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  1. #601
    Senior Member TeslaGod's Avatar
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    Quote Originally Posted by Aaron View Post
    I tried reading it but a bit over my head. Unrealized losses on bonds wouldn't matter that much if you were holding to maturity would it?
    Best way to explain (effects of Q.E/stimulus)

    If cash is poop

    The bonds used as security is the toilet paper .

    Invest in real estate/crypto or other financial assets not bond's or cash .
    Last edited by TeslaGod; 17-11-2021 at 04:55 PM.

  2. #602
    Senior Member TeslaGod's Avatar
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    Debt becomes irrelevant with inflation.

    For example if I purchased 4 house's in 2010 with leveraged debt/With the devaluation of the Dollar/fiat currency today I can sell 1 of those houses to clear the debt on the other 3 house's.

    Now here's the good news

    I can use the income from the rent to recycle the equity and buy more property or Tesla shares.

    The system is corrupt and designed for a people like me who are willing to use it to our advantage

    Your welcome .
    Last edited by TeslaGod; 17-11-2021 at 07:35 PM.

  3. #603
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    Quote Originally Posted by TeslaGod View Post
    Debt becomes irrelevant with inflation.

    For example if I purchased 4 house's in 2010 with leveraged debt/With the devaluation of the Dollar/fiat currency today I can sell 1 of those houses to clear the debt on the other 3 house's.

    Now here's the good news

    I can use the income from the rent to recycle the equity and buy more property or Tesla shares.

    The system is corrupt and designed for a people like me who are willing to use it to our advantage

    Your welcome .
    The only question then is will the central banks keep it going or not.

    The last 30 years indicates yes and I would need to have a look into it further but back in the 50s and 60s they may have set up the 70s inflation along with the oil shocks.

    Ray Dalio talks about long term debt cycles but from what he is saying he expects cash to become worthless before interest rates rise significantly.

  4. #604
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    Quote Originally Posted by TeslaGod View Post
    Debt becomes irrelevant with inflation.

    For example if I purchased 4 house's in 2010 with leveraged debt/With the devaluation of the Dollar/fiat currency today I can sell 1 of those houses to clear the debt on the other 3 house's.

    Now here's the good news

    I can use the income from the rent to recycle the equity and buy more property or Tesla shares.

    The system is corrupt and designed for a people like me who are willing to use it to our advantage

    Your welcome .
    Maybe you are being lulled into dreamland with your reliance on monetary policy.

    https://www.nzherald.co.nz/business/...LM65BUPTGOR4Y/

  5. #605
    Senior Member TeslaGod's Avatar
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    Quote Originally Posted by Aaron View Post
    Maybe you are being lulled into dreamland with your reliance on monetary policy.

    https://www.nzherald.co.nz/business/...LM65BUPTGOR4Y/
    Just when I think you may be understanding you are easily distracted by click bait media.

    You obviously didn't take on Ray Dalios knowledge that what the central bank's have done is cyclical.

    They have stopped printing money/interest rates may rise again/and the cycle will eventually repeat most likely with negative interest rates.
    Last edited by TeslaGod; 18-11-2021 at 10:12 AM.

  6. #606
    Senior Member TeslaGod's Avatar
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    Quote Originally Posted by TeslaGod View Post
    Just when I think you may be understanding you are easily distracted by click bait media.

    You obviously didn't take on Ray Dalios knowledge that what the central bank's have done is cyclical.

    They have stopped printing money/interest may rise again/and the cycle will eventually repeat most likely with negative interest rates.
    And while your at it find out who really owns NZME and the NZ Herald/ because I invest several hundred thousands into these investment bank's and it makes feel dirty but rich.
    Last edited by TeslaGod; 18-11-2021 at 10:11 AM.

  7. #607
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    Article by Bruce Cotterill was interesting. Hard not to agree that spending on covid in hindsight now is starting to look wasteful.

    https://www.nzherald.co.nz/business/...ZGOLFABDHNKHQ/

    But at a 5% inflation rate as Ray Dalio points out you get rid of 50% of your debt after 10 years.

    How likely is it we will see RBNZ raise interest rates more than .25% at the next meeting.

    If everything is expensive and cash is even trashier. Maybe time for gold to shine as a store of wealth until after the madness has ended.

  8. #608
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    Amazing study by the treasury, the lead advisor to the govt on economic and financial policy.

    House price growth decreases inequality overall. This is due to 64% of people owning houses and for most people that is their largest asset so when house prices rise they decrease the gap between the very rich and the home owners.

    And here is me thinking Labour had forgotten their roots when all along they are just trying to get back to that good old NZ egalitarian ideal by boosting house prices with the help of the RBNZ.

    https://www.interest.co.nz/public-po...ns-gap-between
    Last edited by Aaron; 22-11-2021 at 02:17 PM. Reason: no need for profanities

  9. #609
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    Interesting article about economics, the main point is.

    “There is no science, it's all made up, right?” Eaqub says.
    “I mean, it’s whatever works at the time, and it keeps changing.”

    https://www.stuff.co.nz/business/127...bout-inflation

    The rest seems a confused mish mash confirming my view that economics is coming across as a load of bulls**t twisted to whatever suits your view.

    David McLeish from Fisher Funds suggesting raising the price of capital will only add to the rising prices of everything else.
    I am no economist but isn’t it the burden of interest rates that causes consumers to reign in their spending and slow inflation. Isn't a rising cost of capital that causes investors to allocate capital more carefully into things that will provide goods or services required by society.

    Raf Manji suggests raising interest rates will lead to more inflation, and raise the price of petrol at the pump. I would have thought a rising $NZ reduces the cost of imports but I lack Raf’s intelligence so must be wrong.

    I think it is Dileepa who suggests raising interest rates will cause a great contraction in economic activity. I agree with him on this point.

    They ask why capital isn’t going into something useful like business rather than buying houses off each other at higher and higher prices.
    Why would you invest in a business that takes effort and thought when owning a house, lets say $800,000 house going up 20% p.a. (thanks to easy money and low interest rates) earning $160,000 without tenants why would you invest anywhere else.

    What I read is that raising interest rates according to these geniuses is bad no matter what happens although it would be interesting to see if they extrapolate this view to the future as more and more debt needs a bigger and bigger central bank response each time the economy tries to correct. They probably see negative interest rates as a sensible solution in the next crash. Why do we even listen to economists, they are all over the place but the main message is low interest rates and moah money.

    Why don’t they just say “I am all right Jack” don’t rock the boat on asset prices I own some. The poor can pay through a loss of social mobility and the inflation tax we are imposing on them through loose monetary policy and low interest rates it is regressive so we won’t feel it as bad.

    Effectively they are saying f**k the poor. What they will say is that in a depression the poor will suffer more but the reality the poor will suffer either way, it is just that they rich don’t suffer while crazy monetary policy inflates assets.
    Last edited by Aaron; 24-11-2021 at 08:15 AM.

  10. #610
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    The RBNZ is going to hike 50bp today. All locals banks are saying 25bps....

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