Interest Rates

[Jeffa]

Prediction on interest rates..I give you permission Perry to mock and scorn me in 5 to 10 years if I'm wrong.

INTEREST RATES WILL NEVER RETURN BACK TO NORMAL RATES OF 5 or 6%

It would be impossible for governments to repay the debt because tax intake would not be sufficient to service the debt alone as they would still need taxes/money for everything else in our state burdened society..who will house the unemployable? Or educate more tax slaves in our insightful education system.

I'll let everyone in on a secret..

Our central bank has been deleting government debt, its relatively easy and nobody knows about it. They have been deleting zeros of their spread sheet.

Why don't they delete everyone's debt you may ask?

Because if nobody had debt all that extra cash would most likely lead to a flood of spending and hyperinflation..so it has to be done slowly and secretly.

[McDuck]

Prediction on interest rates..I give you permission Perry to mock and scorn me in 5 to 10 years if I'm wrong.

INTEREST RATES WILL NEVER RETURN BACK TO NORMAL RATES OF 5 or 6%

It would be impossible for governments to repay the debt because tax intake would not be sufficient to service the debt alone as they would still need taxes/money for everything else in our state burdened society..who will house the unemployable? Or educate more tax slaves in our insightful education system.

I'll let everyone in on a secret..

Our central bank has been deleting government debt, its relatively easy and nobody knows about it. They have been deleting zeros of their spread sheet.

Why don't they delete everyone's debt you may ask?

Because if nobody had debt all that extra cash would most likely lead to a flood of spending and hyperinflation..so it has to be done slowly and secretly.

Ha!
I think he will do more than that.
He may not simply want to take you down a notch.
He may be worried that gullible people will read this forum and make unwise financial decisions based on half truths and selective figures.
Possibly, to him, there's a imbalance of justice, where you get to highnote, and silly people wind up in debt because of it.

Apart from that, you have some really good ideas and very very good insights.

[McDuck]

Central banks and Basel III have more or less removed price discovery from the credit markets, meaning risk does not have an accurate pricing mechanism in interest rates anymore. And now passive investing has removed price discovery from the equity markets. The simple theses and the models that get people into sectors, factors, indexes, or ETFs and mutual funds mimicking those strategies -- these do not require the security-level analysis that is required for true price discovery.

“This is very much like the bubble in synthetic asset-backed CDOs before the Great Financial Crisis in that price-setting in that market was not done by fundamental security-level analysis, but by massive capital flows based on Nobel-approved models of risk that proved to be untrue.”
-----Michael Burry

So I think like M.Burry who might I add puts its much better than I could ....you can't keep distorting markets , this has been going on for a very long time but how much longer the GFC was the first signs all was not good

Yes, you're totally correct.
And its true that, the chaps and chapesses working the RESERVE BANK do follow the Basel example, even though they are not part of the accord.

But, you didn't answer the question.

The most important question.

What makes you think that the people at the RESERVE BANK will change their ways?

Basically,

What is going to FORCE them to take another approach?

[McDuck]

The scary thing is all my predictions have happened or are in the process of happening..

Yup, your understanding of high finance is right on the money.

A very unusual interest, for a boy from the hood...

But

With no understanding of high finance, you still would have done just fine.

You served a low decile market, that many others couldn't, or wouldn't.
And that required only basic financial understanding to make work.

Hat off to you, it was good work.

But even your plans,(a cash purchase), have been thwarted by the old boys in high finance.

[McDuck]

Ha ha.
I don't do schlong contests.

My wealth is my health, you can't take it with you.

[Jeffa]

Watch the NZD if it starts creeping over 70c USD we are definitely heading to negative interest rates , retail rates in the mid 1% just in time for our borders to re open... watch the housing market go bananas!

[McDuck]

Watch the NZD if it starts creeping over 70c USD -
we are definitely heading to negative interest rates -
retail rates in the mid 1%..

It seems to me, that the RESERVE BANK staff are rather keen on lowering interest rates, no matter what.

(They don't really understand why Roger Douglas' inflation targeting worked).
(I bet Roger Douglas still doesn't understand why it worked, he just got lucky). ha!
And I bet they refuse to consider HOUSE PRICE INFLATION as inflation.
Doesn't suit their targets.
(Just ignore the nasty bits of data that show you are failing).

