Is the Aus economy slowly imploding?

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Aug 14, 2011
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Sep 15, 2007
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Coal generates 40-60 billion in exports. Renewable energy will not replace that income. It will actually cost us more as we have to import all of the solar panels and appalling wind turbines.
Renewables can be used to create hydrogen which can then be exported. Japan and Korea are already trying to find places to import hydrogen from. Tech isn’t quite ready yet though. Give it another decade

the only downside of losing an export source by the way is it weakens the Australian dollar. This actually helps all our other tradeable sectors. Many politicians actually campaign on trying to lower the currency. They are wrong. Lowering the currency is bad overall. But it’s not as big a deal as you think.

the biggest driver of our exports is actually savings rate.
 
Jan 12, 2011
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As we inch closer to MMT with the Government controlling the Money Supply, in theory they can just spend their way out of and down turn(s) and control inflation via Taxation

The US is doing exactly that
 
Aug 14, 2011
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Renewables can be used to create hydrogen which can then be exported. Japan and Korea are already trying to find places to import hydrogen from. Tech isn’t quite ready yet though. Give it another decade

the only downside of losing an export source by the way is it weakens the Australian dollar. This actually helps all our other tradeable sectors. Many politicians actually campaign on trying to lower the currency. They are wrong. Lowering the currency is bad overall. But it’s not as big a deal as you think.

the biggest driver of our exports is actually savings rate.

When commodity prices are written in $US, how are we looking with a weaker dollar?
 
Sep 15, 2007
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When commodity prices are written in $US, how are we looking with a weaker dollar?
It’s irrelevant what currency prices are labelled in. That means absolutely nothing for the actual price which constantly adjusts to account for changes in supply and demand and the fx of the marginal producer in commodity markets with limited suppliers.
 
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As we inch closer to MMT with the Government controlling the Money Supply, in theory they can just spend their way out of and down turn(s) and control inflation via Taxation

The US is doing exactly that
But taxes offset government spending in terms of providing stimulus.

and the us does not have MMT. It’s taxes are not endogenously responding to inflation. The fed still aims to prevent inflation with interest rates.
 
Aug 14, 2011
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It’s irrelevant what currency prices are labelled in. That means absolutely nothing for the actual price which constantly adjusts to account for changes in supply and demand and the fx of the marginal producer in commodity markets with limited suppliers.

The international value of the $A is the currency of the ASX, so its value against the $US (or Euro) is very relevant.
 
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The international value of the $A is the currency of the ASX, so its value against the $US (or Euro) is very relevant.
prices adjust regardless of how they are labelled. I could label it in US dollars, aud, China rmb. It does not matter for The real purchasing power of commodities of an Australian resident. Stop confusing labels with purchasing power.
 
Aug 14, 2011
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prices adjust regardless of how they are labelled. I could label it in US dollars, aud, China rmb. It does not matter for The real purchasing power of commodities of an Australian resident. Stop confusing labels with purchasing power.

There is a market for a commodity & there is a market for the currency.
 

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The economy is getting what is coming to it due to politicians and businesses putting all eggs in few baskets: being reliant on too few industries that aren't really sustainable and too reliant on a trading partner that doesn't see eye to eye to say the least and will go through some economic pain.
 
Aug 14, 2011
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The economy is getting what is coming to it due to politicians and businesses putting all eggs in few baskets: being reliant on too few industries that aren't really sustainable and too reliant on a trading partner that doesn't see eye to eye to say the least and will go through some economic pain.

The economy is getting what is coming to it is the ordinary people wearing the pain.

If you take coal that has worn the brunt of Chinese action, it has found other markets:

Hopes are high that our coming grain harvest will close to 'best ever'.


Its not our export sector that is the problem.
 

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Signs that the inflation genie is out of the bottle in the US:

'4.2 per cent in the seven months of this year to July.
That’s to say, in the first seven months of the year, inflation has run at a 7.1 per cent annual rate.'

Yes, thats the US not Australia, but its enough to have any baby boomer feeling uncomfortable.

Here: annual inflation rate is 3.8%, having jumped from 1.1% for the twelve months to March.
 
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Signs that the inflation genie is out of the bottle in the US:

'4.2 per cent in the seven months of this year to July.
That’s to say, in the first seven months of the year, inflation has run at a 7.1 per cent annual rate.'

Yes, thats the US not Australia, but its enough to have any baby boomer feeling uncomfortable.

Here: annual inflation rate is 3.8%, having jumped from 1.1% for the twelve months to March.
Consequences of high inflation.
1: Price increases across the board.
2: Pressure for public service pay rises especially at the Federal & State level which no govt except WA can afford.
3: Interest rates will start increasing quickly which will also impact on our Federal & State Govt debt.
4: The dollar will weaken
5: The unemployed, pensioners & others relying on welfare will be thrown on the scrap heap as they struggle to survive on their meagre earnings.
If labor comes into Govt it will only become worst as they scrap coal and gas exports which will blow our debt out even further as we lose valuable foreign currency, whilst the Europeans keep using coal and drilling for oil and gas in the Norf Sea.
 
Aug 14, 2011
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Consequences of high inflation.
1: Price increases across the board.
2: Pressure for public service pay rises especially at the Federal & State level which no govt except WA can afford.
3: Interest rates will start increasing quickly which will also impact on our Federal & State Govt debt.
4: The dollar will weaken
5: The unemployed, pensioners & others relying on welfare will be thrown on the scrap heap as they struggle to survive on their meagre earnings.
If labor comes into Govt it will only become worst as they scrap coal and gas exports which will blow our debt out even further as we lose valuable foreign currency, whilst the Europeans keep using coal and drilling for oil and gas in the Norf Sea.

Agree on the consequences.
I'd add the pressure it will exert on home owners with mortgages, if wage increases do not keep up with housing payments & increased interest.

A positive view is that we might spawn another leader in the Bob Hawke mould.
 
Jun 30, 2009
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Agree on the consequences.
I'd add the pressure it will exert on home owners with mortgages, if wage increases do not keep up with housing payments & increased interest.

A positive view is that we might spawn another leader in the Bob Hawke mould.
Id take a pjk right now ta
 
May 3, 2007
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The Economy has been pretty much propped up by Immigration, Rising House prices and the Price of Iron Ore

All of the above have significant risk going forward

As for the Auto Industry, given our location. I always thought it was a missed opportunity considering the love of utes in Asia to market our V8 sport utes into that market as an alternative to the Hilux, Rangers ect given the rising urban middle class in places like Thailand and China.

The auto industry has been hurt. I live in SA. When holden factory in Elizabeth was shut down, the smaller companies that created the smaller parts to send to elizabeth, went broke too.

The price of Iron Ore has helped the aussie economy. I could also say selling quality beef to japan helps too.
 
Aug 14, 2011
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"It is helping for sure, we're very blessed that we have the grain prices where we do, it's saving a few farms that's for sure.'


Australian canola prices have been historically high this year and increased again this week.
The reason was Canada.
Canada is the world's largest producer and exporter of canola, but drought and record temperatures have devastated this year's crop.


Key points:
  • Statisctis Canada has slashed its canola crop forecast to 12.8 million tonnes, down 34 per cent on last year
  • Australian canola prices have surged beyond $900 a tonne
  • Frost ruining the dream run for some farmers in Western Australia

'We're already seeing elevated prices for next year's crop, the Canadian crop is so small that it will take a while for them to build stocks up and rebuild'
 

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Good article about our tech industry being good for the economy in theage online.

Its great to read up on the good things happening in the country than the projection of doom and gloom and pending abject poverty for the nation by the same posters day in day out in nearly all threads who seem to want to indoctrinate the 'absolute and undeniable truth'of how racist, sexist and stupid all citizens of the nation are.
 
The economy is getting what is coming to it is the ordinary people wearing the pain.

If you take coal that has worn the brunt of Chinese action, it has found other markets:

Hopes are high that our coming grain harvest will close to 'best ever'.


Its not our export sector that is the problem.

Iron now below USD100/mt

remember reading that this is allegedly the point some reckon mines start reducing production and some shut - no idea if true or valid, so will be interesting to see what happens now in coming months
 
Aug 14, 2011
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Iron now below USD100/mt

remember reading that this is allegedly the point some reckon mines start reducing production and some shut - no idea if true or valid, so will be interesting to see what happens now in coming months

Thats what happened last time the bottom fell out of the iron ore price. Didnt effect BHP/Rio/ Gina/Twiggy mainly due to the high grade ore in volume terms as I understand. Profitability is another matter completely & the royalties to the WA Govt.
 
Aug 14, 2011
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Exports at work, coal & agriculture. Imports reflecting supply chain difficulties.

“Import volumes fell this quarter as global supply chain pressures began to be felt in Australia,” Mr Tomadini said.

“These falls were partially offset by rises in imports of processed industrial supplies, which saw large increases in imports of Covid-19 vaccines as the national rollout gathered pace.”
 
May 13, 2008
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If labor comes into Govt it will only become worst as they scrap coal and gas exports which will blow our debt out even further as we lose valuable foreign currency, whilst the Europeans keep using coal and drilling for oil and gas in the Norf Sea.

No one is scrapping coal and gas exports.

The worst that will happen is a new government will stop subsidising coal and gas. AS THEY SHOULD
 

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