Petrol to Hit $2 a Litre!!!

Some economists are predicting record petrol prices of $2 a litre over the next 12 months. Sounds a bit far fetched doesn’t it??

It doesn’t seem that long ago, eleven years to be exact, that petrol was selling for 60 cents a litre and predictions were for $1 a litre. No one believed it at the time and we were up in arms when it did eventually happen. Oh for $1 a litre today!

At $2 a litre it would cost $120 to fill the average medium sized sedan. Now that is a huge chunk out of the family budget. Throw in a carbon tax, flood levy, higher electricity prices and maybe an interest rate increase or two and
you can understand why some trade unions are starting to push for higher wages.

From the Reserve Bank’s perspective, higher wages leads to higher inflation which in turn means higher interest rates.

I saw an otherwise unbelievable headline in the Australian Newspaper on April 7, 2011, “From Boom to Gloom in the West”. Apparently according to figures released by the Chamber of Commerce and Industry (CCI) the WA economy
contracted in the last two quarters of 2010; 0.11% in the September quarter and 0.44% in the December quarter.

So under the currently accepted definition this means that Western Australia is in a technical recession.

With the lowest unemployment in Australia at around 4.2% and the biggest mining boom in over a centruy it is hard to believe we could be in a recession. Premier Colin Barnett certainly doesn’t believe it. However, all you have to do is wander around a few shopping centres and talk to the business owners. They don’t need official statistics to tell them business is flat.

By the way housing finance applications fell by 5.6% in February, however as far as the residential real estate market goes, experience tells me there is a buyer for every property, without exception, in any market. So if you really want to sell or need to sell, you can. Don’t be deterred by a ‘slow market’.

Even in a ‘slow market’ properties still sell, it just means things could take a little longer. (-:

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