The banking cycle is beginning to stir

September 8, 2015

Well the banking cycle is beginning to stir. Historically low interest rates are the opportunity for the banks to fix their current problem – low lending growth. Yep, it’s gone full circle and now the banks are complaining that we aren’t borrowing enough. They now believe - you will keep your job, they won’t have to sell your house at a discount and you will pay off your credit card. So “come get some money” they shout.

It wasn’t that long ago that ‘Debt’ was the nastiest four letter word we ever created, so not everyone will be rushing in to repeat the battering the GFC handed out, but many will. And that’s a good thing because it’s quite likely (if invested prudently) they will make some money and help the economy recover. There is less risk after a GFC than before it of course.

Our early call is that you are going to get a letter by June next year giving you an increase in your credit card limit that you didn’t ask for. That’s when you really know the fun has begun. Good luck in riding the cycle this time round.

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