On November 1 last year, The SMH carried a front page interview with Peter Costello in which the Treasurer said the commodities boom was over.

Fast forward 12 months and he’s at it again, predicting a “huge tsunami” will engulf financial markets, the US economy is going down, China will weaken, Australia will fall into recession, the earth with split asunder and issue forth plagues of toads and serpents, foul wraiths and dark vapours. And boils, don’t forget boils. Australians will always suffer more boils under a Labor government than under a Coalition government.

And that’s why the Reserve Bank shouldn’t lift interest rates. Or something like that.

Which leads to the challenge of picking the odd one out: Warren Buffett, Hu Jintao, Don Argus, Peter Costello.

According to Buffett, the subprime wash-up will hurt for up to two years, but the US economy overall will move forward. (The Sage of Omaha is in South Korea inspecting the local subsidiary of the Israeli industrial tools company he bought last year – just another little bit of globalisation.)

According to Argus, commodity demand and prices are staying high despite US weakness. The chairman told the BHP AGM in London overnight that Chinese growth is continuing and India is following it, 10 or 15 years behind.

According to Hu, well, according to the Chinese government, September quarter growth printed at an annualised rate of 11.5 per cent, down a fraction from the June quarter, but the same as the annualised rate for the first nine months of the year. China’s about to overtake Germany as the world’s third biggest economy.

And Prophet Pete Costello is predicting extreme difficulty ahead which will turn into Armageddon if Labor wins the election and he’s not given the chance to be prime minister.

The line of the day goes to Macquarie Bank international economist Mark Tierney: “Perhaps the new Copernican revolution is the discovery that the world economy does not orbit the US.”

Someone should tell Pete.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey