Things not looking good in China and the US, could a serious Australian recession be on the cards?

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DaRick

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Jan 12, 2008
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Yes.

The Chinese and Japanese economy both slowing at roughly the same time, plus commodity prices collapsing (or on the verge), plus the two largest states suffering from lockdowns and pandemics, plus Morrison dithering like he usually does, makes for a lethal cocktail. Even if we somehow avoid a technical recession, it will sure as hell feel like one to most people.

Australians saving up a lot of money, particularly in the two largest states, will soften the blow but IMO not enough.
 

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kranky al

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The concept of a recession is an idiotic one. Should look more at trend growth over a longer period then 2 qtrs.
It really is a self fulfilling prediction

Economists: Oh look everybody the economy looks a little worse than usual.

*everyone stops spending money and saves it in case theres a recession

Economists : oh look we are in a recession.


*everyone gets supertight with their money

Economists : this is a bad recession
 

DaRick

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The energy bubble has made things somewhat interesting, but I don't think it would benefit us that much - we don't have a whole lot of oil reserves (hence why fuel prices have been climbing lately) and the LNG crisis seems most acute in Europe and to a lesser degree the US, not China.

Fuel prices climbing here makes short-term stagflation (lasting 3-7 months) more likely, but that still leads to recessionary conditions, and will be followed by deflation/disinflation as the energy bubble pops.

Besides, most of our LNG IIRC is in WA, with some in QLD and NT, so the two largest states still don't benefit economically.
 

Ben The Donkey

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Aug 18, 2019
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The concept of a recession is an idiotic one. Should look more at trend growth over a longer period then 2 qtrs.
I think the office meeting resulting from an email sent by you would be amusingly chaotic.
A lovely example of why communications skills are so highly regarded. I'm typing up an application at the moment, so thanks for the laugh and the important reminder of how one misused word can send people off in the wrong direction.
 

QuietB

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There is a bit too much cash being printed for the risk of any real recession.

Having said that, at some point the printing presses (return key) are going to stop and it will be interesting to see what that does to asset bubbles. Asset prices are out of control right now.
 

Ned_Flanders

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There is a bit too much cash being printed for the risk of any real recession.

Having said that, at some point the printing presses (return key) are going to stop and it will be interesting to see what that does to asset bubbles. Asset prices are out of control right now.
this only works while inflation remains low. with it rising now we need to remove our reliance on this club
 

Seeds

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this only works while inflation remains low. with it rising now we need to remove our reliance on this club
Im not sure. Most of the inflation seems to be a result of temporary supply side issues and base effects and not to do with too much money floating around.

also note that its only core inflation that counts for monetary policy. not headline inflation. Energy price movements dont count.
 

Baltimore Jack

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There is a bit too much cash being printed for the risk of any real recession.

Having said that, at some point the printing presses (return key) are going to stop and it will be interesting to see what that does to asset bubbles. Asset prices are out of control right now.
A mate just told me they tendered for a shiit load of Bonds again this morning at 1.83% for 2033
 

QuietB

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A mate just told me they tendered for a shiit load of Bonds again this morning at 1.83% for 2033
Pretty sure printing is $4 billion a week still in Aus. That is $210 billion a year - almost 12% of GDP.

You would doing well to go into recession printing 12% of your GDP in cash.

Of course the whole lot is propping up asset bubbles and not being spent on anything particularly useful.
 

Ned_Flanders

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Im not sure. Most of the inflation seems to be a result of temporary supply side issues and base effects and not to do with too much money floating around.

also note that its only core inflation that counts for monetary policy. not headline inflation. Energy price movements dont count.
looking OS, we are seeing impacts on food and consumer goods. if that hits here, then we do have a problem (I 100% agree we are not in the USA or UK position yet)
 

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