RBA needs a fix to our addiction to spending

Another month, another strong retail spending number. The tenacity of the Australian consumer in the face of rising inflation, five interest rate hikes, a precipitous drop in house prices and no real wage growth is becoming something of a riddle.

The robust spending figures coincide with Morgan Stanley’s move to up the ante on its forecast fall in Australian housing prices. It now expects a 20 per cent tumble from peak to trough. The conventional economic script says that in a falling housing market we are expected to feel a negative wealth effect. In other words, we feel poorer because our biggest asset is worth less. In turn this is supposed to curb our spending.

There is clearly a portion of the community that is under financial pressure, with rising inflation adding to the existing burden on some households. But for those with mortgages, banks have seen little evidence of repayment stress as many built up a savings buffer during 2020 and 2021.

if the dollar goes to US 50c maybe

Everything is outsourced. People have become useless outside of their employers environment. People are bored. They spend to have something to share on socially both physically and digitally. The SMH is part of that problem.

Is this about indigenous or non-indigenous communties? Anglo or Welsh or European or Asian or Middle Eastern heritage?

Bizarre

Stop Chinese imports. They're too cheap and accessible. If we return to paying 2 months wages for a tv we'll soon stop spending.

A few more rate hikes will achieve it

What IF people stopped offering things to buy. Like why do we need more retail businesses? Restaurants? Food outlets? etc. Crazy I know!

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