Likewise! Thx
Rates heading which way?
- Thread starter seano4ever
- Start date
The RBA will cut the cash rate sufficiently to get mortgage rates where it wants them. If the RBA wants mortgage rates to drop by 25 points, and they think the banks will only pass on half of the RBA cut, then the RBA will cut by 50 points so the banks can keep half.
Regardless, our banks are a lot less dependent on foreign funds now than they were last time. The savings rate has soared since the GFC and the banks are sitting on a mountain of deposits. There is really no reason why they can't pass on most or all of any RBA cut (as they did with the November cut a few weeks ago).
I know mate. They will be cutting rates again purely to bail the banks out of their liquidity problems.
First bit, true.
Second bit, not quite.
Though it is the case that the the dependence on offshore credit markets has reduced, they are still required.
The "mountain of deposits" simply aint big enough.
The whole covered bonds exercise is evidence of that very fact. You don't go out and raise $1.5B offshore at the equivalent of bbsw plus 150bp just for the fun of it.
As a result, competition for retail deposits will continue and as will the gap between the OCR and the real cost of funding.
But your first point is the key one...if the RBA want's to see borrower rates move down by X, they will move the target rate down by "X plus some" . It's for this reason that the "what are banks going to pass on?" palaver is such a nonsense.
Arrant nonsense. There should be a price put on oxygen too.
It's quite sickening... One day I think it'll pop though
i dont think it will.
you cant just change the way the world trades in 10, 20 or 50 years.
the easiest way to gain total control is for the IMF to issue gold backed SDRs, that way all nations will trade up to them, then down from them on the other side.
this maintains soveriegnty and keeps the sheeple distracted because not much changes on the face of it, just the dumbsheets are left wondering why prawns are suddenly $49 a kilo ex-vietnam. i mean, you still buy petrol and groceries in your local currency so whats the diff, right? you've just been exposed to a "little" inflation.
being gold backed, the IMF should be able to issue bonds and they be bought confidently as the ability to pay isnt based on a debt fuelled promise.
of course, gold would either have to go to 10k/oz or every currency around the world devalue, or a bit of column a and column b.
from there, it will be true currency wars, none of this "fiddle dee dee potatoes" we're seeing now.
i think australia is very well placed for this game, as long as we have a liberal govt to ride us through. once we pop out the other side, socialise all we want.
of course, the "other side" will be a gold backed global currency and more than likely 50 - 60 years away, but IMO there will be a reasonably neutral secular bear market ( what i believe were currently in) followed by an unbelieveable bull market that very literally leaves 80% of the western population a slave to their debt.
the forum can dissect all it wants, but i wont be replying. cheers.
Gold is probably the long-term play at the moment - not sure about a gold back currency. Maybe a China-led currency with Asia Pac participating based in a less biased but friendly jurisdiction, say Singapore? Though that seems remote at the moment too.
The western world will be consumed by debt - agreed. Fiscal and private.
The western world will be consumed by debt - agreed. Fiscal and private.
i think china is very reluctant to expose the yuan to the likes of GS, JPM etc.
gold backed SDRs are already on the table, im just outting 2+2 together but it may yet be too simplistic.
gold backed SDRs are already on the table, im just outting 2+2 together but it may yet be too simplistic.
I know China is trying to advocate a new currency - not the yuan - to replace USD
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