Australian (ASX) Stock Market Forum

RBA cash rate

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qldfrog said:
Really, no insurance, no water, no electricity, no car, no taxi no transport you get internet?
the CPI is a BS under estimate of real cost inflation.And whatever wealth you have had is getting eaten
inflation as I need to pay more for xxx is nothing for investors vs the real depreciation of FIAT
Inflation is the most generic tax you can inflict on a population..at least it is not just the middle class paying it;-)
Click to expand...
that CPI BS has been a progressive thing ( more and more unrealistic over the decades , not just recently )

even using numbers from Shadow Stats has it's flaws ( but less inaccuracy than official figures )
 
PZ99 said:
I can't see rates going that far without crashing the economy. They could even go down again by that point :2twocents
Click to expand...
the RBA THINKS they can lift rates to 2.5% by December 2022 ( i think i saw a 3% estimate as well )

using the 2018 Taper Tantrum as a guide i will find the attempt to hike ,that high will be entertaining ( and yes i expect to be the nasty end of the pain it the plan succeeds )

IF we rise to 2.5% by December will the hikes continue ( or will the markets collapse )

BTW this is NOT an Australia problem but one shared by several developed nations ( and one collapse could trigger others )
 
If we get to 2.5% by December it might be a good idea to stay off the roads because hit and runs will go through the roof with people driving unregistered / uninsured cars to save their house. Petrol stealing has already increased around here - might have to use blind headed bolts on my rego plates :)
 
qldfrog said:
Really, no insurance, no water, no electricity, no car, no taxi no transport you get internet?
the CPI is a BS under estimate of real cost inflation.And whatever wealth you have had is getting eaten
inflation as I need to pay more for xxx is nothing for investors vs the real depreciation of FIAT
Inflation is the most generic tax you can inflict on a population..at least it is not just the middle class paying it;-)
Click to expand...

Already built in to the forward provisioning of household overheads on a rolling basis. Simple task if rates are now $2.5k provision for double that. Same deal with insurances. Always build in a lot of fat. Doesn't everybody do that sort of thing?

Anyway as the SMSF has a large amount in accumulation phase as well as pension phase. In addition to personal holdings. So being over 70 I will run out of funds or it will be depreciated to zero if I live another 70 or so years according to the FP. So no I don't care in the least.
 
divs4ever said:
the RBA THINKS they can lift rates to 2.5% by December 2022 ( i think i saw a 3% estimate as well )

using the 2018 Taper Tantrum as a guide i will find the attempt to hike ,that high will be entertaining ( and yes i expect to be the nasty end of the pain it the plan succeeds )

IF we rise to 2.5% by December will the hikes continue ( or will the markets collapse )

BTW this is NOT an Australia problem but one shared by several developed nations ( and one collapse could trigger others )
Click to expand...
What are the alternatives tho? We are in a hole keep digging down?
 
Belli said:
Already built in to the forward provisioning of household overheads on a rolling basis. Simple task if rates are now $2.5k provision for double that. Same deal with insurances. Always build in a lot of fat. Doesn't everybody do that sort of thing?

Anyway as the SMSF has a large amount in accumulation phase as well as pension phase. In addition to personal holdings. So being over 70 I will run out of funds or it will be depreciated to zero if I live another 70 or so years according to the FP. So no I don't care in the least.
Click to expand...
So yes lucky you...and never trust a FP
 
divs4ever said:
the RBA THINKS they can lift rates to 2.5% by December 2022 ( i think i saw a 3% estimate as well )

using the 2018 Taper Tantrum as a guide i will find the attempt to hike ,that high will be entertaining ( and yes i expect to be the nasty end of the pain it the plan succeeds )

IF we rise to 2.5% by December will the hikes continue ( or will the markets collapse )

BTW this is NOT an Australia problem but one shared by several developed nations ( and one collapse could trigger others )
Click to expand...

It could very well end up like the 1970s, post unpegging of USD to gold, where there was high inflation from RAMPANT creation of monetary supply and the FED tried to hike then economy went into recession/stagflation. inflation got so bad, around 14.8% (which coincidentally using olden day measures, is around what USA/the world is experiencing now) , that they finally had a proper FED chair that just hiked from 11.2% (1979) to 20%(1981) to finally overcome inflation. However this caused MASSIVE unemployment >10% and recession. and of course Australia got our recession during that time in 1982 as well.

GOLD went from $40USD to $650+USD during the 70s high inflation decade. It only went back down to 260 over next 2 decades due to positive real rates and lack of "inflation panic" but its now at 1800 another 2 decades post 2000 dotcom boom and massive "money printing"

Hyperinflation is already here NOW. We can see it in food prices/ car prices/ goods/ services/rents/property prices, dont have to be a genius to see it. (you know inflation is really bad when RBA is hiking before an election. probably so in case things go sideways with hyperinflation, they can say 'hey we did start hiking when everyone else in the world was hiking' even before the elections, so dont blame us and say we were too slow to start hiking, etc..etc...)

3% will be a joke vs 10%+ inflation, it will fail like 1970s, BUT most countries swimming in debt wont be able to service anything higher than 3% or so, otherwise they default.

S**T is about to hit the fan. I would think at least 10%-20% in PM is prudent as well as 6months store of food/TOILET PAPER, when everything tanks, at least that 10%-20% might 10x over the next decade as another "inflation panic" sets in again.
 
