Interest Rates

[McDuck]

All predictions are fair game.

Ha. true.


But I think john Key has friends in places that know, and steer the future of money.

So that's not really a prediction, more a revelation.

look, my simple understanding of global money is this.

They've been telling us for the past decade or so, that interest is low because more people have spare money( in the banking system) than people need to borrow.

Right?

Supply and demand.

Quantity high, demand low, price low.

Has that all been a croc, or has all that spare money vanished?

[eri]

The Reserve Bank has kept the Official Cash Rate at a record low of 1.75 per cent.
It's now been two years since the last move.
It said it expects the rate to stay on hold until 2020

https://www.nzherald.co.nz/business/...ectid=12156492

[Learning]

It said it expects the rate to stay on hold to 2020.

but that's not what John Key said...

https://www.propertytalk.com/forum/showthread.php?43249-John-Key-said-interest-rates-may-be-going-up-all-over-the-world-true&p=436941#post436941

[eri]

while i respect JK's opinion

clearly the public statements of the person who controls the official cash rate

have a higher weighting

perhaps

adrian orr

has new information?

https://www.youtube.com/watch?v=XKVmpJaMffM

[Learning]

For every qualified expert's opinion there's an equally qualified expert with a conflicting opinion.

[eri]

rates will rise

but nothing on the immediate horizon

looks to raise them in the next 2 years

like 2017

2016

2015

2014

[Perry]

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[Bob Kane]

For every qualified expert's opinion there's an equally qualified expert with a conflicting opinion.

I'm not sure about that.
In recent times, every expert who predicted bad times ahead has been wrong.
I think there's a lot of attention seekers who have worked out that predicting bad news gives them more attention than predicting good news.
Bad news sells more newspapers.
None of the bad news predictors are experts.

[Learning]

None of the bad news predictors are experts.

Until one of them is right. Might not be this year, next year or for another 10 years but one day one will be right, again.

[Don't believe the Hype]

Right or lucky that their prediction happended just after their time in the sun predicting the sky is falling

[eri]

interest rates need to rise, should rise

and if nothing rocks the world's interlocked economy badly for the next 10 years

they should be able to safely creep them up

BUT

a saudi political meltdown could cause another oil shock

a chinese political or financial explosion could take the 2nd biggest economy out

likewise another american financial or political crisis could trigger "the great depression 2"

and don't forget the new italian gov wants to borrow it's way out debt courtesy of german savers but the eu says no

did i mention angela merkel, (the leader of the free world), will be stepping down soon and it isn't apparent who else can keep the increasingly wobblys german coalition together..

so yeah, i don't see the golden 2 years ahead

needed to sneak rates up yet

[eri]

New Zealand's largest bank has dropped its interest rate to 3.95 per cent

- the lowest offered by a major bank since just after World War II.

The new rate, revealed today by ANZ, is for a fixed one-year term and will be available from tomorrow for a limited time

https://www.nzherald.co.nz/business/...ectid=12157626

[Perry]

Reserve Bank warns mortgage holders of risk of sharp rise in borrowing costs
8 Feb 2018

Borrowers should brace for the risk of a sharp rise in interest rates, with recent share market turmoil a "warning sign" of volatility to come.

Ho-hum.
Yawn and stretch and scratch a bit.
Failed predictions aplenty.

[eri]

big call here

By the 2020s, Stephens expected the official cash rate to have risen to 3 per cent,

https://www.stuff.co.nz/business/108667038/interest-rates-to-rise-significantly-house-prices-fall-economist-says

[Bob Kane]

big call here

By the 2020s, Stephens expected the official cash rate to have risen to 3 per cent,

https://www.stuff.co.nz/business/108667038/interest-rates-to-rise-significantly-house-prices-fall-economist-says

I read that to say by about 2025 the OCR would rise to 3%.
We'll be into the next property cycle by then and Jacinda will be history so it's a bit far away to say for sure what the OCR will be.