Start pf global interest rate reversals – Aussies take the lead with wages growth unexpectedly slowing
Jenny Jones
May 16, 2007

China and India are concerned about inflation. Australia, New Zealand, and UK are also concerned about inflation. Interest rates were rising all over the world in the last several years. But the trend is about to change. The rates are about to fall unexpectedly and sharply. Lack of loan demands and hidden deflation are counteracting overt residual inflation from previous cycle high is the root cause of such rate reversals.

Australian wage growth unexpectedly slowed in the first quarter. Australian rates will be lowered in the second half of the year. In spite of heavy rate increase by the Federal Reserve, the dollar is sensing lower rates in the future. The gold market is nowhere as dollar makes new lows. Rate reversal is caused by the sector deflation exceeding sector inflation.

Like in Australia, the rest of the world is also experiencing shortage of skilled labor. But in spite of that the lack of wage inflation points to much lower job growth in the negative part of the cycle.< P>

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Start pf global interest rate reversals – Aussies take the lead with wages growth unexpectedly slowing
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