I READ A PROPERTY MAGAZINE LAST WEEK AND IT WAS forcasting an interest rate rise to 9.5% by late 05 early 06. And it will all be tied in with the USA economy which is rising…
ANYONE ABLE TO LOOK INTO THE CRYSTAL BALL FOR THE RATE RISE DATE ?(9% BY LATE 2005).
Appreciate your thoughts ..
Jon.[cap]
$Trillion debt stirs rate fears:
http://www.thewest.com.au/20040731/news/general/tw-news-general-home-sto128961.html
The prospect of another interest rate rise grew yesterday when official figures revealed Australians owe an average of $53,800 each – or a record total of $1.07 trillion.Well I’m happy to write out a cheque for my family’s $215K debt – anyone else prepared to come to the party?
SPAM, I asked my crystal ball if interest rates would reach that 9% level by 05-06 and this is the response I got: “Not in a million years”. So you can rest happily.
If you want to consult it yourself, go to: http://www.imagi-nation.com/moonstruck/question.html
I guarantee it’s more reliable than experts reported in the media.
Cheers,
Aceyducey
In theory, there is no difference between theory and practice. But, in practice, there is.– Jan L.A. van de Snepscheut
If people put the same amount of energy they put into worrying about interest rates to putting together DEALS, it won’t be a huge issue!!
You should put your more energy into things you CAN control.
As for interest rates, all you need to do is make an opinion and be prepared for any future movements…..not predict it.
Cheers [baaa]
Oscar
Wow thanx Oscar that is so cool!!
At last someone has said what Ive been thinking for ages!!
Geez if ppl are worried about interest rates to such an extent then maybe they’ve overcommitted themselves financially!!
I think you ahve to allow for incrases when you first crunch the numbers and if you dont your crazy!!
Pepper
Hi Jon
i really can’t see interest rates anywhere near that level. Inflation would need to be out of control for the RBA to lift the rates to a level that would
1. Destroy the economy
2. Destroy a governments chance of re-electionBanks fixed rates should be seen as a bit of indication where they think the rates will be. If concerned lock in fixed rates. Personaly i think they will be within 1% of where they are now, it could even be less that todays rates. There guys (economists) change there views every month.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Originally posted by westan:Hi Jon
i really can’t see interest rates anywhere near that level. Inflation would need to be out of control
Here or in the US ??????
We are not an economy in isolation. If other econmies pick up we could see capital flow out of Australia to such an extent that rates must go up .
Any idea what 45c dollar will do to our balance of payments.
Can you say Banana.
It is not just inflation, although thats all Peter and Johnny would like ppl to beleive.
If the US picks up real speed, we either eat our currency or rates will return to a neutal setting, (or neutral plus 1 1/2)
9% is not high interest !!!!
Terry
Hi terry
i can’t see that happening in the US either. I think they are in for some hard years.
remember interest rates are still incredibly low over there. They could cope less with a 9% interest rate than we could.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Quote:Originally posted by westan:. They could cope less with a 9% interest rate than we could.
quote]
Westan agree on that, but we may now have had a break between international rate parity. They are about 4 pts below us, and if that stays as parity if they get a rate of 5-6 % we could face 8-9%
Now something else may happen, but it is a possibilty.
Personally think Greenspan sleeps at the wheel, and they are still in the grip of boom bust cycles. Also part of the get rich quick mentality.
Terry
Yawn
Terry, since you’re so negative about it I suggest you sell your your assets immediately & retire to a commune where you will not be effected by the coming crash.
Rates go up, rates go down. Serious investors make money.
And no, you can’t help everyone who makes a bad decision. THEY have to decide to do their research.
Cheers,
Aceyducey
In theory, there is no difference between theory and practice. But, in practice, there is.– Jan L.A. van de Snepscheut
Agree with you guys ,westan, pepper and oscar about focusing on what you can control, doing the necessary due diligence and putting a fudge factor element into your calculations for contingency.
If, however, we’re going to talk world politics and do a bit of crystal ball gazing then here are my thoughts.
