Charlie Perkins

In the last few months our newsletters of Get up and dance (Aug) and The Centre cannot hold (Jul) have built on a theme of Central bank distortion of the free markets to the extent that basic fundamentals have taken a back seat. Deliberately pursuing an artificially cheap interest rate policy (and it's resultant FX implications) has the insidious effect of forcing those that require portfolio income to survive to take inappropriate levels of risk in order to achieve that income. With 3 month money below 0.25% in the US for the past few years, many market participants have been forced into the stockmarket in order to chase dividends. Paradoxically, this yield myopia.... (VIEW LINK)


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James Marlay

This is a good point and I also think domestically the RBA is facing a bit of an issue with inflated housing prices and a resilient dollar. They have clearly stated that they feel the AUD is too high but with rates at all time lows property prices are starting to surge.