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  1. #1
    Join Date
    Apr 2018
    Posts
    260

    Default Interest rates to remain steady for forseeable future?

    I read an article and now Ive lost it ugggh.

    But it was an economist saying there are things in place to keep rates low for the forseeable future.

    Does anyone know of any such plans by the government etc?

    I know they wanted a slight raise to pay for the bank bail out fund increase, but my understanding is this is over 2 years and likely not a big impact to us who owe money :-)

  2. #2
    Join Date
    Mar 2015
    Location
    Brisbane Wellington Auckland
    Posts
    946

    Default

    Quote Originally Posted by OnTheMove View Post
    I read an article and now Ive lost it ugggh.

    But it was an economist saying there are things in place to keep rates low for the forseeable future.

    Does anyone know of any such plans by the government etc?

    I know they wanted a slight raise to pay for the bank bail out fund increase, but my understanding is this is over 2 years and likely not a big impact to us who owe money :-)
    Economist are generally more wrong than right so do the reverse of whatever they say :-)

  3. #3
    Join Date
    May 2008
    Posts
    3,691

    Default

    Quote Originally Posted by OnTheMove View Post
    But it was an economist saying there are things in place to keep rates low for the forseeable future.

    Does anyone know of any such plans by the government etc?
    Rate will stay low for a very long time.
    The government is not causing this.
    The low rates are a world-wide thing and governments don't really know why.

  4. #4
    Join Date
    Dec 2007
    Location
    napier
    Posts
    182

    Default

    Quote Originally Posted by Bob Kane View Post
    Rate will stay low for a very long time.
    The government is not causing this.
    The low rates are a world-wide thing and governments don't really know why.
    "The low rates are a world-wide thing and governments don't really know why".

    Really? a world wide thing, and Govts don't know why? Its hard to know where to start with this..!

  5. #5
    Join Date
    May 2008
    Posts
    3,691

    Default

    Quote Originally Posted by chook View Post
    "The low rates are a world-wide thing and governments don't really know why".

    Really? a world wide thing, and Govts don't know why? Its hard to know where to start with this..!
    Why not take a deep breath and start at the beginning?

  6. #6
    Join Date
    Dec 2007
    Location
    napier
    Posts
    182

    Default

    Why not explain how governments "don't really know why" & "The govt is not causing this"?

    Its your statement

  7. #7
    Join Date
    May 2008
    Posts
    3,691

    Default

    Sure.
    Every economist in the world has been predicting interest rates will return to pre-GFC levels for the last 10 years.
    They have all been wrong.
    Economists advise governments.
    No economist (or government) knows why interest rates have remained low.
    That's why I wrote governments don't know why.
    Since they don't know what is going on then they can't be blamed for causing it.

    Now your turn.
    Deep breath...

  8. #8
    Join Date
    Apr 2018
    Posts
    260

    Default

    Im not going to get technical, Im just going with a chat Perry and I had in which he said something pretty obvious.

    No government in NZ wants to be the one raising rate putting people with sever debt in deep strife and possible foreclosures.

    I think that honestly has a bit to do with it. But Im sure there must be actual technical reasons as well?

  9. #9
    Join Date
    May 2008
    Posts
    3,691

    Default

    Quote Originally Posted by OnTheMove View Post
    But Im sure there must be actual technical reasons as well?
    There probably are but no-one has managed to understand what they are.
    Everyone is stumped over the low interest rates.
    No-one is controlling it.
    At some stage a clever person will realise what is happening and why and explain to us the situation.
    We are waiting for that clever person to step forward.
    I was hoping chook might enlighten us.

  10. #10
    Join Date
    Mar 2015
    Location
    Brisbane Wellington Auckland
    Posts
    946

    Default

    Quote Originally Posted by OnTheMove View Post
    Im not going to get technical, Im just going with a chat Perry and I had in which he said something pretty obvious.

    No government in NZ wants to be the one raising rate putting people with sever debt in deep strife and possible foreclosures.

    I think that honestly has a bit to do with it. But Im sure there must be actual technical reasons as well?
    Interest rates were 3% in the 60's but the government either pushed or allowed or observed interest rates rise to 24% in the 80's.
    If the interest rate rose again to even 14% I can imagine most investors would lose the bulk of their profit and not be able to repay much principal.
    At 24% probably 40 or 50% of investors would lose money.
    I assume 40% of investors have paid off their debt so will be unaffected by high interest (in fact they would benefit as their term deposits would earn a lot)
    I have based this on investors who have been in the market for 20 plus years hence would have fully repaid many loans.


 

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