More Pain As Interest Rate Hike Starts Tomorrow
Most analysts thought it would stay the same at 3.5% and 7.0% respectively. This has come as a shock to many who are in so much debt it is hard to see them getting out of the hole they have dug.
Today the Reserve Bank of South Africa increased their interest rates by 25 points to 3.75% meaning the base home loan rate is now 7.25% will come a s a shock to many. With everything increasing there is literally no end insight
and expect more rate hikes over the coming months.
The problem is salaries are stagnant and only a fortunate few will receive bonuses this December and a salary increase come January. We are talking about the very few companies that have been performing and I don't know of many. I know the family business which is based around online supplying private label to the Amazon equivalent here is booming so there are the exceptions.
A report came out earlier this week regarding the middle class and how they are the biggest offenders when it came to borrowing money. It is as if they haven't had a lockdown and nothing has affected their lifestyles. The average person earning a middle income salary is forking out 60% of take home pay paying their debts. That is insane and now with just the 25 points rate increase all debt payments will now rise leaving them with even less.
I must admit I was a little gob smacked last Christmas when it looked like the entire country was flocking to the coastal resorts without a care in the world. We were invited and refused as I knew that was only the beginning and things will become tougher and tougher the longer this goes on. This is all self inflicted by others not reading the warning signs which are all around them.
I recognise this photo as it is outside the Massmart Distribution Center in Johannesburg where I ran a bicycle assembly plant for a number of years.
Today there was another announcement from another Trade Union with strike action starting tomorrow with Massmart/Walmart on the eve of Black Friday. Talk about picking your timing especially after the riots we saw in June and is just another kick in the teeth. People do not value their jobs and wage increases are not a given. Something called online is going to kill their jobs anyway and give the retail sector another 5 years max before we see less and less bricks and mortar. Warehousing is where the money is as shops are dead compared to what they were 10 years ago.
I think many of us are starting to see how fortunate we are to be involved in crypto as the outside world is a real mess. I know I can smile everyday as my Hive is growing and it somehow has taken on a far more important role than what it used to have. Before it was a long term retirement plan with a passive income, but things can change drastically and is now a great back up plan whatever happens.
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This is one of many tricks that they use to take property from the poor.
There is no inflation so stop looking at prices and interest rates.
Hey, Look over there. Can you believe what conservatives are doing at the trial of that white-supremist Rittenhouse?
Hey, look over there at that supply chain snafu in the ports. Clearly the free market has failed. I think it is finally time that governments step in to regulate the ports.
Hey, look over there at those anti-vaxxers. Those anti-vaxxers want to kill the vaccinated with the disease the vaccinated were vaccinated against.
Hey, look over there. It looks like there is a nest of Jan 6th insurrectionists forming at the pillow factory.
Stop looking at the money supply, the prime rate and prices.
Hey, look over there. i am not sure what it is yet, but it is scary. That is the thing that should attract your attention.
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Too much going on right now that makes no logical sense.
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I love the last line...crypto is a great back-up plan
Are home loans in South-Africa always with variable rates?
You can get both fixed and variable depending on what suits you best at the time. I can remember when we had to have a medical before signing with the bank as the high rate of HIV prevents nearly 1/3 rd of applications. Scary stat that.
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In Belgium a medical is mostly necessary for the insurance that comes with the loan. But luckily HIV is not a big problem over here, and interest rates are so low, they drive house prices through the roof!
Economic changes will not stop, and for me inflation has become an essential part of the global economy. You must change your plan in order to go along with it, not stop it.