Recent policy movements from The RBA caught markets off guard and have promted a decent fall in the AUD. Markets are now factoring in another interest rate cut and CBA have called for a further two rate cutes from current levels. Chad Slater from Morphic Asset Management says the RBA has had a knee jerk reaction to the recent inflation data and is now blowing an asset price bubble. "There doesn't appear to be much consistency. Employment is running still quite well, terms of trade - iron ore is well up off it's lows. It's not clear to me why there is such an emergency... My biggest personal concern here is that they're stoking the fires of a massive asset price bubble." So how does this play out? Watch this short video for more detail and how Slater sees this scenario unfolding.
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Excellent and scary at the same time.
consider the effect on our banks! they will be left holding mortgages when the bubble breaks that will be hard to recover out of falling prices, massive selling, all because the RBA lured people into buying at low interest rates and over stretching on over valued assets. these financial guru "specialists "are ruining things for main dstreet so wall street can pick up the debris at bargain prices. It is all a great con. stop it now! PCW