Tuesday, July 24, 2012

RBA's view

The RBA governor said future economic shocks that would hurt Australia could happen in a number of ways, such as a severe economic slowdown in China and a collapse in dwelling prices.

"The ingredients we would look for as signalling an imminent crash seem, if anything, less in evidence now than five years ago," he said.

"By the same token there are things we can do to improve our prospects or, if you will, to make a bit of our own future luck," he said.  "Some of the adjustments we have been seeing, as awkward as they might seem, are actually strengthening resilience to possible future shocks.  Higher more normal rates of household saving, a more sober attitude towards debt, a re-orientation of banks funding, and a period of dwelling prices not moving much come into this category," Mr Stevens said.

Read more: http://www.news.com.au/business/we-should-build-on-our-luck-rbas-stevens/story-e6frfm1i-1226433865255#ixzz21XBd1kh4

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