I like Warren… but when he says the Fed Reserve can cut four times and they have their cash rate higher than us.. why doesn’t he talk about the mortgages since the US have 30 year mortgages fixed for 1% , whilst in Australia our mortgages are 4 times larger on variable rate s
@@JosephGCamponot all are in the usa. And all loans are effected. Yes sadly it appears he is correct rates still need to go up 2 more times as gee in the last week items at Woolies some have gone up 20% in one week !!!
@@JosephGCamponot all have 30 year morgages plus rates effect credit cards etc not just home loans so aussies are still spending heaps and Labor’s immigration is pushing inflation and wont be stopping in the next year or 2 as all these immigrants take time to settle they just dont jump off the plane with home and decked out 😂- thank Labor’s immigration numbers for this problem
Who didn’t call out the problem in the government manufacturing all these jobs! It’s fake. We don’t needs rates to go up, we need to stop immigration and government spending to cure inflation. Even if we enter an official recession.
I’m in your camp, Mr. Hogan. Thanks for pointing out that inflation is insidious and destructive. I was a young teenager when annual inflation hit over 2400% (not a typo) in Brazil in 1993. I’ve seen the nefarious social consequences of inflation in society. 30 years on and the effects still linger. Hence why I moved to Australia 17 years ago. Gut wrenching to see the beautiful country I came to love and call home going down the same path Brazil went decades ago. The same failed policies. Polies and central bankers are wrecking this great country. And most people say nothing! That’s what’s really disturbing. The level of complacency.
@@NatP-qt1df i’m not a boomer, and I don’t totally blame them for doing what made sense for themselves and their families. Personally, I put a lot more blame on politicians past and present who created and implemented the policies of which boomers happen to be main beneficiaries.
Fantastic interview, love hearing from Warren. Amazed to see him address the elephant in the room about most job creation being Government jobs while the private sector is getting smashed.
I’m closing in on my retirement and I’d like to move from Collinsville to a warmer climate, but the prices on homes are stupidly ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways?
Considering the present situation, diversifying by shifting investments from real estate to financial markets or gold is recommended, despite potential future home price drops. Given prevailing mortgage rates and economic uncertainty, this move is prudent, particularly due to stricter mortgage regulations. Seeking advice from a knowledgeable independent financial advisor is advisable for those seeking guidance.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
Can you provide instructions on how to contact your advisor? I'm experiencing erosion of my funds due to inflation and looking for a more profitable investment strategy to make better use of them.
‘’Marisa Michelle Litwinsky’’ is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thank you for this tip , I must say Marisa, appears to be quite knowledgeable. After coming across her webpage, I thoroughly went through her resume, and I must say, it was quite impressive. I reached out to her, and I have booked a session with her.
Out of touch if it is believed interest rate hikes will reduce costs like insurance premiums, food, groceries, fuel, or rent. It’s a vicious cycle: raising rates drives up rent, which is a key component of inflation!! They’ve raised rates 13 times, significantly affecting not only those with large mortgages but also small businesses and consumer spending. Australians are particularly vulnerable because we don’t have the option of 30-year fixed rates like USA. This inflation isn’t just demand-driven; corporate greed and lack of competition are playing a major role, and corporations are profiting massively from the situation.
Thanks Mark for having Warren on his the first honest finance guy I’ve heard in a long time I’m sick of the propaganda that you hear from the TV & radio stations with guys that have their own self interest.
The risk to Australia has always been an external economic shock . Last time we had China trade as the buffer , this time we have no one and our personal debt levels are exponential!
Interest rates aren’t impacting people like it used to, we need a stop in government spending and immigration. If rates go up they’ll just keep spending more to ‘hide’ a recession. That’s the danger.
Jim Chalmers is so obsessed with avoiding a recession on paper that he is sacrificing the future of australia, and it seems driven by his own ego and legacy that he wants to leave. The ironic thing is that people are seeing through it and he will be remembered as the treasurer that sacrificed the economy for political gain. It's so frustrating that after the covid pandemic, the government again fumbles and makes the economy worse and it's so avoidable and self inflicted.
1) what specifically is he doing that is destroying the future of the country? Genuine question. 2) What did previous treasurers do that was any different?
Warren is out of touch!? Those jobs created were mainly in the public sector, not private. Private sector has been in decline. Consumer spending is in the toilet. What good would more rises do? We already had 13 in a row, RBA is out of buttons to push! Gov policy needs to change if anything to combat inflation. UPDATE 19/09: The Fed have just cut the cash rate by 50 basis points. That is the biggest single cut In 16 years. Australias unemployment remains steady at 4.2%, which is quite remarkable 🤯.
@fatgim we've had 13 rate rises because the rates were too low to start with and we had an economy out of control, people buying houses that should never have, rates are still far too low and the reason why inflation is still too high, our rates are lower than every other country. Any other time in history where we've had so many rate rises house prices crashed, but they've risen because migration is also out of control
@stevemartin9589 Lots of different views on this, but I disagree that rates need to go higher. We had 13 in a row and house prices rose. 2 more aint going to have a significant impact on house prices.Consumer spending has been crushed already and the economy is going backwards. Gov spending and employment in the public sector needs to be reigned in. Interest rates don't Impact the population equally. Time for the federal government to do some of the lifting. Supply and demand is the biggest driver for house prices, making money supply tighter is not going to incentivise new builds!!
Thank you. Jim is quick to blame the RBA, but then gives $300 to every household in Australia and I would say a majority don't need it and $325 to every business to help with their power bill. People on $150k pa or more don't need $300 off their power bill and companies making $50k profit a year or more don't need $325. They are giving away $3,000,000,000 just there. I am sure we could have had the same assistance effect with around $800m. STOP giving away money Jim and audit more people involved with the NDIS. Reduce the limits on getting the pension, people with $1.4m in the bank don't need the pension.
he's giving away money as a deliberate policy. he basically said that he is bloating the public sector to boost gdp figures. and then he gets angry at the rba for even suggesting at hiking rates to counter his inflationary policy. it's ridiculous.
