I don’t think the RBA will go there, that is truly a last...

I don’t think the RBA will go there, that is truly a last resort. If they do go there, it would mean we are in absolutely down s*!+ creek without a paddle.

these things evolve quickly and just yesterday the RBA has said it will start buying back government bonds to increase liquidity (known and QE).

we never had to do this at the peak of the GFC... the repo market trick I spoke about worked for Australia. But obviously had no impact this time round... it shows the severity of this shut down on the financial markets confidence... they don’t want to let go of their cash.

so instead the government is now buying back their bonds and flooding the market with cash. This should work to keep liquidity flowing for the time being and it did for the rest of the world during the GFC ... but the questions is how long will it last for?

ultimately the bigger picture is how will Australia’s economy look after the lockdowns stop. Will it just have some fractured limbs or will they be shattered or lost?

My guess is that for the economy to come out in the best shape possible, all businesses should do what Qantas is doing... shelve the business but don’t it down completely... if you try ride this out, all you will do is build up a crazy amount of debt that you will spend the next decade paying off.

a short term drop in underutilisation of the workforce is better than long term high rates of unemployment.