Australian dollar hits new lows as RBA minutes lets doves fly

Via the Lunatic just now:

International Economic Conditions

Members commenced their discussion by noting that the data on the global economy released since the previous meeting had been mixed. GDP growth outcomes for the March quarter in some economies had been slightly stronger than the second half of 2018, while labour markets had remained tight. However, global trade and conditions in the global manufacturing sector had remained weak. New export orders had been little changed at subdued levels and growth in industrial production had slowed in many economies, including those economies in east Asia that are closely integrated with global supply chains.

The US–China trade dispute had escalated in May, intensifying the downside risk posed to the global economic outlook from this source. The United States had proceeded to increase tariffs from 10 per cent to 25 per cent on US$200 billion of imports from China, and China had responded by announcing that tariffs would increase by 5–25 per cent on US$60 billion of US imports from 1 June 2019. In the days leading up to the meeting, the US administration had also announced tariff measures affecting Mexico and India.

In the major advanced economies, GDP growth for the March quarter had been somewhat stronger than in the second half of 2018. However, in both Japan and the United States the contribution from domestic demand had declined, and investment intentions in Japan pointed to only moderate investment growth over the period to early 2020. Nevertheless, labour markets in the advanced economies had remained tight. As a result, wages growth had continued to increase, reaching around the highest rates recorded during the current expansion in the three major advanced economies. Moreover, firms’ employment intentions had remained positive at high levels and firms had continued to report widespread difficulties in filling jobs.

Inflation had remained subdued globally despite tight labour markets and rising wages growth in many advanced economies. Core inflation had been below target in the three major advanced economies, following the decline in core inflation in the United States in recent months. Members noted that temporary factors had been contributing to the decline in the US core inflation measure, with the trimmed mean underlying inflation measure close to 2 per cent over recent months.

In China, indicators of activity had moderated in April. The moderation had partly reversed the unusually strong results in March, which had included activity brought forward ahead of tax changes that came into effect on 1 April 2019. Growth in fixed asset investment had slowed in April, driven by a sharp fall in manufacturing investment, while infrastructure investment had been supported by increased government spending. Industrial production had slowed across a wide range of products in April, although production of construction-related materials – such as steel, plate glass and cement – had remained strong.

Elsewhere in east Asia, growth had slowed further in the March quarter, mainly because of weaker growth in exports and investment. Growth in India had been at the lower end of the range of recent experience, with members noting that the recent tariff announcements by the US administration could adversely affect Indian exports of goods.

Commodity price movements had been mixed since the previous meeting. Iron ore and rural prices had increased. The increase in iron ore prices had been underpinned by supply constraints, strong demand from China and an increase in steel production. On the other hand, the prices of coal, oil and base metals had declined. Members noted that the decline in oil prices had mainly reflected renewed concerns around the outlook for global oil demand.

Domestic Economic Conditions

Members noted that national accounts data for GDP growth in the March quarter would be released the day after the meeting. GDP growth was expected to have been a little firmer than in the preceding two quarters, supported by growth in exports, non-mining business investment and public spending. Growth in consumption, however, was expected to continue to be sluggish and dwelling investment was expected to have declined further in the March quarter.

Information received for the June quarter and indicators of future economic activity had been mixed. Business conditions and consumer sentiment had been broadly stable at or slightly above average levels. Information from the ABS capital expenditure survey and the Bank’s business liaison contacts suggested that mining investment was close to its trough, while the available information pointed to ongoing modest growth in non-residential building investment. Members noted that the low- and middle-income tax offset, including the increase announced in the Australian Government Budget for 2019/20, would boost household disposable income and could support household consumption in the second half of 2019.

Members also discussed the distributional implications of low interest rates on household incomes. Lower interest rates lead to a decline in the interest that households pay on their debt, but also lead to a decline in the interest income that households receive from interest-bearing assets, such as term deposits. As such, changes in interest rates have different effects on different groups of households. In particular, members recognised that many older Australians rely on interest income, which would decline with lower interest rates. The overall net effect of lower interest rates was nevertheless expected to boost aggregate household disposable income and thus spending capacity.

