BoE's Kate Barker - Rates could stay low for some time

inspector_monkfish

bendix wrote: »

Oh, believe me, I am. But I'm planning on retiring in 4-5 years so am happy to keep signicant cash reserves in . umm . .cash so long as it generates a decent return.

The monthly drip feed and pension fund payments are all in assets.

A balanced portfolio ;-)

you have to admit, you are lucky that you have the NZD option, where rates are higher.

Be no good if it was in USD or JPY !!

inspector_monkfish

bendix wrote: »

Bank of New Zealand (the largest retail bank) is still advertising 4.25% for three months on their website today.

Yes, I'm aware of the RBNZ decision overnight. It will likely drop, but the last two times it's dropped it hasnt affected longer term deposit rates.

We shall see .. .

interesting how they can quote higher on their website for customers, compared to where the interbank market currently trades

bendix

Really2 wrote: »

But surely if hyper inflation took hold that would be a disaster and your £150K would be nothing in five years time.

I see why you want a balanced portfolio but that hardly goes with what you say is going to happen.

Umm . with the greatest of respect (he says, with tongue firmly planted in cheek) you are prone to hyperbole, arent you?

Where did i predict hyper inflation?

My call is that inflation will rise gradually due to the pressures already mentioned, and that interest rates will increase also.....

My fear is not for normal prudent people like you and me; it's for those who are already stretched while rates are at historic lows and who will be hit when interest rates could - feasibly - double from today's level in 2-3 years time.

It won't hurt your or I much if they hit double figures, but I don't see that happening.

bendix

inspector_monkfish wrote: »

you have to admit, you are lucky that you have the NZD option, where rates are higher.

Be no good if it was in USD or JPY !!

Sure, but I have to factor in the currency risk too, don't forget. Swings and roundabouts always, isnt it?

inspector_monkfish

bendix wrote: »

Sure, but I have to factor in the currency risk too, don't forget. Swings and roundabouts always, isnt it?

Think you should be ok with Kiwi Dollars.
Its pretty stable.

Now, if you had your dosh in Latvia.........:eek:

Really2

bendix wrote: »

Umm . with the greatest of respect (he says, with tongue firmly planted in cheek) you are prone to hyperbole, arent you?

Where did i predict hyper inflation?

My call is that inflation will rise gradually due to the pressures already mentioned, and that interest rates will increase also.....

My fear is not for normal prudent people like you and me; it's for those who are already stretched while rates are at historic lows and who will be hit when interest rates could - feasibly - double from today's level in 2-3 years time.

It won't hurt your or I much if they hit double figures, but I don't see that happening.

I agree, but you also must admit inflation does take hold it should be in part a recovery.

I would then say with the banks being recapitalized the difference between say 3 month libor and A year fixed will be around the same.

I agree with what you are doing but i think it is unwise to think rates will be 5-6X 3 month libor in the recovery.

(sorry about the hyper inflation but it does get banded by so many:))

inspector_monkfish

bendix wrote: »

Sure, but I have to factor in the currency risk too, don't forget. Swings and roundabouts always, isnt it?

just found this
it may interest you

http://www.stuff.co.nz/business/2485743/ANZ-National-lift-mortgage-rates

pickles110564

bendix wrote: »

who will be hit when interest rates could - feasibly - double from today's level in 2-3 years time.

If they double to 2.18% in 2 to 3 years I will still be extremly happy.

Thrugelmir

Really2 wrote: »

I mean pre crunch some still have fixed savings rates

Thanks for clarifying.

bendix

inspector_monkfish wrote: »

just found this
it may interest you

http://www.stuff.co.nz/business/2485743/ANZ-National-lift-mortgage-rates

Interesting. Isnt the last paragraph of that story exactly what I've been arguing here - about the decoupling of retail interest rates (for both borrowing and lending) from official rates?