The state of the economy at the street level

[SirRumpole]

it makes our manufactured goods even less competitive.

What manufactured goods ?

As you say, if we want manufacturing back, tariffs will be needed. We simply can't compete with slave labour, and why should we ?

Places like China and India are the biggest markets in the world. If the workers there were paid enough so they could afford the goods they produce then they could be self sustaining and wouldn't need to flog stuff to the rest of the world.

At the moment there are a few people in these countries making a lot of money from the working poor.

No level playing field there.

 

[qldfrog]

Help the economy, demand a pay rise !

Excellent article by Ian Verrender.

Why you should demand a pay rise now

If you really want to do something patriotic this year, if you really want to help our economy recover from impacts of the pandemic, then you should demand a pay rise, writes Ian Verrender.

www.abc.net.au

We all know that inflation is the ONLY way to go for our leader, study the Reset for the official program, but people have to realise that inflation is the ultimate tool to screw the people, the savers ,the home owners less than the renters,
Your taxes will increase,your benefits decrease, it is an economic nuclear bomb but there is no alternative

 

[over9k]

Alternatively, they raise interest rates but print a bunch of cash and KO some of the debt with it, in doing so dropping the value of the AUD and solving the export problem.

The only issue from there becomes cost of imports.

 

[sptrawler]

We all know that inflation is the ONLY way to go for our leader, study the Reset for the official program, but people have to realise that inflation is the ultimate tool to screw the people, the savers ,the home owners less than the renters,
Your taxes will increase,your benefits decrease, it is an economic nuclear bomb but there is no alternative

Alternatively, they raise interest rates but print a bunch of cash and KO some of the debt with it, in doing so dropping the value of the AUD and solving the export problem.

The only issue from there becomes cost of imports.

@over9k your alternative isn't an alternative, it is a follow on after the frogs quote. As day follows night once wages take off, prices take take off and interest rates take off, welfare takes off, people can afford bigger loans = sum gain nothing, just sounds better that everyone is getting more money.
In reality we aren't producing more, so our dollar devalues which makes our resources cheaper and as you say everything the worker buys that is imported becomes dearer.

 

[over9k]

mm i was speaking from the perspective of debt mostly.

 

[againsthegrain]

Alternatively, they raise interest rates but print a bunch of cash and KO some of the debt with it, in doing so dropping the value of the AUD and solving the export problem.

The only issue from there becomes cost of imports.

They wouldn't dare, wasn't that our conclusion on the housing thread?

 

[sptrawler]

mm i was speaking from the perspective of debt mostly.

They wont raise interest rates until inflation takes off, because too many people will default, so the RBA wants pay rises to enable the wheel to start turning.
Pay rise = business has to increase prices to cover the cost = worker spends the extra money on a house = house prices accelerate up = RBA gets control of currency with interest rates again = worker becomes a wage slave again.
From a workers perspective, as long as you are working things are pretty good, my mate the local council garbo is on $100k and he can buy a house in Perth for $350k that's pretty good.

 

[SirRumpole]

They wont raise interest rates until inflation takes off, because too many people will default, so the RBA wants pay rises to enable the wheel to start turning.
Pay rise = business has to increase prices to cover the cost = worker spends the extra money on a house = house prices accelerate up = RBA gets control of currency with interest rates again = worker becomes a wage slave again.
From a workers perspective, as long as you are working things are pretty good, my mate the local council garbo is on $100k and he can buy a house in Perth for $350k that's pretty good.

Why the assumption that wages will "take off" uncontrollably ?

Inflation has been below the Reserve Banks targets for decades, so if properly managed moderate rises in wages will result in more consumer spending and bigger profits for companies.

 

[Dona Ferentes]

crashing the party.... rba.gov.au

The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. For this to occur, wages growth will have to be materially higher than it is currently.
This will require significant gains in employment and a return to a tight labour market. The Board does not expect these conditions to be met until 2024 at the earliest.

 

[Smurf1976]

What manufactured goods ?

As you say, if we want manufacturing back, tariffs will be needed. We simply can't compete with slave labour, and why should we ?

We still do make the odd random thing.

The world's third largest electrolytic zinc refinery is in Tasmania for example and we've still got blast furnaces operating for steel production in SA and NSW.

But overall yes, manufacturing in Australia has declined to the point there's stuff all left. Oil refining's a classic example - we had 10 refineries of which 4 remain, one is in the process of closing and another announced its closure today which leaves two. We've gone from an industry that existed in all 5 mainland states to one which remains as a single operator in Brisbane and another at Geelong.

As with anything, if it can't continue then it comes to a halt - Australia can't continue with the path of relying on iron ore, coal, gas and mass immigration and winding down manufacturing for the simple reason that the world market doesn't support growth in iron ore or coal, we don't have enough gas to grow that, and immigration has fallen in a heap too.

When something comes to the point where it just can't continue then change is inevitable, the only question being the detail of it.

 

[sptrawler]

Why the assumption that wages will "take off" uncontrollably ?

Inflation has been below the Reserve Banks targets for decades, so if properly managed moderate rises in wages will result in more consumer spending and bigger profits for companies.

I never said they will take off uncontrollably, they will take off until the RBA and monetary effect of interest rates come into effect and get control of the economy again, be that to speed the economy up or slow it down.
At the moment everything is frozen, the RBA can't put up interest rates, because workers can't afford it. Businesses can't put up costs because people wont buy it, so something has to give to get the wheel moving and the easiest thing is to free up wages.
But there is always a lag in the economy, so even if wages start rising, it takes time for inflation to kick in.
For the Reserve Bank to be able to properly manage the economy, the economy has to be working properly, currently it isn't.
With regard manufacturing, we have lost most of it, but if Australia wants to remain an independent first world nation it will have to re introduce manufacturing. Simple really.

