Sep 3, 2012

Kohler: suffering China’s structural slowdown

The rapid fall in the iron ore price in the past few weeks has exposed the core risk to the Australian economy: the currency needs to fall, but the banks still need foreign funding.

Alan Kohler

Business Spectator editor-in-chief

The rapid fall in the iron ore price in the past few weeks has exposed the core risk to the Australian economy: the currency needs to fall, but the banks still need foreign funding.

The rising terms of trade and/or high Australian interest rates have kept the money flowing in for three decades to cover a persistently negative current account, despite the resources export boom.

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4 thoughts on “Kohler: suffering China’s structural slowdown

  1. Hamis Hill

    So if everyone else is buying the Australian Dollar then it makes sense to print more for sale.
    More sense than selling the farm and easier to buy back.
    But what about selling more overpriced real estate to foreigners to put more money in the bank?
    Baby Boomers might be enticed into early retirement and sea changing to some declining tourist resorts and ploughing some of that foreign sourced income back into the banks.
    One thing is certain, thanks to the Howard-Costello mortgage debt binge, their grandchildren cannot afford to buy these homes.
    And there is a limit to how many new migrants without employment can be housed in “investment homes” at taxpayers’ rent susbsidy expense.
    Isn’t there a charming tent resort going up right now on a wonderful pacific island, perfect for cashed up Baby Boomers?
    Would the Banks buy it?

  2. Owen Gary

    The market system hegemony controlled by the banksters is slowly being digested by some of the worlds population, thats why the revolutionary reaction is slow. Although there are some positive signs in Greece & Spain.
    We are being routed by the same regimes here in Australia yet as George Carlin said “nobody seems to notice, nobody seems to care”

    Many believe as do I that the system is being brought to collapse to usher in a more tyranical era of governance by the much touted NWO, but this can go 2 ways but that depends on those who react & I guess that timing is also critical to the end scenario.

    One things for sure the capitalist market system controlled by those who would be king has gone way past it’s use by date and is unsustainable especially when the “corpse” are running riot. For the system to suddenly crash would bring on a global food panic, that is why a transition from the current hegemon to community based co-ops would be a far more desired model. We would once again be eating food produced in localities rather than this tightly controlled WTO monopoly of poisoned produce, which only serves to keep the big Pharmaceuticals in business.

    We are entering what is tagged the age of enlightenment, but that remains to be seen as the Coal Seam Gas industry is destroying the aquifers & waterways that irrigate those crops needed to sustain us all, this is happening worlwide. Is this an attempt to cause death disease & famine by means of lack of availability of unpolluted tracts of arable land & water supply or is this merely another coincidence????

    Certainly here in Australia the CSG & mining industry seems to be targetting all the food bowl & arable land locations, & whether they get them all or not, most underground Aquifers are interconnected.

  3. Mike Flanagan

    The essential point of the Variant report is the shallowness of the commentator’s, like you, reaction.
    It is intriguing to observe that Murdoch’s WSJ on Monday last week featured a glowing tribute to our banks and prudential regime and then followed up in the Murdoch FT at the end of week with the Variant Perceptions report. One has to wonder whether the News International Treasury Department took a ‘long’ or ‘short’ position in the forex and share markets in the intervening period with its shareholder’s cash horde.
    Yes Owen Gary, it is not only the fossil fuel barons that are raping the common but also the influence pedalling moguls that are raping and pillaging the super savings of the average man by their manipulation of the markets and our so called journalistic fraternity are complicit.

  4. Liamj

    Will Gina now go broke faster than Fairfax?! Palmer will go first of course, made a bad investment in that LNP mob, fell for the old “potent synergies” line. The banks will cut him off at the knees and everyone else they can, but it wont save them – we can’t have infinite growth on a finite & now post-peak world.

    @ Mike Flanagan – thats an interesting observation. A global media empire would be the perfect tool for market manipulation, puts a new meaning on “buy the rumor, sell the news”. Even assuming there was evidence, are there any international regulators that could prosecute?

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