Conditions in established housing markets had remained weak. Housing prices had continued to decline in Sydney and Melbourne during May, although the pace of decline had eased from earlier in the year. Housing prices had continued to decline markedly in Perth. Members noted that the housing market was likely to be affected by the removal of uncertainty around possible changes to taxation arrangements relating to housing. They also considered the effects of the Australian Prudential Regulation Authority’s (APRA’s) proposal to amend its requirement for banks to determine the borrowing capacity of loan applicants using a specified minimum interest rate. While it remained too early to determine the overall effects, auction clearance rates had increased noticeably in Sydney the weekend following these developments. Building approvals had declined further in April, however, to be more than 20 per cent lower over the preceding 12 months. This suggested that, even if there were a marked turnaround in housing sentiment, given the lags involved it would take some time for this to translate into higher residential construction activity.

Several key domestic data series relating to the labour market had been released over the previous month. The wage price index had increased by 0.5 per cent in the March quarter to be 2.3 per cent higher over the year. While wages growth had been higher than a year earlier in most industries and states, the low rate of wages growth provided further evidence of spare capacity in the labour market. Wages growth in the private sector had been unchanged in the March quarter, and had increased to 2.4 per cent over the year (2.7 per cent including bonuses). The Fair Work Commission had recently granted a 3.0 per cent increase in the national minimum and award classification wages, which would take effect from 1 July 2019. Members noted that this decision directly affected the wages of around one-fifth of workers in Australia. Public sector wages growth had been little changed in recent years because of caps on salary increases for public sector employees. Members also noted that an increasing proportion of business liaison contacts were expecting wages growth to be stable in the year ahead, although the proportion of contacts expecting wages growth to decline had continued to fall.

The data on conditions in the labour market in April had been mixed. The unemployment rate had increased to 5.2 per cent in April from (an upwardly revised) 5.1 per cent in March. This followed a six-month period during which the unemployment rate had remained at around 5 per cent. The increase in the unemployment rate had been accompanied by an increase in the participation rate to its highest level on record. The underemployment rate had also increased in April. While the unemployment rate in both New South Wales and Victoria remained historically low, in both states it had increased since the beginning of 2019. Employment growth nationwide had moderated in 2019, but had remained above growth in the working-age population. Employment growth had been robust in most states in preceding months; the exceptions were Western Australia and Tasmania, where the level of employment had been roughly unchanged since mid 2018.

Forward-looking indicators of labour demand pointed to a moderation in employment growth in the near term, to around the rate of growth in the working-age population. Measures of job advertisements had declined over recent months. Employment intentions reported by the Bank’s business liaison contacts had been lower than in mid 2018, but these intentions were still generally positive.

Members had a detailed discussion of spare capacity in the labour market. Although difficult to measure directly, the extent of spare capacity in the labour market is an important factor that affects wages growth and price inflation. On a number of measures, it was apparent that the labour market still had significant spare capacity. The main approach to measuring spare capacity is to compare the current unemployment rate with an estimate of the unemployment rate associated with full employment, which is the rate of unemployment consistent with stable inflation. The Bank’s estimate of this unemployment rate had declined gradually over recent years, to be around 4½ per cent currently.

Members noted the significant uncertainty around modelled estimates of the unemployment rate consistent with full employment. They also discussed other measures of spare capacity, including underemployment of part-time workers, recognising that the supply side of the labour market had been quite flexible. Strong employment growth over recent years had encouraged more people to join the labour force, allowing the economy to absorb increased activity without generating inflationary pressure. Notwithstanding the uncertainties involved, members revised their assessment of labour market capacity, acknowledging the accumulation of evidence that there was now more capacity for the labour market to absorb additional labour demand before inflation concerns would emerge.

Financial Markets

Members commenced their discussion of financial market developments by noting that escalating trade disputes had led to a rise in volatility in global financial markets over preceding weeks, most notably in equity markets. Nevertheless, with central banks expected to maintain expansionary policy settings and risk premiums generally low, global financial conditions remained accommodative.

The escalation in the trade dispute between the United States and China had resulted in declines in global equity markets. The fall in equity prices had been particularly sharp in China, but substantial declines had also been seen in the United States as well as in a range of other advanced economies. Members observed that the declines in equity prices had been largest for sectors more directly exposed to the announced and prospective tariff changes and/or deriving a larger share of revenue from international trade.

By contrast, Australian equity prices were little changed at close to their highest level in a decade. Members noted that a sharp increase in Australian banks’ share prices, following the federal election, had partly offset a recent decline in resource stocks in the context of escalating trade tensions.

