Hold out the umbrella


“Lending is becoming more difficult to get for many people as banks exercise more caution.”

What a joke. The banks are NOT cautious – they are ‘Too big to fail”. What they have realised is that mugs are getting close to their repayment abilities in an economy with zero real wage growth over the last 30 years. The percentage spent on housing has gone from 25% of a man’s wage to 60%+ of two people’s wages. Where is there room for it to rise any further?

We have the stupid magazines encouraging us to eat offal, recycle and stop buying smashed avo breakfasts but evidently, their exhortations haven’t created enough surplus in the wallet (Far less a bank account) for further housing price rises.

Knowing they will be laying off more staff and certainly not increasing the wage bill, the banks have realised the game is nearly over.

Auckland Property Investors Association president Andrew Bruce says investors have been warned about a “funding gap” as banks struggled to get in enough deposits and faced demand for high levels of lending.

Normally a smart man, but sucked in this time. NEWSFLASH! Banks do not get money from depositors. They get it from international wholesale markets. Europe is awash with money that the banks themselves have to pay interest on. USA is desperately seeking a home for it’s QE fiat currency.

Hold out the umbrella of 1-2% interest and international banks will swarm all over you, throwing money at you.