rates to be cut in 2015?

[Benvolio]

is there poll for somersofters on what will happen to rates in 2015??

 

[Freckle]

There are military buildups everywhere. The next 5 years will see an arms race on steroids. You need exposure to US and EU military suppliers. Not just weapons. Everything from sub contractors to tech to aerospace, clothing etc etc etc.

 

[unloadmymind]

is there poll for somersofters on what will happen to rates in 2015??

There will be no RBA rate cut next year.

The US Fed will do the work for us - they will raise their rates first half 2015, and that will put the AUD exchange rate to a level considered desirable by the RBA to counteract the falling iron ore prices.

Even if the RBA cut happens - Aussie banks are overly dependent on overseas wholesale funding.

When the US rates go up, our banks' cost of funds will increase regardless of what the RBA is doing.

The banks won't be able to pass on much of any RBA rate cuts as they have to protect their interest margins.

 

[antistar]

There are military buildups everywhere. The next 5 years will see an arms race on steroids. You need exposure to US and EU military suppliers. Not just weapons. Everything from sub contractors to tech to aerospace, clothing etc etc etc.

And the purpose of helping provide capital for such a cause would be??? Hope you really stop and think of your money 'at work' in detail while you are salivating over the extra few % you will make in those industries

 

[js1]

There will be no RBA rate cut next year.

The US Fed will do the work for us - they will raise their rates first half 2015, and that will put the AUD exchange rate to a level considered desirable by the RBA to counteract the falling iron ore prices.

Even if the RBA cut happens - Aussie banks are overly dependent on overseas wholesale funding.

When the US rates go up, our banks' cost of funds will increase regardless of what the RBA is doing.

The banks won't be able to pass on much of any RBA rate cuts as they have to protect their interest margins.

 

[Freckle]

And the purpose of helping provide capital for such a cause would be??? Hope you really stop and think of your money 'at work' in detail while you are salivating over the extra few % you will make in those industries

The reply was in response on 'where' to invest given current global macro volatility and an impending correction.

That doesn't presuppose that I invest in the military industrial complex or advocate investing in it.

During the first and second world wars many made a buck or two in investing in companies who manufactured medical supplies like bandages. If one wanted to take advantage of a conflict situation that was in some way positive or humanitarian in nature that would be route I would tend to recommend.

 

[unloadmymind]

Don't be confused.

Think Global.

Local forces are not immune from the money-sucking or money-flooding United States of America. Remember, a lot of our Aussie banks' funding come from overseas.

When the US Federal Reserve raise their rates, expect local banks to feel the pinch.

International wholesale financial markets will require greater returns from the CBAs and Westpacs, and the RBA has little control over this.

And as you have seen in the past year or so, the RBA peeps were sitting pretty not doing anything with the official cash rates.

However with the American Quantitative Easing, the cost of funds in international markets went down - thanks to the US Fed, that's why the Aussie banks have been lowering their interest rates because they can afford to.

It was the US Fed which gave us the real, actual interest rate cuts in Australia in the past year or so, while the RBA was doing nothing.