The recessions already here

[Nom De Plume]

AND Australian Banks hold 45 trillion in derivatives...about a fifth of the US at 217 trillion …….
Big numbers aren't they......

That's scary.
Where is the economic modelling to show
that our Govts and banks have made sensible decisions?

Don't fret peeps... the capitalist' will go begging to the govt for welfare, and the libs will comply... just don't call it socialism as it offends the righties.

[Bobby]

AND Australian Banks hold 45 trillion in derivatives...about a fifth of the US at 217 trillion …….
Big numbers aren't they......

That's scary.
Where is the economic modelling to show
that our Govts and banks have made sensible decisions?

Don't fret peeps... the capitalist' will go begging to the govt for welfare, and the libs will comply... just don't call it socialism as it offends the righties.

We're in too deep with our debt.
There is no escape.
If we tried to pay it back in say 10 years -
our economy would collapse into a great depression -
and then we'd still be unable to pay.
So what do the Govts do? -
easy - just borrow more and more.

[billy the kid]

Our economy is not the only economy heading into/in a recession....
The world has exactly the same problems.....
Its not a right or left issue....
Its an incompetence issue with central banks fucking it up everywhere for the benefit
of their banking oligarchs....
Rules/legislation...call it what you will...they are made for the benefit of the elites...
BTW the elites are busily building their bunkers/shelters all over the world....
They know whats coming...
AND even Japan wants US fighter planes on their navy ships....fuck me....
BTW Japan is in negative rates...
I should be posting this on the other thread....why the worlds rooted...…
But I digress.....

[Bobby]

Our economy is not the only economy heading into/in a recession....
The world has exactly the same problems.....
Its not a right or left issue....
Its an incompetence issue with central banks fucking it up everywhere for the benefit
of their banking oligarchs....
Rules/legislation...call it what you will...they are made for the benefit of the elites...
BTW the elites are busily building their bunkers/shelters all over the world....
They know whats coming...
AND even Japan wants US fighter planes on their navy ships....fuck me....
BTW Japan is in negative rates...
I should be posting this on the other thread....why the worlds rooted...…
But I digress.....

Maybe we're headed for another GFC?

We never really recovered from the last one -
we just borrowed heaps of money to make it all look rosy.

[billy the kid]

Id agree with that...some of the prominent commentators have stated that we never really recovered
from the GFC... even suggesting that the future will make the GFC look like a teddy bears picnic....
We only avoided the GFC last time because we had some rocks to sell.....nowadays, we're fucked......
Weve got nothing...….

[Bobby]

Id agree with that...some of the prominent commentators have stated that we never really recovered
from the GFC... even suggesting that the future will make the GFC look like a teddy bears picnic....
We only avoided the GFC last time because we had some rocks to sell.....nowadays, we're fucked......
Weve got nothing...….

Our problem is that we don't value add to the rocks we have. e.g.
We sell iron ore not steel -
we sell yellow cake not Uranium fuel rods.

We let other countries make the vast majority of money out of our raw materials.

[billy the kid]

Id agree with that...some of the prominent commentators have stated that we never really recovered
from the GFC... even suggesting that the future will make the GFC look like a teddy bears picnic....
We only avoided the GFC last time because we had some rocks to sell.....nowadays, we're fucked......
Weve got nothing...….

Our problem is that we don't value add to the rocks we have. e.g.
We sell iron ore not steel -
we sell yellow cake not Uranium fuel rods.

We let other countries make the vast majority of money out of our raw materials.

[Bobby]

Id agree with that...some of the prominent commentators have stated that we never really recovered
from the GFC... even suggesting that the future will make the GFC look like a teddy bears picnic....
We only avoided the GFC last time because we had some rocks to sell.....nowadays, we're fucked......
Weve got nothing...….

Our problem is that we don't value add to the rocks we have. e.g.
We sell iron ore not steel -
we sell yellow cake not Uranium fuel rods.

We let other countries make the vast majority of money out of our raw materials.

Yes - notice value adding wasn't mentioned in the last election?
Just a few cents in price can mean the loss of whole industries due
to bean counters running every company.
It's criminal and causes loss of jobs too.
BHP used to export huge amounts of steel but not anymore.
Customers prefer to buy cheap Chinese inferior steel full of impurities
that cause buildings and bridges to collapse.
It's not until our buildings & bridges collapse that the Govt. will do anything about it.
Wait - buildings are already collapsing.

[Valkie]

And it's all because our corrupt public servants, politicians and multinational bribe givers want as much money as they can get.

Pollies through brown paper bags full of cash.

Public servants through bribes and trips.

Multinationals through shipping raw materials to third world countries to process the materials.

But we shouldn't worry too much.
The way the morons in charge are going
Pretty soon Australia will be one of those third world countries.
After all, our schools, public transport, hospitals and roads are worse than most third world countries already.
And we pay through the nose for it.

