# Strong vs Weak Countries + Markets --- Affecting Australia



## Garpal Gumnut (2 June 2022)

I was reading the NYT, ToL and the WSJ today and it reminded me of what a mess the USA and the World is in atm and got me wondering as to how the actions of different countries would affect me here in Australia economically. 

So I decided to make 3 lists of Strong, Medium and Weak in relation to Markets/Bourses/Politics/Power to assist me in developing a position for my portfolios viz a viz commodities and sectors I trade and invest in on the ASX. 

A * denotes an exception following with a matching *. 

I suppose it is easier to start off with the Weak. 

*THE WEAK*

All of Africa.
All of South America. *
All  of Southeast Asia.
Pakistan and all the Stans
Eastern Europe.
Western Europe. 
UK
New Zealand
*THE MEDIUM*

Taiwan
Argentina *
Russia and its statelets.
North America *
*THE STRONG*

USA *
Canada *
China
S. Korea
India

This list is of those who in my opinion are important materially to the economic well being of Australia in terms of relative power and economic strength.

The USA is a worry politically more than anything else, with an irreconcilable 50/50 division between it's peoples, tending towards hatred and conflict. This why they are in the medium and strong. Its $ is under threat, its market affects ours daily.

Canada, likewise, may be affected by this which is why they are both in the medium and strong columns.  

Europe is a basket case, dependant on Russia with no strong political or economic leadership.

Argentina atm gets a medium because of rare earths but its a crazy place and the market movers are about to smash the RE price.

Taiwan I put in the medium because it may get rolled by China.  

New Zealand may qualify for a medium as a labour force/migrant source for Australia but otherwise imo they are in big trouble with their economy and juggling the Pacific cousins. 

The UK, although Londongrad controls many Financial Markets reminds me of Egypt under the Romans, faded glory and a kleptocracy. The hordes may have Dukes for breakfast once E2 leaves this mortal coil. 

Canada is a quarry with a number of workforces who speak different languages and who dislike each other intensely.

Russia reminds me of China during the Cultural Revolution, (although 90% are pissed on vodka 16/24 ) going backwards and about in circles.

S.Korea I put in strong, because of their industry and it is not commonly known are just as warry and mongrel as their cousins in N. Korea. So they will remain strong. 

China and India are very strong.

I may change the list around later. 

If I left any out or misclassified please let me know.

gg


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## Dona Ferentes (2 June 2022)

I think Vietnam could slide into Medium. Janet Yellen called for the “friend-shoring” of supply chains  and VN is one of the good guys (!). But it is a one party state.

When I was in Cambodia, a govt contact described his country as a 1, VN as a 5 and China as a 10 for mercantilist drive.

EDIT:  and Japan?

EDIT: Latin America  (not just S.Am); with a * for Mexico because of NAFTA


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## waterbottle (2 June 2022)

Where does Australia sit in all of this?


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## Garpal Gumnut (2 June 2022)

waterbottle said:


> Where does Australia sit in all of this?



It is all about us. 

When do we get there ?

I would if looking from outside put us in strong.

gg


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## Garpal Gumnut (2 June 2022)

Thanks @Dona Ferentes . I'll rejig that list. 

Japan I overlooked. A great place. Good work ethic, v.intelligent people ( most wear spectacles like China )

VN I'll put in Medium. 

THE WEAK

All of Africa.
All of South America. *
All of Southeast Asia. *
Pakistan and all the Stans
Eastern Europe.
Western Europe. 
UK
New Zealand
THE MEDIUM

Taiwan
Argentina *
Russia and its statelets.
North America *
Vietnam *
THE STRONG

USA *
Canada *
China
S. Korea
India
Japan
gg


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## waterbottle (2 June 2022)

Garpal Gumnut said:


> I would if looking from outside put us in strong.




That's fine. I was afraid, for a moment, you had grouped us with 'New Zealand'.


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## divs4ever (2 June 2022)

waterbottle said:


> That's fine. I was afraid, for a moment, you had grouped us with 'New Zealand'.



certain sectors in NZ are doing well compared to Australia ( telcos and power companies for example )

the problem for some , of course in liquidity


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## Garpal Gumnut (2 June 2022)

Does anyone else feel Mexico should go in medium because of NAFTA  as @Dona Ferentes does or be lumped as weak for when/if the Bronze Loon or a lookalike resumes his Presidency of the USA.

gg


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## waterbottle (2 June 2022)

You should probably list the OPEC conglomerate given their ability to affect geopolitics, the global economy and the green transition


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## divs4ever (2 June 2022)

Garpal Gumnut said:


> Does anyone else feel Mexico should go in medium because of NAFTA  as @Dona Ferentes does or be lumped as weak for when/if the Bronze Loon or a lookalike resumes his Presidency of the USA.
> 
> gg



 that's a bit tricky  , in theory Mexico is awash with militias ( although some call them cartels ) and is busy invading the US  and finding minimal resistance  , they have resources and energy  and exports  and from memory haven't lost a war in 100 years ( plus )

 what's Mexico's national debt look like ??  ( the trade balance  should be OK )


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## Garpal Gumnut (2 June 2022)

Thank you all for the feedback.

