>>However I never trust metaphors that attribute physical laws to human-driven enterprises.<<
That is of course your right. But it should be noted that there are those amongst us who in fact base their investment decisions upon physical phenomina….some even manage to do this successfully.
I must point out however, that you seem to have taken my tides comment literally. I doubt that too many people did the same.
>>Humans are far too unpredictable for me to put my money down based purely on what happened in the past….<<
I agree up to a point…individuals are pretty much unpredictable. Humans in a crowd situation have behaviours which tend to reoccur often enough, to be able to make an educated guess as to what will happen next.
A case in point is the advertising industry. They have studied which words, colours, shapes etc that have an impact on the greatest number of people. There are numerous more examples.
>>people LOVE finding patterns. Sometimes it’s better to look at the information objectively however.<<
I admit it! I love finding patterns also! As a matter of fact I have made a career out of it. A combination of the two disiplines (finding patterns & objectivity) is not a bad approach. I may even add a touch of objectivity in my analyses. LOL
Originally posted by georgisj:The discussion about headline rates of inflation and interest rates are somewhat dettached from the investors decision matrix.
Can I point out that ultimately, it is firstly real interest rates and the expectation of real rates into the future(interest rates minus inflation) that will guide an investor (whether it is property, stocks or bonds). So if interest rates go up another 1% and inflation 1%, then theoretically at least, you are no worse off.
Admittedly, there are multiple factors which re-inforce and counteract each other and it is almost impossible to know how they will play out. However, there are two key factors which will mitigate inflation increasing
1. Centralised wage fixing, has broken wage increases & wage inflation nexus, as a result of productivity related trade-offs.
2. The economy is much more senitive to rate rises today that it was fifteen years ago. The degree of borrowings across households (predominantly) increases the dampening effect on expenditure of any interest rate increases.It was also mentioned that with the depreciation of the $A, there will be imported inflation as a result. We had a $A value at $US49 cents approximately 2-3 years ago, and inflation was not affected. Ultimately, it is market forces which will dictate ability to increase prices.
Massive interest rates increases are more unlikely than most people think.
James
I am not alluding to massive hikes, you do not have to have the grey matter of Albert Einstein to realize only a small rise is needed for people to lose it all. For many, that may mean only one or two percent. Not everyone is as astute as these guys on the forum.
We will see, anyway, are you perhaps a betting person?
[shades2]We are all made from Stars
Bionic,
The annual inflation rate was 2% this year. (I mentioned that before but you asked again, so I’m replying again). It is tipped to be *possibly* about 2.5% later this year. I just think that suggesting there will be a huge inflationary spiral, when in fact, it’s the lowest it’s been in 4 years, is incorrect. You obviously disagree. This time last year, inflation was 2.4%. Well, if it goes to that again, no problem- it’s still within the target range of up to 3%. If inflation started to fall under 2%, people would start screaming “deflation!!!”. I just don’t know why people are panicking when there’s such healthy economic conditions.
And why do you “rest your case” because my name is kay henry? Play the ball, not the person (or the issue and not the person). I’m all up for discussion about issues, not so much up for people choosing to ignore the issue and make comments about someone’s nick, for god’s sake.
kay henry
>>The discussion about headline rates of inflation and interest rates are somewhat detached from the investors decision matrix.<<
James, you better explain what the words ‘headline rates of inflation and interest rates’ mean.
Pisces
All those who suggest they can see the future raise their left hands.
Now, All those who doubt them raise their right hands.
Have i summed up this thread?
he he he he[jester]
lifexperience
No
We are all made from Stars
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