News just to hand, the RBA has dropped its cash benchmark rate 25 basis points to 2.25%.
Is this smart stimulus or the dawn of an Australian financial Armageddon?
What do you think?
- This topic was modified 5 years, 12 months ago by Steve McKnight.
For those following the ups and downs of the AUD then you may like to read this:
– SteveTomParticipant@tom9876543Join Date: 2015Post Count: 1
Supposedly the drop in the petrol price was going to provide a boost to world economies.
The RBA action shows the extra money from lower petrol costs hasn’t helped.
If the drop in the petrol price didn’t help the economy, why would a drop in home loan repayments be any different?D.T.Participant@dtraegerJoin Date: 2014Post Count: 128Corey BattParticipant@cjaysaJoin Date: 2012Post Count: 1,010
Already cheap funding getting cheaper – we’ve negotiating heavy discounting across the board for months from the lenders, so no doubt we will see the majority of lenders passing on the full amount. Some smaller lenders have already done so.kwozzys Tam and BrentParticipant@kwozzys-tam-and-brentJoin Date: 2005Post Count: 9
Am concerned if this will lead to a “financial armageddon”. In the short-term I’m wondering if the banks will pass on and if this may stimulate property buyers to come out in market areas that have been neutral to negative.Walking to runParticipant@alisdair-horgenJoin Date: 2014Post Count: 68
Remember the first part of the return to boom on the property clock as in 1 o’clock is fear of a another crash.ChappoParticipant@helgarchapJoin Date: 2014Post Count: 1
What’s your opinion of where we are on the property clock ?Jason StaggersParticipant@jason_staggersJoin Date: 2006Post Count: 61
Smart stimulus is an oxymoron. Fiscal and monetary intervention is very bad long term. Artificially low interest rates create imbalances that lead to either consumer price inflation or asset bubbles or both. Credit expansion makes people believe that they are more prosperous than they really are, which will of course eventually lead to disappointment. The correction will come. We should opt for a little pain now rather than a lot of pain later.DeanCollinsParticipant@deancollinsJoin Date: 2015Post Count: 376
So the real question now is will the banks pass the savings along…. – https://www.propertyinvesting.com/topic/5000013-0-25-rba-cut-was-your-bank-naughty-or-nice/
And will we see a bump in this weekends auction rates as the mug punters rush in to “push up auctions” when doing their calculator sums to work out how much house they can afford – http://blog.collins.net.pr/2015/01/australian-reserve-bank-interest-rate.htmlitsandrewParticipant@itsandrewJoin Date: 2007Post Count: 294
I don’t think 25 basis points is going to make a huge difference. Confidence is low across the board when it comes to business and consumers. There may be a bump in activity but it is probably just short term. The small businesses contacts I’m talking with are struggling for every penny atm. GDP growth is trending downwards. Unless there’s a real circuit breaker I’m looking at more of the same. I think 2015 budget will be crucial. Joe Hockey, over to you.
Go as far as you can see and you will see further.