Want to talk about something we haven't covered? It's time for our Saturday open thread.
3 comments:
Anonymous
said...
What is you opinion on Mboweni keeping interest stable even with inflation booming? I this loosing monetary policy evolving to dramatic consequences in mid-term. Especially since the SA stat office will 'invent' new ways calculating inflation, by lowering weight of food in the index; the perfect way to squeeze middle class.
My views: http://www.emergingsouth.net/the-world-and-south-africa-in-the-news-today/
My boss has been buying a lot of property recently - using 2010 and Black Diamonds as his rationale - he struts around the office telling everyone about his property "business" - his "business model" is based on capital appreciation and when I point out that his model has negative cash flow he says "well at least my salary is leveraged". How stupid is this? No, this is a serious question - I would like arguments to point out just how stupid this is! Thanking you in advance
emerging south: I believe that rates will remain high for a while. Either the repo rate will increase later as other inflationary pressures come to the fore (particularly Eskom's tarriff increases and the growing import/export disparity) or they will plateau at current levels for a while.
anonymous: Ask your boss to work out how much capital appreciation he needs to make money after ALL costs are taken into account (bond payments, transfer duty, maintenance, vacancy, rates, levies etc etc).
Now because property prices tend to track inflation and salary growth ask your boss for a raise equal to the amount of capital appreciation. If he believes property prices are going to increase that much then he must believe that people will have the money to buy them and salaries therefore must be going up to meet property growth. Right?
3 comments:
What is you opinion on Mboweni keeping interest stable even with inflation booming?
I this loosing monetary policy evolving to dramatic consequences in mid-term. Especially since the SA stat office will 'invent' new ways calculating inflation, by lowering weight of food in the index; the perfect way to squeeze middle class.
My views:
http://www.emergingsouth.net/the-world-and-south-africa-in-the-news-today/
My boss has been buying a lot of property recently - using 2010 and Black Diamonds as his rationale - he struts around the office telling everyone about his property "business" - his "business model" is based on capital appreciation and when I point out that his model has negative cash flow he says "well at least my salary is leveraged". How stupid is this? No, this is a serious question - I would like arguments to point out just how stupid this is! Thanking you in advance
emerging south: I believe that rates will remain high for a while. Either the repo rate will increase later as other inflationary pressures come to the fore (particularly Eskom's tarriff increases and the growing import/export disparity) or they will plateau at current levels for a while.
anonymous: Ask your boss to work out how much capital appreciation he needs to make money after ALL costs are taken into account (bond payments, transfer duty, maintenance, vacancy, rates, levies etc etc).
Now because property prices tend to track inflation and salary growth ask your boss for a raise equal to the amount of capital appreciation. If he believes property prices are going to increase that much then he must believe that people will have the money to buy them and salaries therefore must be going up to meet property growth. Right?
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