Hi, the rest of the world has higher unemployment rates and higher interest rates and you interpreted that as Jim Chalmers has failed - weird take but good for you 🥴
@@tms9790 I am not referring to the unemployment rate, I am talking about the unnecessary cash hand outs to high income earners and businesses making descent profits. This is just throwing money away and fuelling inflation, not to mention could be used to reduce our debt.
Average house in the US is $250,000 and most US citizens have 30 year loans @ 2% interest fixed 🤷 The US comparison is nonsense. All this job creation is low value jobs. And walk around Sydney and see the number of gig economy food delivery people sleeping in the streets. These jobs aren't creating demand for housing. And AI cool aid. AI is a bubble. 90% hype.
I fear you’re right. He talks glowingly about opening up and deregulating the economy and labour market, and fair enough, I don’t doubt these reforms have improved the broader economy and many people’s lives, but in some important ways it has also helped create many of the conditions that have trapped us working class in poverty. Sham contracting, underpayment, insecure work, underemployment have become increasingly common in the last 20 years. And yes that’s life in a capitalist economy to some degree, but we want to be very careful not to create to many of these types of jobs. Otherwise we’ll just see a further worsening of inequity and political discontent
Right! The guy is delusional. The talk of 'an open and free economy' doesn't align with the current geopolitical environment. Orchestrated economic slowdown and currency debasement supporting decoupling and protectionism. This guy is delulu...
I’m struggling with Warrens logic. On one hand he says at 6:09 government spending doesn’t matter because it’s income into the economy. Yet he calls for further rate hikes to slow inflation. As an economist the key driver of inflation is government spending so why not just call for a slashing of our public spending and reduction of bureaucracy. I remember when RBA chairs use to call governments out for driving inflation. Now they get the blame and say nothing. Not so independent it seems.
💯 agree @ricecrash...Hogan. "They are creating Gov jobs - but it doesn't actually matter"... Wrong. Classic Keynesian falsehood. These are unproductive jobs. In the end taxpayers have to pay these salaries. A healthy economy is growing productive jobs...
Moving out of the "emergency rate settings" is around 6%. But I'm guessing that the RBA is looking at the $80bn Investor loans written since Jan-Aug 2024 as "data" that the interest can't change because it's "equity mate" and "it's yours and it's super". The Purpose of Superannuation Report is overdue it's public release. The Aged Care Reform hasn't scared anyone yet. But putting the superannuation jeanie back in the bottle is going to be necessary. Superannuation is still a relatively new phenomenon and our economy still doesn't understand it. It either needs to be shutdown or preserved till 67, otherwise we are going to have inflation spikes as Boomers and GenX hit 60-67 soon. They then have average fund size of $150k-$350k untaxed cash to blow in our economy. Supply and demand will go wild in coming years. Add to that many of them are landlords, that's serious 🤑🤑🤑🤑 and then Stage 3. And the Opposition wants to give the richest another $4,500 so they get the $9k Morrison promised at next Election. Won't that be fun to watch while the middle just gets LMITO basically. Our best chance is that they bugger off and blow their super overseas.
He also compared US interest rates to Aus for mortgages saying US rates are higher and we need to be near theirs, yet failed to mention majority of US mortgages are 30 year lower fixed rate loans. Here majority are variable so those higher rates would cripple the entire market here
So refreshing to hear from someone who won’t pull punches and sees our rates and economy for what it is. Not another house investor shill trying to sell lower rates to drive house prices back up again.
The Government certainly isn't investing in Housing, that's for sure! No new Houses built in the past 2 years yet over 1 million immigrants coming into the Country. What a great Government we have!
4.2 % unemployment.... SURE, just part time jobs, that no one can live on !! unless you have multiple jobs.. see August data >> full-time employment decreased by 3,100 to 9,979,100 people. part-time employment increased by 50,600 to 4,479,500 people.
@@Charliechorizo Only if you have a tons of debt to start with. However, if defllation is allowed to play out on a daily basis, it should not be a problem to start with. Deflation means you get more for what you earn. It means more people get to access wealth instead of just a few on the top.
@@Dismanameboi Banks need inflation because people have to take out crazy loan to buy essential item such as house, car and foods. Governments need inflation so they can wipe out the debt they accumulate.
That would result in a million people losing their homes almost overnight. It's simply not a option. People are already spending 50%~ of their incomes on housing.
This guy is the first person I’ve heard who doesn’t sound like they have their own agenda. Just calls it how it is and unbiased. Kudos, please have him on again
No agenda, but the solution of "just raise rates" simply isn't a option due to the rock and a hard place the economy is in. 7% rates would have a million people default on their loans within a year. It's simply not an option.
@@stinger15au I agree, too much emphasis is put on rate manipulation instead of actual economic production. However I don’t think cutting rates will end well either.
@williampallot6809 absolutely. This is what happens when the levers stop working. The only way out of this mess is 1) to build a Crapton of housing and home owners (which I am one) accept that their values will stay sideways for a decade. 2) some sort of backbone for price gouging. Every industry is doing it to some degree but coles/woolies are the worst. They are using their monopoly to control pricing, making Australians the highest paying people in the world for groceries
Albanese and the State Governments are continuing to spend money at record levels and go into more debt. This is causing significant inflation as opposed to the incorrect CPI figures. If the RBA was serious about inflation, rates would be above 10 percent.