Gerome over in the US had his girly panties on too, especially in the language.
 
againsthegrain said:
What are the alternatives tho? We are in a hole keep digging down?
Click to expand...
MAYBE we shouldn't have started digging there in the first place ( let the 'free-market ' work undistracted )

but the government/RBA like to pretend they are in control ( and not just annoying meddlers

given RBA rates rises are NOT over-taking REAL inflation , there MIGHT be an argument that these ( too ) late rises are only boosting perceived inflation , with tax indexation ( CPI-adjusted rises ) and a GST to amplify that .. and THEN you also have the probability of 'bracket creep '


take the nice little earner fuel-excise will make for Treasury as just one example

maybe we should stop digging and pray it DOESN'T rain

after all there is a theory that the best cure for higher prices is higher prices ( the prices will exceed what the consumer will pay and therefore face a reduction in demand )
 
bluekelah said:
It could very well end up like the 1970s, post unpegging of USD to gold, where there was high inflation from RAMPANT creation of monetary supply and the FED tried to hike then economy went into recession/stagflation. inflation got so bad, around 14.8% (which coincidentally using olden day measures, is around what USA/the world is experiencing now) , that they finally had a proper FED chair that just hiked from 11.2% (1979) to 20%(1981) to finally overcome inflation. However this caused MASSIVE unemployment >10% and recession. and of course Australia got our recession during that time in 1982 as well.

GOLD went from $40USD to $650+USD during the 70s high inflation decade. It only went back down to 260 over next 2 decades due to positive real rates and lack of "inflation panic" but its now at 1800 another 2 decades post 2000 dotcom boom and massive "money printing"

Hyperinflation is already here NOW. We can see it in food prices/ car prices/ goods/ services/rents/property prices, dont have to be a genius to see it. (you know inflation is really bad when RBA is hiking before an election. probably so in case things go sideways with hyperinflation, they can say 'hey we did start hiking when everyone else in the world was hiking' even before the elections, so dont blame us and say we were too slow to start hiking, etc..etc...)

3% will be a joke vs 10%+ inflation, it will fail like 1970s, BUT most countries swimming in debt wont be able to service anything higher than 3% or so, otherwise they default.

S**T is about to hit the fan. I would think at least 10%-20% in PM is prudent as well as 6months store of food/TOILET PAPER, when everything tanks, at least that 10%-20% might 10x over the next decade as another "inflation panic" sets in again.
Click to expand...
i lived through the 1970's i can probably survive that again BUT several folk are saying we are in uncharted territory piloted by a ship of fools ,

BTW there was a stupid war raging then as well , BUT that might be a coincidence
 
divs4ever said:
MAYBE we shouldn't have started digging there in the first place ( let the 'free-market ' work undistracted )

but the government/RBA like to pretend they are in control ( and not just annoying meddlers

given RBA rates rises are NOT over-taking REAL inflation , there MIGHT be an argument that these ( too ) late rises are only boosting perceived inflation , with tax indexation ( CPI-adjusted rises ) and a GST to amplify that .. and THEN you also have the probability of 'bracket creep '


take the nice little earner fuel-excise will make for Treasury as just one example

maybe we should stop digging and pray it DOESN'T rain

after all there is a theory that the best cure for higher prices is higher prices ( the prices will exceed what the consumer will pay and therefore face a reduction in demand )
Click to expand...

Saying this kind of stuff even a year ago made you a doomsayer and ?
 
Times like these I'm glad I swore off ever taking any debt/leverage after paying off my place a few years ago. Maybe not the smartest approach, but makes for more restful sleep. I would have to be extremely confident about the gamble to borrow again.
 
StockyGuy said:
Times like these I'm glad I swore off ever taking any debt/leverage after paying off my place a few years ago. Maybe not the smartest approach, but makes for more restful sleep. I would have to be extremely confident about the gamble to borrow again.
Click to expand...
looks clever to me , but then i roll my eyes at the guys/gals the use high leverage plays to buy other assets ( stuff like property )

AND you are liable to sleep easier at night ( as a bonus )
 
divs4ever said:
looks clever to me , but then i roll my eyes at the guys/gals the use high leverage plays to buy other assets ( stuff like property )

AND you are liable to sleep easier at night ( as a bonus )
Click to expand...

Sadly my cautious way is not really a way to get "proper rich", though - unless one of my buy and hold stocks goes utterly nuts (I can only dream lol).
 
but your way MIGHT help you stay rich ( or solvent )

there are several billionaires that can't say that ( they have declared bankruptcy , and restructured their debt obligations )

i see what the 'credit-friendly ' folk do , and how it works , but am trying to avoid train-wrecks whilst still a passenger on the train
 
divs4ever said:
i lived through the 1970's i can probably survive that again BUT several folk are saying we are in uncharted territory piloted by a ship of fools ,

BTW there was a stupid war raging then as well , BUT that might be a coincidence
Click to expand...
Which stupid war was that? Was that the end of the Vietnam war in the early 70s where the Americans finally pulled out and the communist Viet Cong then managed to take over the entire country ? Sounds like a repeat of history in Afghanistan, where US forces left and the country fell to the Taliban.

or was it on of the Arab - Isreali wars?

Must have been a rough time to live through. I believe in history repeating itself, maybe not exactly but in similar fashion. Its been shown throughout history that a dominant power will create their own reserve fiat currency for global trade (dutch -> british -> USA) but ultimately another superpower takes over. Gold is what prevails in the end. We could be looking at a Chinese based global trade currency soon.

This Ray Dalio Video i think sums it up well.


I do think most CBs are hiking now, not becoz their economies are doing well but becoz they have NO CHOICE as thats the only way they know to fight inflation (or dare i say hyperinflation). Perhaps if we get to 15-20% rates again folks will remember it for at least a generation or so...Just like during the DotCom boom, those highly leveraged players will be wiped out for sure, we might even have to do a bank bail out or two :D
 

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