Owen Raszkiewicz

So you've got to invest.

So even if interest rates were to go from where they are to negative, I think that would only provide more support for investments.

Because remember, when interest rates fall...

What the RBA, which is the central bank here in Australia, is trying to get you to do is to invest that money because then it creates more production and more everything for the economy, which then creates more wages, which then pushes inflation up, which then means that interest rates go up.

So it kind of balances itself out.

The second thing that I want to bring your attention to is this thing called real interest rates.

It's such an economic and economist thing, real interest rates.

So interest rates, as we know them, when you get them from the bank, let's say you got a 1% term deposit, you think, okay, I'm getting 1%.

Well, if that isn't a term deposit for a year, you would think, okay, I'm going to get 1% more.

I'm going to have 1% more from today in a year from today.

Well, no, you're not actually.

Because what is money?

Money is just a store of wealth and a way to transfer and pay for things.

But if all of the things that you would be buying in a year from now have gone up more than 1%, you've actually gone backwards.

So that's why we call it real interest rates because it has to adjust for inflation and

So actually as it stands, I was just looking at the RBA website and we were recording this in mid-December.

The cash rate or interest rate according to the RBA is 0.1%.

That's what the banks can lend out.

And then inflation, which is the amount that your money is getting eaten away at every year, is 0.7%.

So 0.1% for interest, 0.7% for inflation or the cost of your coffee from this year to the next.