It's the Saturday Open Thread. This weeks topic: Interest Rates - Stable for 2011 or will we see a bump up in the Repo Rate before the end of the year?
5 comments:
froggy
said...
Ok I'll go first. Massive inflation on the horison. Our esteemed governor of the reserve bank will try to put the brakes on by raising the repo rate. (this part is a mathematical certainty) The rest is gueswork. Unfortunately the economic train will be speeding down a massive mountain of paper. There will be no stopping this beast, it migth descend all the way to Hell! Expect it to go up around the same time as America raises it's rates, all the plastic economies of the world is in cahoots via the IMF, or manipulated by the elite. Some european countries is already raising their Repo rate. By the time the rate is adjusted upward there would be a false perception that property values are recovering, they will show an increase in value on paper but if measured in commodities their value will still be falling. (I'd like to exclude special properties in the very high value range, they will devalue in paper terms as well, the rich are cottening on that they are being milked by government via property taxes). And to conclude expect all this to happen faster than expected, nobody thought securities will be reaching record hights, but look where the JSE is today. After a lot of experts talked about 8 and 10 years cycles.
Barring sudden shocks (EU going under), I reckon we're going to leave our "target band" of 6% inflation in about September or October, and nudge 10% by the end of the year.
According to the recent rates cycles that means rates should be up 2% when we leave the band, up 6% by year end.
But with local elections to win and a national conference coming in 2012, will the ANC risk the ire of the poor by raising rates? 40-million Lubners lounge sets bought on credit...that's a lot of potential rage right there if rates start rising...
My 2 favourite loaves of bread just went up 50% each - the supermarket manager says more increases coming down the line. Food has gone crazy. Partly because of the money men in the US manipulating the commodity markets.
Tough times ahead.
I see an article in a UK paper today shows that Spain has embraced the property crash just like the US. A house in the best location will sell for half the price it sold for 3 or 4 years ago ... all the rest are not selling even at that discount ... ouch. The expats who went out there for a better life are getting hung out to dry.
The same paper says UK house prices are heading down 20% soon ... the real price graph certainly indicates this.
Meanwhile in SA, the country that had the biggest global bubble and where real prices are 50% over valued, people are still insisting a nominal crash will not happen here.
I look at the weekend papers and I see a lot of very expensive overpriced properties.
Although someone mentioned recently, maybe it was here, that sea point sales are presently averaging 30% below asking ... that sounds promising.
A studio apartment for R1.23 million? With a "good" rental. If it's so "good" why don't they disclose it in the ad? Methinks it won't cover half the bond and levy per month.
UK food prices are up and so of course is petrol. These two are linked so if oil keeps with continued MENA (middle east, north africa) uncertainty, living costs will continue to rise. The same of course for SA.
The west is exposed to living standards degradation as people need to compete harder for work (ie no salary increases) but knowledge work continues to be exported to cheaper and smarter workers in the east.
South Africa is caught in its own time warp here due to uncompetitive wages rates, uncompetitive skill levels, oppressive labour regulations, and workers still demanding more and a government that needs to deliver it.
How this plays out in terms of SA fortunes in the future will be crucial for determining living standards in SA. How much mineral and commodity business will be redirected to cheaper more efficient countries?
Very little room for protectionist policies in this new world we find ourselves in now.
5 comments:
Ok I'll go first. Massive inflation on the horison. Our esteemed governor of the reserve bank will try to put the brakes on by raising the repo rate. (this part is a mathematical certainty) The rest is gueswork. Unfortunately the economic train will be speeding down a massive mountain of paper. There will be no stopping this beast, it migth descend all the way to Hell!
Expect it to go up around the same time as America raises it's rates, all the plastic economies of the world is in cahoots via the IMF, or manipulated by the elite. Some european countries is already raising their Repo rate. By the time the rate is adjusted upward there would be a false perception that property values are recovering, they will show an increase in value on paper but if measured in commodities their value will still be falling. (I'd like to exclude special properties in the very high value range, they will devalue in paper terms as well, the rich are cottening on that they are being milked by government via property taxes). And to conclude expect all this to happen faster than expected, nobody thought securities will be reaching record hights, but look where the JSE is today. After a lot of experts talked about 8 and 10 years cycles.
Barring sudden shocks (EU going under), I reckon we're going to leave our "target band" of 6% inflation in about September or October, and nudge 10% by the end of the year.
According to the recent rates cycles that means rates should be up 2% when we leave the band, up 6% by year end.
But with local elections to win and a national conference coming in 2012, will the ANC risk the ire of the poor by raising rates? 40-million Lubners lounge sets bought on credit...that's a lot of potential rage right there if rates start rising...
My 2 favourite loaves of bread just went up 50% each - the supermarket manager says more increases coming down the line. Food has gone crazy. Partly because of the money men in the US manipulating the commodity markets.
Tough times ahead.
I see an article in a UK paper today shows that Spain has embraced the property crash just like the US. A house in the best location will sell for half the price it sold for 3 or 4 years ago ... all the rest are not selling even at that discount ... ouch. The expats who went out there for a better life are getting hung out to dry.
The same paper says UK house prices are heading down 20% soon ... the real price graph certainly indicates this.
Meanwhile in SA, the country that had the biggest global bubble and where real prices are 50% over valued, people are still insisting a nominal crash will not happen here.
I look at the weekend papers and I see a lot of very expensive overpriced properties.
Although someone mentioned recently, maybe it was here, that sea point sales are presently averaging 30% below asking ... that sounds promising.
Ok maybe this off topic
http://capetown.gumtree.co.za/c-Flat-House-Real-Estate-vacant-land-properties-for-sale-Mandela-Rhodes-Place-studio-apartment-to-buy-with-tenant-W0QQAdIdZ159076919
A studio apartment for R1.23 million?
With a "good" rental. If it's so "good" why don't they disclose it in the ad? Methinks it won't cover half the bond and levy per month.
We are in for really interesting times ahead.
UK food prices are up and so of course is petrol. These two are linked so if oil keeps with continued MENA (middle east, north africa) uncertainty, living costs will continue to rise. The same of course for SA.
The west is exposed to living standards degradation as people need to compete harder for work (ie no salary increases) but knowledge work continues to be exported to cheaper and smarter workers in the east.
South Africa is caught in its own time warp here due to uncompetitive wages rates, uncompetitive skill levels, oppressive labour regulations, and workers still demanding more and a government that needs to deliver it.
How this plays out in terms of SA fortunes in the future will be crucial for determining living standards in SA. How much mineral and commodity business will be redirected to cheaper more efficient countries?
Very little room for protectionist policies in this new world we find ourselves in now.
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