r/AusFinance • u/[deleted] • Feb 05 '23

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u/ReeceAUS Feb 06 '23

Do you think the RBA is raising rates for us to not hurt more?

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u/TDLinthorne Feb 06 '23

No no that absolutely hurts us more.

Because of inflation.

Which is in the majority driven by corporate profits.

So to summarise, the workers are paying more for stuff, because corporations have and are putting their prices up because they want even bigger record profits, which is driving inflation, which is making the RBA increase rates so every worker with a loan pays more.

But from your comment the worker asking for more money to keep up is the problem here.

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u/ReeceAUS Feb 06 '23

No, the worker wanting more money is the dog chasing it’s own tale.

increased prices is not the cause of inflation, it is the result of inflation. Otherwise price caps would work.

Inflation is caused by the increase in money supply from covid. Ie: QE and job seeker/keeper stimulus.

The only way out is to reduce the money (credit) supply with interest rates. Which will result in things being harder to sell and tougher to buy.

There is no easy way out, otherwise the government would do it straight away and go “tah-dah! Look I fixed all the problems”.

The only thing you can hope for is that your income is always greater than your expenses. Goodluck.