RBA’s rate rise gives free billions to Aussie banks – Michael West

‘’There are two ways to reside in a house. Rent the house from a landlord or rent the money from a bank and become your own landlord. What happens when these prices are out of whack prices will change in the housing market to make them equal again. So if you put interest rates up, the cost of renting money goes up compared to the cost of renting a house and to make them equal again the price of the house must drop”. So any way you cut it, the cost of residing in a house is likely to remain the same before and after these interest rate rises.

Higher interest rates are on their way

Further interest rate rises are expected, with Governor Lowe saying that: “The Board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time. This will require a further lift in interest rates over the period ahead.” With these rises, banks with billions in their exchange settlement accounts will see higher and higher risk-free profits.

Source: RBA’s rate rise gives free billions to Aussie banks – Michael West

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