rba may start cutting rates, page-3

Not entirely impossible but it won't stop the housing rot. In fact, it weill exascerbate the crash !

The moment the RBA cuts rates, the AUD will tumble especially the US is now starting to grow again and the FED is likely to raise rates in the US.

Any overseas property owners will dump all their holdings as they will take a massive hit on the exchange rate not to mention more losses in the house price crash.

Another reason why the RBA can't cut rate is that inflation is going through the roof globally. Once rate is cut, teh AUD falls and anything from plasma TV to petrol at the pump will go SKY HIGH !

I'll leave the really bad news till last.

Cutting rates once the hosuing crash starts is the proverbial pushing-on-a-string. The US cut rate to ZERO and stayed there for more than 3 years and their housing market is still rotting like a carcass.

The Japanese kept rate for 2 decades at close to 0%-1% and their property market is rotting just as bad.

Forget about the RBA cutting rate to 0. Just slashing teh cash rate back by 1% to 4.25%, you'll see the AUD in the 70's US cents range. Cut it down to 3% (like in the middle of the GFC, then the AUD will be lucky to stay above 60cents US.

Petrol will be $2.5 a litre and your friendly Chinese property investor will have lost 40% of their property value before taking into account the house price crash fallout.

In total, a 3% cash rate will result in overseas property owners losing 70% +

NOW THAT'S SCARY.

Sorry.