I can't say i see a booming jobs market. Going by the terrible wages i see everywhere, the job market looks horrendous. Lotta desperate people taking om poorly paid second jobs, however.
Gents. Great chat. Podcasts like this need more exposure. The host does a good job at trying to break down some of the terminology for the general audience too. Keep it up. I’m subscribed now.
Michael Bordenaro does some great podcasts about the basketcase of the USA housing market. The episode he did with Adam Taggart is really interesting. We definately do not want the USA housing system here.
I love word salad. Inflation is definitely my favourite. What is inflation? When you say the word it sounds like the cost of everything is going up. Lets break it down with an apple. 100 years ago to grow an apple you'd need some horses to plow the field, multiple men to plant the apples, care for the apples, pick the apples, transport the apples and then multiple different shops to sell the apple. Now through technology and advanced techniques we use way less man power and 2 large corporations buy and sell the apples. They even got rid of the cashier and replaced them with you scanning and paying for your apple on a robot. All of these advances have drastically reduced the cost of growing an apple. The apple still needs the same sun and water combo but somehow the actual cost of that apple has INFLATED. Guess what its actually cheaper to grow an apple so how can it be inflating????? IT'S NOT. What is happening is the government and banks keep printing money with quantitative easing and fractional banking. When the print, or more common now, digitally create money. That new money has to get its value from somewhere. Money is a representation of stuff. When you increase the money without increasing the stuff the buying power of the money that is literally in your wallet goes down. Every single time they print up money they are literally reaching into your pocket and STEAL the value from your money to give value to their new money. What is happening is your money in your pocket is being DEFLATED. Thats why the apple costs more. Not because apples decided to be difficult and harder to grow, because your money LOST value. Then you guys and the traitors at the ABC say the word inflation to describe something that is going down. Word salad. Its the same as saying I'm going to inflate this tyre by letting all the air out. You're all liars and no longer believe you don't know what you're doing. You know but you choose to continue it as it's in the bank's, the governments and the super riches interest to do so. I think you're all traitors against humanity.
The economy is stuffed. The only levers fiscal and monetary policy hurt certain areas (especially the average Aussie) and reward others (companies with gov contracts) There are a lot of gov jobs being created which are a drain on production and taking resources. Infrastructure is being worn down and there are very little gov spending in areas which help economic growth like great motorways and cheap electricity.
These two guys are speaking coherently but they basically just skimmed over the grim reaper's shadow cast over Australia's entire economy - House prices. When 4 banks, successive Governments, and a cheerleading corporate media collude to impose a delirious obsession with residential dwelling, the economy sooner or later will assume atrophy.
Great interview, could listen to Mr Hogan all day, wish I could be asking questions. I don’t agree with employment, the data is behind, the last 3 to 4 months the markets changed at grassroots. In my sphere, property, construction and tradies private industry in Sydney, worked has dried up, large redundancies taking place. Feels like the 80’s. Also AI I don’t think it will be the productivity producer people are claiming as technology was. Preciously from no internet, mobile phones, emails etc is a massive step and increased in productivity. AI is not starting from such a low base
Also should add, we are all aware that the US rate cuts has less impact on discretionary spend than Australia due to the home loan structures with the US predominately 30yr fixed compared to Oz variable loans so when Mr Hogan says the US could have 3 rate cuts before it matches Oz I don’t think this is a fair comparison.
Give the GST control to the Reserve bank as another tool. 10% base that they can’t adjust, and in the range of 10-15 give control to the reserve bank, with 6 or 12 monthly meetings
“Care economy” misnomer. NDIS Uneconomic expenditure trebles and “Promised disabled productivity”benefits” disappeared. GST is a mistake as is Superannuation. Bracket creeps whilst stamp duties are another “Stealthy creepingTAX”. Bigger Government is problematic. There’s future 7% interest rates versus 4%.
I'm confused, he said job growth in Australia has been good even though most of the job growth has come from the public sector which in return "should go back into the real economy", yet says interest rates should go up? How is public sector spending not a problem? I 100% agree about his method of calculating real interest rates and they need to go up but this guys ADHD is on another level explaining his take on things
Why is no one pointing out the fact we have a two speed economy. Young people with a mortgage have low spending and are not stoking inflation, but hurt most from interest rate rises. Older people who have paid off their mortgages have lots of spare income and are looking to spend (cars, holidays, investment properties, and luxury goods) and aren't as affected by interest rate rise. All interest rate rises do, is hurt young mortgage holders and small businesses. Both of which aren't the cause of inflation. This isn't boomer bashing, this is the actual situation. We need specific policies targeting inflation. Not heavy handed leaver pulling
Exactly this. Economists like this calling for rates to rise to “fix” the economy even at the risk of recession have no clue. How about having targeted fiscal policies, immigration controls and prudential measures from APRA if the govt really want to control spending.
@@ChickityChicken that's not what we're asking for. We think the government needs to swallow bitter pills more often. And the Australian people need to be accepting of some policies like removing negative gearing, like limiting tax loop hopes for the wealthy, like properly taxing massive corporations, like making massive mining companies pay a fair price for the resources they're digging and shipping overseas.
I like his positivity about Australia's future potential, just not so confident about current jobs being replaced by AI and drones. It's 2024 and I don't yet have a flying car nor have I holidayed on the moon.
Looking at the cause of Inflation and supply chain economics interest me a HELL of a lot more than just brainlessly hiking interest rates. You can limit foreign investment in our housing market as well. BUT economics that look at WHY the price of living is going up is key. For example the price of oil has a massive impact on all parts of the supply chain (packaging and logistics). Are people eating more because they have more money ? No. Trickle down economics is bullshit. Constant growth models are bullshit. Assuming that just raising interest rates actually impacts inflation is bullshit.