I'll add Mexico to medium and OPEC Nations to Strong and OPEC + Nations minus OPEC Nations to Medium. 


THE WEAK

All of Africa.
All of South America. *
All of Southeast Asia. *
Pakistan and all the Stans
Eastern Europe.
Western Europe. 
UK
New Zealand
THE MEDIUM

Taiwan
Argentina *
Russia and its statelets.
North America *
Vietnam *
Mexico
OPEC + Nations minus OPEC Nations
THE STRONG

USA *
Canada *
China
S. Korea
India
Japan
OPEC Nations


gg


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## bux2000 (2 June 2022)

Over 5 years ago I would have grouped NZ in a strong position............We had a change of direction via a new Prime Minister and a  left leaning Government.
I fear Australia is now embarking at the top of a similar slippery slope.
 I hope for a prosperous and free  Australia and am proved completely wrong.

I am not sure I would put Canada in the strong file for the same reasons I have mentioned above or the US for that matter.

bux


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## divs4ever (2 June 2022)

bux2000 said:


> Over 5 years ago I would have grouped NZ in a strong position............We had a change of direction via a new Prime Minister and a  left leaning Government.
> I fear Australia is now embarking at the top of a similar slippery slope.
> I hope for a prosperous and free  Australia and am proved completely wrong.
> 
> ...



 it depends on priorities  , a commodity exporter ( with a positive trade balance ) will do better than a resource poor nation with a solid  government ( like say Hungary )

 but in general i agree , a Left-learning  government promises equality , and the optimists  think living standards will rise and cheer , but the only way for there to be equality  is to drag everyone down to the most basic level  ( of that society )


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## frugal.rock (2 June 2022)

Garpal Gumnut said:


> If I left any out or misclassified please let me know.






Dona Ferentes said:


> I think Vietnam could slide into Medium




A fair bit of manufacturing industry has left China lately and gone to Vietnam, Malaysia, Thailand, Indonesia and Phillipines (due to covid restrictions/CCP)
So South East Asia might be a Medium?
I don't see them returning to China...


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## Garpal Gumnut (2 June 2022)

frugal.rock said:


> A fair bit of manufacturing industry has left China lately and gone to Vietnam, Malaysia, Thailand, Indonesia and Phillipines (due to covid restrictions/CCP)
> So South East Asia might be a Medium?
> I don't see them returning to China...



Thanks @frugal.rock 

So if we divide Southeast Asia in to SE Asia+ in medium and keep Southeast Asia generally in weak. 

Does that sound reasonable?


THE WEAK

All of Africa.
South and Central America. *
Southeast Asia. *
Pakistan and all the Stans
Eastern Europe.
Western Europe. 
UK
New Zealand
THE MEDIUM

Taiwan
Argentina *
Russia and its statelets.
North America *
Vietnam *
Mexico
OPEC + Nations minus OPEC Nations
Southeast Asia + (Vietn Thai Malay Phill)
THE STRONG

USA *
Canada *
China
S. Korea
India
Japan
OPEC Nations

gg


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## Value Collector (2 June 2022)

Garpal Gumnut said:


> I was reading the NYT, ToL and the WSJ today and it reminded me of what a mess the USA and the World is in atm and got me wondering as to how the actions of different countries would affect me here in Australia economically.
> 
> So I decided to make 3 lists of Strong, Medium and Weak in relation to Markets/Bourses/Politics/Power to assist me in developing a position for my portfolios viz a viz commodities and sectors I trade and invest in on the ASX.
> 
> ...



I think you would get a lot of this book.

It changed the way I view the world.


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## Dona Ferentes (3 June 2022)

and , what about Singapore. the Lion City?

only small, but always a China alternative


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## Garpal Gumnut (3 June 2022)

Dona Ferentes said:


> and , what about Singapore. the Lion City?
> 
> only small, but always a China alternative



I would agree that the Lion city deserves a mention of its own. 

A medium seems appropriate. 



THE WEAK

All of Africa.
South and Central America. *
Southeast Asia. *
Pakistan and all the Stans
Eastern Europe.
Western Europe. 
UK
New Zealand
THE MEDIUM

Taiwan
Argentina *
Russia and its statelets.
North America *
Vietnam *
Mexico
OPEC + Nations minus OPEC Nations
Southeast Asia + (Vietn Thai Malay Phill)
Singapore
THE STRONG

USA *
Canada *
China
S. Korea
India
Japan
OPEC Nations
gg


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## Dona Ferentes (3 June 2022)

> GG .... _decided to make 3 lists of Strong, Medium and Weak in relation to Markets/ Bourses/ Politics/ Power to assist [ ] in developing a position for [ ] portfolios viz commodities and sectors [for] trading and investing on the ASX._




Recently there have been a few articles looking back at macro trends. One mentioned the *BRIC *concept. The other, allied, was the *rise of the middle class* and the impact on demand/ consumption. No-one talks about the now discredited, or at least atomised, BRICs as a force any more. And Covid with attendant disruptions have set back the advancement of significant numbers around the world to achieving a higher standard of living. The European *war*, with Russia making inroads into independent Ukraine, has had further impacts on energy costs and food supplies. And *globalisation *is also an idea that flowed but is now ebbing, as supply chains undergo stress and strategic alliances reconsider what may or may not be such a good idea, after all.

