How to Overcome Debt and Regain Financial Freedom: The Barefoot Investor’s Advice to RBA Boss
Quick Summary
Scott Pape, the Barefoot Investor, has criticized a homeowner for blaming the Reserve Bank of Australia’s boss, Philip Lowe, for taking out a large loan when interest rates were at record lows. Pape argued that the homeowner should take responsibility for his actions and that Lowe should be held accountable and “benched” for his inaccurate forecast. He also noted that media had amplified Lowe’s soundbite, and that it was not financial advice but rather “financial porn”. Lowe has since defended his actions in rapidly hiking rates before a Senate hearing and warned that rate rises weren’t done yet.
Full Story – Barefoot Investor says the debt-laden can’t blame RBA boss
By David Southwell For Daily Mail Australia
00:59 19 Feb 2023, updated 09:23 19 Feb 2023
Barefoot Investor told borrower to take responsibilityHomeowner said he was considering suing RBA boss
The Barefoot Investor has slammed a homeowner for borrowing too much money from the bank and blaming the Reserve Bank of Australia boss for his woes.
Scott Pape issued the scathing takedown to homeowner Ben after he revealed he was considering legal action against Philip Lowe.
Ben said he had taken out a hefty loan and based his decision on forecasts made by Dr Lowe in 2021 where he predicted interest rates would stay at record low levels until 2024.
Interest rates were increased for the ninth consecutive time in February raising the cash rate to 3.35 per cent, leading to more financial pain for borrowers.
Mr Pape agreed with Ben that the RBA boss should be held accountable and ‘benched’ for the disastrous rates forecast but told the homeowner to take responsibility for his actions.
‘Barefoot Investor’ Scott Pape has brutally shut down a reader who blamed RBA boss Philip Lowe for his decision to borrow heavily when rates were at record lows
‘Did you really base a significant long-term financial decision on a relatively short-term prediction from the Reserve Bank?’ Mr Pape wrote in his Sunday Column for the Courier Mail.
A fired-up Ben had written to Mr Pape saying the RBA boss needed to take responsibility for his actions.
‘How can the head of the RBA make unequivocal statements (not predictions) that interest rates will not rise until 2024 and then wash his hands and take no responsibility for the trauma (financial and mentally) his words have caused?’ he wrote.
He said because he borrowed the money on the basis of that forecast he was in ‘serious financial stress’.
Ben said he had approached his lawyer to determine his legal options, saying he would ‘willingly join in any class action that might be looming’.
Pape replied that he thought Dr Lowe had ‘stuffed up right royally’ and as a consequence he should be ‘benched’.
He pointed out that the fuller RBA statements said there was incredible uncertainty around Covid and the world economy, which is why Dr Lowe should have put ‘his crystal ball away’.
However, Pape said most people had just listened to the media amplifying Dr Lowe’s soundbite’ and that same media were now calling for ‘his head’.
‘It’s not financial advice, it’s financial porn, plain and simple,’ he wrote.
‘Look, no one put a gun to your head and told you to borrow too much money when interest rates were at their lowest levels in recorded history.’
Dr Lowe (pictured) was forced to defend himself and the Reserve Bank’s actions in rapidly hiking rates during parliamentary hearings
Appearing before Parliament this week, Dr Lowe warned that rate rises weren’t done yet, despite him admitting it’s ‘really, really tough’ for borrowers.
The RBA governor told a Senate hearing in Canberra this month’s ninth consecutive increase – taking the cash rate to a 10-year high of 3.35 per cent – would be far from the last.
Philip Lowe faces being shortest serving RBA boss since 1996
Philip Lowe’s seven-year term ends on September 17 and if it’s not extended, he will be Australia’s shortest-serving RBA governor since Bernie Fraser’s seven-year term ended in September, 1996.
That’s when John Howard’s Coalition government declined to extend his tenure that had covered an interest rate-induced recession.
Dr Lowe was appointed for a seven-year term in May, 2016 when…
