 3% because otherwise they have to pay 5% from real savers.
So printing and lowering the cost of money creates lower margins, more risk, inflation, capital destruction and unsustainable bubbles.
Hopefully, the RBA will do nothing.

The Spectator writes:"an improvement in dwelling investment and higher house prices...".Wow, ain't it the truth: the 2013 Demographia Housing Affordability Survey came out yesterday showing Australia has 8 in the top 20 most expensive residential city property prices on the planet (Why rates have no further to fall, January 22).
The Spectator writes: "economic and markets news has materially improved since December...".That was only 3 weeks ago!
Let us remember that the cause of the western world's problems is debt, writ large. Since the start of the sub- prime crisis in the US in '06/'07, the top 6 central banks have printed $10 Tn , and all that has happened is that sovereign debt has increased and banks have been given time to get their houses in order.Politicians have done very little to change things.
From where I stand things are just getting worse, and we are just about at the stage where the person in the street is finding economists' statements incredulous.

"Improvement in house prices".... I am not sure what this means - is it an improvement for the cost of houses to go up - keeping home owners happy, or is it an improvement for house prices to return to their real economic value and thus make them more realistic investments? (Why rates have no further to fall, January 22.)

Are you playing devils advocate? (Why rates have no further to fall, January 22.)
The only reason the stock market is rising is because there is too much cash in the bank, brought about because the RBA has had rates too high for nearly a decade.
The AU$ is too high because rates are the the highest without soverign risk, the only reason they are not above $1.10US is because the market has factored in 100point falls, if the RBA dont cut in feb, bank and $1.08US within a week.
Lets see if the RBA drive the final nail in the Australia manufacturing coffin!

Stephen, look at the real base fundamentals and you will see that at the moment, unemployment will shoot to 8%, housing will be stable yet plateau, mining will come off more, a Government needs to change and a mess cleaned up (will take two years), and confidence needs to rise in the minds of the thinkers and creators of enterprise and business/industry, and generate real wealth and jobs again (Why rates have no further to fall, January 22).
The finance industry which now, seems to be the biggest industry in Australia is nothing but a virtual casino doing nothing really productive but eating into peoples savings and super funds while the finance industry gets the cash.
I remember, just before the "Recession we had to have", the finance industry and economists were talking the same message, as you are now, and then "91 arrived, what now?
It's back to basics whether we like it or not and therefore interest rates and "industrious funding" will be the driver, no matter what.
Things "out there" are really not as you say, and is unreal "Spin Stuff" at the moment!

Will be interested to see how yoru view is goign to change as there will be more unemployment (Why rates have no further to fall, January 22).
Houses are ridiculously overpriced in Oz and whoever beleives otherwise good luck.
The economy where I am standing - small exporter and distrtibutor - has not improved a bit, but I guess office and economic gaga land and reality is always different.

Stephen Nordstrom is correct and everyone seems to have forgotten that our RBA cash rate is already at the "GFC emergency level" (Why rates have no further to fall, January 22). If the RBA reduces rates any further we will be seen to be in an economic morass which won't be a good look for our current Labor minority/Green/Independent government facing an election with a huge debt around its neck.

Australia is about 5 years behind the rest of the world in economic phases (Why rates have no further to fall, January 22).
As the rest of the worlds employment figures improve ours are getting worse. Australia has too much private debt and as unemployment increases we will fall into recession.
This one will be really ugly.

Our treasury and the RBA need to get up to speed on MacroEconomics (Why rates have no further to fall, January 22).
Monetary Policy has lost its bite/use in managing cycles. If anything lowering interest rates just encourages more risk and debt and an asset bubble (in property).
If the RBA is concerned about the high $ - it can intervene in the offshore fx market - without adding to the local money supply. Inflation and a high dollar are Australia's biggest dangers - not high levels of interest rates...
If they want to stimulate the economy - they should do it via fiscal policy.
You know it makes sense!
Check out this link:
http://www.economist.com/blogs/freeexchange/2012/12/reforming-macroeconomics

The problem with forecasts is that they are about the future. However, this highly qualified one looks like a an attempt to pick the recovery in the Australian economy and do a reverse Bill Evans with pike. (Why rates have no further to fall, January 22).

The economies of this world (including Australia) remain phoney manipulations, that are perpetually succoured for the sole purpose of keeping the "gravy train" on its tracks for the top 10% and to deliberately distort fair remuneration regardless of productivity, but based on whether or not one is a 'better' or a 'worser'.
When the majority of a nation don't have to produce anything to obtain a luxurious living, and the money just keeps on being printed or borrowed by governments to fund this 'busy exercise in maintaining social status quo' (which in turn maintains an established political power base norm) it is time to call it by it's correct name - an outrageous ponzi scheme!
The financial world should have been made to take it's 'haircut' 2008. In 2013 it is we, the hardworking innocents, who are about to be 'scalped'. (Why rates have no further to fall, January 22).

The short answer is that all the interest rate experts have no idea (Why rates have no further to fall, January 22).

Ummm, doesn't improved house prices translate to increased poverty amongst the intendant first home buyers now and in the future? (Why rates have no further to fall, January 22.)
All the blustering by politicians and political social workers about their concerns of housing affordability and the social dislocation caused by unaffordable housing is BS. Following the onset of the GFC and now again, their only concern is to keep house prices high and - at the least - growing.

I like the way that commentators talk about Australia's "low inflation environment", and yet never stop to think about, much less investigate, the reality.
Over the past 5 years Australia has become the most expensive country on the planet, not just in the developed world, but ON THE PLANET.
And this despite the highest dollar we have had for decades, and its presumed impact in keeping import costs down.
Talk to anyone who does the household shopping, puts fuel in a motor car, runs a business (especially a small one, where management can't just pass the buck), or visits this country from overseas.
The official figures are total distortions.
"Low inflation environment"?