Well does any one notice a issue also is that the Rates set by RBA vs the Lenders has a high cap than they used to before 2008 the % difference was much lower. Also comparing the average rates in America is 6.33% and Australia is 6.77%
Most foreign small business in construction, are importing labour and are not interested in training Aussies, they are foreign people setting up companies bringing in their own countrymen to do the construction work and the immigration lawyers are in on it making up jobs that are on the unskilled whilst they are doing a completely different job that is not on the skilled shortage list.
Of course there’s not enough teachers, nurses and police people. Why would anyone bother going to uni to take up these lower middle income professions knowing they will NEVER own a home. Not ever. The more young people connect the dots, the more will realise that pursuing almost any career is futile unless you’re going to inherit a property to live in. We are at risk of a large number of young people giving up. You don’t need to climb the corporate ladder to spend half the year on a beach in SE Asia. (Which is many will conclude is their best option). I don’t think it’s an overstatement to say that if property ownership is completely out of reach now, then it is only a matter of time before social cohesion collapses completely, and with it, our society as we know it.
The price gouging is out of control, spending will plummet, small business will close, homelessness will increase. I’m down to one meal a day just to pay the mortgage, elec, gas, fuel, rego, ctp and home insurances. I’m about to gut off the gas and electricity.
I never worry about things which I cannot change. Losing money does not mean much to me, because I have never had much. Some people seem to become really frantic about the likelihood of poverty. I have about 9 people in my life who love me. I will never be a loser.
Australia has a massive under employment, if you judge our unemployment rate as they did years ago it would be above 10%. People just do not have full time jobs, unless of course you are with the public service and these are the people who have guaranteed job security with salaries well above the private sector. All governments but especially the Labor governments reduce unemployment by increasing non productive jobs. And Australia has something like a $2,8 trillion dollar overseas debt which is just behind China and about tenth in the world. We use to have minimal overseas debt. As well as unfunded public service debt now and in the future as well as personal debt. I could go on but we are in deep poo poo.
Rising interest rates give more money to the people who are spending up. I agree with Wayne Swan, will interest rate increases drop the price of Gas? Food? Insurance? NO, because they are all ESSENTIAL, which is why the market powers can keep increasing prices.
Whoever thought that the field of economics deserved so much influence in making critical decisions about the lives of whole communities needs their head read. These guys just layer assumption on top of assumption, explain things away with historical references with anecdotes that make assumption upon assumption of what happened. It's an assumption house of cards with zero actual merit other than the power structures that economists have managed to create for themselves. Try even asking an economist why higher inflation is bad - take their assumption filled answer and ask why a few times and unless you buy into the story or are yourself indoctrinated you'll see that every argument unravels.
To think the rest of the worlds problems wont affect us shortly is ludacris we are a global economony with a global derivatives market that is based around under the table deals between banks. The data that every reserve bank is 1. incorrect 2. lagging and 3. reactive to the bond market
Australia's inflation problem is a government problem because the government is wasting money on non-productive renewable energy projects that require subsidies that are predominantly paid by taxpayers and pensioners who can't afford them.
Get this man on more regularly. He doesn't mince his words & everything he says is factual & nonbiast. Thankyou sir.
I like Warren… but when he says the Fed Reserve can cut four times and they have their cash rate higher than us.. why doesn’t he talk about the mortgages since the US have 30 year mortgages fixed for 1% , whilst in Australia our mortgages are 4 times larger on variable rate s
@@JosephGCamponot all are in the usa. And all loans are effected. Yes sadly it appears he is correct rates still need to go up 2 more times as gee in the last week items at Woolies some have gone up 20% in one week !!!
Home ownership has already been destroyed in this country. It's disgusting our gov is so incompetent.
@@JosephGCamponot all have 30 year morgages plus rates effect credit cards etc not just home loans so aussies are still spending heaps and Labor’s immigration is pushing inflation and wont be stopping in the next year or 2 as all these immigrants take time to settle they just dont jump off the plane with home and decked out 😂- thank Labor’s immigration numbers for this problem
Make him the treasurer
Finally a real economist!
Who didn’t call out the problem in the government manufacturing all these jobs! It’s fake. We don’t needs rates to go up, we need to stop immigration and government spending to cure inflation. Even if we enter an official recession.
I’m in your camp, Mr. Hogan. Thanks for pointing out that inflation is insidious and destructive. I was a young teenager when annual inflation hit over 2400% (not a typo) in Brazil in 1993. I’ve seen the nefarious social consequences of inflation in society. 30 years on and the effects still linger. Hence why I moved to Australia 17 years ago. Gut wrenching to see the beautiful country I came to love and call home going down the same path Brazil went decades ago. The same failed policies. Polies and central bankers are wrecking this great country. And most people say nothing! That’s what’s really disturbing. The level of complacency.
Well said!
Exactly 💯.
Typical boomer
@@NatP-qt1df i’m not a boomer, and I don’t totally blame them for doing what made sense for themselves and their families. Personally, I put a lot more blame on politicians past and present who created and implemented the policies of which boomers happen to be main beneficiaries.
uSA is coming in fast to Australia indebting us to America for military
Fantastic interview, love hearing from Warren. Amazed to see him address the elephant in the room about most job creation being Government jobs while the private sector is getting smashed.
💯
Smashed and taxed!
Smashed and taxed to pay for their expansion in jobs and pay rises.
I’m closing in on my retirement and I’d like to move from Collinsville to a warmer climate, but the prices on homes are stupidly ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways?
