10
Oct
08

Interest rate

Okie my first new post on wordpress.. I am sure most ppl have heard by now Reserve Bank of Australia (RBA) have slash interest down by 1%….apparenently its the biggest slash in the past 16 years.  Some national banks have passed down the savings to consumers like me. Not the full 1% but 0.8% (varies with banks)… any savings is good savings 🙂

interest rates going down is good for ppl without much savings and have a big ass mortgage hehe. that means they have less monthly repayments. But ppl without mortgages will be crying as they dun get as much interests in their savings. stop whinging already. most of us are still in debt..

Whether u have a mortgage not , you should still be concerned with the direction the interest is going.  why? cause it is a indicator of how our economy is going. High interest rate can slow down inflation. very obvious.. since most ppl are still in debt and have some form of loan, high interest means ppl have less money == less spending power == less demand  == price slows/drop

Whereas low interest rate can spur economy growth because ppl have more money == more spending power == more demand == inflation.

Australia is actually doing pretty well since alot of our exports goes to china so even with the US current economy crisis,we are not hit that hard. we are only affected cause of human fear factor, like everyone is scared, heaps of uncertainty etc etc . i lost quite a bit in shares recently too ..zzzzz.. should have sold it when i was earning and just pay a premium tax. haiz.. foresight is such a wonderful thing ….

I know there’s quite alot of people that wants the prices of houses to drop. But if it does really drops.. we are fuked. just like US, ppl bought houses that cost eg 600,000 and prices  drop to 400,000, ppl will just choose to foreclose the house since theres no point trying to pay it off. then banks will be hit etc etc cause they just lost 200,000. this is why the US government injected so much money into the banks recently cause if the banks goes down ==  the ppl loses their money == country goes down.

Of course there are many other indicator to forecast our economy such as consumer price index(cpi),  gross domestic product, employment rate,  consumer credit etc etc etc…but i am not going to explain all of it simply because i am a PROGRAMMER not a FINANCE ANALYSIS. So why i am blabbing here? 

Dunno, hahah u just spend 5 minutes reading some financial shit from a IT guy..:)

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Recent migration to wordpress from blogspot the original blog can still be found at teapls.blogspot.com I have link all image sources on the image itself I will always reference my source whenever possible but with so many images floating around the net, it is pretty hard to identify which image belongs to who. If I have not given the source proper credit, inform me and i will correct it immediately

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