Have XJO bottomed today, page-13

Hi moviedancer

I don't think we will get a rate cut from the RBA (out of cycle).

Traditionally loose monetary policy has worked by putting money in consumers' and businesses' pockets, they will, in turn, spend and get the economy going.

This works in the US because the consumer is still strong.

Our central bank knows that this doesn't work for Australia. Why?: because we have mortgages and debt coming out of our noses. So lose monetary policy doesn't stimulate the economy, people just use the opportunity to pay down their debt, or take on more speculative debt to purchase property i.e the only outcome is hurting the banks and creating a real estate bubble. The RBA governor credit to him is a very sharp operator and has been screaming this from the rooftop: for the government to stop looking to the RBA and SPEND. The government has been too busy trying to achieve a balanced budget whilst managing Billion $ cost blowouts on various projects.

In this regard, there are only a few ammunitions left, government fiscal responses (this will never be anything substantial, Australia is run by a bunch of idiots on both side of the aisle), or some form of Quantitative easing program by the RBA. I would say the next action we see from our central bank is some form of a QE.