But we still could have a billion people moving to middle class (defined as a US$5000 _per capita _income level) in the next decade. It is around this point where a transition occurs, be it to acquire a refrigerator, a vehicle, aircon or other goods, and a move away from subsistence and other pressing issues. I remember about 2005 it was all about China; and we have seen what it has achieved with the 8%pa growth for a decade or more. And how Australia benefited from resources boom marks 1 and 2. (blurred boundaries because the GFC intruded but the response kicked in even stronger growth). 

So thanks, _gg, _for kick-starting a revisit. Clearly the notion of Australia benefiting from global demand is still there. Our very reality of an island continent provides a level of security even though logistically we can be quite removed from markets. A few points

Dry-land wide acreage agriculture. Tick. We are food exporters.
Commodities. On the plus side, a  range of minerals, both the '_old_' such as iron ore and coal, and the _new_, or 'forward facing', that will be involved in decarbonisation. On the other side, energy is a mixed bag; as importers of oil though with large LNG exports
We don't do upstream processing well. A high cost country, with a small labour force and little history of succeeding
Still a net importer of capital (and on that point, slotting in Europe / UK as _Weak _ignores their importance in the global financing chain). But it's getting better, our Superannuation and Future Funds are enabling global investment.
Rule of law. Educated. Open to migration flows, both ways.
So, where to, now? Best thing I did in 2005 when the embryonic resources boom was kicking off, was to buy MND for a buck. Pity I missed FMG.


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## divs4ever (3 June 2022)

no i haven't forgotten about BRICS ,
 but i am guessing  competing power bases thought BRICS was dead when Brazil had a regime change  , South Africa  is in crisis , and Russia  is under 'crippling sanctions '  , and China and India are facing internal problems 

 given Russia's annoying to resilience to ( is it now round six of ) sanctions , and some independence of thought shown by the Brazilian Government  , maybe BRICS isn't all that stricken at all ( compared to say , the EU )

and recently discussions have restarted about including new members  to BRICS . depending who is accepted  this could be a game changer , suggested candidates included Iran and Indonesia  , i am VERY surprised Afghanistan wasn't mentioned , and i don't remember extra Latin America nations being mentioned  a mild surprise to me ( i would have sounded out Argentina and Chile )


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## Garpal Gumnut (4 June 2022)

Dona Ferentes said:


> Recently there have been a few articles looking back at macro trends. One mentioned the *BRIC *concept. The other, allied, was the *rise of the middle class* and the impact on demand/ consumption. No-one talks about the now discredited, or at least atomised, BRICs as a force any more. And Covid with attendant disruptions have set back the advancement of significant numbers around the world to achieving a higher standard of living. The European *war*, with Russia making inroads into independent Ukraine, has had further impacts on energy costs and food supplies. And *globalisation *is also an idea that flowed but is now ebbing, as supply chains undergo stress and strategic alliances reconsider what may or may not be such a good idea, after all.
> 
> But we still could have a billion people moving to middle class (defined as a US$5000 _per capita _income level) in the next decade. It is around this point where a transition occurs, be it to acquire a refrigerator, a vehicle, aircon or other goods, and a move away from subsistence and other pressing issues. I remember about 2005 it was all about China; and we have seen what it has achieved with the 8%pa growth for a decade or more. And how Australia benefited from resources boom marks 1 and 2. (blurred boundaries because the GFC intruded but the response kicked in even stronger growth).
> 
> ...



Thanks @Dona Ferentes . I was being a bit provocative putting the UK in weak and I take your points re London being a major Financial Centre. The UK may be breaking up once HM departs and outside of London it is too dark to see ( to quote Groucho Marx ) economically with N.I and Scotland always on the tilt. As we saw with the Nickel debacle and how it affected us recently on the LME I agree that there should be a promotion. BRICS I'm open to including as a separate entity somewhere following further ASF member discussion. 

THE WEAK

All of Africa.
South and Central America. *
Southeast Asia. *
Pakistan and all the Stans
Eastern Europe.
Western Europe. 
UK minus London.
New Zealand
THE MEDIUM

Taiwan
Argentina *
Russia and its statelets.
North America *
Vietnam *
Mexico
OPEC + Nations minus OPEC Nations
Southeast Asia + (Vietn Thai Malay Phill)
Singapore
London
THE STRONG

USA *
Canada *
China
S. Korea
India
Japan
OPEC Nations

gg


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