[I spotted this gem of information on a website. Previously it was being said that S.Africans are on AVERAGE in debt up to about two-thirds of their annual salaries.

But another economist says this is now much higher and some people are in debt up to 140% of their salaries?

I raised the question a long time back as to whether we would FALL HARD with the house prices now that the interest rates are rising.

Again I wonder if serious trouble is coming our way. My advice to people is to cut costs, cut debt, and do all you can, because we do not know how high interest rates will go.

It was predicted that in June 2008, we’d see the last of “this round of interest rate hikes” – but can we be sure? In 1998 interest rates went over 25%. If you’re in debt, you could be in trouble.

Interestingly, the higher rates hit the banks more – and I do wonder if South Africa’s BANKS could end up in SERIOUS TROUBLE! We must keep watching this. Jan]

Interest Rate increase œtoo little, too late

According to Dynamic Wealth chief economist Professor Chris Harmse, the Reserve Bank™s increase of interest rates was too little, too late as household debt was already too high. Household debt went above 75% as a percentage of disposable income last year. Harmse said that the Reserve Bank failed to act timeously at the beginning of the year. Some people earning between R10 000 and R14 000 were recorded to have debt as income of 140%. He went on to say that the Bank should have increased interest rates in February and April this year as they knew the economy was growing beyond its potential.

http://www.rapidinfo.co.za/webpage.php?exc=headhuntedzn&PageName=Business%20Weekly%20Summary