Interest Rates

Whether it’s the rate you pay on your mortgage or business loan to the return on your money at call in the bank…the interest rate is the key variable in the economy.

In fact, it’s THE most important signal in the economy. Alas, if you think the economists at the RBA know what they’re doing when they fix the price of money, you’ll soon learn why the economy lurches from boom to bust.

Will interest rates rise?

A question you all may have..

Markets and Money will show you the threats and opportunities. For example, when interest rates fall, investors often go hunting for dividend stocks and bid their prices up. When interests rate rise, you don’t want to own companies with a lot of rate sensitive debt.

Discover if you should be in cash, stocks or bonds and why below…

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Expect Things to Change

You would be surprised how many people invest based on recent past performance, projecting the present into the future. Economists even have a name for it: extrapolation bias.

Welcome to Fantasy Land

The circulation of those borrowed monies within the economy is what’s kept the GDP numbers in the positive. For the best part of 30 years, we’ve been compounding our debt pile at an average annual…

Forget Bitcoin and Focus on Stocks

Have you heard the latest news? Twitter banned advertisements on cryptocurrency initial coin offerings (ICOs). Bitcoin fell 7% on the news. It’s currently trading below US$8,000 at the time of writing. Weeks of regulatory uncertainty…

Overheard in a Wall Street Bar…

Households are borrowing 90 cents for every incremental dollar they spend, up from 40 cents four years ago. Household debt service costs are expected to increase by $75 billion this year — almost completely offsetting…

Surprise Attack

Ever since June 1991 — our last official recession — the textbook approach to generating GDP growth has been to encourage households to borrow to ‘get the economy moving’. Our economic ‘success’ has really been…

Markets and Money