GFC or economic recession is looming for Australia ?

oh please. that is too sensational. even at 50M......which it isn't....that is about 15% of the population. how many australian's rely on social security handouts.

the poverty rate between the two countries is almost identical.

but it also belies a huge difference between the two countries as well. what is considered "poverty" in one state in the US because of cost of living isn't the same in another state with lower costs of living.

i paid $1.49 for gas the other day (i.e. a gallon - not a litre). in california, it's nearly $3.

there are national averages .........and then there are state differences.

 

I love these absolute national stereotypes of billion plus sized populations.

The good ol' OECD are somewhat more quite positive on India from Nov '15

Economic growth is projected to remain robust, at around 7¼ per cent over the projection period. Public investment has picked up with faster clearance of key projects; better infrastructure and greater ease of doing business are promoting private investment; and more generous benefits and wages for public employees are supporting private consumption.

India - Economic forecast summary (November 2015) - OECD

As stated before, our exports to India increased in value by 21% last year

 

58% of India's population live on less than 3.10 dollars a day. You think these people would buy our resources?
We, as a country should stop projecting our economical growth on resources. That is getting us nowhere.

 

yes, 12.6 billion dollars worth of exports

 

What should we dooooooo? Oh pleaseeee tell me wise oneeeee

 

There is a video I came across which I find very interesting. It was posted on another website. It is a bit long at 1 hour but well worth watching the whole video. I wonder if what the guy is saying in the video does eventuate, how it will affect Australia.

 

That's 6,5 times less than to China, 3 + times less than to Japan and even less than to South Korea. That's not enough, not even close.

 

You realise, its not a zero sum game barnes, No-one is saying India will replace China, Japan and Korea. India is an addtion to the mix. India is a rapidly growing economy of over 1 billion people that will become increasingly important to Australia and the world as its economy continues to grow.

Also keep an eye on our backyard. Vietnam, Philippines and Indonesia are also massive emerging middle class populations that we seem to have vast untapped potential for increased trade.

 

If you look at company earnings and their economies, things are going badly in China, Japan, Korea and India at the moment. China worlds no.2 economy is slowing very very quickly if you look at their energy use figures. Japan is struggling from their 2 lost decades and even resorting to negative interest rates like the European banks.

Any benefit from Indian growth to global economy will be tempered by contraction in other large emerging economies like Russia and Brazil in the short and medium term.

Nearby South east asian countries will be hit very badly as well, a currency crisis situation like 1997 could arise if china's currency further devalues. China has entered their yuan into the IMF as a SDR currency but now has to defend it. They have been drawing down their foreign currency reserves to defend the yuan since the devaluation last year. http://www.rba.gov.au/speeches/2007/sp-gov-180707.html

So currently things are not looking up for us. A recession sometime soon is looking very likely, in fact were it not for the interest rate cuts we have had, we'd likely be sitting in a recession right now.

Only 2% more to go before we hit negative interest rates.

Of course don't forget the carry-trade situation and what will happen to stocks and our banks.

 

If India will NOT replace China - nobody will and if we will not change our resource depending economy we are stuck in recession for only God knows how long.
And what makes you think that if China doesn't buy something from us Indonesia or Vietnam will?

 

Where is China going?? on Holiday, the Rapture, retiring in a holiday home in Antigua.

Also mining makes up 7% of our economy and from memory about 3% of employment. Resources are important but Australia as one of the most advanced and educated countries in the world with several of the most liveable cities is not a one hit wonder. Education and Tourism has increased more than 10% last year alone with the lower AUD.

China bought close to a 100 billion worth of our exports last year. Has this stopped?

I dont think, I know

Indonesia and Vietnam and rest of Asean bought half of China... at around $50 billion worth of Australian exports last year

 

Australia Balance of Trade | 1971-2016 | Data | Chart | Calendar | Forecast

as you can see we have been in trade deficits for past year, sure we sell stuff to other countries, but at the same time we are importing more than we are exporting. It's only when commodities are expensive that we get trade surplus. Whether a trade deficit is good or bad is debatable but I am of the view that its better to have a trade surplus

So yeah we could get more trade from emerging economies and be less dependent on China in the future, and sure we could make more money from tourism and education with the more attractive AUD. However at the moment, we are definitely coming down from a "mining high". Why else is canberra putting forward changes like reduce/cut funding to welfare/healthcare and talking about GST increases etc etc. The government is basically trying to plug that ever expanding unsustainable budget deficit!

Hehe I have yet to be convinced that there will be another sector that can function like the "mining ATM" canberra is so used to. Oh Gina I feel you...

 

I'm not waiting for a mining boom any time soon. But I am also not so ignorant to claim the Australian economy will never recover from this downturn.

 

You are a very big optimist, but I hope that you are right and I'm wrong.

 

I think you are pretty safe on that.

 

Thanks @barnes. I love it when a person who thinks the Australian economy is headed for a prolonged economic downturn is called "a very big optimist".

 

Below is just a small list of powerful people who are ex- Goldman Sachs’s employees. Is it a coincidence? Why Goldman Sachs’s employees have been consistently been appointed to the Top Job @ central banks?

· Malcolm Turnbull – Prime Minister of Australia
· Ian Macfarlane – Governor of the Reserve Bank of Australia (1996–2006)
· Mark Carney - Governor of the Bank of England
· Ben Broadbent – Deputy Governor of the Bank of England
· Mario Draghi – Governor of European Central Banks (ECB)& Former Governor of Italian Central Bank
· William Dudley – President of Federal Reserve Bank of New York
· Neel Kashkari - President/CEO Federal Reserve Bank of Minneapolis
· Robert Steven Kaplan – President and CEO of the Federal Reserve Bank of Dallas
· Hank Paulson – Former U.S Treasury Secretary
· Efthymios Christodoulou – Former Governor of the Bank of Greece
· Erik Åsbrink – Minister for Finance of Sweden (1996–1999)

 

Here's a little bit of a story about Former U.S Treasury Secretary who swept the Sub-Prime mortgage problem under the big carpet when it was about to blow up.

Taken from: A Financial System Controlled by Insiders, Looking after Insiders | Mortgage

 

Firstly, you don't get "appointed" Prime Minister of Australia - you are elected (even if it is, in this case, simply by your own caucus).

Secondly, Ian MacFarlane joined Goldman Sachs as an adviser after he left his distinguished career at the RBA (so you have the cart before the horse there).

 

They are probably all freemasons too. Sorry to make fun @Tekoz and I do agree with you that some local and international finacial systems are looking very concerning. But trying to find consiparacy theories behind the mess is unproductive. In my experience, people are not that organised. There is no "master plan" or secret organisation behind what is happening. A much simpler explanation is sheer greed and incompetence. It looks like the world financial systems are heading for trouble. To me, this indicates a lack of planning, not the result of financial systems engineering.