The scary truth about interest rates hits home
IS THERE a point in life when you are just meant to know about certain things? Adulthood, or whatever it means to be a grownup, can feel out of reach because – writing this with my head hanging low – I have little to no understanding about interest rates.
Mortgages fixed or variable. Cash rates. Capital gains tax. Negative gearing.
Nada.
Inflation. Bull market. Bear market. Supply and demand. Superannuation. That thing about fully franking that was a big deal for retirees one election back.
No flipping clue.
How has life seemingly drifted along without at least a basic understanding of such fiscal matters?
And how did everyone else just suddenly seem to know?
Or do they?
Just this week, while waiting to do an interview at Avalon Airport, I casually chatted to a group of colleagues and strangers whiling away time.
Traffic. The Metro delays. Air travel prices. The Voice referendum. A story about a billionaire tipping a waitress a cool $10,000 in a South Yarra restaurant.
All these subjects were breezily and enjoyably discussed in passing.
Then talk of housing prices came up.
“It’s a good time. They will drop for a bit and then go up,” I think was the drift of the conversation, but please do not quote me on this.
I thought it was a bad time, and that interest rates had gone up more times than Reserve Bank governor Philip Lowe can count, and were going to keep going up.
I did what I always do.
A slight shuffle from foot to foot. Perhaps a “hmmm”, or “mmm, yes” with some solemn nodding of head.
Then when conversation looks like becoming even more impenetrable, I assume a look as if something vitally important has just come up and, with a fumble of my phone in the bottom of my bag, whoosh, I’m out of there.
For years, I have gotten by without really knowing whatever it is while trying to appear as if I do when such subjects come up at the dinner table or in the newsroom.
Don’t we all do that when we’re struggling just a bit?
That was until becoming a homeowner.
Hang on. Scrap that.
That was until getting a really big fat loan with one of the big fat banks late last year.
Because at the moment it certainly doesn’t feel like owning a house, but paying off a never-ending debt with someone nasty looming over you.
The bank feels like one of those really scary drug lords on the crime dramas I binge on TV late at night when I’m worrying about what it all means.
The Reserve Bank keeps banging on about unemployment – and that’s going up, too – and I feel like so many other cash-strapped Australians wondering about what it’s all doing to the ol’ bottom line.
Reading about a young struggling family not wanting to open the letters from the bank has become all too real. The constant letters arriving by snail mail announcing more minimum payment increases have started to feel like that scene in Harry Potter when the owl post inundates the Dursleys.
Taking out the home loan was daunting, but just feasible; now it’s a kind of scary reality.
I’m confused when tuning in to hear the Reserve Bank’s latest waffle.
It wants to curb spending, but aren’t we also told spending creates jobs, and isn’t that good for the economy?
People have black spots. So does the Reserve Bank. Remember (who could forget) that they told us interest rates would not go up until next year and they said that before even this year.
There are plenty who could not tell you that the dying words this week of Richard Belzer, the actor who played detective Munch on the Law and Order TV series for more than 20 years, were the sublime “f--k you, motherf--cker”.
Or that Rihanna was the only pregnant woman to ever perform at the Super Bowl halftime show.
Others could tell you about why Dustin Martin will play more forward this year and how Ben Simmons’ NBA career is threatening to implode. Or are they just trying to forget about interest rates?
I keep thinking about detective Munch’s final words, just because they make me feel better in these tricky fiscal times. He was the guy wearing the dark-coloured glasses, not the rose-tinted ones.