I am not an economist, I am not studying business and I don’t really understand the ins and outs of the Australian and world markets. That of course means that the plethora of expert opinion on the state of the nation’s economy is only going to confuse me rather than inform me. Is there a consensus - bullish or bearish? There doesn’t seem to be any evidence that conclusively supports either side, however everyone has their opinions.
Thank God for China, our giant neighbour to the north who continues to buy our commodities, albeit in smaller quantities, the economists say. Beware our close ties to the US economy who continues to hiccough their way to recovery. Australia seems to be the piggy in the middle, the rope in a tug-of-war – not capable of inducing change ourselves in this arena we are left to feel the effects of the larger players. The best, and the worst, aspect of this middling position is that we could go either way. Will we come out as winners or losers? Will the worst aspects of the recession pass us by or are we just so far away from the rest of the world that the rolling wave of the Global Financial Crisis is just taking a little longer to hit us like a tsunami (let’s hope the giant wave runs out of some steam before it reaches our shores if this is the case).
I’ve listened to some weird stuff over the last year, however one of the favourite opinions I’ve heard from a high ranking global economist at the height of the recession hysteria was that all Aussies should buy a plot of land and a shot gun, because things were going to get very very bad and we would have to grow and hunt our own food (I kid you not). I can’t speak for the rest of you, but I’m certainly glad this prediction didn’t materialise into reality. I actually have a picture of myself petting a wild rabbit on my Facebook profile; I would hate to have to shoot the sweet thing for my dinner.
On a local scale we’re currently arguing amongst ourselves as to whether or not Australia is safely out of harms way and therefore the government’s stimulus package is no longer needed, or whether the market is pulling a sneaky on us and is planning on receding at least once more before heading on back up to comfortably positive figures. You may have seen the reports saying that unemployment held steady in August (suggesting the stimulus is no longer needed) and other stories on the unexpected fall in the latest figures for both retail sales and new housing loans (suggesting the stimulus is still needed) – these are all September stories, I’m giving you as relevant data as I can.
Speaking of relevant, I should mention that Kevin Rudd was on the ABC’s 7:30 Report on Thursday, 10th September, being rather non-committal on Australia’s economic progress. Key takeout from the interview – we’re doing much better than other world economies, but we have a lot of work to do yet (didn’t he say this last year too? I’m glad that he and his advisors are able to re-use material). However, his vagueness on the subject worries me. He has access to the same information I do, but has a raft of economists to interpret it for him and “we have a lot of work to do yet” is the best he can come with? Is this an implication that things may possibly get worse before they get better?
K-Rudd says he wants to be frank, but he’s really Kev, and all I want are answers. Should we keep frenetically alternating between saving for a rainy day and pumping money into the Australian market? When can we expect things to return to the norm? Unemployment held steady this month, but will it trend up or down in the next? Do we need to move back in with our parents (for those of us not living at home)? Can our parents even afford to let us move back in now that their super has been wiped out? Do we buy into the stock market now that everything seems so cheap, cheap, cheap? Mining stocks – I’m particularly looking in your direction.
I understand that no two economists are going to agree on the state and rate of Australia’s financial recovery, but a general sense of direction would be nice. And put it in layman’s terms, please. When I think of bulls and bears, I genuinely get the ‘Teddy Bears’ Picnic’ song in my head so technical jargon will only get lost in the lyrics. My question to the economists is this; if I go down to the woods today - will I find picnicking bears or rampaging bulls? Or perhaps I’m safer sitting at home until this all blows over.
By Therese Raft
No comments:
Post a Comment