# The Interest Rate Quandry



## EthenGroom (Feb 1, 2011)

The downside to gearing is of course that interest rates are used as a first tool by the Reserve Bank to counter inflation, so rates are hiked to keep inflation within the government prescribed rate, and that means we end up with a variable monthly cost which is very dangerous if you have not provided for it.

We now know that interest rates are going to move up. The banks have already made the assumption that rates will be increased by the end of the year by 0.5%, although SARB is still talking about early 2012.

Is there any way to negotiate a fixed rate from the bank?


----------



## Daxk (Jan 20, 2008)

EthenGroom said:


> The downside to gearing is of course that interest rates are used as a first tool by the Reserve Bank to counter inflation, so rates are hiked to keep inflation within the government prescribed rate, and that means we end up with a variable monthly cost which is very dangerous if you have not provided for it.
> 
> We now know that interest rates are going to move up. The banks have already made the assumption that rates will be increased by the end of the year by 0.5%, although SARB is still talking about early 2012.
> 
> Is there any way to negotiate a fixed rate from the bank?


yes, deposit a large sum of cash at a low fixed rate and they will give you a nice flat rate.(nice for them)

They gambled on the WC and spent money they dont have.
they (the GOVT)are struggling to get finance for the Electricity infrastructure they need to put in, the mines are not doing greenfield investment and the Bigg miners are holding back on FDI because of Kiddies idiocy.
SA managed to miss the Toxic debt crunch because of exchange controls, but the repo is going to yo-yo like crazy because apart from the Chinese offloading American Bonds no-one else is handing out the FDI the Govt needs to keep the masses from burning stuff.


----------