WE NEED A REVOLUTION NOW

[Black Orchid]

Read this today ...

Australia’s economy is reaching crisis point — but instead of springing into action, the government is reverting to its old “absurd obsession”.

Australia’s economy is in a spot of bother. Let us count the ways:

• A trade war threatening the economies of our two biggest trading partners.

• Monstrous levels of household debt combined with pitiful wages growth.

• Unemployment and underemployment stuck too high to generate wages growth.

• A Reserve Bank slashing interest rates to record lows and talking about bringing in quantitative easing.

What we need from the government is a bit of oomph. A spending push to keep the cycle of earning and spending going. Instead we’re going to get … a surplus? How can that possibly be a good idea?

Australia has an absurd surplus obsession based on a misreading of what former Treasurer Peter Costello did in the 2000s. Costello was Treasurer during a time when money was coming in hand over fist. So much money that Treasury was continually surprised how much there was.

The economy was in amazing shape and the Treasurer was able to throw money at lots of things. He brought in a baby bonus, gave away huge tax cuts, made massive increases in defence spending, and was still able to run surpluses big enough to pay off the Government debt. Paying off the debt wasn’t necessarily seen as a big priority back then. It was just something to do with all that money.

But of course after the debt was paid off, the Treasurer claimed his run of surpluses as an important achievement. A singular triumph of sheer discipline. (Scant discipline was required, money was going everywhere in those days.)

Lo and behold the idea stuck. Now apparently we have to aim to get back to surplus every year. As though the big problem facing the country was our government debt, not our household debt.

Peter Costello and his Prime Minister John Howard were not stupid. They did not run a surplus in the bad times. That would be insane. They ran a surplus because the times were bountiful. They presided over a giant and unforeseen run of economic good fortune.

‘WORST SURPLUS EVER’

In the most recent Budget, though, Australia’s Treasurer announced a surplus. The 2019-20 surplus is projected to be $7.1 billion, and with the recent high price of iron ore, it could be even more.

Let’s just say it. This is the wrong time for a surplus. The wrong time for the government to be taking money out of the economy and using it to pay down debt. The economy needs all the money going around it can get. This is the worst surplus ever.

This is not to say the surplus is as fat as it might be. When I asked if this was the right time to be running a surplus, the Treasurer promptly pointed to all the spending the government has been doing.

“Conscious of the economic challenges we face, we set out in the Budget a pro-growth strategy with $158 billion of tax cuts, our $100 billion infrastructure plan and the creation of 80,000 apprenticeships,” Mr Frydenberg said, acknowledging the importance of this kind of stimulus. But of course, the surplus is also part of the boast.

“This economic plan also includes restoring the nation’s finances by returning the budget to the surplus for the first time in more than a decade.”

HOW TO SPEND IT

There’s two ways to feed a surplus back into the economy. Tax cuts or spending.

Spending is good. It can be used to set up a country for the future, for example by investing in infrastructure. The RBA has practically been begging the Government to announce a bit more infrastructure spending to both keep the economy going and set us up for the future. Anyone who has sat in traffic recently can probably think of some projects worth funding.

There’s plenty of schools and hospitals that could use a funding boost too. But the current government might see a spending splurge as a bit of ‘a Labor idea’. Luckily they have a good alternative. LMITO — the low and middle income tax offset.

That’s the tax cut that gave most middle income earners $1080 back at the end of last financial year. (Despite the name, the LMITO doesn’t do awfully much for low income earners. The full $1080 offset is only for people earning more than $48,000)

The Government announced the LMITO in the most recent Budget and the Reserve Bank, which has for some time felt like the only institution doing anything at all to juice up the economy of this country, fell on it with glee. The LMITO was likely to increased consumer disposable income by 0.6 per cent, the RBA said, which should flow into consumer spending.

The LMITO is a good idea. It takes money that could be going to the surplus and gives it back to people to spend. That’s not to say it’s better than investing for the future, or spending on solving social problems — two types of spending which would also prop up the economy — but it is an effective and non-controversial way to keep the economy ticking.

BUT IS IT ENOUGH?

The problem is the LMITO is only worth a few billion dollars a year. Probably not enough to jolt the economy out of the doldrums. If this government wanted to find a good and politically acceptable way to pump a bit more money back into the economy — at a time when the economy desperately needs it — they could crank up the LMITO. If things get bad, and they’re worried stimulus cheques seem too much like a Kevin Rudd manoeuvre — they could possibly even send out stimulus cheques and just call them LMITO advances.

The Treasurer has said he is willing to take “the necessary actions” to keep the economy going, if needed. The question is whether he’d be willing to give up his surplus by taking those actions. He should. Because he will deserve very little credit for bringing down a surplus in an era of economic weakness.

https://www.news.com.au/finance/economy ... db91043af6