I want to talk about your relationship

Andrew Pegler – 13 February 2010

Hello Valentine’s week lovers, it’s the cupid of economics here fearlessly firing weekly arrows of love (mixed in with the odd one of despair) into the digital ether. In this Valentine’s week I want to talk to you about your relationship. No not that one; it’s the one you’re rekindling with debt and spending that concerns me.

Retail sales are up, house prices continue skyward, personal debt is starting to grow and I hear margin lending is back on the card table. This sounds like a trial separation with frugality to me. Who gets the dog and how about the kids? In case you have been intoxicated by spurious data falsely indicating otherwise we just scraped through this meltdown mess by the hair of our chinny chin chin thanks to the low debt left by the Howard Government and bold, swift action by our Kev and Wayne. In other words, lovers, don’t stray back to your old ways of debt and spending. Put love over gold (Dire Straits’ best album?), temper rapacious spending impulses and learn to love to save because we’re not out of the woods yet. Chinese growth is slowing. Europe is teetering on the edge of a debt crisis. And the US employment picture still looks like a stick figure drawn by a five-year-old. Is that a light at the end of the tunnel or the entry light into another one? Simply start squirreling away a few acorns in case a cold snap turns into a winter of discontent.

To get this savings festival started right here’s a few tight-arse tips I prepared earlier:

1. Save on chewing gum by mixing blue tack with tooth paste.
2. Walk into your next party carrying a case of beer, struggling a bit like it’s full when in fact it’s only holding a six-pack.
3. Save on an expensive iPod by simply thinking of your favourite tune and humming it. To hear another song hum that one instead.
4. Save money on birthday cards this year by collecting up all the ones you get and returning them with the simple inscription “back at ya”.
5. And finally remember you can make clothing last twice as long if you only wear it every other day.

So that’s it, lover boys and girls, stay kind to each other and remember love is a good economy.

In other news… the monetary policy pendulum has just swung decisively toward further rate rises. January’s labour force figures reveal the strongest growth for three years with over 52,000 jobs created. The unemployment rate was 5.3% down from 5.5% in December. Meanwhile the US rate fell to 9.7% in January after the December high of 10%, giving hope that the hardest employment market over there in over 25 years is finally turning.