They have cut rates over here in the UK and it hasn't made a...

They have cut rates over here in the UK and it hasn't made a difference as the banks can't source the cash to lend and borrowing costs have gone up. In fact, the banks have all gone way out to encourage people to save, by offering attractive savings plans. House prices have dropped this year by about 8% and people are now settling at 10% below their asking price. In the US the interest rate is so low they can't even really cut it any further, so I think Australia should learn from the US and UK and not cut interest rates. I think Australia should count itself lucky that it has a small yet prosperous economy (per capita) and that it is a lot easier to regulate the financial industry without becoming an encumberance. My girlfriend worked in structured credit over here in London and 18 months ago, it was a crazy ride, but everyone knew the music had to stop soon.

If Australia lowers the rates, all it will do is lower the value of the Aus dollar and won't free up money for borrowing. This in turn will drive up the cost of everything that has a dependence on oil (which in a big country like Aus, means pretty much everything costs more)and increase inflation. I think now is the time to save, rather than borrow, and invest in stocks (if you have the spare cash of course).

Governments like to think they have big influences on the economy but I think these days they can take a lot less credit. Its all swings and roundabouts, and when its good, people forget that there were times when it wasn't so good. As Bill Hicks said, "It's just a ride"

Anyway, EXM is an exercise in patience in different market conditions. If you have the spare cash, then now is the time to be putting it into stocks you think are worthwhile, or at least saving cash in a good interest account and doing research, until you think things are going to head up, and then invest.

The fact is, we know more about the quality of EXMs prospects than we did 12 months ago, and most of it is good. If you believed in it then, I can't see why you wouldn't believe in it now.