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To read "Kevin's Thoughts and Musings" on the banking industry and related issues click here or articles below.
Predictions made on the 5th Feb 2010.
Citi Group predicted the RBA rate would be 5.25% by Christmas, Commonweatlh Bank predict 5%, ColonialFirstState predict 5%.
A CASE AGAINST A RATE INCREASE
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"What arguements support increasing rates at all?
RBA's website has charts that show a strong direct correlation between interest rates and inflation ie low interest equals low inflation."
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PROPERTY INVESTORS GO ON THE ATTACK OVER RATES
By Nigel Adams: TERRITORY property investors yesterday demanded that the Reserve Bank not increase interest rates this morning. NT Investors' Club head Barry Seabrook said inflation was under control and there no need to lift rates...read more (PDF File).
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NO END IN SITE FOR RATE RISES
By Sarah Martin: HOMEOWNERS will have to find an extra $341 a month for mortgage repayments by the end of year, if interest rates rise in line with economists; forecasts. read more (PDF File).
Housing Finance: Recent Rate Rise Cycles
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'First sustained high rate cycle over 2-6 years'
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Click here to enlarge the graph. |
Do I change banks? - 6 January 2010 - Kevin Young
Following the last interest rate hike and the big move up by Westpac, the question I am now getting a lot is “is it worthwhile shifting from Westpac to a lower rate with another lender?” The answer in a nutshell is that it may in fact not be worth shifting. Westpac have been very clever in realising that by the time that you pay any exit fees, discharge fees, then your application fees. The total of these charges could come to be approximately the total amount that you would save by switching to a lower rate with another lender...read more.
Interest rates and inflation - 5th January 2010
Glen Stevens refers internationally to the period from the mid 1980s and to the mid 2000s as a period of “inflation in most countries was low and pretty stable. So were interest rates. Australia shared in this experience from about the mid 1990s onwards”...read more.
Inflation and Interest Rates - US Data
Source: economicshelp.org |
US Confirms rates up causes inflation!
There are some who apparently worry about inflation prospects in the US.
Read more... |
The RBA Not Learning!
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Dwelling approvals are showing a decline in light of the housing shortage and yet the RBA are set to increase rates further... Read more... |
Impacts of the Interest Rate Rises
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The high interest rates caused the dip in the supply, then when the interest rates fell the supply rose. See various graphs showing the impact interest rates have on dwellings. Read more... |
GDP Growth
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GDP Growth is headed back to its trend rate of 3.25% in 2010.
Click here to view the graphs. |
Graph source: ABS website
RBA Rates Up = Inflation Up! - RBA Rates Down = Inflation Down!
So why does the RBA continue to have high rates?
The above graph shows that lowing rates has been the only way that the RBA has lowered inflation. Click here to enlarge graph.
Back to the Future
Nick Nichols, business editor | December 17th, 2009
BANKS must know something that they're not telling the rest of us.
Why else would they knock back business at a time when housing prices have bounced above pre-crisis levels and the stock market is looking as healthy as ever?
Property buyers across the Gold Coast are having good deals crushed by banks through appallingly weak valuations.
In some cases, gun-shy valuers are setting values so unrealistically low that a kindergarten child could do their paint-by-numbers job. http://www.goldcoast.com.au/article/2009/12/17/170255_nick-nichols-opinion.html
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Interest Rates
The Fed is locking down short yields by recommitting to keep the funds rate near zero for an "extended period".
Source: NAB - Australian Markets Weekly
Rising Interest Rates, Surging Australian Dollar...
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Sources: The Australian Financial Review and The Sunday Mail
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