Considering the present situation, diversifying by shifting investments from real estate to financial markets or gold is recommended, despite potential future home price drops. Given prevailing mortgage rates and economic uncertainty, this move is prudent, particularly due to stricter mortgage regulations. Seeking advice from a knowledgeable independent financial advisor is advisable for those seeking guidance.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
Can you provide instructions on how to contact your advisor? I'm experiencing erosion of my funds due to inflation and looking for a more profitable investment strategy to make better use of them.
‘’Marisa Michelle Litwinsky’’ is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thank you for this tip , I must say Marisa, appears to be quite knowledgeable. After coming across her webpage, I thoroughly went through her resume, and I must say, it was quite impressive. I reached out to her, and I have booked a session with her.
Everyone knows there's more to inflation than just interest rates but the government doesn't care to address them as it doesn't fit their agenda
So impressed with Warren. Now here's a guest who knows what his talking about, and not yet another property price spruiker.
More of Warren Hogan... finally a real truth
Out of touch if it is believed interest rate hikes will reduce costs like insurance premiums, food, groceries, fuel, or rent. It’s a vicious cycle: raising rates drives up rent, which is a key component of inflation!! They’ve raised rates 13 times, significantly affecting not only those with large mortgages but also small businesses and consumer spending. Australians are particularly vulnerable because we don’t have the option of 30-year fixed rates like USA. This inflation isn’t just demand-driven; corporate greed and lack of competition are playing a major role, and corporations are profiting massively from the situation.
Thanks Mark for having Warren on his the first honest finance guy I’ve heard in a long time I’m sick of the propaganda that you hear from the TV & radio stations with guys that have their own self interest.
What about multinationals like Santos not being taxed.
Freeloading.
Including our infrastructure!
All our resources!
The risk to Australia has always been an external economic shock . Last time we had China trade as the buffer , this time we have no one and our personal debt levels are exponential!
Interest rates aren’t impacting people like it used to, we need a stop in government spending and immigration. If rates go up they’ll just keep spending more to ‘hide’ a recession. That’s the danger.
Jim Chalmers is so obsessed with avoiding a recession on paper that he is sacrificing the future of australia, and it seems driven by his own ego and legacy that he wants to leave. The ironic thing is that people are seeing through it and he will be remembered as the treasurer that sacrificed the economy for political gain. It's so frustrating that after the covid pandemic, the government again fumbles and makes the economy worse and it's so avoidable and self inflicted.
1) what specifically is he doing that is destroying the future of the country? Genuine question.
2) What did previous treasurers do that was any different?
Exactly what is he doing that every previous govt treasurer hasn't done? Seriously
Warren hogan is a fantastic economist. Love his work
Just took 40min to say "we are screwed"
I learned a lot about how this place runs and what is happening and I totally agree. Thank You.
Warren is out of touch!? Those jobs created were mainly in the public sector, not private. Private sector has been in decline. Consumer spending is in the toilet. What good would more rises do? We already had 13 in a row, RBA is out of buttons to push! Gov policy needs to change if anything to combat inflation.
UPDATE 19/09: The Fed have just cut the cash rate by 50 basis points. That is the biggest single cut In 16 years. Australias unemployment remains steady at 4.2%, which is quite remarkable 🤯.
Not to mention the private people pay for the public jobs. It's a circular economy that ends up with less in the private pocket
100%! There's other factors in the governments hands which are the real reason for inflation. Of course he will be biased, he's a banker
@fatgim we've had 13 rate rises because the rates were too low to start with and we had an economy out of control, people buying houses that should never have, rates are still far too low and the reason why inflation is still too high, our rates are lower than every other country. Any other time in history where we've had so many rate rises house prices crashed, but they've risen because migration is also out of control
I think he is, unfortunately.
@stevemartin9589 Lots of different views on this, but I disagree that rates need to go higher. We had 13 in a row and house prices rose. 2 more aint going to have a significant impact on house prices.Consumer spending has been crushed already and the economy is going backwards. Gov spending and employment in the public sector needs to be reigned in. Interest rates don't Impact the population equally. Time for the federal government to do some of the lifting. Supply and demand is the biggest driver for house prices, making money supply tighter is not going to incentivise new builds!!
Fantastic - thanks for this Mark 👍
Thank you. Jim is quick to blame the RBA, but then gives $300 to every household in Australia and I would say a majority don't need it and $325 to every business to help with their power bill. People on $150k pa or more don't need $300 off their power bill and companies making $50k profit a year or more don't need $325. They are giving away $3,000,000,000 just there. I am sure we could have had the same assistance effect with around $800m. STOP giving away money Jim and audit more people involved with the NDIS. Reduce the limits on getting the pension, people with $1.4m in the bank don't need the pension.
he's giving away money as a deliberate policy. he basically said that he is bloating the public sector to boost gdp figures. and then he gets angry at the rba for even suggesting at hiking rates to counter his inflationary policy. it's ridiculous.
@@womp6338 TOTALLY Agree. We need to cut the spending ASAP.
Political Vote grab that is shameful. Politics over people??? Vote wisely🎉🎉🎉🎉🎉🎉🎉
Hi, the rest of the world has higher unemployment rates and higher interest rates and you interpreted that as Jim Chalmers has failed - weird take but good for you 🥴
@@tms9790 I am not referring to the unemployment rate, I am talking about the unnecessary cash hand outs to high income earners and businesses making descent profits. This is just throwing money away and fuelling inflation, not to mention could be used to reduce our debt.
Average house in the US is $250,000 and most US citizens have 30 year loans @ 2% interest fixed 🤷 The US comparison is nonsense.
All this job creation is low value jobs. And walk around Sydney and see the number of gig economy food delivery people sleeping in the streets. These jobs aren't creating demand for housing.
And AI cool aid. AI is a bubble. 90% hype.
