Current Issues Interest Rates Aug2022
Wed, 8/3 5:01PM • 5:40
interest rates, inflation, happen, government, taper, austerity, price gouging, business, starts, october, margins, face, march, increase, ridiculous, videos, high, profit, questions, spend
Brett Alegre-Wood 00:02
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I said, Welcome my thoughts on the current issues which and this issue is about interest rates. So I think with interest rates and and it's August 2222. Right now, just in case you're wondering, so we've seen interest rates rise, okay, they've started to turn around, they've been all time low. A lot of people have forgotten what it was like to have higher rates, actually, the rates aren't that much higher. The problem right now is, is that you've got the rates going up, the banks trying to keep their margins, okay. So the reality is, what you'll find is in order for the business, the banks to keep the business going and understand, a lot of their profit has gone out of that industry, you know, which is a great thing, because they've been ripping people blind for years. But what they'll have to do is squeeze their margins in order to create the business as interest rates go up, because people can't afford increasing interest rates forever. Interest rates can't go on forever, because it will stop the economy dead. And then what we'll have is stagflation. Nobody wants stagflation. It's not good for governments, because what happens is, they're going to get thrown out, you know, there'll be a change of government, nobody wants that. The interesting thing is with this, you know, look, right now, interest rates may feel like they're Up up and away. But I think that's not going to happen. And we'll see a reversal. I think around October, maybe November, December, January, through to march, sometime there. Depending on what happens in the data that comes out and all that sort of stuff. I think we're gonna see interest rates continue to increase a couple of months. And I think probably in October, when we start to see inflation, which I believe is already gonna start to soften, because a lot of the inflation has not been real inflation. It's been companies building in the for profit company profits. It's incredible what they're making. They have been price gouging, make no mistake. And, and nobody calls a price gouging right now, because what they're calling it is that they're increasing their prices now in anticipation, okay. So it's good business to do that. Yeah. But the reality is, there's no doubt about it, they're making huge amounts of money, and let's face it, privatising things like energy is a ridiculous concept, which should never happen. It's, it's just stupid. But anyway, that's what clearly, the government wants to gift to their mates. You know, there's no doubt about that. That's the business and nose and business and corrupt politicians. Anyway, let's not get into that, because we can go on all day. Interest rates. So I think what we'll see is interest rates will continue to increase until we see things start to really taper off. And normally we have taper off in about October through to March each year, where things start to slow down, everyone's finished their holidays, it started to cool down, the clock goes back on. So the clock come forward, and I think it is whichever. And there's more darkness, everyone starts to go and walk around with jumpers and all sorts of things. So when that happens, I think that's where we're likely to hit the recession. Okay, if we're going to have one. And if we do, then interest rates start to drop now, would they come down to their all time lows? No, I don't think they will. I don't think they have to, as I don't think I think we're gonna start to see the inflation now start to taper off a bit. And I think what we're going to see also is, yeah, the interest rates don't have to go up as much. Alright, so I think we're not we're nearing the end of the interest rate increase cycle. Now that could change because, you know, us can affect it. A lot of countries can affect if we start seeing people, you know, you got three choices. And I talked about three choices. Austerity, which we tried that for 10 years. Ridiculous, stupid idea does not work, you know, if fiscal responsibility. Okay, fine. Austerity, ridiculous. Yeah. And we still are suffering from that austerity and that decision in a ridiculous decision by the government. The other one is default, we're not going to default on our debts, you know, it just it's not going to be allowed to happen. So the only option is to deflate the debt. Yeah. So what does that mean? The more inflation for the government, the better. To a point, we don't wanna get too high. Because if it gets too high, then we start getting rebellion and kickback from people where they marched in the streets and things like that. That's not what governments want. They want to be voted back in. So it's a fine line. And the problem is, there's lots of factors to do with that. But my take is, interest rates will continue, maybe for one or two more increases, you know, maybe another half a percent, or percent. I don't think it's gonna go much higher than that. And then I think what will happen is, it'll either stay around there, and I'll wait and see and get some definite measure of what's happening. Or you might see it actually start to taper off a bit as the economy starts to slow and as the stats come out, and that will depend on what the stats, so that's really what we're seeing with interest rates, and what's likely to happen. So hopefully, that gives you a good thing. Guys, if you got any questions, you can on this page here somewhere, you'll have the ability to just type question and I'll respond back in a video on social media so everyone can benefit from the questions because I think that's really important to have that interaction.
Brett Alegre-Wood 04:58
And the key here Yeah, whatever you want to cover, whether it be this or anything to do with property, I'm happy to record videos about it. Okay? Because let's face it, you know, now there's so much going on. There's so many issues you have to face and try and resolve. And I mean, that's what I do all day every day is I think about these sort of things. It sounds like quite a boring life, doesn't it? No, not really. No, I don't spend all my date on this and worrying about it. But I do spend a lot of time thinking about it, because that's my role in the business and you know, doing videos like this. So anyway, guys, any questions? Put them in there. Otherwise, I'll talk to you soon. Bye.
Read about more of our Predictions for Property Investors For August 2022.