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Thread: Carbon Tax

  1. #76
    Member Redeye's Avatar
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    Default Re: Carbon Tax

    great post Joanne!!




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  2. #77
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    Default Re: Carbon Tax

    Thanks for the detailed reply Joanne. Your explaination makes sense and I was aware of OCR - I re-read my original question and I worded it quite bad (sorry). Knowing the definition of the system and how it works... I still don't understand the logic of the overall system.

    Australia's 0fficial Cash rate is 3.5%, America is 0.25%, Japan is 0.1% and china is 6% which is the interest rates that need to be paid by banks to the "insitutions", "central banks" or "world banks"... the OCR has been set by each country.

    To me it is amazing that Insitutions are being controlled by countries "telling" them exactly how much will be paid in Interest by there banks and it is the main part which is hard for me to believe.

    For example, Why would the "institutions" lend money to Japan with only a 0.1% return on there money when they could sell the "same money" to Australia for 3.5% return or to China for 6%.

    The only logical reasons for me... why this may occur is -

    A/ The Institutions have "unlimited" money supply, so even a .01% return is better than none. - Most logical answer to me!
    B/ They need to lend money to all countries so there are no major market crashes like the U.S banks which occured during the GFC, so it is an insurance policy with potential of future earnings, or a way to stop any competition entering the market (so maintain a monopoly). - again, possible but unlikely.
    C/ governments compensate (cover up) - which I doubt

    Real life Example... If the reserve bank dropped the offical cash rate from 3.5% to 3% in August 2012 and the banks passed on a .25% rate cut on home loans... wouldn't the Institutions be only ones taking the hit (home owners win, banks win) and the reserve bank is the ones dictating/forcing the institution to charge a lower interest rate? if so, why would they charge less?

    Is this example correct or am i missing something?

    Simmo.

  3. #78
    Senior Member Lawn Mowing Professionals's Avatar
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    Default Re: Carbon Tax

    Thanks for the detailed reply Joanne. Your explaination makes sense and I was aware of OCR - I re-read my original question and I worded it quite bad (sorry). Knowing the definition of the system and how it works... I still don't understand the logic of the overall system.

    Australia's 0fficial Cash rate is 3.5%, America is 0.25%, Japan is 0.1% and china is 6% which is the interest rates that need to be paid by banks to the "insitutions", "central banks" or "world banks"... the OCR has been set by each country.

    To me it is amazing that Insitutions are being controlled by countries "telling" them exactly how much will be paid in Interest by there banks and it is the main part which is hard for me to believe.

    For example, Why would the "institutions" lend money to Japan with only a 0.1% return on there money when they could sell the "same money" to Australia for 3.5% return or to China for 6%.

    The only logical reasons for me... why this may occur is -

    A/ The Institutions have "unlimited" money supply, so even a .01% return is better than none. - Most logical answer to me!
    B/ They need to lend money to all countries so there are no major market crashes like the U.S banks which occured during the GFC, so it is an insurance policy with potential of future earnings, or a way to stop any competition entering the market (so maintain a monopoly). - again, possible but unlikely.
    C/ governments compensate (cover up) - which I doubt

    Real life Example... If the reserve bank dropped the offical cash rate from 3.5% to 3% in August 2012 and the banks passed on a .25% rate cut on home loans... wouldn't the Institutions be only ones taking the hit (home owners win, banks win) and the reserve bank is the ones dictating/forcing the institution to charge a lower interest rate? if so, why would they charge less?

    Is this example correct or am i missing something?

    Simmo.

  4. #79
    Member Redeye's Avatar
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    Default Re: Carbon Tax

    not sure where you're getting your "facts" from simmo, but you might want to start looking somewhere a bit more factual (no offence intended at all!!!) re point A, there is no unlimited funds, although countries such as Nigeria are trying to prove otherwise




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  5. #80
    Senior Member AJD Mowing's Avatar
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    Default Re: Carbon Tax

    I like your signature Redeye.. My interpritation of that is people work so hard to have a good lifestyle that their lifestyle is actually work.. Is that what it means??
    AJD Mowing Giving Back Your Life

    http://www.ajdmowing.com.au/

  6. #81
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    Default Re: Carbon Tax

    Quote Originally Posted by Redeye View Post
    not sure where you're getting your "facts" from simmo, but you might want to start looking somewhere a bit more factual (no offence intended at all!!!) re point A, there is no unlimited funds, although countries such as Nigeria are trying to prove otherwise
    No offence taken... So i guess your saying the example is incorrect? here is where i am getting the "facts" - Reserve bank of Australia.

    The official cash rates for all countries can be found here - http://www.global-rates.com/interest...ral-banks.aspx

    Info about Reserve banks monetry polocies can be found here (what this discussion has been all about - inflation, interest rate and cash rate - http://www.rba.gov.au/monetary-policy/index.html

    You are dilusional (no offence intended) if you think monetry funds are limited... It increases and decreases every second of the day... this is why the inflation rate is so important. fom memory, the RBA needs to maintain positive inflation but ideally under 3%.

    The majority of the worlds money is now electronically transfered from account to account and never printed, and as the RBA controls the amount of currency being in the economy i'm confident the value is different every single day.

    By unlimited supply of money, I mean - they have 1 trillion dollars in reserves but only need to ever lend between 500 billion and 800 billion at any given time. If they ever need more than 1 trillion, well they are making interest everyday so 1 trillion turns to 2 trillion pretty quick!

    Are you able to prove otherwise and direct me towards better factual information... afterall, i am asking for answers.

    Simmo.

  7. #82
    Member Mick's Avatar
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    Default Re: Carbon Tax

    Simmo, if you have Super (lets just say you do), you cant complain. The banks do this stuff for your advantage. You cant have it both ways!
    Its the people who have no interests in banks/super or other that have a reason to complain.

    Deregulation, ie "let the market set the price" (they want to do this with carbon) has caused so many problems as far as Im concerned.
    I can only think of 1 industry where deregulation has made stuff cheaper..............

  8. #83
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    Default Re: Carbon Tax

    Quote Originally Posted by Redeye View Post
    not sure where you're getting your "facts" from simmo, but you might want to start looking somewhere a bit more factual (no offence intended at all!!!) re point A, there is no unlimited funds, although countries such as Nigeria are trying to prove otherwise
    Some more facts....

    France borrows at negative rates

    http://finance.ninemsn.com.au/newsbu...negative-rates

    Wow, 6 billion Euro given in a flash with a kicker to boot - 0.05% interest to "keep" for the priveledge of having the loan!

    This logic is the same as me going to my customers and mow there lawns for free and then pay $2.50 for the previledge to keep them on my books...

    I know that I would only do this if I had "excess" staff available or "spare time" on my hands and I want to keep the customer for future profits. I guess it would be the similar if you have unlimited cash at your disposal also, right?

    And they call me mad


    Anyway... back to the Original Carbon Tax thread.

    Simmo.

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