Rhett Kessler, Senior Fund Manager at Pengana Capital says one thing keeps him up at night - inflation
Rhett Kessler, Senior Fund Manager at Pengana Capital says one thing keeps him up at night - inflation. Kessler says the artificially low interest rates in the Chinese deposit system are forcing Chinese nationals to invest in shadow banking and overseas property which is driving asset price inflation, and will soon drive cost inflation. There's 17 Trillion Renminbi sitting in bank deposits earning less than 0.3% in an inflationary environment of 3% plus. Depositors are being charged to leave their money in real terms. It's no wonder this capital is searching for a better home and in fact, finding its way into the Australian property market... and creating quite a bit of asset price inflation. What happens next is cost inflation or cost of living inflation... and I think that's going to be a big problem.