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Fellow Aussies: RBA boss warns 'job losses sign of the times' and ' signal of worse to come'

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posted on Aug, 27 2011 @ 08:19 PM
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Reserve Bank boss warns of further job cuts


RESERVE Bank boss Glenn Stevens has issued a chilling warning to workers: job losses are not only a sign of the times, but a signal of worse still to come.

Reeling from a massive unemployment carve up in the manufacturing industry, the RBA governor gave cold comfort to families whose loved ones are now out of work, declaring: "I'm sorry, but that is just the reality."

BlueScope Steel devastated more than 1000 workers when it announced a restructure after posting losses of more than $1 billion. The news followed similar announcements by Qantas, OneSteel and Westpac, and brought the official number of job losses for the month to 9000, although the true figure is likely to be higher.

Mr Stevens warned the global economy had significantly worsened in recent months and that restructuring in various sectors couldn't be helped.

"Some parts of the economy will shrink while others grow. I wish I could say we had a way of avoiding that; I don't think we do . . . We don't have an instrument that can prevent these shifts in the structure of the economy from occurring. I'm sorry but that is just the reality," he said.

Economists claim job losses already announced are just the tip of the iceberg and that the figure could jump drastically - reaching 100,000 by Christmas.



Well you could start with lowering the interest rates, by far the highest in the developed world, before you and your board wait until its too late and then go into panic mode and drop them too fast and low like you did in circa 2008. Oh but that's right, we have the beast of inflation hanging over the Australian economy like a menacing hurricane.

Well here it is fellow Aussies. The RBA chief telling it how it is, and that the Australian economy is finally getting dragged into the mess of the broader global economy. And don't count on a miracle from China though for the time being, it is a big help, this won't last.

Clearly the Federal government won't be able to accomplish anything and to flag providing stimulus for the ailing steel industry is going to prove a slippery slope that will do little other than put a band aid on a gaping wound, even while other industries go into similar downward directions.
edit on 27-8-2011 by surrealist because: (no reason given)




posted on Aug, 28 2011 @ 04:26 AM
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Fellow Aussie replying here.
Would be great to drop interest rates, but that isn't the problem; the lack of finances for the banks is.

The banks have been crowing about their reduction in foreign borrowings this year.
They owe a gazillion overseas and trying to refinance that would be interesting "Who's up for mortgage backed securities in the most overpriced real estate market in the world?"
So if the Government keeps interest rates high, money floods in and they can reduce foreign borrowings and not be hung out to dry on the open markets when they have to refinance borrowings.

If rates drop, the money flows out, the banks have to refinance their borrowings on the open market and thats when everyone realises the Australian property market is dodgy and the game is over.

And the Government then has to take on the banks' debts as they cannot refinance them, and like everyone else we are left carrying the can for their greed.

Have a look at the term deposit rates the banks are offering; it gives the game away about how they need to lock in deposits to reduce their foreign borrowings. Westpac, less than 12 months, 3.75%. Longer than 12 months, 5.8%.

The question is; why are they chasing money at such interest rates when theoretically they can borrow at lower rates overseas if they are as healthy as they claim to be?


edit on 28-8-2011 by Colbomoose because: Grammatical errors



posted on Aug, 28 2011 @ 04:33 AM
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reply to post by surrealist
 


The RBA should NOT be controlling Australia..

They are private, just like the US Fed..

Why the hell do we let them do it??



posted on Aug, 28 2011 @ 04:56 AM
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Want to save jobs?

Devalue the dollar.

Australia's economy is based almost entirely on exports, no one wants to buy products from us at a ridiculously high price when it can be bought elsewhere for a much lower price.

The boss of the RBA is right, many more jobs will be lost whilst the dollar is high.

The question is, will the government take the steps to drop the dollar to save jobs?



posted on Aug, 28 2011 @ 04:41 PM
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reply to post by Chadwickus
 


Interest rates along with high house prices are killing the home market..

Many are still loosing their homes with payments going through the roof..

Lowering interest rates would devalue the $$$ so I don't see the issue..



posted on Aug, 28 2011 @ 04:49 PM
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A whinging Poms point of view

They will cut your wages and put many on the dole to ensure you do not ask for more any time soon and raid your pensions. You will then notice Bentley coupes becoming more common

That is the way it has gone with us prisoners of mother England.

Did you know caviar is back on the menu? ........ For a few



posted on Aug, 29 2011 @ 01:02 AM
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reply to post by backinblack
 


Dropping interest rates shouldn't be an issue and if it devalues the dollar then even better.

I can't understand why the gov and the RBA don't do something about it now, they can save jobs by being proactive.

And then there's the unions, god I hate unions, they get all the clueless muppets on side and make things worse.

I don't blame Bluescope and QANTAS and whoever else for reducing their presence in Australia, it's either that or go belly up completely.

Big off-shore players are taking their business elsewhere now too.

It's not looking pretty.



posted on Aug, 29 2011 @ 04:55 AM
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reply to post by Chadwickus
 


The Government is too busy spending up a huge deficit..
I don't think most realize just how much this hung Government is spending.



posted on Aug, 29 2011 @ 04:59 AM
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reply to post by backinblack
 


You'll shoot me for saying it but if they wanna spend it...print it.

Another way to devalue the dollar!




posted on Aug, 29 2011 @ 05:05 AM
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Originally posted by Chadwickus
reply to post by backinblack
 


You'll shoot me for saying it but if they wanna spend it...print it.

Another way to devalue the dollar!



