Higher interest rates due to Donald, but Australia doing well
Higher interest rates due to Donald, but Australia doing well
Earlier David Richardson gave a valuable fact check to claims that higher interest rates were about to blow a huge hole in the budget.
He’s right, the rise in the interest rate that governments pay in their borrowings (known as the bond “yield”) does not apply to all borrowing. But the future interest repayments are going to rise because, as we can see, the 10 year government bond yield (essentially the interest rate the government has to pay when it borrows money long-term) has risen sharply this year
This has led the opposition, through it’s exceptionally sharp minded Treasury spokesperson, Tim Wilson, to blame the government.
Last Thursday in Question Time, Wilson asked this of the Treasurer:
Mr TIM WILSON (Goldstein) (14:18): My question is to the Treasurer. In Labor’s budget, it was assumed the cost of government debt would be 4.8 per cent, yet it’s already around 5.2 per cent for a 10-year bond, with the interest bill on government debt becoming the fastest growing line in the budget. Meanwhile, major banks and economists are predicting up to two further interest rate rises this year alone. Will the Treasurer concede that his plan for higher debt and spending is forcing up interest rates?
Ahh, yes. It’s always the fault of government spending.
The problem is the interest rates for all governments around the world are having to pay has gone up. Maybe Wilson thinks the budget deficit here in Australia is the cause of the Japanese government having to pay higher interest rates?
There’s two main reasons for the interest rate going up.
The first is the investment in datacentres and AI. The absurd bubble of investment has created a huge demand for money – and governments have to get money from pretty much the same institutions as do big companies like Meta and Apple etc who are building these absurd civilisation killing building.
So when lenders suddenly have a lot of companies wanting their money, that means they can demand a higher interest rate. And that has flowed into the rate governments are paying.
But the second, bigger, issue is Donald Trump and his illegal brain-dead, war on Iran.
As I noted earlier, that has sent oil price soaring (and continuing to soar). If you are lending money and you think inflation is going to be higher for longer because of those oil prices you will demand a higher interest rate – because why would you give money to someone at 3% interest if inflation is 3.5%? That would means you would lose money!
And so rates have gone up around the world since the end of February and the Iran War began.
But here’s the thing – the Australian government 10 year bond yield has gone up by less than it has for USA, UK, German and Japanese government bonds:
The German 10 year bond yield has gone up 74.8 basis points (ie 0.748%pts)
The US 10 year bond yield is up 78 basis points, Japan is up 81.9 basis points, the UK is up 88.8 basis points.
And Australia? Just 57.4 basis points.
So much for the government’s plan forcing up interest rates…











Comments (3)
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MrsG
Mon, 14.09.26
11.20 AEST
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Gregory Shearman
Mon, 14.09.26
10.16 AEST
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Richard
Mon, 14.09.26
09.20 AEST
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‘The thing Watt is missing – is that Australians listening to One Nation don’t actually mind the attacks. It’s never about them (they think) – but all those other people taking advantage of what they are paying for, or missing out on.’
What a sad nasty pathetic place Australia has become if this is how many Aussies now think. Surely we as a nation are not that dumb and lacking in decency to want to see this despicable woman and her party gain more power not because they want to help those sad people who vote for them but to enable them to do a Trump and feed their greed.
Pauline Hanson.... what a grub. I call her a racist and I call anyone who votes for her a racist. Everyone knows what she stands for.
I give Albanese space to combat Hanson's crap about his mother's situation, but I do NOT give him space to express anger about a snide reference to his dog when he can't find sufficient sympathy for the genocide in Gaza and now the West Bank to even step up to the crease to keep the faith with our responsibilities under the 'international rule of law'.