Rates heading which way?

[Deltaberry]

Okay, I see your point. If the AU$ is overvalued, now's the time to buy HK$ and invest there. Then, when the AU$ falls (as it likely would with a 100BP interest rate drop), you could sell down and revert to AU$ with an exchange rate profit. Fair enough. Where do I sign up again?

A trip to the place and a few weeks with agents and seeing every suburb and development you could imagine helps, as I have done in the past 2 years, and speaking to tax advisors and meeting a couple of banks.

Just as we don't buy in Syd/Melb without knowing anything about the city. Same concept.

 

[Belbo]

A trip to the place and a few weeks with agents and seeing every suburb and development you could imagine helps, as I have done in the past 2 years, and speaking to tax advisors and meeting a couple of banks.

Just as we don't buy in Syd/Melb without knowing anything about the city. Same concept.

Thanks for the heads up, DB.

The sad truth for me though is that I'll be waiting for the next credit glut to come down before any bank will speak to me again for a long while. ("Let's just round that loan application up to the nearest $10 million, shall we Belbo? Wouldn't want to raise any red flags with the gnomes out back, what!")

It sounds like you're well sorted though. Good work.

 

[Deltaberry]

Ah yes credit is more of an issue over there, you need some low LVRs to play at the moment. But when rules are relaxed it would probably only get better. Or you can think of it as, despite such strict lending criteria, the market has not retraced as much as everybody expected.

 

[Belbo]

Ah yes credit is more of an issue over there, you need some low LVRs to play at the moment. But when rules are relaxed it would probably only get better. Or you can think of it as, despite such strict lending criteria, the market has not retraced as much as everybody expected.

Not yet, but there's always Paris.

 

[tom32]

Okay, I see your point. If the AU$ is overvalued, now's the time to buy HK$ and invest there. Then, when the AU$ falls (as it likely would with a 100BP interest rate drop), you could sell down and revert to AU$ with an exchange rate profit. Fair enough. Where do I sign up again?

If you are only going in with 20k - 30k and you don't want leverage after looking at combank foreign exchange account (no fees but potential negative interest rates!) I am thinking of just going to US dollar cash.

If you don't get interest anyway (which you don't to speak of on US dollars in that qty) then why take the risk on banks? Sure you can deposit it in a safety box at a bank but at least this is yours. If you have some other kit like jewellry or other precious metals you can keep it all together. Another thing to consider is reading the product info brochure it does not appear foreign exchange accounts are not covered by the gov deposit guarantee.

http://www.thereservevault.com.au/safetydepbox.htm

You lose a bit buying in but I reckon it might be worth it?

I would be interested in others thoughts as to if you want an unleveraged play in US dollars why not just use cash? Why deposit it when the interest is so low?

 

[Deltaberry]

US$ same as HK$

What risk on banks? Like then closing and not returning your money?

 

[tom32]

What risk on banks? Like then closing and not returning your money?

On US dollar = same as HK dollar it is but their is a very small element of risk this will not always be the case. Also US dollar is accepted in more places than HK. Only an outside reason for picking it but you can also buy sell them at lower spreads especially if buying the physical.

On risk of bank collapse you get it in the end as a depositor or near enough to it after bank capital protection etc but I am not sure whether foreign exchange accounts are a regular deposit account in that they have the government guarantee apply to them?

Certainly the day before the government guarantee was introduced in and before combank bought them I would not have touched say bank wests 8%, 3 year deposit rates. The day after the gov guarantee was introduced they were about the best investment going at the time, and I expect why within about a week the rate had dropped back to parity with other smaller banks.

Clearly if they are covered under the guarantee who cares which bank but if not and if you read the product disclosure statement you would think you were investing in some high risk investment even putting exchange risk to one side!

 

[Nth Brisbanite]

Just finished reading Alan Kohler's weekend briefing. It reads "there will now definitely be another rate cut in December, in my view. The RBA has no choice. If there was a case for a cut in November, there is even more of one in December"

Hope he is right!!!

 

[Deltaberry]

If HK$ unpegs, it will more likely than not appreciate against the US$ and A$.

1. Peg with RMB, which trades stronger
2. GDP growth of 5% and inflation up there...

 

[Aaron Sice]

rates are gonna get slashed here, if im reading between the lines correctly with over half of the weekend australians articles.....the banks wont be passing any - or very litte - on to the customer.

 

[Belbo]

Just finished reading Alan Kohler's weekend briefing. It reads "there will now definitely be another rate cut in December, in my view. The RBA has no choice. If there was a case for a cut in November, there is even more of one in December"

Hope he is right!!!

And WHY would our inflation-first-fearing-RBA do that? To bring happy days to PI pissants like a you and I?

The RBA will only cut if it sees ARMAGEDDON coming. Get a goddamn brain!

 

[Bon]

rates are gonna get slashed here, if im reading between the lines correctly with over half of the weekend australians articles.....the banks wont be passing any - or very litte - on to the customer.

qft.. might be lucky to get 5bps passed on.

The RBA know this though, wouldn't it be good to see them avoid cutting because they know the banks won't pass them on and it's futile.

Ahh... but I forgot about how most likely the RBA, the Government and the banks would all be colluding on this matter since the financial health of our nation depends on the bank's profitability... Oops!

 

[Aaron Sice]

qft.. might be lucky to get 5bps passed on.

The RBA know this though, wouldn't it be good to see them avoid cutting because they know the banks won't pass them on and it's futile.

Ahh... but I forgot about how most likely the RBA, the Government and the banks would all be colluding on this matter since the financial health of our nation depends on the bank's profitability... Oops!

the RBA is there to protect the money supply and the monetary system.

don't fool yourself for a second that they exist for the benefit of credit card holders, governments and/or home owners.

the RBA will cut rates to give local banks more fat to ride out the storm. to maintain said fat, the banks will not be passing on much at all, if any.

 

[DJBarnstar]

We just got offered 5.74% fixed for 3 yrs.....

 

[Indifference]

Interest rates are going south for some time... but the elephant in the room will be inflation or rather currency debasement manifesting as inflation.

I don't think hyper-inflationary pressures are out of the question in some countries either, particular within the EU. This would put great strain on the global economy and credit may tighten substantially as a result.

So lower interest rates may not be the gift that everyone is expecting, but rather the beginning of some serious pain.

 

[virgo]

Great deal

We just got offered 5.74% fixed for 3 yrs.....

Hiya

Care to share which bank and what loan size and LVR to get this rate?

thanks!

 

[silverx]

Hiya

Care to share which bank and what loan size and LVR to get this rate?

thanks!

interested to find out too!

 

[DJBarnstar]

Hiya

Care to share which bank and what loan size and LVR to get this rate?

thanks!

I work for LJHooker and is a rate by BankWest through LJHooker financial solutions for LJH Staff.

Not sure about the LVR but I wont be over 80% anyway.

That will be for 2 loans totaling $470K.

I'll find out how much a fixed rate is for average punters.

Seems like an awesome deal. we are going to go for it and lock it in eddie.

 

[virgo]

BANk wEST

thanks djbarnes...

would appreciate if you could provide details of the BankWest manager who is organising the deal...

i have a bw loan atm and am very very interested....

you could pm me if you prefer...

 

[silverx]

thanks djbarnes...

would appreciate if you could provide details of the BankWest manager who is organising the deal...

i have a bw loan atm and am very very interested....

you could pm me if you prefer...

i dont mind getting the manager details too!