Members noted that there had been only a modest tightening in financial conditions in emerging markets, including in Mexico, where trade tensions with the United States had recently resurfaced. Equity prices had declined and sovereign credit spreads had widened somewhat, and there had been modest outflows from bond and equity funds in emerging markets. Currencies of emerging market economies had also generally depreciated a little, although there had mostly been little change in yields on government bonds denominated in local currencies.

In the advanced economies, there had been some widening in yield spreads between corporate and sovereign debt, particularly for corporations rated below investment grade. Members observed that financing costs for corporations remained low nonetheless, with government bond yields having declined further over the preceding month, in some cases to historic lows. This had partly reflected a shift down in market participants’ expectations of future policy interest rates in several advanced economies, including Australia, in an environment of ongoing trade tensions and subdued inflation. In the cases of the United States, Canada and New Zealand, members noted that market pricing implied a lowering of policy rates in the period ahead, although central banks in these economies had not indicated that a near-term change in policy rates was in prospect.

Volatility in foreign exchange markets had generally remained low, although the Japanese yen had appreciated over recent weeks, as tends to be the case in periods of increased uncertainty. There had been a moderate depreciation of the Chinese renminbi over the preceding month.

Members noted that the Australian dollar had depreciated a little over preceding months, remaining around the lower end of its narrow range of the preceding few years. Members also noted that while the strength in commodity prices had supported the exchange rate, the decline in Australian government bond yields relative to those in the major markets over 2019 had worked in the opposite direction. Long-term government bond yields in Australia remained noticeably below those in the United States, although this gap had narrowed a little recently as market participants’ expectations for the future path of the US federal funds rate were revised sharply lower.

Housing credit growth had stabilised in recent months, having slowed substantially over the preceding year. Growth in housing lending to owner-occupiers was running at around 4½ per cent in six-month-ended annualised terms, while the rate of growth in housing lending to investors had been close to zero since early 2019. Although standard variable reference rates for housing loans had increased since mid 2018, the average rate paid on outstanding loans had been little changed since then, as banks had continued to compete for new borrowers by offering materially lower rates on new loans. Borrowers shifting from interest-only to principal-and-interest loans had also put downward pressure on average outstanding mortgage rates.

Members were briefed on the changes proposed by APRA to its requirement that banks determine the borrowing capacity of loan applicants using a specified minimum interest rate. Members observed that the proposed changes would be likely to result in a modest increase in borrowing capacity for those with lower interest rate loans, typically owner-occupiers and borrowers with principal-and-interest loans. However, some borrowers facing higher-than-average interest rates would not see an increase in their borrowing capacity. Members observed that such a change to serviceability assessments would mean that any reduction in actual interest rates paid would increase households’ borrowing capacity a little. This would be in addition to the positive effect on the cash flow of the household sector overall.

The pace of growth in business lending had slowed in recent months, with lending to large businesses continuing to be the sole source of growth. Lending to small businesses had declined over the preceding year. Members noted that the stricter verification of income and expenses required for consumer lending was also being applied to many small businesses.

Members noted that financing conditions for both financial and non-financial corporations were highly favourable, with Australian bond yields at historic lows. Yields on residential mortgage-backed securities were also at low levels, having declined in line with the one-month bank bill swap rate (BBSW), which is the reference rate for these securities. Members observed that the increase in BBSW and other short-term money market rates in 2018 had been fully unwound. As a result, the major banks’ debt funding costs were now at a historic low. The major banks’ retail deposit rates were also historically low, with deposit rates having continued to edge lower. The average interest rate paid on retail deposits by banks was slightly below the cash rate, although only a small share of deposits by value received a rate below 0.5 per cent (predominantly deposits on transaction accounts).

Financial market pricing implied that the cash rate target was expected to be lowered by 25 basis points at the present meeting, with a further 25 basis point reduction expected later in the year.

Considerations for Monetary Policy

In considering the stance of monetary policy, members observed that the outlook for the global economy remained reasonable, although the risks from the international trade disputes had increased. Members noted that the associated uncertainty had been affecting investment intentions in a number of economies and that international trade remained weak. At the same time, the Chinese authorities had continued to provide targeted stimulus to support economic growth, and global financial conditions remained very accommodative. In most advanced economies, labour markets had remained tight and wages growth had picked up, while inflation had remained subdued.

