Dr Sam Wylie

So your student debt will go up by 5.1%.

That's correct.

All right, so quantitative easing is the creation of new money.

And if we just sort of back up a little bit to what normal monetary policy is, then we'll see that quantitative easing is extraordinary monetary policy.

It's a very unusual and in many ways, a very unhealthy thing that had never happened before the global financial crisis in 2008.

in the United States and Europe and had never happened in Australia before COVID-19.

So we didn't have any QE, quantitative easing in Australia,

before COVID-19.

But just backing up to normal monetary policy, it's the Reserve Bank's job to speed up and slow down the economy by raising and lowering interest rates.

So if the economy is running too hot, there's too much demand, and now prices are starting to rise.

And so we don't have price stability.

We're getting a lot of inflation.

Inflation is going up 3%, 4%, 5%.

That's what's happening at the moment, of course.

then the RBA will push the lever up.

They'll push the short-term interest rates, the cash rate up, which will have a whole bunch of effects.

One thing is that it will cause people to save more and to spend less.

because when interest rates go up, then saving is just a more worthwhile thing to do.

Interest rates are like an exchange rate.

They're an exchange rate between the present and the future.