Not here to sugar coat facts

 Hi Readers 

It's interesting to see the responses I got from yesterday's post.

I'm not here to sugar coat anything to you, I say it like it is and if you can't accept it its a matter for you.

Oh and too the 2 real estate agents who sent me an email loaded, Happy to name any price as a bet, if you believe your right and I'm wrong.

So Lets look at where the Australian dollar is at and what's next. We have seen the Aussie dollar hold up quiet well considering rates in the US are higher. Why invest in the Australian dollar or bonds.

The Reserve banks has paused on rates at the present time which is a huge mistake. I say that because the devaluation of the currency will see higher import prices for product which will feed inflation over the next 3-6 months.

We saw New Zealand's central bank increase rates by 50 basis points with there current inflation rate at 7.2%. While the Australian inflation rate is at 7.4% and the RBA paused. Is it political pressure or mortgage pressure either way the independence of rates is no longer there I feel.

Current RBA rates are at 3.60% 

Current RBNZ rates are at 5.25%

As this is being posted AUD/US .6625 NZD/US .6200

So we have a 4 point spread yet on the currency and a 1.65% spread on rates. 

Why would you invest in Australia dollar or rates again? 

Regardless of whether the economy is struggling or not if inflation is double the rate of interest rates, inflation isn't coming down any time soon.

While in New Zealand yes the economy is going to slow down which will bring the balance back (supply/demand) zombie companies will go broke and new smarter and efficient companies will thrive and grow. The weak get cleaned out while the responsible push through with new opportunities.

While in Australia the economy is likely to seriously drag its feet. Government spending is going to create a drag on the economy. Yes migration will create demand of goods and services but with the lower Australian dollar will put pressure on margins which companies will push the costs to consumers, which will create consistent pressure on inflation, once again falls back on to the responsibility of the RBA. Its simply a cycle which growth produces.

I'm a huge advocate of the quicker we deal with it the quicker we get over and done with it.

If I was Governor I would have been moving on rates last year 1% every meeting from April -September last year. To hell with the property market and the debt people have put themselves in. If inflation is under control then the hard you work the more you keep.

While inflation is at the current levels it discourages people from working hard for reward.  

Solar Eclipse is coming people and its in Aries.

April 20th

I'll leave you with the following.

Changes are coming and they are going to be long term. Yes Australia, Indonesia, Papua New Guinea and the islands around These countries will be affected.

Can You Remember what you did in 2004? if you want a glimpse of what will take place and how the Eclipse will affect your demeanor and changes you will go through look back for the clue's.