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Aussie cash rates down from 6.0% to 1.0% in the decade since the GFC

 

Aussie cash rates down from 6.0% to 1.0% in the decade since the GFC

In this week’s video insight David reviews the low growth and low inflation environment we currently find ourselves in. This is attributable to four major factors which are structural in nature and are causing disruption across the Western world workforce. Together with casualisation and little growth in real wages, many people are logically feeling less secure.  Are there any winners?

To read more on the structural reasons driving the change of low interest rates, you can download Montaka Global Investments’ whitepaper here.

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Chief Executive Officer of Montgomery Investment Management, David has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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3 Comments

  1. From Whitepaper – In Part I of this two-part whitepaper series, we considered the likely drivers of low interest rates that are currently being observed, particularly around demographics, indebtedness, technology, globalisation and the structure of the international monetary and financial system.

    David I think your arguement is that the basic current problem is deflation – governments need to keep dropping interest rates in this type of deflationary scenario.

    Yet, governments seem to be relying on a flawed logic here. The housing market which in many ways is the major part of the economy is not, and has not been for decades, in a state of deflation. Maybe the real problem is based on ideological stupidity – governments should be spending more on productive activities as means of stimulating the ‘right’ sectors of the economy rather than using a sledge hammer (interest rates) to fix a what is a intricate problem.

    • Thanks John. Ultimately, growth in productivity is what gets slower growing, highly indebted economies out of holes. And you are right about the “right”sectors”.

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