Mortgage pain in 2013?


National Australia Bank (ASX: NAB) suggest interest rates could rise in 2013. Although it may be painful for the mortgage belt, rising rates are at least a sign the global economy will be on the mend.

NAB has become the first major bank to suggest interest rates could rise in mid-2013.

We admire their boldness. It’s easy to follow the crowd, and the crowd is still predicting interest rates will fall.  Westpac (ASX: WBC), for example, are forecasting two rate cuts in the December quarter, triggered by a slowdown in mining or a return of troubles in Europe.

Who’ll be right? Who’ll be tucking into the turkey, prawns and plum pudding come Christmas Day, and who’ll be singing for their supper?

You can see where NAB is coming from. Their own business confidence index has just posted its biggest jump in 10 months.

Optimism is back. Even The Australian Financial Review agrees, saying “It could be time to admit defeat on pessimism.”

We couldn’t agree more.

Unfortunately, it seems that we Australians couldn’t see how well our economy is travelling if it ran into us at 100km per hour.

No.

We’re obsessed with trivial matters, like the whole ‘boat people’ debate, the carbon tax and the lack of Australian Olympic gold medals.

Luckily we Fools are sworn off caring about, nor following politics. It is what it is, and whinging about policies or politicians of any persuasion isn’t going to change a thing. And besides, it doesn’t help us pick the next big stock market winner.

With interest rates, we’ll optimistically wait, knowing lower interest rates will stimulate the economy, and rising interest rates will indicate the global economy is recovering faster than many thought.

Heads we win, tails the pessimists lose!

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Bruce Jackson the Motley Fool’s General Manager. The Motley Fools purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691)

 

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