Interest Rates Go UP

[The Hulkster]

News just in.

The RBA has today increased interest rates by 0.25%

 

[Former]

Time to get out there and look for more bargains.

 

[Lidge]

Yep - happy with that.

About to go buying - and this should scare off a lot of the 1st time buyers at auctions, keep away competitive bidders and hopefully keep prices in check.

 

[Roonaldo!]

Ouch for investors, but they've been dealt a good hand for the last few years.

 

[Ghostwriter]

Good news, can't wait for them to hit 10%.

 

[- PC -]

The gloss is rubbing of Johnnies new suit. Wonder how they will spin this one

With the petrol prices rising approximately 50% this is the 3rd effective interest rise in peoples pockets since January

 

[Lidge]

The gloss is rubbing of Johnnies new suit. Wonder how they will spin this one

With the petrol prices rising approximately 50% this is the 3rd effective interest rise in peoples pockets since January

He didn't recall that happening, didn't receive the memo, his department didn't inform him and no comment.

 

[agitator]

The gloss is rubbing of Johnnies new suit. Wonder how they will spin this one

With the petrol prices rising approximately 50% this is the 3rd effective interest rise in peoples pockets since January

yeah its johnnies fault oil prices are going up.

 

[- PC -]

yeah its johnnies fault oil prices are going up.

CoW ring a bell?

Now go back and read and I posted ''effective interest rate'' ie the recent fuel price rises are an equivalent household expense to a rate rise

 

[rick James]

Anyone with half a brain would have realised that during the so-called 'housing boom' of the last decade that this was going to happen eventually.

I smell recession within 5 years.

 

[sgPanther]

As someone with far more savings than debt, all I can say is woooohooo. Keep on going up.

 

[Leper]

As someone with far more savings than debt, all I can say is woooohooo. Keep on going up.

Not necessarily (I'm assuming here) like me you want the A$ to get back to US$0.50 - higher Aus rates don't help that. But yeah, anyhow, shiff stit.

 

[Lidge]

Not necessarily (I'm assuming here) like me you want the A$ to get back to US$0.50 - higher Aus rates don't help that. But yeah, anyhow, shiff stit.

No thanks. I want the Aussie battler climbing as high as it can go <I carry a USD sales quota>

$12mUSD ==> $24m AUD - No way Jose.

 

[TheBloods]

Not necessarily (I'm assuming here) like me you want the A$ to get back to US$0.50

Why?

 

[Financialpanther]

Anyone with half a brain would have realised that during the so-called 'housing boom' of the last decade that this was going to happen eventually.

I smell recession within 5 years.

Spot of RJ, we are due a recession as we have maintained a strong economic growth position for far too long and are due negative growth.

Something had to give with the economy in its current position - just could not maintain the level it was at.

But seriously folks, the rise in interest rates is only slight and will have an effect on the price of fuel (as in going down) which everyone has been bitching about. When the interest rates rise another 0.25 points in the next 6 months - then expect there to be a little more economic panic.

The housing boom across Australia has caused this nation to acquire more and more debt due to unexpected increase in their equity held in their property (be it residential or investment). Expect a big, big situation with banks calling these loans in soon and the economy will slide (my prediction) very quickly leading to a prolonged recession.

 

[Leper]

Why?

Just me being a greedy selfish prk because much of my income is in US$.

But a lower A$ is also good for the country in many ways, such as making our $A based exports more competitive and also brings in more toursit $ if our currency is low. Obviously many prefer it to be higher as imports are cheaper and it's cheaper to travel OS. Swings and roundabouts.

 

[sgPanther]

Not necessarily (I'm assuming here) like me you want the A$ to get back to US$0.50 - higher Aus rates don't help that. But yeah, anyhow, shiff stit.

Yep. That would make me a happy man but I don't see it as likely unless the commodity boom slows down. To me that is what is fuelling the demand for the $A and historically the $A seems to ebb and flow with the demand for commodities.

 

[sgPanther]

The housing boom across Australia has caused this nation to acquire more and more debt due to unexpected increase in their equity held in their property (be it residential or investment). Expect a big, big situation with banks calling these loans in soon and the economy will slide (my prediction) very quickly leading to a prolonged recession.

I have been expecting this for a long time but it keeps confounding me and going from strength to strength. We need Paul Keating to come back and give us the recession we had to have

I am very fearful for a lot of family and friends that are mortgaged to the hilt and come to me and say that the property market never goes down. It will always keep on going up. They need to look at places like UK, Singapore, HK, Japan where prices dropped substantially from their peaks. Uk has boomed back but the others have struggled out of it.

 

[agitator]

its all based on supply and demand.
if there are many people in the market going after a small number of houses then the prices will always rise.

 

[agitator]

geez talk about negative party poopers.

the glass is half full.............with this attitude you'll talk yourselves into a recession followed by deep clinical depression.

 

[Rob]

its all based on supply and demand.
if there are many people in the market going after a small number of houses then the prices will always rise.

Of course it is, but if the demand is fuelled primarily by debt then interest rates going up will have a pretty big impact on that. Although there's not going to be a crash unless IR go up another 1% at least.

 

[sgPanther]

geez talk about negative party poopers.

the glass is half full.............with this attitude you'll talk yourselves into a recession followed by deep clinical depression.

I guess I did sound a bit pessimistic at that. Truth is I'm not really pessimistic or hoping for it to happen. It's just my investment (risk) style to always plan for the worst. That way I don't have any problems sleeping at night. This investment style has historically netted me 15%pa through thick and thin (averaged) so I'll probably stay with it.

 

[taurus]

geez talk about negative party poopers.

the glass is half full.............with this attitude you'll talk yourselves into a recession followed by deep clinical depression.

Well even the best party does eventually end. I am bearish because historically the debt/consumption driven growth always run out of steam.

Surely the current average household debt which is above 100% of income is not going to just go away...

 

[agitator]

as long as the economy keeps growing strongly and there is jobs growth then this boom should continue.
things may get interesting if the economy slows down.

 

[taurus]

as long as the economy keeps growing strongly and there is jobs growth then this boom should continue.
things may get interesting if the economy slows down.

Exactly, what goes up must come down. Credit crunch will happen, the onlyquestion is when.