Issues for consideration
Updated: Nov 8
RBA says look out for a ‘patchy recovery’. Some recovery is almost certain due to massive fiscal stimulus plus the RBA’s cut of cash rates to 0.10 % (roll out the barrel!) and quantitative easing (QE) - buying bonds – to the tune of $100 billion. The general view is that these bold steps are designed to keep the dollar from plunging upward. Far better to use Henry’s plan and impose a modest tax on capital inflow.
The NAB’s Chief Ross McEwan forsees ‘a boom as world emerges from Covid-19 pandemic’. Robert Gottliebsen however warns that this will be driven by ‘two major developed countries’ who ‘have emerged as the best places on earth to live’. The two booming nations are Australia and New Zealand, hardly ‘major’. In the meantime the USA has a hot verbal war between its two presidential candidates and is losing lives thanks to the pandemicat a great rate. Not to mention the UK, France and most of the rest of the mighty EU. ‘Gotters’ says Australia has an opportunity but prospects look ‘too good to be true’.
Paul Kelly and Greg Sheridan at the Oz have subtly different takes on the US situation. Mr Kelly says ‘Joe Biden has a herculean task ahead to reunite a nation torn apart by Donald Trump’s divisive personality’ while Mr Sheridan says ‘Donald Trump has transformed America. The election is gone. Trump is still there.’ While Mr Biden seems sure to win the election, leading in all four states still in play, with lead seemingly increasing, the nation is indeed being ‘torn apart’.
Hard to see the mighty USA foster a global boom while the two candidates work on tearing the joint apart.
Looking to spank Australia
The AFR has a decidedly gloomier view. Phillip Coorey and Michael smith say ‘tensions between Australia and China are worsening, with Bejing accusing Canberra behaving like America’s “roughneck” as it threatened to inflict even more economic pain unless Australia stops so-called anti-Chinese actions’. What I do not understand is why is China threatening practically every nation around, and especially little, well-behaved Australia, with its over 1 million Chinese people buying houses in the eastern suburbs of the larger cities, overbidding Aussie battlers. My tax on capital inflow would help the Aussie battler house buyers also.
All I can think of is that our trade bureaucrats mut start phoning opposite numbers in countries who will take their calls. They must offer wonderfully nice fruit and veg, wine, live lobsters, coal, etc, and not to forget our wonderfully nice iron ore. Our iron ore will be the hardest item for China to do without but, at least until Brazil stops passing the Covid-19 around and begins to mine its wonderful iron ore, that is one trade item China will not be able to do without.
Joe Biden and Kamila Harris
Warm congratulations President elect Biden and Vice president elect Harris. I wish you every good fortune and highly successful leaders of the mighty USA.
President Trump, cop it sweet, mate. You had your chance and you blew it.