Economic and Politics: Time to Make a Call

There is a saying “Politicians are like nappies – they both need to be changed regularly – and for the same reason”.

I don’t know if agree with that…maybe the "Devil you know” is more appropriate.

I’m a little jumpy with the economy at the moment. The US has scheduled 6 times .025% increases in interest rates. The Australian economy appears robust – but has been stimulated by hyperactive property growth which is now stagnating.

“Interest rates will probably rise again shortly after the election, but in response to consumer borrowing, not government profligacy”. –The Economist.

So I’m looking at taking a hit and fixing my interest rates for 3 years. The Bank is a devious as ever. It will be $700 to move my loan from variable to a fixed rate and it will take 4-6 weeks to process – but I can pay an extra $450 now to cap the rate (in case it rises)….”make a call” they say.

My guess is that the federal government will not tolerate a pre-election rate rise – so I’m making a call and keeping the $450 in my wallet.

What ever the situation – unfortnuately it will be the coffee shops and a few other businesses that rely on luxury and the convenience spend and catch the stray dollars that will suffer as we tighten the purse strings trying to save yet another $100 per month.