Sell Australia - shae Russell

Was sent this doom and gloom article written by Shae Russell last week and quite frankly Scared the ***t out of me, mainly because i know nothing about the broader Australian and global economics

However once you get past the biased doom story at the start and actually get to her points, alot of it starts to make sense.. in my uneducated view.

Many on here have a much better understanding and may be able to debunk and pull apart this which is precisely what i hope happens by posting this

A very short summary is how she believes we are on the cusp of a huge recession seeing large crashes in stocks and property (nothing we havent heard before) however she lists a whole host of reasons why that to me make sense. A lot of it based on how reliant we are on exports to china to keep us afloat and how this isn't going to save us again if things go pear shaped - Put simply if China stops buying due to political reasons or us siding with the US, everything stops. We don't have enough of anything else to pick up the slack.

Disclaimer = yes she is selling a book. Be warned its a large document. 73 pages

 

Yes. I believe our biggest threat is US-China relations. We are stuck in the middle and I have no idea if there is anything we can do about it. I'm not reading 73 pages though. Pleasant dreams.......

 

I think the economy at the moment is very fragile.
Its being held up by good commodity prices , so as long as they do not substantially fall , all may be well.
The government was also using high immigration to make the numbers look good , but at some point people get sick of it and want things to be slowed down a bit.
We never really come out on top during trade wars between the superpowers.
We also have a few other really big problem which are completely opposed to each other, being high debt , flat wage growth, low inflation and high house prices(and now falling), for banks to continue to write bigger and bigger loans to the mainstream population, wages need to go up at the same time, otherwise it eventually drags the economy down as everyone collectively tightens their belts , people spend less and become more thrifty, forcing business to do the same , which also drags on wage growth.
It just goes around in a vicious circle
You cannot really stimulate an economy with interest rates to low , in the past rates would be dropped by 2%-4% if there was a major shock to the economy, our last one happened over 10 years ago , yet we are still trying to push rates down to stimulate the economy.

 

....and a newsletter, yearly subscription...etc.

 

Every country relies on others. There is no self sufficient prospering economy anywhere.

 

Don't really need to read this book.

We already know property is on the nose and why it started going south. Now its time to batten the helms and sit back and see how it all unfolds... well that's what I am doing.

Regardless Brisbane is finally going to boom ….. ...

 

That is a long sales funnel. I only skimmed it, did it answer what asset the rich own (not gold / silver) out of the system or do you have to buy the book to find out?

Australia is in a precarious position and a lot of what she wrote is true, but a lot of it has been true for 10+ years.

Own some insurance assets, keep calm and carry on

 

A truck running you over will do a lot of damage. The statement makes sense, but it doesnt tell you how likely it is.

 

If anyone knew when “doom” is gonna go caboom they would have shorted the economy and made a ton of money. So my point is that no one, no one, even the almighty RBA and APRA know for sure what is going to happen in next year or two. Otherwise it would have been so easy to make billions of simple short.

On the other hand, if recession happens so what? Why are people so scared of the recessions? Short term pain for a long term gain. Every recession Australia went through, we came up my stronger and wealthier on the other end. Recessions help policies to reset, flush out the inefficient and generate significant wealth afterwards.

Either way, IMHO not worth spending hard earned cash.

 

It also depends on how much risk you take, someone that continually takes shortcuts , is inattentive , jay walks and does not follows signage will be at a higher risk.
For markets it can translate to areas that have become highly speculative with to many people taking shortcuts and just assuming markets will continue to rise.

 

don't worry we will be fine scomo or bill will save us

 

Sure no doubt, but if china is all ready turning away coal ships to prove a point, are we not at high risk at the moment?

 

I guess everyone's situation is different, so whilst a recession or period on no growth/inflation or a period where things go south dramatically is not a great deal to some if you have time and can ride it out, myself being late 20s has time on my side to ride corrections and blips and not be too concerned as my timeline is another 25yrs. But i can see how this is largely concerning to someone heading into retirement phase and has their eggs in the shares basket for income

 

China's imports of Australian coking coal nearly doubled in March from a month earlier, customs data shows, as a flurry of shipments were accepted after being delayed at customs clearance for more than a month.

Arrivals of Australian coking coal were at 2.23 million tonnes last month, up 92 per cent from 1.16 million tonnes in February, according to data released by the General Administration of Customs on Thursday.

That compares to 1.33 million tonnes in March 2018.

 

I cant give any insights into what is going to happen in Australia but I can tell you that business is booming here in the USA.

You only have to look at Q1 earnings to see that consumer purchases are causing some record announcements - so much for SaltShock (which im guilty of thinking was going to cause a slowdown).

I think Australia will be ok due to China's stimulus pump in January......but that all depends on how trade talks go.....which is still 50/50 and the fact that Pelosi and trump started talking about "Infrastructure" yesterday (followup meeting in 3 weeks) makes me think.....talks with China may not be going well and trump wants a second "ace in the hole" to pull out if it blows up (or possibly he is just worried about sell the news....so wants a second ace for when the sell the news kicks in).

May we live in interesting times as they say......

 

Remember Too Much Luck: The Mining Boom and Australia’s Future by Paul Cleary?

'We think we are the lucky country, but what we really have is dumb luck—a lot of luck without the planning or strategy to make sure our good fortune lasts.'—Paul Cleary

In Too Much Luck, Paul Cleary shows that the resources boom, which seems like a blessing, has the potential to become a curse – unless our governments take urgent action.

Today, under-taxed and under-regulated multinational companies make a tidy profit by selling off our non-renewable resources. As the mining boom accelerates, it will drive the dollar sky-high, forcing up the cost of doing business for everybody. Industries

Riding our resources 'dumb luck' to ruin