That's gotta hurt if you are highly leveraged in your personal finances. If the US taper is causing USD "liquidity" (hot money) to retract from peripheral countries and speculative equity markets around the world, I wonder what the doyens of value and prices in Martin Place are thinking about leading up to Tuesday? 4 February 2014 2.30 pm AEDT - Reserve Bank Board Meeting, Sydney
And more ... Interest rates have to rise to support currencies and entice foreign capital back. If sovereign states begin competing more heavily for shrinking amounts of foreign capital available for investment and if the All Ords continues to slide, it should be a very interesting RBA meeting next week.
But the IMF is on top of the causes .... ... apparently reducing liquidity doesn't effect interest rates because the FED has convinced markets that it is so!
Only people who would be buying would be those who could buy outright at discounted prices am I right?
Well, the FED has played their card in the global liquidity game and announced a further $10B per month tapering of their QE program. That's going to deepen the impact of reduced availability of cash for investment in speculative markets. RBA plays its card on Tuesday and I reckon if the ASX declines further there will be a lot of pressure to increase rates.
"1929 Bankers jumping out of windows?" Read something years ago, that they did a survey of the NYC suicide rate in 1929/30. No spike in suicide in NYC! OC
Well, Asian market reaction doesn't look good following the reduction of QE. Tsk, tsk, tsk ... what ever will Glenn Stevens do ... compete for foreign capital with higher interest rates to aid local markets and strengthen the dollar, or stimulate national credit (debt) growth with lower interest rates and weaken the dollar further fuelling consumer price inflation ... but how can he raise rates if the US says tapering doesn't effect interest rates? What a way to start the year for the central planners. They might just need a pay rise to cope with it all!
The problem with these stats is that they aren't a percentage of anything, and even in the farming example (5% of farmers evicted), we have no insight into that was normal for that era. 20,000 companies bankrupt - out of 30,000 companies that is terrible. Out of 1,000,000 it's not so bad.
Highly likely he'll bump up 0.25% I think. The more margin RBA has to drop the more it will like it. This is a tiny opportunity to lift a little.
