The problem for pensioners and savers

The economic landscape as observed by RBA Governor, Glenn Stevens acknowledges that low interest rates are here to stay – no matter what happens. This is contrary to the thinking of Treasurer, Joe Hockey whom has suggested that higher rates will follow on from Australia’s debt problems. Investors may see that Hockey suggests that a credit downgrade would be good for retirees (higher interest rates) whilst Stevens says sorry, a credit downgrade will mean that rates may well fall based on the European experience. These conflicting views and commentaries clearly show the mess that the world’s financial system is in. No one knows whether bad or good news is bad or good for interest rates. (VIEW LINK)