[The original title was "With governments like this, who needs enemies" - changed for a more indicative one.]
At Rudd to announce rescue package for homeowners, we can read that the Federal Government says that the Commonwealth, NAB, Westpac and the ANZ banks are postponing mortgage repayments for up to one year for people in financial difficulty.
The interest, however, will be added to the total amount of the loan.
Mike Stasse of Running on Empty Oz, (Australia's peak-oil list) says, "Let's analyse this. You have a $400,000 mortgage and lose your job.
The payments are ~$2500 a month (round figures over 25 years) or $30,000 a year. So 12 months later, if you still don't have a job, you now owe the bank $430,000...... and the repayments are now $2700!"
"Plus there's the distinct possibility that if/when inflation kicks in from all the money printing. or oil prices going back up, interest rates will also go back up."
"If interest rates go up 0.5%, the repayments are now $2830
If they go up a full % repayments would be $2970"
"This is no solution!" he says.
Editor: Debt and house prices are what is keeping people poor and production expensive and working hours long and wages down. Who cares about the banks - which have become nothing much more than growth-lobbyist home loan merchants? They have been having their cake and eating it for years. They need the chop, like Marie-Antoinette.