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  • Writer's picturePete Jonson

News + Views, December 2016

Aussie budget still stuffed, 'Mad Dog' Mattis to be nominated as USA/Global Defence Chief, 4 December.

The AFR, a Fairfax organ, has hit the mark with yesterday's editorial. It concludes: 'Burnt by the 2014 budget, the Coalition government is yet to grasp the nettle on fixing the budget and retaining our AAA rating. More needs to be done to set out a more compelling narrative on the economic reform needed to revive national income growth. The deep worry is that, abetted with a dumbed-down media debate, Australians have become so complacent after two decades of rising prosperity that they actually prefer not to take the steps required to preserve it'.

President-elect Trump has already raised international interest rates merely by being there. The US economy has shown signs of revival and the US Fed has been hinting of rate hikes to come. Both the Trump arrival and the Fed's reading of the economy point to rate hikes to come. For Australia, so does the threat of a cut to our current AAA credit rating. This is a near certainty given the miniscule progress toward budget reform despite the Treasurer's begging letter to the rating agencies, reported today. And three strikes in favour of rate hikes tell us economic recovery is about to get harder.

The Donald seems to be making fairly conservative appointments to his key posts. Perhaps General James ('Mad Dog') Mattis as defence secretary is the boldest nomination and this may just send a helpful message to the bad people inflicting great misery in the Middle East.

Image of the week = Baltic Dry Index, 3 Dec

The uptick in the Baltic Dry Index will encourage optimists about the world economy and markets, as will the sharp recent upturn of important commodity prices.

Deep political uncertainty just about everywhere issues a warning.

We don't need a working class any more, 20 December

Henry's picture framer is a canny fellow, Bruce by name.

Today Bruce was worrying about the future of the world once President Trump is sworn in. 'He's a monster' Bruce opined. 'He's cozying up to Russia and abusing China. The TTP is done for and who knows what else he might do or say'.

Henry tried to put Mr Trump into the context of Brexit, Eurozone worries, loss of traditional manufacturing jobs and general unhappiness about 'politics as usual', meaning most standard pollies are on the nose with voters. 'The Brits are fed up with European bureaucracy. the Eurozone has a fundamental design flaw and many voters are sick of business as usual.

'I'll tell you the reason', Bruce asserted. 'Voters know the world is in deep trouble, yet politicians keep saying we've never had it so good. People are not stupid and object to being fed bullshit by the political class'. He reflected for a few moments then unloaded a highly relevant opinion.

'People know we don't need a working class anymore. They have not been told what they know is coming or what to do to prepare for the bleak future most of us are facing'. 20 December

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