The tightening is here. 12 months ago a person on X $ pa could borrow $900k, now its $700k. I'm seeing property purchase defaults increase in recent months cos a purchaser can't get finance they thought they'd get when they committed to the contract 12+ months ago. Dark clouds out there, just not sure when and how hard they will hit.
Driving up the cost of living is not a good goal. If interest rates were free to move with the market then I wouldn’t have a problem. But they’re not. They’re at the mercy of government regulation, legislation and interference, egotistical central planning public servants, dumb-arsed journos, entitleist-minded voters and self-serving politicians.
Artificially low interest rate is what caused people to speculate on the property market and thus causing the cost of living to increase dramatically. Central banks in conjunction with governments is what allowed interest rates to go lower then the free market would have ever allowed.
Precisely. So I don’t celebrate artificial interest rate moves either way under our current fucked up system.
The big question is where would the true market price interest rates today? I would guess higher then where they are now.
The thing is that no-one is solvent and buying, which means no growth, which is the blood of capitalism. I'll be surprised if government mandates rate rises. Banks are another issue altogether. What I find fascinating is that Westpac has been left to twist in the wind. Pundits say it is the Banking Royal Commission, but I suspect there is a bigger game going on. Considering the international players, anything could be going on, but you can be sure it won't be good for your average punter.
In order to have a free-market in the premium payable (interest rate) to lend or borrow money, it would be necessary to have some form of sound money to begin with. Something that can’t be deliberately inflated, manipulated or created out of thin air by States. A system that protects the purchasing power of every $ earned. Under such a market system I would expect interest rates to remain fairly steady and probably fairly low.
Ludwig Von Mises on a return to the gold standard and interest rates in an economy operating with sound money. He continues: What I think Mises is saying is that flooding the market with easy access to artificial money does not replace capital goods that are produced in response to satisfying real human needs and desires. And it is the ever improving productive use of capital goods that enhances wealth, not increasing the money supply to encourage spending.
When money is easy to get and plentiful, everyone's a property tycoon. When the well starts to look dry, countless people who thought it was easy before will no longer have the clout to get funds. The market has been propped up by these people during the boom, and now they'll vanish.
http://www.abc.net.au/news/2018-09-06/anz-lifts-variable-mortgate-rates/10208852 These increases are not likely to start a fire-sale as it will increase repayments for P&I borrows $30 to $40 a month more for a $400,000 loan. But for the few who are struggling with IO loans at the moment and need to roll over to P&O it wont help. According to CBA, for $400,000 loan fixed for 5 years and rolls over to P&O the repayment goes from $1690 a month, $2380 a month. A jump of $690
BANKS’ HEARTLESS MOVE: Australians are getting screwed THEY make billions and pay their bosses millions, but say they’re struggling. It’s time to get back at the banks for rate rises. "AUSTRALIA’S major banks post multibillion-dollar profits and employ bosses who take home millions in performance bonuses. But while their reputations have taken a battering in recent months thanks to a Royal Commission which uncovered a wealth of dodgy practices, their arrogance continues unabated." https://www.news.com.au/finance/bus...s/news-story/fe2b7a5d749d043204f01ab08314dbb6 Let's cut the crap spouting bodgy numbers and bullsh*t jargon ... stop putting up with their sh*t ... the banks are scum ...
You need to start a revolution to stop people borrowing money from the banks. People need to grow a pair and save until they can pay cash, and give the banks the middle finger.
Maybe it will take a revolution ... maybe it will take an education ... maybe we need another way ... and print public money without interest .... instead of the fraudulent debt driven system that serves the cabal ...
CommBank, ANZ raise interest rates COMMBANK and ANZ are set to rake in nearly $1 billion in extra interest from struggling families after hiking rates. https://www.news.com.au/finance/eco...s/news-story/d77d7d0ea15623a1d12fbae7d37df410 It's a bankers paradise when people are being financially abused ...