Janet CollinsThey tell me I’ve now lost all my consumer confidence?
June 11th 2008 09:51
The funniest thing about experts is they are always so willing to tell me what I already know in the first place. This morning was no different when I woke up to news of almost economic calamity. Yes, you guessed it. Consumer confidence has plunged to its lowest since 1992!
Not only was Westpac’s chief economist “surprised” at this most bewildering result reasoning that usually this would only happen if an interest rate rise was being predicted and this was not the case and suggesting that it was petrol prices rises that have done this. Great - so now the banks can blame the oil companies! What a world we live in!
Can we just go back six or so months and remember a few vital points. When the Reserve Bank made a decision to raise interest rates which pressures banks to put theirs up also, our government told us it was because inflation had exploded and the only way to manage this was to raise the interest rates.
A clear translation of this is “we have to stop people spending”. The banks went on to raise interest rates again and again. The petrol prices continue to escalate and food and most necessities are hardly going down in price. So why be so surprised?
The messages that bombard us daily from our government, our media and our economists are so conflicting that we really need to stop paying any attention.
One day we will be told that everything is all stars and roses and prosperous and the next we will be told to stop spending or we’ll have a recession. When all the small businesses that aren’t seeing our money any more close down, our experts will tell us it has all been because of a “drop in consumer confidence”. When the big businesses stop getting sales from the small businesses that have closed down, they’ll start putting people off and their consumer confidence will certainly plunge.
If you think this too simple and silly consider this. How would all those people who lost their homes months ago after the interest rate rises have heard this morning’s announcement? They probably didn’t have much confidence left to lose.
What is really amusing about these announcements though is the language they couch it all in. “Consumer confidence low” or “consumer sentiment falling”. I can give them another one – “consumer broke”!
Whatever they teach them at economics schools it certainly isn’t commonsense.
Not only was Westpac’s chief economist “surprised” at this most bewildering result reasoning that usually this would only happen if an interest rate rise was being predicted and this was not the case and suggesting that it was petrol prices rises that have done this. Great - so now the banks can blame the oil companies! What a world we live in!
Can we just go back six or so months and remember a few vital points. When the Reserve Bank made a decision to raise interest rates which pressures banks to put theirs up also, our government told us it was because inflation had exploded and the only way to manage this was to raise the interest rates.
A clear translation of this is “we have to stop people spending”. The banks went on to raise interest rates again and again. The petrol prices continue to escalate and food and most necessities are hardly going down in price. So why be so surprised?
The messages that bombard us daily from our government, our media and our economists are so conflicting that we really need to stop paying any attention.
One day we will be told that everything is all stars and roses and prosperous and the next we will be told to stop spending or we’ll have a recession. When all the small businesses that aren’t seeing our money any more close down, our experts will tell us it has all been because of a “drop in consumer confidence”. When the big businesses stop getting sales from the small businesses that have closed down, they’ll start putting people off and their consumer confidence will certainly plunge.
If you think this too simple and silly consider this. How would all those people who lost their homes months ago after the interest rate rises have heard this morning’s announcement? They probably didn’t have much confidence left to lose.
What is really amusing about these announcements though is the language they couch it all in. “Consumer confidence low” or “consumer sentiment falling”. I can give them another one – “consumer broke”!
Whatever they teach them at economics schools it certainly isn’t commonsense.
| 65 |
| Vote |
Add To: 
subscribe to this blog
