{"id":5652,"date":"2012-10-03T01:32:42","date_gmt":"2012-10-03T05:32:42","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=5652"},"modified":"2012-10-03T01:32:42","modified_gmt":"2012-10-03T05:32:42","slug":"australia-rba-overview","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2012\/10\/03\/australia-rba-overview\/","title":{"rendered":"Australia: RBA overview"},"content":{"rendered":"<p>A quick review of the <a title=\"RBA Chart Pack\" href=\"http:\/\/www.rba.gov.au\/chart-pack\/\" target=\"_blank\">RBA chart pack<\/a> released today.<\/p>\n<p>Household finances remain in a precarious position with debt at 150 percent of disposable income &#8212; three times the level of the early nineties.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2012\/6tl-hhfin.gif?w=525&#038;ssl=1\" alt=\"Index\" \/><\/p>\n<p>Housing credit growth slowed to around 5 percent, but will probably fall further by the end of the cycle &#8212; following personal credit into a contraction &#8212; in order to reduce the debt to disposable income. Declining growth rates leave a hole in aggregate demand but this is being offset by rising business credit.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2012\/9br-cgbys.gif?w=525&#038;ssl=1\" alt=\"Index\" \/><\/p>\n<p>Bank capital ratios are improving but these are based on risk-weighted assets. As <a title=\"Macrobusiness: Deep T - APRA continues Invisopower!\" href=\"http:\/\/www.macrobusiness.com.au\/2011\/09\/apra-addresses-tree-misses-fores\/\" target=\"_blank\">Deep T<\/a> pointed out last year:<\/p>\n<blockquote><p>&#8220;&#8230;&#8230;..the average minimum amount of Total Capital against total residential assets held by those [the 4 major] banks is less than 2%.&#8221;<\/p><\/blockquote>\n<p>They still have a long way to go to build sufficient reserves to withstand a collapse of the housing bubble, brought about by household deleveraging.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2012\/30bl-caprat.gif?w=525&#038;ssl=1\" alt=\"Index\" \/><\/p>\n<p>Bank interest margins are being squeezed, making them reluctant to expand their balance sheets. Further decline in net interest margins could precipitate a credit contraction.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2012\/29br-nim.gif?w=525&#038;ssl=1\" alt=\"Index\" \/><\/p>\n<p>Bulk commodity prices are falling but the full impact of the sharp drop in iron ore spot prices has not yet been felt on the current account and government tax revenues.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2012\/15bl-blkcomp.gif?w=525&#038;ssl=1\" alt=\"Index\" \/><\/p>\n<p>The current account trade balance is improving but, as a net debtor, interest and dividends to offshore investors drag the country into deficit. As <a title=\"David Murray: Australian government spending on alarming trajectory\" href=\"http:\/\/goldstocksforex.com\/2012\/10\/01\/david-murray-australian-government-spending-on-alarming-trajectory\/\" target=\"_blank\">David Murray<\/a> points out: the fact that Australia was unable to post a current account surplus throughout the mining boom indicates we are living beyond our means and will lead to burgeoning debt levels.<\/p>\n<p><img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2012\/17tl-cab.gif?w=525&#038;ssl=1\" alt=\"Index\" \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A quick review of the RBA chart pack released today. Household finances remain in a precarious position with debt at 150 percent of disposable income &#8212; three times the level of the early nineties. Housing credit growth slowed to around 5 percent, but will probably fall further by the end of the cycle &#8212; following &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2012\/10\/03\/australia-rba-overview\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Australia: RBA overview&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[40,5],"tags":[290,590,729,927,1041,1726,1902,2438,2860,3447],"class_list":["post-5652","post","type-post","status-publish","format-standard","hentry","category-australia-nz-countries-regions","category-economy","tag-australia","tag-capital-ratios","tag-coking-coal","tag-current-account","tag-disposable-income","tag-household-debt","tag-iron-ore","tag-net-interest-margin","tag-rba","tag-trade-balance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Australia: RBA overview - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Australia: RBA overview - the patient investor\" \/>\n<meta property=\"og:description\" content=\"A quick review of the RBA chart pack released today. Household finances remain in a precarious position with debt at 150 percent of disposable income &#8212; three times the level of the early nineties. 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Cutting interest rates to stimulate new home construction may cushion the impact, but comes at a price. Consumers may benefit from lower interest rates but that is merely a side-effect: the real objective\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":15434,"url":"https:\/\/thepatientinvestor.com\/index.php\/2017\/06\/10\/australia-rba-hands-tied\/","url_meta":{"origin":5652,"position":1},"title":"Australia: RBA hands tied","author":"ColinTwiggs","date":"June 10, 2017","format":false,"excerpt":"Falling wage rate growth suggests that we are headed for a period of low growth in employment and personal consumption. The impact is already evident in the Retail sector. The RBA would normally intervene to stimulate investment and employment but its hands are tied. Lowering interest rates would aggravate the\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":38974,"url":"https:\/\/thepatientinvestor.com\/index.php\/2022\/11\/22\/australias-debt-end-game\/","url_meta":{"origin":5652,"position":2},"title":"Australia&#8217;s debt end game","author":"Colin Twiggs","date":"November 22, 2022","format":false,"excerpt":"We are nearing the end of a thirty year bull market in credit, during which time the overnight cash rate in Australia fell from 18% in 1989 to 0.03% in 2021. Low interest rates enabled households to borrow more relative to their income, with housing debt expanding 4.5 times, over\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":41226,"url":"https:\/\/thepatientinvestor.com\/index.php\/2023\/03\/14\/volatility-how-does-australia-compare\/","url_meta":{"origin":5652,"position":3},"title":"Volatility: How Does Australia Compare?","author":"Colin Twiggs","date":"March 14, 2023","format":false,"excerpt":"Last week we covered suppression of volatility in complex systems and showed how Fed suppression of interest rate has destroyed productivity, causing debt to grow at a faster rate than GDP. Quick Recap The ratio of federal government debt increased to a precarious 121% of GDP at the end of\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"Federal Government Debt & Non-Financial Private Debt\/GDP","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2023\/2023-03-07-debt-gdp.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2023\/2023-03-07-debt-gdp.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2023\/2023-03-07-debt-gdp.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":6053,"url":"https:\/\/thepatientinvestor.com\/index.php\/2012\/11\/06\/australia-hard-or-soft-landing\/","url_meta":{"origin":5652,"position":4},"title":"Australia: Hard or soft landing?","author":"Colin Twiggs","date":"November 6, 2012","format":false,"excerpt":"Browsing the latest charts from the RBA. Despite record low 10-year bond yields..... Credit growth is subdued and likely to remain so for some time. After a massive credit bubble lasting more than a decade. Households are saving close to 10 percent of Disposable Income in anticipation of a contraction.\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":18081,"url":"https:\/\/thepatientinvestor.com\/index.php\/2019\/04\/05\/australia-headwinds-persist\/","url_meta":{"origin":5652,"position":5},"title":"Australia: Headwinds persist","author":"Colin Twiggs","date":"April 5, 2019","format":false,"excerpt":"From Elliot Clarke & Simon Murray at Westpac: ...the take home from Budget 2019 is that, while supportive of activity over the long-term, the near-term impact on incomes and activity is limited. Labor\u2019s alternative proposals, as per the budget reply, are also spread out over time. So no matter which\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/5652","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=5652"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/5652\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=5652"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=5652"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=5652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}