I fear you’re right. He talks glowingly about opening up and deregulating the economy and labour market, and fair enough, I don’t doubt these reforms have improved the broader economy and many people’s lives, but in some important ways it has also helped create many of the conditions that have trapped us working class in poverty. Sham contracting, underpayment, insecure work, underemployment have become increasingly common in the last 20 years. And yes that’s life in a capitalist economy to some degree, but we want to be very careful not to create to many of these types of jobs. Otherwise we’ll just see a further worsening of inequity and political discontent
Right! The guy is delusional. The talk of 'an open and free economy' doesn't align with the current geopolitical environment.
Orchestrated economic slowdown and currency debasement supporting decoupling and protectionism.
This guy is delulu...
I’m struggling with Warrens logic. On one hand he says at 6:09 government spending doesn’t matter because it’s income into the economy. Yet he calls for further rate hikes to slow inflation. As an economist the key driver of inflation is government spending so why not just call for a slashing of our public spending and reduction of bureaucracy. I remember when RBA chairs use to call governments out for driving inflation. Now they get the blame and say nothing. Not so independent it seems.
Exactly!!!
💯 agree @ricecrash...Hogan. "They are creating Gov jobs - but it doesn't actually matter"... Wrong. Classic Keynesian falsehood. These are unproductive jobs. In the end taxpayers have to pay these salaries. A healthy economy is growing productive jobs...
That and corporate price gouging #colesworth
Moving out of the "emergency rate settings" is around 6%. But I'm guessing that the RBA is looking at the $80bn Investor loans written since Jan-Aug 2024 as "data" that the interest can't change because it's "equity mate" and "it's yours and it's super". The Purpose of Superannuation Report is overdue it's public release. The Aged Care Reform hasn't scared anyone yet. But putting the superannuation jeanie back in the bottle is going to be necessary. Superannuation is still a relatively new phenomenon and our economy still doesn't understand it. It either needs to be shutdown or preserved till 67, otherwise we are going to have inflation spikes as Boomers and GenX hit 60-67 soon. They then have average fund size of $150k-$350k untaxed cash to blow in our economy. Supply and demand will go wild in coming years. Add to that many of them are landlords, that's serious 🤑🤑🤑🤑 and then Stage 3. And the Opposition wants to give the richest another $4,500 so they get the $9k Morrison promised at next Election. Won't that be fun to watch while the middle just gets LMITO basically. Our best chance is that they bugger off and blow their super overseas.
He also compared US interest rates to Aus for mortgages saying US rates are higher and we need to be near theirs, yet failed to mention majority of US mortgages are 30 year lower fixed rate loans. Here majority are variable so those higher rates would cripple the entire market here
So refreshing to hear from someone who won’t pull punches and sees our rates and economy for what it is. Not another house investor shill trying to sell lower rates to drive house prices back up again.
The Government certainly isn't investing in Housing, that's for sure! No new Houses built in the past 2 years yet over 1 million immigrants coming into the Country. What a great Government we have!
What kind of government would destroy an economy to protect house prices answer an Australian government.
4.2 % unemployment.... SURE, just part time jobs, that no one can live on !! unless you have multiple jobs.. see August data >>
full-time employment decreased by 3,100 to 9,979,100 people.
part-time employment increased by 50,600 to 4,479,500 people.
Deflation is what we need. Only banks and governments need inflation.
Why
With a currency that wasn’t debased, deflation would be the norm
Corporations and the 1% love inflation
@@Charliechorizo Only if you have a tons of debt to start with. However, if defllation is allowed to play out on a daily basis, it should not be a problem to start with. Deflation means you get more for what you earn. It means more people get to access wealth instead of just a few on the top.
@@Dismanameboi Banks need inflation because people have to take out crazy loan to buy essential item such as house, car and foods. Governments need inflation so they can wipe out the debt they accumulate.
Says it how it is! Awesome interview 🎉
THIS IS WHY WE NEED 8% interest rates ASAP TO FIX THIS FIX IT NOW FIX IT ASAP not let's see what happens
That would result in a million people losing their homes almost overnight.
It's simply not a option.
People are already spending 50%~ of their incomes on housing.
Fantastic! Thank you for this! A robust conversation that I can genuinely learn from. I'm hooked, can't wait to listen to more!
This guy is the first person I’ve heard who doesn’t sound like they have their own agenda. Just calls it how it is and unbiased. Kudos, please have him on again
No agenda, but the solution of "just raise rates" simply isn't a option due to the rock and a hard place the economy is in.
7% rates would have a million people default on their loans within a year. It's simply not an option.
@@stinger15au I agree, too much emphasis is put on rate manipulation instead of actual economic production. However I don’t think cutting rates will end well either.
@williampallot6809 absolutely.
This is what happens when the levers stop working.
The only way out of this mess is
1) to build a Crapton of housing and home owners (which I am one) accept that their values will stay sideways for a decade.
2) some sort of backbone for price gouging. Every industry is doing it to some degree but coles/woolies are the worst. They are using their monopoly to control pricing, making Australians the highest paying people in the world for groceries
If you only have 1 house the value dosnt matter@stinger15au
Really heard the truth! Warren should be the treasurer!!
Albanese and the State Governments are continuing to spend money at record levels and go into more debt. This is causing significant inflation as opposed to the incorrect CPI figures. If the RBA was serious about inflation, rates would be above 10 percent.
That was the most interesting honest interview I have seen from an economist in history!
Keep up the great work Mark, a necessary podcast for Australia
This is the most knowledgeable and erudite conversation I have seen on the failing Australian economy and its possible partial remedies.
Totally agree. But hasn't Mark Bouris been very vocal in his criticism of the RBA for not reducing interest rates?
