Strong vs Weak Countries + Markets --- Affecting Australia

[Garpal Gumnut]

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

 

[Dona Ferentes]

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

 

[waterbottle]

Where does Australia sit in all of this?

 

[Garpal Gumnut]

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

 

[Garpal Gumnut]

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

 

[waterbottle]

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'.

 

[divs4ever]

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

 

[Garpal Gumnut]

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

 

[waterbottle]

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

 

[divs4ever]

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 )

 

[Garpal Gumnut]

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

 

[bux2000]

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

 

[divs4ever]

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

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 )

 

[frugal.rock]

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

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...

 

[Garpal Gumnut]

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

 

[Value Collector]

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

I think you would get a lot of this book.

It changed the way I view the world.

 

[Dona Ferentes]

and , what about Singapore. the Lion City?

only small, but always a China alternative

 

[Garpal Gumnut]

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

 

[Dona Ferentes]

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.

 

[divs4ever]

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 )