Thanks for posting IV, good article.
It didn't really give me a whole lot of confidence.
I read Keen as saying that in order for the economy to improve, consumer spending to resume, we will need to deleverage and reduce our (private) debt to more acceptable levels. But this actually has an adverse effect on the economy in the first place... it's like the entire country should be saving, but if that happens personal incomes will drop making saving more difficult. A downward spiral.
In this case, indeed all we have to look forward to are the rate drops.
I must be a little different because the artical actually gave me some confidence.
I dont really care what happens with short to medium term house values.
Its the weekly cost to the hip pocket that can screw me( and others)
Its clear that relatively small interest movements can have the desired effect these days so 10+ % interest rates are unlikely while we owe as much as we do.
And any significant weakening in the economy or property market from here will likely lead to a rate drop so thats a cashflow improvement.
I dont have rose coloured glasses on or anything. Just looking at my own situation and working on that.
It didn't really give me a whole lot of confidence.
I read Keen as saying that in order for the economy to improve, consumer spending to resume, we will need to deleverage and reduce our (private) debt to more acceptable levels. But this actually has an adverse effect on the economy in the first place... it's like the entire country should be saving, but if that happens personal incomes will drop making saving more difficult. A downward spiral.
In this case, indeed all we have to look forward to are the rate drops.