Jackes Posted June 4, 2008 Share http://www.news24.com/News24/Columnists/Max_du_Preez/0,,2-1630-2148_2334402,00.html Link to comment Share on other sites More sharing options...
fandacious Posted June 4, 2008 Share Yes... lets take the world of a columnist over Mr Mboweni. I'm sure its easy to run the reserve bank from your armchair.As someone pointed out the other day, interest rates are cyclical. Around 10 years ago it was @ 25% and banks had special measures in place to help homeowners who couldnt afford the repayments. A bank has no use for a million homes it cant sell.... Link to comment Share on other sites More sharing options...
fandacious Posted June 4, 2008 Share and secondly... if inflation is @ 20% per annum, what does it help if interest is @ 10% pa... your money is effectively losing value while sitting in the bank account.... Link to comment Share on other sites More sharing options...
Jackes Posted June 4, 2008 Share just funny that all the econimists advices accordingly, so i just wondered are they ( tito ) heading in the right direction here ...      One concept i just can not get my mind rapped aroud, is how can we be punished with interest rates, while the food and petrol prices ( which we have no control over ) pushes up the inflation. And since spending has come down ? Link to comment Share on other sites More sharing options...
fandacious Posted June 4, 2008 Share just funny that all the econimists advices accordingly' date=' so i just wondered are they ( tito ) heading in the right direction here ...     [/quote']  Really? they ALL advice to lower interest rates? Link to comment Share on other sites More sharing options...
Jackes Posted June 4, 2008 Share since you are so clever to note the " all " why dont you not all that i wrote, and reply on the rest of my post ? Link to comment Share on other sites More sharing options...
NotSoBigBen Posted June 4, 2008 Share As a layman, if raising interest rates is so effective at reducing inflation then how come after all these many increases why is it still going up ....... just a thought, use it don't use it! Link to comment Share on other sites More sharing options...
fandacious Posted June 4, 2008 Share As a layman' date=' if raising interest rates is so effective at reducing inflation then how come after all these many increases why is it still going up ....... just a thought, use it don't use it![/quote'] Â hence my first post. do you remember it being 25% 10 years ago? it took a LOT of interest rate raises to get inflation down. stopping half way thru the process isnt going to help... Link to comment Share on other sites More sharing options...
Jackes Posted June 4, 2008 Share thats why the economists / columnists advises that it had to be a huge hike at the start, to shock everyone. at this stage, what does interest hikes do to food prices and petrol prises, apart from pushing the food prices even more upwards , and then inflation, ,,, blah blahthough i see they recon the supermarkets will have to start absorbing and not passing on the rising prises from almost now on Link to comment Share on other sites More sharing options...
fandacious Posted June 4, 2008 Share i'm quite actively involved in retail, and i can tell you one thing - shop owners are taking a smaller and smaller margin the whole time. i think its just a tough phase SA is going thru. Make no mistake - higher interest rates attract a LOT of foreign capital, so there a up sides as well. The economy is still booming. Builders are making a killing at the moment... Link to comment Share on other sites More sharing options...
Canaris Posted June 4, 2008 Share the basic assumption of economics is the concept of supply and demand. It is hoped that by increasing interest the demand for goods will be decreased as the available money declines. HOwever, if prices keeping going up in sectors where the government controls (power and fuel) then Tito is sending mixed messages......... Link to comment Share on other sites More sharing options...
Francois Posted June 4, 2008 Share As I understand it, the reason for pushing up the prime interest rate is to encourage people to save. ?This is done in 2 ways, - 1. Higher interest from the bank on savings (if you can afford to have savings, that is) - 2. Stop people goin gout and buying things that they really can't afford and hence have to buy on HP etc. I don't know the full economics of it all, but if we look at the sales of new cars last month - dropped. ?People realize thay can't afford the new car so have either not bought one or have gone for a cheaper second hand one. ?House sales are also dropping at a large rate. ?Maybe it is working. My opinion only, and I do realise that there are many arguments for and against. ?Yes the poorest of the poor suffer the most, especially with the price of everything else going up so much. Link to comment Share on other sites More sharing options...
Jackes Posted June 4, 2008 Share Builders are making a killing at the moment...Dumb question, how is that possible with no one being able to buy ? Link to comment Share on other sites More sharing options...
fandacious Posted June 4, 2008 Share Builders are making a killing at the moment...Dumb question' date=' how is that possible with no one being able to buy ? [/quote'] dont assume that because some people are struggling the whole of SA is in depression. There is a HUGE building boom @ the moment... Link to comment Share on other sites More sharing options...
Jackes Posted June 4, 2008 Share Yes Francois, but spending ( credit card / installments / everything ) has been going down since Feb, but still they beat us with the rate hikes, while food and fuel ( higher prices = higher spending ) is out of our control. Dont even get me started on the Eskom issue. pathetic Link to comment Share on other sites More sharing options...
Jackes Posted June 4, 2008 Share Go and ask any, yes ANYone in the propertymarket how their sales was the last 12 months !! Link to comment Share on other sites More sharing options...
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