RBA rate cut down to 0.5%

I didn’t know Australia’s rates are so low. It’s a total mismatch for a robust economy that is having surpluses. Singapore’s 1 year is near 2% but I’m already pulling money out of FDs.
 
sgbuyer said:
I didn’t know Australia’s rates are so low. It’s a total mismatch for a robust economy that is having surpluses.
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Robust economy? hardly. Our economy mainly consist of flipping houses and digging holes in the ground.


-By lowering rates(increasing money supply) you lower the AUD, a lower AUD boost exports and foreigners buying land, boost in exports/sales gives government more tax revenue. Seems great until you realise everything you buy comes from overseas and now cost 2x the price.

-If the central bank stops lowering rates (reduces money supply) you increase the AUD, a higher AUD reduces exports and foreigners buying land, reduction in exports/sales gives government less tax revenue.

-This will cause government to run big deficits, which then forces the central bank to lower rates (increase money supply) Now you have a circular loop.
 
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I am expecting rare cut in Canada USA also and Europe Japan Probably follows. new all time high in stock market as money pumps into market ( short term)
 
precious roar said:
Lowering the interest rate has worked so well, thus far, it's no surprise they keep doing it.
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Has it really? Or has it just over-inflated asset prices? The question is... Where do we go from here? What tools are available when we officially enter into a recession?

Historically, Australia (and central banks around the globe) has reduced the cash rate by 6-8 points to help kick-start the economy back to growth, but we only have .50 basis points to go before we go negative.

Hell, some of you may remember very well that we had a cash rate of 19% in the 90's.
I even remember as a kid thinking to myself "I only need to make $1 Million and then I can live off the interest for the rest of my days."

I really feel for the Boomer's. Many have worked their arses off their whole lives, dreaming of a happy and prosperous retirement, yet that won't be the case for many. Even if they've been the main ones to benefit from these over-inflated markets, they're still the mothers, father's and grandparents of the generations below them.
 
Tokyo said:
It would continue until music stops
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I disagree, Lowe has made it clear that 0.25% is the effective ZLB.

At that point the music will really begin. The helicopters are fuelled , they’re just waiting for the band to start.
 
mmm....shiney! said:
I disagree, Lowe has made it clear that 0.25% is the effective ZLB.

At that point the music will really begin. The helicopters are fuelled , they’re just waiting for the band to start.
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Is the Lowe fortuneteller?-We have heard the same news when interest was 3%-long time ago....
 
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