Members observed that the outlook for the Australian economy also remained reasonable, with the sustained low level of interest rates continuing to support economic activity. A pick-up in growth in household disposable income, continued investment in infrastructure and a renewed expansion in the resources sector were expected to contribute to growth in output over coming years. The unemployment rate was expected to decline a little towards the end of the forecast period, and underlying inflation was expected to pick up gradually, to be at the lower end of the target range in the next couple of years. Members noted that this outlook was based on the usual technical assumption that the cash rate followed the path implied by market pricing, which suggested interest rates would be lower in the period ahead.

The most recent data on labour market conditions had shown that, despite ongoing strong growth in employment, the unemployment rate had not declined any further in the preceding six months and had edged up in the most recent two months. Reasonably strong demand for labour had been met partly by a rise in labour force participation. Members observed that this increased flexibility on the supply side of the labour market, together with ongoing subdued growth in wages and inflation, suggested that spare capacity was likely to remain in the labour market for some time. While wages growth had picked up from a year earlier, it had remained subdued and recent data suggested the pick-up was only very gradual. Together, these data suggested that the Australian economy could sustain a lower rate of unemployment than previously estimated, while achieving inflation consistent with the target.

Members observed that underlying inflation had been below the 2–3 per cent target range for three years and that the lower-than-expected March quarter inflation data – at 1½ per cent in underlying terms – had pointed to ongoing subdued inflationary pressures. In part, this reflected continued slow growth in wages. Members also observed that competition in retailing, very weak growth in rents in the context of the housing market adjustment and government initiatives to reduce cost-of-living pressures had been dampening inflation pressures. These factors were likely to continue for some time. Members recognised that Australia’s flexible inflation targeting framework did not require inflation to be within the target range at all times, which allows the Board to set monetary policy so as best to achieve the Bank’s broad objectives. However, they also agreed that the inflation target plays an important role as a strong medium-term anchor for inflation expectations, to help deliver low and stable inflation, which in turn supports sustainable growth in employment and incomes.

In these circumstances, members agreed that further improvement in the labour market would be required for wages growth and inflation to rise to levels consistent with the medium-term inflation target. Moreover, while the Bank’s central forecast scenario for growth and inflation was unchanged, the accumulation of data on inflation and labour market conditions over recent months had led members to revise their assessment of the extent of inflationary pressure in the economy and, relatedly, the extent of spare capacity in the Australian labour market.

Given these considerations, members considered the case for a reduction in the cash rate at the current meeting. A lower level of interest rates would support growth in the economy, thereby reducing unemployment and contributing to inflation rising to a level consistent with the target.

Members recognised that, in the current environment, the main channels through which lower interest rates would support the economy were a lower value of the exchange rate, reduced borrowing rates for businesses, and lower required interest payments on borrowing by households, freeing up cash for other expenditure. Although households are net borrowers in aggregate, members recognised that there are many individual households that are net savers and whose interest income would be reduced by lower interest rates. Carefully considering these different effects, members judged that a lower level of interest rates was likely to support growth in employment and incomes, and promote stronger overall economic conditions.

Members also considered the risks associated with a lower level of interest rates in the period ahead. Given the high level of household debt, the adjustment under way in housing markets and the tightening in lending practices, members judged that a decline in interest rates was unlikely to encourage a material pick-up in borrowing by households that would add to medium-term risks in the economy. Members continued to recognise that there were risks to the forecasts for growth and inflation in both directions. However, given the extent of spare capacity in the economy and the subdued inflationary pressures, they judged there was a low likelihood of a decline in interest rates resulting in an unexpectedly strong pick-up in inflation. Members also observed that a lower level of interest rates would stimulate activity and thereby improve the resilience of the Australian economy to any future adverse shocks.

Taking into account all the available information, the Board decided that it was appropriate to lower the cash rate by 25 basis points at this meeting. A lower level of the cash rate would assist in reducing spare capacity in the labour market, providing more Australians with jobs and greater confidence that inflation will return to be comfortably within the medium-term target range in the period ahead. Given the amount of spare capacity in the labour market and the economy more broadly, members agreed that it was more likely than not that a further easing in monetary policy would be appropriate in the period ahead. They also recognised, however, that lower interest rates were not the only policy option available to assist in lowering the rate of unemployment, consistent with the medium-term inflation target. Members agreed that, in assessing whether further monetary easing was appropriate, developments in the labour market would be particularly important.

The Decision

The Board decided to lower the cash rate by 25 basis points to 1.25 per cent, effective 5 June.

Rates are going 50bps. AUD at new lows:

Comments

  1. Given the high level of household debt, the adjustment under way in housing markets and the tightening in lending practices, members judged that a decline in interest rates was unlikely to encourage a material pick-up in borrowing by households that would add to medium-term risks in the economy.

