Recession almost inevitable (says Alan Kohler)I think a recession is going to happen regardless its all the debt blowing up that really worries me.
The Australian economy was ... fragile, as shown by the December quarter national accounts, and not in a strong position to handle the crisis as the government claims it is.
Consumer spending growth of 0.4 per cent in the quarter underpinned the insipid GDP growth of 0.5 per cent. Net exports contributed 0.1 per cent.
the anecdotal evidence of changes isPopulation growth last year was 1.6 per cent — 0.4 per cent per quarter, the same as the increase in consumer spending. No one spent any more — there were just more people spending.
The increase in population in 2019 was 381,600. Included in that were 268,000 temporary visas for Chinese people, of which 134,000 are students. And then there is tourism. Short-term visitors from China have been running at about 1.4 million a year. In other words, most of Australia’s economic growth has been the result of extra people, not an increase in the productivity or wealth of the people already here. Most of the extra people aren’t coming now...
Remember, increases in Newstart and pensions are forever, no government will reduce them once they are given, so there has to be an increase in recurrent income to balance it.
RBA is monetary policy (interest rates and money supply)One of the biggest economic implications is actually the Government response right across the board on managing the virus / information and of course monetary...
Im in two minds about stimulus.
On the other hand, people will suffer. Not sure the banks would cope with a lot of defaults. Small businesses would really wear it.
But at some point it will hit anyway. So what's the way forward?
I'm not in the business but I've got the gear.I pity the asbestos team needing new masks..this means no job
It is essentially a Ponzi scheme. Eventually the world will run out of greater fools.Yeah. This is a very real short term and longer term problem.
Honestly I don't think our current economic system and framework is fit for purpose to offer a cogent way forward.
Why ? Lots of reasons. Firstly I see much of our current " economic progress" as false. I suggest that trying encourage people to buy more and more "stuff" that is wasteful or creates secondary effects of pollution and poor health/social outcomes is not that good for us. Makes money but is it progress ?
Secondly from what I see the huge push in the current economic system is AI and automation everywhere. Retail and transport for a start are slated for big changes. I still haven't seen any serious indication of how new careers will be created as many traditional ones are destroyed.
Solutions ? Maybe a nasty world wide virus that.............
Speaking of which, I had to check the date to confirm it wasn't the 1st of April after reading this.It is essentially a Ponzi scheme.
The Australian way smurf, it is a quick fire way of fixing the problem, but long term it will be our demise IMO.Speaking of which, I had to check the date to confirm it wasn't the 1st of April after reading this.
https://www.news.com.au/finance/eco...s/news-story/2fc4560c782ed83d3a2696c4e4522fb1
The last thing we need is more Ponzi economics which try to do more of the same in the false hope of getting a different result.
Note that I'm not opposed to people of any particular race but I most certainly am opposed to the idea of constant growth in population so as to avoid a technical recession. It's madness really.
Speaking of which, I had to check the date to confirm it wasn't the 1st of April after reading this.
https://www.news.com.au/finance/eco...s/news-story/2fc4560c782ed83d3a2696c4e4522fb1
The last thing we need is more Ponzi economics which try to do more of the same in the false hope of getting a different result.
Note that I'm not opposed to people of any particular race but I most certainly am opposed to the idea of constant growth in population so as to avoid a technical recession. It's madness really.
Sober, scary story. I'm not sure how staying in the stock market is going to "preserve"capital. Frankly I think today will be a bloodbath on the exchange. (Collapse in oil prices for a start..)https://www.sagecap.com.au/insights/now-is-not-the-time-to-be-hero-but-to-look-to-preserve-capital
Pretty sensible article in my opinion
Hope it helps
RBA is monetary policy (interest rates and money supply)
Government is fiscal policy (tax rates, levels of government spending and, likely soon, stimulus ... to influence aggregate demand in the economy)
A good article on the state of play, regarding the economy.
https://www.abc.net.au/news/2020-03...rison-stave-off-a-recession-covid-19/12037522
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