Dr Sam Wylie

And then you end up with supply being a lot more than demand because wages can't fall.

And then the government comes in with job keeper.

But unless there's something, unless there's some impediment or some government intervention, supply and demand will just come together differently.

automatically.

When there's a lot of demand for people to wash dishes, wages will go up and people will move from other sectors into hospitality, and then the supply of hospitality will go up.

The prices themselves will bring supply and demand back into equilibrium.

And you were asking earlier, Kate, does that happen in investing?

Absolutely, it happens in investing.

You know, when we were talking about our mortgage example earlier, and we were saying that the interest rate is the RBA's part, at the moment that's close to zero, but we're expecting it to go up at some stage, probably not next year, maybe the year after.

There's the RBA's component, but then there's the bank's components, the 240 basis points, if I use that expression.

So 2.4% is the same as 240 basis points, but that's a very common expression in talking about mortgages.

But that 2.4%, that itself is supply and demand.

There's a lot of demand for mortgages across all the people who want to refinance their existing mortgage or to get a new mortgage to buy something.

And then there's a lot of supply of mortgages, the money that banks have available to lend out to people.

And those two things, the demand for mortgages, all of those millions of mortgages out there, and the supply of money to be the mortgages from banks, those two things have to come together at the interest rate.

The interest rate is just a price.

And if there's more demand for mortgages than there is supply, then that 2.4% will go up.

Not the RBA's part.

The RBA sets that.

But the bank part, that bank margin, if there's more demand than there is supply, that'll go up.