Interest Rates

[Knobby22]

Yes and in Australia property is king so we can expect a bubble.

 

[SirRumpole]

Well we're down to 0.75% and they seem pretty clear that there's more to come so here we are basically. One more step and we get the 0.5% and no guarantees that's the bottom.

Looking at all of this, I'm thinking that the markets are telling us that world economy is actually somewhat weaker than seems to be widely accepted.

RBA cuts rates from 1.5% to 0.75%, so halving them, and the AUD drops only slightly.

A couple of weeks after the blowing up of oil infrastructure in Saudi Arabia and the oil price is now lower than it was before that incident.

And so on. Doesn't make any sense unless the real message from the currency and oil markets is that the economy's actually pretty weak. Eg no point worrying about falling rates in Australia if the US is going to be forced into doing the same anyway. No point worrying about oil supply if demand's going to slump. And so on.

I do have a definite "uneasy" feeling about all this. Economics and politics globally looks rather stretched to put it mildly and yet the markets remain calm. At some point that's going to change I expect with the question being "what breaks?"

I share your unease. There are signs around the world that something will "break" as you say. Thomas Cook being the latest indicator that people everywhere are reluctant to spend. Even negative interest rates in places like Japan haven't achieved much.

People don't spend if they don't have secure jobs and the confidence to know that they can continue to afford the luxuries they want. The rise of the gig economy and automation, and the resulting depressed wages have only provided pessimism about the future of work imo.

No Central Bank can do anything about this, it's up to the government to honestly recognise the problems and do something about it.

 

[sptrawler]

Yes and in Australia property is king so we can expect a bubble.

Property is only king in Sydney and Melbourne, in W.A it is on the nose, as there is no influx of immigrants therefore an oversupply.

 

[sptrawler]

My guess is the flow into ETF's and LIC's will continue, as picking individual stocks to weather a correction and supply an income, is a fine art not many are prepared to learn.

 

[Junior]

My guess is the flow into ETF's and LIC's will continue, as picking individual stocks to weather a correction and supply an income, is a fine art not many are prepared to learn.

The consensus seems to be that stock-picking is dead, value investing is dead, and everyone should buy index funds as cost is all that matters. I don't buy it, and it makes me think of this quote: "The more things change, the more they stay the same".

 

[qldfrog]

Hard to find the right place for this one
I really like the good in my opinion summary, and the implications for bank shares

 

[Knobby22]

Hard to find the right place for this one
I really like the good in my opinion summary, and the implications for bank shares

Thanks for that Qldfrog.
I like the term "economic heroin." Good video.
He does explain quite well how the system presently is about making the rich richer and how they won't care if there is a major recession and may even want it.

The guy's solutions, his faith in crypto currencies I don't share. I 100% agree with the implications for bank shares. I think it will be worse due to the effect of technology creating competition.

My prediction is that rather like what happened in England centuries ago, governments will need to tax property more.

 

[qldfrog]

And they will slam a death duty to effectively kill the middle class, and the class ladder, while adopting so called socialist or liberal policies which benefit the real super richs and nomenclature

 

[Knobby22]

Well, I think it will depend on many things.
The future is not clear at this stage.

 

[qldfrog]

Well, I think it will depend on many things.
The future is not clear at this stage.

Is it ever?
But we are indeed living in an instable world
On longuer trends
Ascending religious fanatism,
Western civilization downtrend, China superpower, unrelenting population increase and planet destruction, mass propaganda and lower real education level,radicalisation as a results
And now i am trying to drive my investments for the next 40y 50y
Good luck qldfrog