You don't need the NZD to shift (the relative pressure differentia at our border) to drop interest rates.
The action potential is far more local.
It's in the brains of those chaps and chapesses around the boardroom table at the Reserve Bank.

So why do you throw it into the mix?

PS you'll note that all things in the world of movement follow these same simple rules. See vide below.
No need to wrap it in fancy economic theory.
Unless you want to film flam a generation, that is.

Every set, be it a set as small as a cell or a seat as large as a country, all move on density gradients.
It's so simple.

[Jeffa]

It's looking less likely we are heading towards negative interest rates this cycle..you have permission to mock me Perry! ¯_(ツ)_/¯.

On a brighter note the flp should still push retail rates into the 1% range over the next year.

Side note:according to myvalocity my portfolio has increased 97k in 7 days thats just under 200k in 2 weeks?!

Is anyone else seeing similar results with larger portfolio's?

[Jeffa]

Next year should be as fascinating as this year! Love it!


If the Reserve Bank of New Zealand (RBNZ) had not eased monetary policy further, the NZD/USD exchange rate would be higher by 5-10%, Deputy Governor Christian Hawkesby said while speaking alongside Governor Adrian Orr following the Financial Stability Report publication this Wednesday.

Meanwhile, Orr added that the policy intentions stand as stated in the monetary policy statement.

“NZ economy is one of most resilient on planet earth,” Orr noted.

Orr said: “The RBNZ is operationally ready to implement negative OCR if conditions warrant it.”

• NZD/USD wavers around 2.5-year high below 0.7000 even as RBNZ’s Orr backs low interest rates

[McDuck]

..

On a brighter note the flp should still push retail rates into the 1% range over the next year.

Side note:according to myvalocity my portfolio has increased 97k in 7 days thats just under 200k in 2 weeks?!

..

That seems about right.

So do you think you will go another 200k next week?

And how much (in total) by the time they start to consider LVRs next year?

Remember, its all paper gains at this point.
Do you have an exit strategy?

[McDuck]

Ha ha.
Fair enough.

To some people money is a means to an end, to others it is the end in itself
Whatever rocks your boat.

So you have 12 points of data.

Q1 did the increase across all properties in the first 2weeks increase by the same percentage?
(Or did some do better than others.)

Q2;
Was the percentage increase in the second 2weeks the same as the first 2weeks .

In other words, is it a line or a curve.

[McDuck]

1/Porirua and Hutt big jumps.
South Auckland not far behind.
Christchurch smaller but not insignificant.

2/Roughly the same.. but I'm not holding my breath for the same result next week.Im guessing there first time home buyers pushing it up?I doubt experienced investors would pay that much over market value it just doesn't make sense... I'm not complaining.

Thanks.
That's what I figured.

12 data points.

Very small and indirect sample to make any concrete conclusions about, but yea, .. you know..

Well.. you know the rough speed and direction of the critters.
I suspect they are running from several different fires.
(well, a couple of them are just sauntering off disgruntled).

If you want to see the Nano Economic picture, it can be done.
The real estate agents in those areas could tell you whos buying and why.
A smart economic reporter would phone them and ask.

One interesting thing.
Banks aren't a cohesive unit.
They have internal struggles to keep order.
The computer control system, consisting of boxes and forms is weak.

[Wayne]

No need to quarrel my fellow capitalist!

Jeffas predictions are always accurate! ALWAYS!!

DISCLAIMER:King Jeffa has a margin of error within 3 to 5%. Time frames can very 3 to 6 months.

Didn't you predict negative OCR by years end?

[Jeffa]

Didn't you predict negative OCR by years end?

Yes and I was WRONG..WRONG with a capital W!
Did I say I was wrong?Oh yes I said it I was WRONG.

Don't worry Wayne I'm wiping away my crocodile tears with all the money I made this year..

[McDuck]

Yes and I was WRONG..WRONG with a capital W!
Did I say I was wrong?Oh yes I said it I was WRONG.

Don't worry Wayne I'm wiping away my crocodile tears with all the money I made this year..

Alexander the Great, Suleiman the Magnificent, King Jeffa the Mistaken?
You still have a few weeks to redeem yourself...

Now my hopes of a Rich Jeffa , Poor Jeffa book for Xmas are dashed.