As trade partners waited all last week for a Chinese revaluation, economists saw a leadership focused more on letting the good times roll while they can, reports Hamish McDonald in the Sydney Morning Herald. All the signs point to China coming to the late stage of its frenetic economic cycle, one characterised by massive oversupply of a currency so long pegged to the US dollar its holders treat it as the same, says economist Jim Walker. And after two years of quiet diplomacy by the Bush administration failed to persuade China to change its currency system, the US is turning up the volume, reports Business Week. Trade experts believe the US trade imbalance with China could top US$240 billion this year. The forces that will drive Australian prosperity are going to change dramatically in the next five years and unless we recognise these forces quickly and begin to take action, we could be left behind, says Robert Gottliebsen in The Australian. The 2005 Future Summit began the process of alerting us to the new paradigms.
Australia’s biggest insolvency firms are increasing staff by as much as 20% and preparing for a sharp increase in activity as a slowing economy causes more businesses to fail, reports the Fin Review.
Central banks don’t like admitting mistakes but the Reserve Bank went close to doing so in its quarterly Statement on Monetary Policy on Friday, says Malcolm Maiden in the Smage. It’s still stalking the economic ramparts, but it admits that inflation has not built up as expected when it raised rates in March.
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