US will continue to struggle to gain the dominance in the world markets that it once enjoyed – it should have been careful about what it asked for – Globalisation! Corporate governance legislation like Sarbanes Oxely and social issues are forcing US corporations and ultimately the economy to take a more risk adverse approach to business strategy – more focus on the urgent and not the important.
My biggest concern is that the Australian government isn’t doing more to develop closer economic relations with our northern brethren – China and India are the fastest growing economies in the world and there is so much opportunity for us as a nation. A lot of commentators feel this but aren’t empowered to set policy. I realise that this is a complex problem, and cultural and political values, beliefs and issues prevent a simple solution but I don’t believe that developing such a strong reliance on the US is smart. We need to be innovators, spatially aware and not be sheep or worse lemmings to the US.
…I’ll stop my rant there.
Squash
Originally posted by Aceyducey:Yawn
Terry, since you’re so negative about it I suggest you sell your your assets immediately & retire to a commune where you will not be effected by the coming crash.
Rates go up, rates go down. Serious investors make money.
And no, you can’t help everyone who makes a bad decision. THEY have to decide to do their research.
Cheers,
Aceyducey
In theory, there is no difference between theory and practice. But, in practice, there is.– Jan L.A. van de Snepscheut
I did not know I said anything about a crash, did not know talking about econimics was being negative. If you can find any of my quotes in this topic as being emotive please post them.( the Banana quote might qualify but it was meant to highlight that interest and international $$ are related, not my view of what would happen )
Having paid 19% I feel 9% is low.I’m not worried.
And as to the commune quote…..seriously…
I can predict a 0.5% rise
by the end of the year
I dont think they will go to 9%
under current circumstancesIf interest rates hit 9% this forum will no longer be around, try finding a cash flow + deal trying to repay a 9% loan. The USA is moving and further intrest rate jumps will come in the comming months. I have also read personal debt has hit a trillion $, thats over 50k per person (this alone is enough for a couple of points rise in rates.
Rates head higher Inflation fears help push 30-year loan back over 6%
By Steve Kerch, CBS.MarketWatch.com
SAN FRANCISCO (CBS.MW) — U.S. mortgage rates rose in the week ending Thursday, sending the benchmark 30-year fixed-rate loan back above 6 percent, Freddie Mac said. The 30-year loan hit a national average 6.08 percent, up from 5.98 percent a week ago.
The 15-year mortgage, a popular refinancing choice, jumped to 5.49 percent from 5.39 percent. One-year, Treasury-indexed, adjustable-rate loans also were up, to 4.17 percent from 4.12 percent a week earlier.
All three loans required the payment of an average 0.6 points to achieve the rate. A point is 1 percent of the loan amount, charged as prepaid interest.
Freddie Mac (FRE: news, chart, profile) chief economist Frank Nothaft said the hikes came on the heels of market expectations that the Federal Reserve may move more aggressively to raise interest rates to combat inflation.
“So far, inflation seems to be under control, but if the economy should heat up too rapidly, the Fed would have to act quickly and decisively,” Nothaft said.
So who know!!!!!!!!!
Hey Yack the rise was only 1/10 of a percent.
On another matter i’d love fixing my loans for 15 years at 5.49 %
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Originally posted by gmh454:And as to the commune quote…..seriously…
Terry,
You’d be in good company. I know someone who owned 12 properties who did just that in 1996, fearing that the economy was about to go bust.
Cheers,
Aceyducey
In theory, there is no difference between theory and practice. But, in practice, there is.– Jan L.A. van de Snepscheut
<<<<On another matter i’d love fixing my loans for 15 years at 5.49 %>>>
Me too. But I was more referring to the sentiment that as the US economy comes out of recession, increase rates will rise.
I predict one of three scenarios, one of which I am certain will come true:
1/ Interest rates rise
2/ Interest rates fall
3/ Interest rates stay roughly the sameand I have my affairs arranged accordingly.
Joking aside, my *guess* is that the US economy will fizzle and no big interest rate rises.
Hi guys
Wayne i’m with you on that one, but more importantly as you say “have your affairs arranged accordingly”. I used to have a friend who said “you have to back your judgement”. While i partly agreed i’m not smart enough to get it right all the time. So i’d go with my judgement but build in as much “insurance” as i could incase i was wrong.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
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