 

[over9k]

We still do make the odd random thing.

The world's third largest electrolytic zinc refinery is in Tasmania for example and we've still got blast furnaces operating for steel production in SA and NSW.

But overall yes, manufacturing in Australia has declined to the point there's stuff all left. Oil refining's a classic example - we had 10 refineries of which 4 remain, one is in the process of closing and another announced its closure today which leaves two. We've gone from an industry that existed in all 5 mainland states to one which remains as a single operator in Brisbane and another at Geelong.

As with anything, if it can't continue then it comes to a halt - Australia can't continue with the path of relying on iron ore, coal, gas and mass immigration and winding down manufacturing for the simple reason that the world market doesn't support growth in iron ore or coal, we don't have enough gas to grow that, and immigration has fallen in a heap too.

When something comes to the point where it just can't continue then change is inevitable, the only question being the detail of it.

Yeah, the difference is made up with even MORE immigration.

You just watch.

 

[moXJO]

Its hard to see wages raise from here. Especially during covid.

We now have certain businesses killing it and others getting killed.
The higher wages lead to less choice unfortunately. Sooner or later it will literally be bunnings, woollies and kmart.

On another note:

*Noticed junk bond yields have moved under 4% (for the first time?). People are loading into steaming piles for yields.


*Australia needs a total education revolution geared at the upcoming dominance of Asia.

 

[over9k]

Every asian country has a completely inverted population pyramid and are totally reliant on massive choke points for their oil. They aren't going to dominate ****.

 

[over9k]

Not being funny here, what will happen over the next few years is whatever causes the powers that be the least amount of pain. They might (might) have to finally stop ripping the whole country off, but that's really as far as we can realistically hope to get with them. There's no way they're going to put themselves through any more pain than they absolutely have to.

 

[SirRumpole]

Not being funny here, what will happen over the next few years is whatever causes the powers that be the least amount of pain. They might (might) have to finally stop ripping the whole country off, but that's really as far as we can realistically hope to get with them. There's no way they're going to put themselves through any more pain than they absolutely have to.

Yes, which basically means doing nothing for the LNP. Don't rock the boat with spending (investment) in new technologies and keep saying what a great job they did with covid.

Keep propping up industries like tourism which employs mainly low paying jobs and don't give much support to manufacturing.

Business as usual in other words.

 

[over9k]

Yes, which basically means doing nothing for the LNP. Don't rock the boat with spending (investment) in new technologies and keep saying what a great job they did with covid.

Keep propping up industries like tourism which employs mainly low paying jobs and don't give much support to manufacturing.

Business as usual in other words.

Yeah, this is my fear. All the justifications for the "need" for certain things (I'm looking at you, mass migration, foreign students, and foreign "investment" into existing housing stock) will be even greater now.

Even Krudd ran immigration at a net 400,000 in 2009 if I recall correctly. All of Canberra in 12 months.

 

[sptrawler]

Yes, which basically means doing nothing for the LNP. Don't rock the boat with spending (investment) in new technologies and keep saying what a great job they did with covid.

Keep propping up industries like tourism which employs mainly low paying jobs and don't give much support to manufacturing.

Business as usual in other words.

Well it doesn't sound good for us then does it, Labor signed us up to the Lima agreement and got rid of tariffs in the first place, which killed our manufacturing.
So who is going to turn it around for us Pauline?
She would have about as much chance as Trump did. ?


In March, 1975, Hawke/Whitlam accepted the conditions of the U.N.I.D.O. -sponsored “LIMA DECLARATION”, in Lima, Peru, whereby Australia would devolve its manufacturing and much of its agricultural industries in favour of Third World Asian countries, and be only a mine for the rest of the World

 

[qldfrog]

Well it doesn't sound good for us then does it, as it was Labor that signed up to the Lima agreement and got rid of tariffs, in the first place.
So who is going to turn it around for us Pauline?

the only people ever at least pretending to save the western view of the world: former democracy, existence of midlle class aspiration are nowadays labelled as far right, populists BTW *what is wrong with being for the people, people is an insult
Make no mistake, real wealth is globally finite, and when one pretends otherwise, the earth is footing the bill, so as population increases and Asia rises, the real wealth of the west goes down the drain, first the working class then the middle class diseappears and then the peacocks parading at the top follow.
we can not decide to rebuilt manufacturing, we have no workforce or brain, do you want to compare the education level of the average chinese kid with our own?
our model can work if we attract as the US did for decades the brightest, and for that, it is not welfare and NDIS we need, it is the carrot of of extreme wealth and social escalator
We attracted in Australia for a while disappointed europeans coming for the beach and relatively free lifestyle..I was among the past waves, i doubt this is still the case.
25 y ago, all Europeans I was meeting here dreamed of settling in Australia, not anymore. And these are people crying out to get out of the EU..well but not to Australia anymore
A bit sad but you draw the conclusion you want. I do not believe we will attract the brightest, the EU neither and with Biden, doubt the US will

 

[over9k]

Labour hasn't been a labour movement for a very long time. Not sure I'd date it back to the 70's, but mark latham was the last working class labourite, and he was actually kicked out iirc and is with one nation now.

That alone should really tell you everything you need to know about what the left has become: a movement of upper-middle champagne socialists that resent the upper's.