Rate Cut? 01 Nov 2012
- Thread starter hiho
- Start date
THUCYDIDES79 said:jpanggy said:
You mean until it hits -2% ?!
In the ivory towers and at expensive wine bars the theory is that the lower the interest rate the more people spend.
Meanwhile in the real world it turns out that people save more the lower the interest rates are because surprise surprise people are saving for a reason and with next to no return the amount needed to be saved is inordinately larger.
15% interest rates and the debt free will spend.
15% would be great for the retiree's whom did save for their retirement. However many loud mouths are drowning in debt so a meagre 0.25% movement is cause for serious whining or major celebration. Not that it really matters, the private banking cartel based in the US wants low interest rates so it's low interest rates the world will get 
Market is pricing 100% chance of rate cut in December..
Silverthorn
Well-Known Member
Nugget said:THUCYDIDES79 said:jpanggy said:
You mean until it hits -2% ?!
In the ivory towers and at expensive wine bars the theory is that the lower the interest rate the more people spend.
Meanwhile in the real world it turns out that people save more the lower the interest rates are because surprise surprise people are saving for a reason and with next to no return the amount needed to be saved is inordinately larger.
15% interest rates and the debt free will spend.
That's true. If interest rates were 15% I'd be spending more than I do at the moment but I'd also be spending less on PMs so might balance itself out a bit.
Yippe-Ki-Ya
New Member
yeh - you'd be giving more to the thieving banks!
and spending a lot less on life's other nescessities...
and spending a lot less on life's other nescessities...
People dont save more when rates are low, if you leave rates too low it tells people "why save you wont get much return for it", they take on more debt because the money is cheap, low rates is one of the reasons for the housing bubbles around the world and soaring credit card debt
There is de-leveraging happening though but I think its because more and more people (even some of the zombies) realise that debt is going out of fashion and they have seen other peoples debt grief so they are paying them down (in the US anyway) we still have a huge private debt to gdp ratio
There is de-leveraging happening though but I think its because more and more people (even some of the zombies) realise that debt is going out of fashion and they have seen other peoples debt grief so they are paying them down (in the US anyway) we still have a huge private debt to gdp ratio
Wout said:
Even at 0.1% interest over 25 years on a $1 million loan is $780 a week.
There is a limit to what people can borrow.
Additionally if people see asset prices falling then they aren't inclined to buy. Cue Japan where buying still isn't cool and that's been what? 20 years since their bubble burst?
nonrecourse
Well-Known Member
Nugget said:
If its interest only thats $192.31 a week using fiat currency and you can put the balance of the repayment into gold bullion for 25 years. Wow what a moat of liquidity
Kind Regards
non recourse
Yippe-Ki-Ya
New Member
jnkmbx said:
cash investments? :lol: isn't that an oxymoron?
jnkmbx
Well-Known Member
Nugget said:
I generally stay away from TDs, because I like to pull out before things reach critical mass
Yippe-Ki-Ya said:
While the can keeps getting kicked down the road, cash remains useful.
Of course, I'm prepared to lose all my AUD deposits if I fail to withdraw and convert it quickly enough. @_@