Possums

he was talking term deposits, the whole point of them is that you gamble on the rate when you set it up, rate could go down in which case you did well.

if it goes up then you could have made more though if it goes up substantially then you can cancel it and retake it at the better rate, it may be worth losing the cancelling fee for the bigger profit, either way it will pay out on the rate you took it out at maturity. You sign a contract is that not a guarantee?

for every article against there is one for, who to believe? what I believe is that the top 4 will not go tits up.

http://www.news.com.au/business/mone...013952,00.html

DrWho

No

Believe what you will, but deposits in bank accounts in Australia are not guaranteed by anyone, unlike the UK.

renth

Correct.

A lot of people here in WA don't realise that Bank West is HBOS - a bank that is looking distinctly dodgy at the moment.

Possums

how is the bank allowed to say guaranteed returns then? its there in black and white

http://www.commbank.com.au/personal/...s/default.aspx

DrWho

What they mean is that it is a guaranteed return from them... i.e. you invest x amount with us and we guarantee to return you x plus y, as distinct from you invest x with us in a normal savings account and the value of y will depend upon what happens to the RBA's base rate and what CommBank do in reponse, etc...

What Renth and I mean is that there are no guarantees from anyone if you put your money in a bank over here... the Bank goes bust and you can lose it all, unlike the UK where the first x amount is guaranteed (think it's 30,000 but not sure)

lastere

this is primitive and typical of the nanny state approach. but it seems they came to grips tho.

http://www.treasurer.gov.au/DisplayD...ear=&DocType=0

Vash the Stampede

ABC.

In the UK the government has been cutting interest rates to fend off recession. In Australia the government has been raising interest rates to tackle inflation.

Two very different economies.

NKSK version 2

I'm not so sure. Retail price index in the UK was 4.6% in June, Aus 4.8%.

Moreover, your point about the UK is now the case for Australia.

I'd put the links in but I'm sure you know the sources.

Tableland

Vash

UK Govt. raised rates last time round, and the US Govt cut rates to 2% and it still has not had a real effect on house prices. Can the Australian Govt cut rates to 2% to help house prices? Of course not. It needs to raise rates because Australian core inflation is at a 17 year high and getting out of control.

Aussie house prices are toast. Expect 30% minimum off average house price by mid 2010.

I add in edit that your comment on percentage increases in house prices is scary because these ridiculous percentage increases were recorded in the UK just before the crash started.

BATS666

..which fairy story did this trash come from ???
reality check !!

BATS666

it was the first £2,000 + 90% of the next £33,000. It was increased to £50,000 on 1st July 2008 after the Northern Rock fiasco.

Tableland

Yes, US Govt guarantees (I think) $100,000 US as well. As I have pointed out before, you will know when the Aussie economy is about to tank for real because Canberra will pass some legislation PDQ securing funds in fear of bank runs across the nation, which have already occurred in the UK and US, despite deposit safeguards.

Despite the imprving exchange rate I will not move any money to Australia until a) the govt. will secure the funds, or b) I am ready to buy a house (and I won't be ready to buy a house until after the crash, so the reddies stay in the UK).

How this legislation is not already in place staggers me, frankly. Of course, the last few years have been safe-banking, but now the gloabl economy is in its worse shape since just before the 1929 crash & depression, and people are starting not to trust their banks any longer. What many people just don't understand is that money doesn't actually exist in physical form. Only about 3% of the UK's money can be realised. In other words, 97% of people could not have their money if everyone decided to withdraw their funds.

Budawang

What's so bad about house prices going down by 30% anyway? They'll still be 30% up on 2001 prices. For most owner-occupiers it won't make any difference. For people who invested heavily in investment properties it won't look good on paper but rents have been going up a lot so that will cushion the blow. The RBA's aggressive interest rate policy means interest rates will most likely be significantly lower in 2010. For young first home buyers it will be sweet.

I honestly don't care much if my house value drops 30%. Might be a good time for buying that beach house I've been dreaming about.

Cant rain all the time2

The only people to gain from higher house prices are the companys borrowing you the money to buy them in the first place. I certainly hope prices come down.

Vash the Stampede

I don't recall mentioning house prices. I agree that the Australian government cannot help house prices by any means.

Precisely my point. Two very different economies. One raising interest rates, the other cutting them: for two entirely different reasons.

We'll see. No skin off my nose, to be honest. The mortgage on my Aussie house is only $161,000 and I'm not planning to sell, so the credit crunch is irrelevant to me either way.

16.2% is not a ridiculous increase. But it is surprisingly high for Adelaide.