19 Mar So what happened today?

Ok all sorts of stuff happened today.

Usually the RBA holds its rate meeting on the first Tuesday of every month. They held a special meeting today, because 7th April is an eternity away in this climate.

Desperate times call for desperate measures…

I am going to focus on the Quantitative Easing and the Stimulus Package (which happened last week).

In addition to the below, APRA eased up on bank regulation, AOFM has also jumped in on the action and helped pump more money into lenders.

But in short, everything that happened today and in means it’s going to be easier, cheaper and more worthwhile to borrow for stuff. E.g. Solar.

Quantitative Easing (QE)

The RBA just printed money. Well they didn’t print money, it’s digital, but they created it out of thin air. And have (basically) pumped it into the banks.

Why don’t they just always do that?

Because every time you create money out of nothing, money in general becomes less valuable. There is no value to something that you can just create out of nothing.

You guys have probably noticed the AUD taking a hit as your stock prices (panels and inverters not shares) are increasing.

Theoretically QE is probably gunna make stock more expensive. As long as it is purchased overseas.

So why do it then? The RBA is trying to encourage people to spend.

When the RBA lowers the rate, they are decreasing the price to borrow, which encourages people to borrow.

When the RBA creates more money, they are increasing the quantity of money in the market, which allows banks to lend more.

Both strategies are used to encourage people to spend more.

Government stimulus package

There is more to come. Probably more targeted towards individuals this time though.

But for now the main thing that everyone is talking about is the $150k instant write off.

This is not financial advice.

This is not financial advice.

This is not financial advice.

So I have a feeling that the Rental will become less popular.

I also have a feeling that the Chattel will be everyone’s go to commercial finance product now.

But what do I know? I don’t know your personal situation and don’t know how this stimulus package impacts you.

Get your own advice from an accountant or financial advisor.