Why is Aussie growth stagnating at all?The answer to this...

Why is Aussie growth stagnating at all?

The answer to this question may be pretty simple, given one's understanding of QFE's business model.

For those that do not understand QFE;

Echoing a report I have written on the stock previously - "QFE acts as a working capital machine for professional services firms (particularly accounting & law firms)."

Unless you'd been living under a virally-suppressant rock for the past 18 months then you would understand the financial impact of covid-19 and the fiscal response to such.

The Australian government [as similar to their US counterparts] combined with the RBA have pumped an enormous amount of capital into the economy in attempt to stimulate and revive economic growth and investment. The increase in money supply is unprecedentedly immense when compared to events such as the GFC in 2008. (please see graph for reference).



If we take two-steps back again we need to understand what QFE offer, and who their customers are.

QFE offer working capital/funding for those that cannot afford to pay for professional services outright and hence their customers are individuals (through professional services firms) who have been being handed cash fresh from the printer of the Federal government & RBA.

Given that their customers are now 'cash-strapped', they decide that they no-longer require QFE's services (loans etc).




So in conclusion - "Why is Aussie growth stagnating at all?"

My answer would be; it has something to do with the one in one hundred year event we are experiencing and the fiscal response to such an event.