I'd be all for it if only they could spend wisely..

But alas, we know it will be the usual scam..

Huge amounts lost to bureaucracy and a job created for every $million spent if we're lucky.



posted on Aug, 29 2011 @ 05:07 AM
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reply to post by backinblack
 


They can throw some my way.

No one wants a landscaper when money is tight...



ETA:

Just had a brainwave, print the $2-4 billion needed to bring in the infrastructure for renewable energy, this will negate the need to introduce the carbon tax, it will also devalue the dollar which saves jobs and keeps our export revenue up.

So simple!





edit on 29/8/11 by Chadwickus because: (no reason given)



posted on Aug, 29 2011 @ 04:47 PM
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i read the other day (will try to find source) that if the carbon tax goes ahead, we will be sending 57 BILLION dollars a year overseas to buy carbon credits. if this is true, and i think manufacturing is going by the way side.....how do we survive as a country????

i was speaking to my 79y/o grandmother the other day, and she was talking about years ago when if you didnt have a job, you would just walk down a street with factories and you would have a job by the end of the street. those factories are all but gone.



posted on Aug, 29 2011 @ 05:12 PM
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reply to post by bellagirl
 


Your grandmother is correct. I can recall even just 20 years ago how much easier it was to get a low-skilled job and they still paid reasonably well. Me and a couple of mates got a tip that a transporting co was looking for a few workers at Lidcombe in Sydney, so we just walked up and I hit the bell and through the window said "Want any workers or what mate?!" Everyone had a laugh at my unique approach to getting a job and they hired about three of us that day.
Seriously things much different these days. My 20 yo nephew is doing okay but that's only cos his mother works in the hospitality industry, and he like his mother, just does bar and gaming. He has his HSC and it's not a job that allows for much, both of them live at home with my folks as they wouldn't be able to afford the rent or mortgage at Sydney prices.

As for lowering interest rates, they could be lowered just 25 basis points initially. This would be bearish on the AUD, but in a way, I think if they keep them where they are at, it will only worsen those aspects of the economy not related to mining or otherwise in proximity, and sooner or later they will likely have to make even bigger drops in the rates because there will be escalating unemployment and failing businesses. Oh well.



posted on Aug, 30 2011 @ 12:02 AM
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thanks for your reply. i just dont get what goes on these days. i heard that the chinese that are buying up the mines are bringing in their own workers and also bringing all the steel for railway lines etc from china...this just doesnt make sense????



posted on Aug, 30 2011 @ 07:13 AM
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Originally posted by Chadwickus
Want to save jobs?

Devalue the dollar.

Australia's economy is based almost entirely on exports, no one wants to buy products from us at a ridiculously high price when it can be bought elsewhere for a much lower price.

The boss of the RBA is right, many more jobs will be lost whilst the dollar is high.

The question is, will the government take the steps to drop the dollar to save jobs?



Devalue the dollar?

You recommended devaluation? The crime of stealing from those who have tried to save all their lives and store 'value' for their old age? You must be music to the governments ears (or working for the propaganda arm thereof).




edit on 30-8-2011 by Pentothal because: (no reason given)



posted on Aug, 30 2011 @ 07:43 AM
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reply to post by Pentothal
 


I think what he meant was devalue the Australian dollar against other currencies as it is high currently, and this is having some significant adverse impact on a few of our industries, notably those that rely on exports and tourism, as well as a lot of retail as customers prefer to shop for cheaper merchandise overseas. This will help save jobs that would otherwise be lost because of falling sales and profits, which is what Australia is seeing now.



posted on Aug, 30 2011 @ 07:50 AM
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I love Australia. I've been there twice for a month each time. I even considered moving there but it's too expensive.
I'm not bashing Australia here, I really liked the people I met there, you're a hardy bunch.
But this is what I noticed when I was there.
Your minimum wage is twice what ours is in the US. You can't find a decent place to rent in the Brisane suburbs for less then $325 per WEEK. Beer is way too expensive, $16 for a 6 pack of Tooheys, (I can buy it here in the states for $10 a 6 pack, why is that?). A loaf of bread is over $3.
A small 3 bedrooom house is going to cost over $300,000, I don't understand how the young people can afford these.
Why did Gillard let the Greens push her into implementing the carbon tax, that is going to be a huge drain on your economy.
As you pointed out the interest rates are way too high, they need to come down more in line with the rest of the world.
You do have a better handle on your immigration problems than we do.
Your beaches are the best in the world!!!!!
I wish the best for you guys down under, especially with that carbon tax staring you in the face. That's going to cost you even more jobs.



posted on Aug, 30 2011 @ 09:00 AM
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reply to post by surrealist
 


You are right... but the principle is the same. Devaluation destroys (or steals) peoples 'value' that they have stored. It takes from those who have been careful and tried to save. Most people do not even understand this. They just accept it as 'one of those things'. The ignorant will be destroyed in the coming few months/years. So sad. Transfer the value represented by fiat into Gold , Silver and any other 'real' stores of value while the fiat still has some value.

When things get bad again (as they are about to) the U.S. Dollar will actually climb as people world wide run to what they perceive to be safety. This is the time to move. When they print again they will dilute the purchasing power again and the fall will be greater. This will happen again and again until people realise that their money is not being stolen... the amounts in their bank account remain the same... but the purchasing power that their 'money' represents is being taken away. Prices for food, fuel, clothing etc will rise faster and faster.
edit on 30-8-2011 by Pentothal because: (no reason given)



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