I can't say i see a booming jobs market. Going by the terrible wages i see everywhere, the job market looks horrendous. Lotta desperate people taking om poorly paid second jobs, however.
Thanks for getting this bloke on. Great to not get those clickbate characters that some have on.
Gents. Great chat. Podcasts like this need more exposure. The host does a good job at trying to break down some of the terminology for the general audience too. Keep it up. I’m subscribed now.
Such a good interview, I watched it twice. Warren Hogan would have to be to be one of the best economists in this country.
USA has 30year fixed rates at 2% for majority of their population. You can’t compare to Australia.
Far from majority
We should be having 30 year fixed ffs
@donman92 we did before Keating. Ours was 9.5% fixed for the full 25 years. We never had this up and down %.
Michael Bordenaro does some great podcasts about the basketcase of the USA housing market. The episode he did with Adam Taggart is really interesting. We definately do not want the USA housing system here.
@@donman92lol you do know why it will never happen here right ?.
What a fantastic episonde, thank you for the insight.
First ep I’ve watched and it was incredible! Great work and look forward to watching future eps!
I love word salad. Inflation is definitely my favourite. What is inflation? When you say the word it sounds like the cost of everything is going up. Lets break it down with an apple. 100 years ago to grow an apple you'd need some horses to plow the field, multiple men to plant the apples, care for the apples, pick the apples, transport the apples and then multiple different shops to sell the apple. Now through technology and advanced techniques we use way less man power and 2 large corporations buy and sell the apples. They even got rid of the cashier and replaced them with you scanning and paying for your apple on a robot. All of these advances have drastically reduced the cost of growing an apple. The apple still needs the same sun and water combo but somehow the actual cost of that apple has INFLATED. Guess what its actually cheaper to grow an apple so how can it be inflating????? IT'S NOT. What is happening is the government and banks keep printing money with quantitative easing and fractional banking. When the print, or more common now, digitally create money. That new money has to get its value from somewhere. Money is a representation of stuff. When you increase the money without increasing the stuff the buying power of the money that is literally in your wallet goes down. Every single time they print up money they are literally reaching into your pocket and STEAL the value from your money to give value to their new money. What is happening is your money in your pocket is being DEFLATED. Thats why the apple costs more. Not because apples decided to be difficult and harder to grow, because your money LOST value. Then you guys and the traitors at the ABC say the word inflation to describe something that is going down. Word salad. Its the same as saying I'm going to inflate this tyre by letting all the air out. You're all liars and no longer believe you don't know what you're doing. You know but you choose to continue it as it's in the bank's, the governments and the super riches interest to do so. I think you're all traitors against humanity.
thats a prescient call. its clear that inflation is still too high and the rba has been well behind the curve
Excellent thank you compulsory listening
That Warren is spot on.
Excellent discussion
The economy is stuffed. The only levers fiscal and monetary policy hurt certain areas (especially the average Aussie) and reward others (companies with gov contracts) There are a lot of gov jobs being created which are a drain on production and taking resources. Infrastructure is being worn down and there are very little gov spending in areas which help economic growth like great motorways and cheap electricity.
Excellent interview.
US cut rates, Aus is next.
All these rate rises you want are not going to happen
These two guys are speaking coherently but they basically just skimmed over the grim reaper's shadow cast over Australia's entire economy - House prices. When 4 banks, successive Governments, and a cheerleading corporate media collude to impose a delirious obsession with residential dwelling, the economy sooner or later will assume atrophy.
Bring home prices DOWN
Great interview, could listen to Mr Hogan all day, wish I could be asking questions.
I don’t agree with employment, the data is behind, the last 3 to 4 months the markets changed at grassroots. In my sphere, property, construction and tradies private industry in Sydney, worked has dried up, large redundancies taking place. Feels like the 80’s.
Also AI I don’t think it will be the productivity producer people are claiming as technology was.
Preciously from no internet, mobile phones, emails etc is a massive step and increased in productivity. AI is not starting from such a low base
Also should add, we are all aware that the US rate cuts has less impact on discretionary spend than Australia due to the home loan structures with the US predominately 30yr fixed compared to Oz variable loans so when Mr Hogan says the US could have 3 rate cuts before it matches Oz I don’t think this is a fair comparison.
This bloke deserves way more airtime than kouk.
Give the GST control to the Reserve bank as another tool. 10% base that they can’t adjust, and in the range of 10-15 give control to the reserve bank, with 6 or 12 monthly meetings
More! More!! This was wayyyy too short!
everyone should listen to this podcast. Warren makes so much sense. Cuts through the spin from the govt
Worth a careful listen, thanks.
Too late mate got a third job unemployment numbers are bullshit
ALL government stats are bs.
This guy should be giving our treasurer some lessons in economics
Makes a lot of sense
“Care economy” misnomer. NDIS Uneconomic expenditure trebles and “Promised disabled productivity”benefits” disappeared. GST is a mistake as is Superannuation. Bracket creeps whilst stamp duties are another “Stealthy creepingTAX”. Bigger Government is problematic. There’s future 7% interest rates versus 4%.
Warren Hogan - Brilliant!
Good on you mate!
The headline says it all - wealth creation via currency debasement
I'm confused, he said job growth in Australia has been good even though most of the job growth has come from the public sector which in return "should go back into the real economy", yet says interest rates should go up?
How is public sector spending not a problem?
I 100% agree about his method of calculating real interest rates and they need to go up but this guys ADHD is on another level explaining his take on things
Why is no one pointing out the fact we have a two speed economy. Young people with a mortgage have low spending and are not stoking inflation, but hurt most from interest rate rises.
Older people who have paid off their mortgages have lots of spare income and are looking to spend (cars, holidays, investment properties, and luxury goods) and aren't as affected by interest rate rise.
