Reply to: Uber Doomed...

[rootsnall]

Now pity the people that have stretched their finances to the maximum these days and are only seeing their income rise at the same rate as low inflation.

How about some pity for the poor 1990s contractor who has seen their daily rate FALL by about 200 a day in 10 years

[Gonzo]

I can understand why you might want higher interest rates .. yin and yang and all that.. but higher inflation by choice... seems a bit strange.

Inflation is good for homeowners who have stretched themselves to the maximum to buy their houses/flats/broom cupboards.

They have a couple of years of sacrifice to be able to pay the mortgage especially while interest rates are rising to curb that inflation, but rising income and eventually lower interest rates means that the period of sacrifice is not too extended.

Now pity the people that have stretched their finances to the maximum these days and are only seeing their income rise at the same rate as low inflation. Their period of sacrifice is going to seem like a long, long time.

[tay]

I would like a bit of inflation say 5-6%, and higher interest rates

I can understand why you might want higher interest rates .. yin and yang and all that.. but higher inflation by choice... seems a bit strange.

[Archangel]

The housing crash will at least help with keeping a low inflation figure.....

I would like a bit of inflation say 5-6%, and higher interest rates.

[tay]

Good idea, they could put house prices inflation back into the main inflation rate calculation index thingumy.

Dont doubt .. when it suits them they will.

[TimberWolf]

The housing crash will at least help with keeping a low inflation figure.....

Good idea, they could put house prices inflation back into the main inflation rate calculation index thingumy.

[Diver]

Rubs hands together and sniggers.

Lot's of cheap property soon. and No mortgages to worry about. Pay cash and laugh at the lenders

[tay]

The housing crash will at least help with keeping a low inflation figure.....

[NoddY]

There is no way they are going up, more likely panic cutting. Canada did an unexpected cut yesterday, more countries to follow would be my shamateurnomics guess.

Some economies will take their cue from the United States, which has seen it's currency pulped. Only poor people work for dollars.

Inflation, once seen as yesterday's problem, is soon to re-emerge as a political as well as an economic problem. It's inherent in our monetary system. China is soon to stop exporting deflation and without a requisite increase in the value of money (higher interest rates) a situation will arise where only the little people will work for money.

[rootsnall]

Yes but now there is the problem as the economy hums along interest rates have to go up. Interest rates always go gradually up if the economy hums, only when it stops humming can they go down, either way it is curtains for overstretched borrowers.

There is no way they are going up, more likely panic cutting. Canada did an unexpected cut yesterday, more countries to follow would be my shamateurnomics guess.

[tay]

I didn't realise it had got that high ! I read an article a while back that the more they put interest rates up to try and stop things overheating the more the carry trade money came flooding in and the worse the problem got.

Yes but they are desperate to keep inflation down, so they want to kill housing growth completely, so keep hiking the rate up. Kind of annoying if you want to buy NZ dollars as well.

http://www.anz.com/nz/ratefee/interest.asp

[BlasterBates]

There aren't any job losses yet, IT job market is humming along as far as I can see. I think they'll slash interest rates again and may keep it afloat a little while longer. If that fails to stop the rot and job losses do kick in then it's triple double extra thick uber doom !

Yes but now there is the problem as the economy hums along interest rates have to go up. Interest rates always go gradually up if the economy hums, only when it stops humming can they go down, either way it is curtains for overstretched borrowers.

[Bagpuss]

How does one get a NZ savings account!

There aren't any job losses yet, IT job market is humming along as far as I can see. I think they'll slash interest rates again and may keep it afloat a little while longer. If that fails to stop the rot and job losses do kick in then it's triple double extra thick uber doom !

No not yet, but the service sector is bound take a big hit. Buy Aldi and Neto shares now

[rootsnall]

And interest rates are still low in the UK, its 10.5% in NZ, that hurts!

I didn't realise it had got that high ! I read an article a while back that the more they put interest rates up to try and stop things overheating the more the carry trade money came flooding in and the worse the problem got.

[rootsnall]

It has the potential to be a real disaster. All the ingredients are there:

Credit crunch
Unrealistic Expectations
Job losses
Herd mentality

There aren't any job losses yet, IT job market is humming along as far as I can see. I think they'll slash interest rates again and may keep it afloat a little while longer. If that fails to stop the rot and job losses do kick in then it's triple double extra thick uber doom !