the Aussie market has had to compete with cash rates of around 6 per cent. So asset prices have stayed low in order to attract buyers. Further price falls from here will make equity prices attractive relative to cash. That’s especially the case if you choose to ignore 95 per cent of the economists out there and believe that interest rates will fall in Australia later this year or early next.
-- Currency manipulation, just another potent ingredient in this horrible global cocktail of bad policy decisions, is one major reason why the RBA won’t be raising rates anytime soon.
--We’re in a crisis of government. The whole apparatus needs an overhaul and more than anything we need a return to sound money so people can conduct business in a stable environment.
-- That reality is still some time away. In the meantime, don’t look at the market as crashing, look at it as getting cheaper. Because as a value investor, we think this market is beginning to look very cheap.
I agree with sound money, but I don't see a return to a gold standard or anything remotely close to it short of a default.
ReplyDeleteI for one would like the RBA to raise rates... wishful thinking I know, with the majority of Australians up to their eyeballs with debt, it would be brave for the RBA to do so in this environment. Although, then again... if inflation ever reaches 6+ percent here, there is no doubt rates would be raised.
I'm not sure the market is cheap. It is yet to reach 08 lows, the fundamentals of the economy have not changed (read - we are still in a deep doo doo). Until I see 08 lows on the market, I wouldn't touch equities with a ten foot pole.