All interest rate rises do, is hurt young mortgage holders and small businesses. Both of which aren't the cause of inflation.
This isn't boomer bashing, this is the actual situation.
We need specific policies targeting inflation. Not heavy handed leaver pulling
Exactly this. Economists like this calling for rates to rise to “fix” the economy even at the risk of recession have no clue. How about having targeted fiscal policies, immigration controls and prudential measures from APRA if the govt really want to control spending.
Fair enough but why should i get less than 5% on my savings?
@@ChickityChicken that's not what we're asking for. We think the government needs to swallow bitter pills more often. And the Australian people need to be accepting of some policies like removing negative gearing, like limiting tax loop hopes for the wealthy, like properly taxing massive corporations, like making massive mining companies pay a fair price for the resources they're digging and shipping overseas.
Great conversation
I wonder why a banker would want rates to go up !
Great interview
Get him back next month
Thankyou
The most arrogant thing in the world is thinking you can centrally plan interest rates.
I like his positivity about Australia's future potential, just not so confident about current jobs being replaced by AI and drones. It's 2024 and I don't yet have a flying car nor have I holidayed on the moon.
I clapped at the end what a great convo
He needs to do a show on the news to educate Australians in simple economics.
And also educate the news anchors who constantly sprout nonsense.
For the Mar 2024 quarter, the governments contribution to GDP growth was more than national GDP growth …
Pleased to see he thinks some others guests are a joke - Kouk, Panos.
Why does the monetary system have to be based around paying interest and to who does it go??
Looking at the cause of Inflation and supply chain economics interest me a HELL of a lot more than just brainlessly hiking interest rates. You can limit foreign investment in our housing market as well. BUT economics that look at WHY the price of living is going up is key. For example the price of oil has a massive impact on all parts of the supply chain (packaging and logistics). Are people eating more because they have more money ? No. Trickle down economics is bullshit. Constant growth models are bullshit. Assuming that just raising interest rates actually impacts inflation is bullshit.
Well does any one notice a issue also is that the Rates set by RBA vs the Lenders has a high cap than they used to before 2008 the % difference was much lower. Also comparing the average rates in America is 6.33% and Australia is 6.77%
Most foreign small business in construction, are importing labour and are not interested in training Aussies, they are foreign people setting up companies bringing in their own countrymen to do the construction work and the immigration lawyers are in on it making up jobs that are on the unskilled whilst they are doing a completely different job that is not on the skilled shortage list.
Of course there’s not enough teachers, nurses and police people. Why would anyone bother going to uni to take up these lower middle income professions knowing they will NEVER own a home. Not ever. The more young people connect the dots, the more will realise that pursuing almost any career is futile unless you’re going to inherit a property to live in. We are at risk of a large number of young people giving up. You don’t need to climb the corporate ladder to spend half the year on a beach in SE Asia. (Which is many will conclude is their best option). I don’t think it’s an overstatement to say that if property ownership is completely out of reach now, then it is only a matter of time before social cohesion collapses completely, and with it, our society as we know it.
The price gouging is out of control, spending will plummet, small business will close, homelessness will increase. I’m down to one meal a day just to pay the mortgage, elec, gas, fuel, rego, ctp and home insurances. I’m about to gut off the gas and electricity.
Variable GST? Great idea. But the banks will hate it.
How many jobs that have been created are related to Bill Shorten's NDIS?
It's a sill fantasy, but imagine if we had some as knowledgable, clear thinking and genuine as Warren as our Treasurer or Shadow?
I never worry about things which I cannot change. Losing money does not mean much to me, because I have never had much. Some people seem to become really frantic about the likelihood of poverty. I have about 9 people in my life who love me. I will never be a loser.
Australia has a massive under employment, if you judge our unemployment rate as they did years ago it would be above 10%. People just do not have full time jobs, unless of course you are with the public service and these are the people who have guaranteed job security with salaries well above the private sector. All governments but especially the Labor governments reduce unemployment by increasing non productive jobs. And Australia has something like a $2,8 trillion dollar overseas debt which is just behind China and about tenth in the world. We use to have minimal overseas debt. As well as unfunded public service debt now and in the future as well as personal debt. I could go on but we are in deep poo poo.
If rates are cut, watch inflation soar..!
Rising interest rates give more money to the people who are spending up. I agree with Wayne Swan, will interest rate increases drop the price of Gas? Food? Insurance? NO, because they are all ESSENTIAL, which is why the market powers can keep increasing prices.
Whoever thought that the field of economics deserved so much influence in making critical decisions about the lives of whole communities needs their head read. These guys just layer assumption on top of assumption, explain things away with historical references with anecdotes that make assumption upon assumption of what happened. It's an assumption house of cards with zero actual merit other than the power structures that economists have managed to create for themselves. Try even asking an economist why higher inflation is bad - take their assumption filled answer and ask why a few times and unless you buy into the story or are yourself indoctrinated you'll see that every argument unravels.
The greatest millstone around our necks is the fed reserve.
What the RBA is scared of, is exactly what we need. Only a deep recession will fix inflation at this point.
Are you sure you haven’t mixed up the ‘24 data with the ‘23 data?
To think the rest of the worlds problems wont affect us shortly is ludacris we are a global economony with a global derivatives market that is based around under the table deals between banks. The data that every reserve bank is
1. incorrect
2. lagging and
3. reactive to the bond market
Australia's inflation problem is a government problem because the government is wasting money on non-productive renewable energy projects that require subsidies that are predominantly paid by taxpayers and pensioners who can't afford them.
We need Mr Hogan not Jim Chalmers he understands
Australia is to expensive no one should be broke in this day and age
RBA has pinned the AUD to the USD a sinking ship down 30 percent in 12 months