    They’re praying for the opposite. Lord, give me one last can kick, Amen.

  2. We need more income, not more debt.

    Policy makers should be focusing on how to raise income. Tax cuts and increase spending/transfers and as rates fall towards zero, monetisation NOT QE. Expand the money supply by buying bonds directly from the Treasury and leaving them unsterilised, expand base money which would weaken the A$ and transfer funds into households.

    Sterilised deficit spending and QE will do nothing, just more distortions and more debt.

    • They are already clamoring for QE. Take today’s AFR:

      The Reserve Bank of Australia should learn from the financial crisis mistakes of the US Federal Reserve and swiftly shift to “quantitative easing” stimulus if the RBA runs out of space to cut interest rates, a new report says.

      • Pretty sure QE doesn’t work. It just created more wealth inequality…

        On the other hand that’s probably what it was supposed to do. So never mind me, carry on then.

      • Once there was a car business, Joe’s Crazy Cars, that had successfully driven up the sales activity and price of cars within the town.

        Business was great, until 1 day Joe came in to discover there were no customers. Joe was worried!

        The local government, recognizing the importance of Joe’s Crazy Cars for the town economy, decided to stimulate the car market by buying up all of Joe’s cars. Business is great! Joe is flush with cash and decides to load up on an even greater stock of cars (as well as buying himself some nice stuff (he’s uber successful after all)).

        Joe comes in the next day…. but there’s still no customers. He tries all his old tricks of free hotdogs and scantily clad saleswomen, but to no avail. Why? Because these tactics had already worked. They had worked so well that every person in town had 3 cars! Not only are the townspeople struggling to pay for these cars, there is no productive use for every person in town to have 3 overvalued cars. Hence we are left with a car industry that is artificially stimulated by government buying, without any change to the stagnating and struggling customer base.

      • Jumping jack flash

        +1 Brenton!

        Meanwhile the interest owing on each one of the trillions of debt dollars attached to houses sucks spending capacity out of the economy

      • QE is a bad idea in Australia. People borrow mainly short term so it won’t lower the cost of capital much. It won’t prompt more fiscal spending and it won’t boost the ASX and create a wealth effect because of the large financial component in the index.

        The tyres will spin and there will be no forward motionZ

    • “We need more income, not more debt”.

      Unfortunately in a debt based monetary system they aren’t totally decoupled. Less debt growth (i.e. credit) means less income and vice versa especially since we don’t export enough and the Government wants surpluses down the track. What we probably need is a change in ratio from “credit money” to “government money” in the system and less imports – I don’t see any happening soon unless helicopter money starts and the dollar sinks in response.

  3. proofreadersMEMBER

    “The average interest rate paid on retail deposits by banks was slightly below the cash rate, although only a small share of deposits by value received a rate below 0.5 per cent (predominantly deposits on transaction accounts).”

    Thank goodness that the RBA happy clappy are convinced that retail depositors will just continue to be happily screwed?

  4. So, according to the RBA things are going pretty much okay and yet we need to cut rates to 1.25%. Wow. And not a single mention of (insanely high) population growth

    All this debt has dragged forward an enormous amount of consumption that will have to realign with ACTUAL income in the near future. I wonder how long Trump can stave off a recession to help get himself over the line again in 2020. Going to be tricky if not impossible.

    So many ugly little black ducklings swimming round the globe looking for large schwarz swans

    • Jumping jack flash

      If only.

      Free money can never exist, unfortunately.
      It’d solve a lot of problems if it could exist, though.

      These Shylocks want their pounds of flesh you know.

  5. Jumping jack flash

    “Given the high level of household debt, the adjustment under way in housing markets and the tightening in lending practices, members judged that a decline in interest rates was unlikely to encourage a material pick-up in borrowing by households that would add to medium-term risks in the economy.”

    well thank goodness for that. I’m sure that wasn’t the original plan, but there’s nothing better than to simply take reality and say “I hoped that would happen”

    “Members … judged there was a low likelihood of a decline in interest rates resulting in an unexpectedly strong pick-up in inflation. ”
    Ummm…. no inflation now. So tell me, why did they lower interest rates?

    “Members also observed that a lower level of interest rates would stimulate activity and thereby improve the resilience of the Australian economy to any future adverse shocks.”

