Hotcopper ain't the forum for your question everskim. A little box to type doesn't support thesis. However right now is tussle between Keynesian economics and Austrian economics.
In short Keynesian economics is about buying straw hats in winter - policy intervention whether more or less - to smooth out the cycles. When its bad spend more- when it’s good spend less. But the problem is when its been good we've spent more and more, and when it’s been bad we have spent more and more and more.
Austrian economics say take your medicine - if your investment fails well tough. pay it back the hard way. Only the individual can make a difference. This is much different to the Keynesian alternative.
Because we have all been Keynesian junkies for so long sooner or later the Austrians will win the argument because globally there is just too much debt everywhere.
The cash rate will be solely dependent on two things - credit growth and savings rates. If credit growth slows to a point which is less than the last 30 years, central banks will be happy because it will be happy medium and they will be more inclined to keep rates medium term averages. If credit growth stays at 30 year averages eventually central banks will get peeved and hike rates like Keating and scare everyone into not borrowing.
If savings rates continue along at the same pace - banks will have more resources to lend at cheaper rates rather than having to go overseas and having fight hedging and currency.
So to work out your cash rate look at your credit growth and subtract your savings rate. If credit growth is slow and savings middle of the road you can expect very modest interest rates.
If credit growth is high, you can expect high interest rates which will eventually attract more savers to the supposed risk free returns.
But truly where do I see things in the next 5 years - Australian cash rates averaging 3.0% - 3.25%. The world is hocked to the hilt and we have 10 years of grind and that is the shortest path out. If we think that "da nile is only a river" it will take us 20 years.
