another 45 point rise from the banks coming?

[sash]

sorry mate, i dont follow.

so are you saying Australian economy will slow and inflation will fall thus RBA will drop rates?

or are you saying China/India are growing strongly as well as domestic consumption, and despite this RBA will drop rates?

Trendsta,

The OZ economy is already slowing...maybe faster than all us think. Another rate rise or two is going to be in the nail on the coffin. As interest rates take about 6 months to take affect by Oct./Nov. the RBA maybe getting nervous about paying blind man's bluff with the economy and will look to move rates downwards. The USA at this time would also would not be healthy. However, I don't think we will hit negative growth just a lot slower growth....1.5-2% growth instead of the 4-5% growth we have seen in GDP. Would be good for easing pressure on the labour market, as inflation and unemployment are inversely proportional.

The reason we won't hit negative growth is because the India and China will still grow albeit not at the 8%-12% growths we have seen over the last few year. It will be more like 6%-8%...slow growth but healthy growth. This will also assist with the stagflation in China...particularly in food where pork (staple meat) prices have gone up about 40%. They can grow at these rates because their domestic consumption is now significant...so the USA being slower won't hurt as much.

 

[alexlee]

True Trendsta, true...I am interested in risk mitigation, I wouldn't be reading this thread...but it just started to waffle on a bit about the same old same old..interest rates are interest rates...they go up and down, and according to a poll here recently, most investors don't care about them...

I'd re-read the responses in that poll, HA888. People generally said interest rates matter, but it's not the ONLY thing that matters. In any case, just because other people can handle higher rates doesn't mean you can. I'd double check your cashflow projections.
Alex

 

[trendsta]

Trendsta,

The OZ economy is already slowing...maybe faster than all us think. Another rate rise or two is going to be in the nail on the coffin. As interest rates take about 6 months to take affect by Oct./Nov. the RBA maybe getting nervous about paying blind man's bluff with the economy and will look to move rates downwards. The USA at this time would also would not be healthy. However, I don't think we will hit negative growth just a lot slower growth....1.5-2% growth instead of the 4-5% growth we have seen in GDP. Would be good for easing pressure on the labour market, as inflation and unemployment are inversely proportional.

The reason we won't hit negative growth is because the India and China will still grow albeit not at the 8%-12% growths we have seen over the last few year. It will be more like 6%-8%...slow growth but healthy growth. This will also assist with the stagflation in China...particularly in food where pork (staple meat) prices have gone up about 40%. They can grow at these rates because their domestic consumption is now significant...so the USA being slower won't hurt as much.

Fair points Sash.
I initially didnt understand your viewpoint.. thanks for clarifying.