    Aha! The “activity stimulation” and “resilience improvement” of the economy! Well everyone likes stimulating activities and improvements to resilience. Pity they’re just memes.

    But on the rare chance they aren’t just saying strings of catchphrases, what’s the objective measure for those?

    “…the Board decided that it was appropriate to lower the cash rate by 25 basis points at this meeting. A lower level of the cash rate would assist in reducing spare capacity in the labour market, providing more Australians with jobs. …and greater confidence that inflation will return”

    So no actual inflation, but improved confidence that inflation will return. That’s great. When my bosses ask me how my project is coming along I’ll tell them that I’m working on improving confidence that I will complete it. I’m sure that’ll go down a treat.

    Ahh, jobs! Jobs!! Sweet precious jobs!!!

    Pity they haven’t mentioned where that was up to as a result of the cuts. Maybe it will go the way of the inflation? Maybe there will be greater confidence that there will be more jobs, but actually no extra jobs?

    Of course this RBA bleating is all hogwash. It is quite simple to understand what is actually happening and will continue to happen as a result of all this nonproductive debt that everyone has.

  6. I get the feeling that this is going to mushroom until it suddenly explodes and whocoodanode! The banks will hide the delinquencies, APRA will continue to turn a blind eye, RBA will continue living in whatever parallel universe it is that they live in and the government will ignore it all especially whilst commodity prices are high. Shops and restaurants are dropping like flies, the consumer is tapped out, we are getting reamed 15 ways to Sunday and everyone in the MSM keeps telling us it’s all rainbows and lollipops. What a weird time to be alive.

    Oh, and let’s not forget the crumblind flammable towers that have spread like wildfire over the last 15 years. That should end well…

    • AUD is key. The RBA can cut if the AUD holds up, but if it breaches the GFC support level, then it’s clear air all the way down to the 9/11 support level. If it free-falls down to that territory then Megabank busts on its external debt and Australian consumption busts on no longer being able to afford the imports upon which we now depend so much (having fallen victim to a self inflicted resource curse and killed off our manufacturing sector).

      Venezuela fell this way. It specialised too much in a single industry (exporting oil), allowing the rest of its economy to be killed off thanks to a stronger currency that incentivised imports (of everything else) over domestic production. Over time, an exporter of low complexity goods will face declining terms of trade until foreign debt starts building up to a problematic level (while trying to maintain living standards). Add in local government incompetence, sanctions from an opportunistic, hostile foreign power, plus a weak market in the specialised commodity of interest and it’s game over.

      It’s no coincidence that Megabank is suddenly active on the wires talking about QE. As I’ve said all along, if the AUD collapses, our economy undergoes a crisis / phase change, requiring QE to bail out Megabank over its exposure to foreign debt. It bears mentioning that Australian foreign debt is at a record high (although not in per-capita terms).

      Post crisis, we end up with government debt exploding to ~160% of GDP, interest rates at zero (if not negative), an AUD down in the 0.40’s (I think maybe as low as high 0.30’s) and, if the government f*cks up as much as I expect it to do with its subsequent spending (ie, it chooses to straight up bail out the FIRE sector), then we’ll also have a decimated middle class and severe political unrest.

      The RBA can’t entirely be staffed by muppets. Surely there are some people in there with enough brains to understand the danger here. They must realise that the RBA f’d up big time by over-reacting to the last period of softness, cutting rates too much then refusing to raise them. They must understand that cutting too much again could trigger a doom spiral if international markets get the impression that Australia’s economy is degrading faster than broader markets.

      The RBA dodged a bullet when the world economy started turning down. All they have to do is tread water until the world economy catches down to Australia and they’re back in sync, able to cut freely without wrecking the AUD (and Megabank).

  7. Mining BoganMEMBER

    I just got a ‘Dear Bogan’ letter from ING, cutting my savings back .25%.

    Looking at you Lunatic. That’s less spending you’ve just caused.

    • Lol I emptied my 2 savings accounts labeled rainy day and HECS (I’d been diligently depositing into Them for a year, not lots but enough) and bought some gold mining shares and a little crypto. I figured I’d have ‘fun’ with that money. Screw you Martin Place. I’m spending even less this next year. And the best thing is that after a while of not spending money it becomes so easy to not spend money. I can’t ever see myself going back to spending like I used to, and I was never profligate, i’ve always saved.

      The amount of interest earned that will end up being in my house deposit will be less than eff all. And I’m not happy about that.