Economics

This week the question, whether 2015 will be the year Australian enters a recession, was asked by one of our subscribers, here is what I had to say in response: continue…

by Roger Montgomery Posted in Economics, Foreign Currency, Insightful Insights, Market commentary.

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On Monday night, the US markets were closed for the Presidents’ Day holiday but Greece was not sleeping comfortably.

To understand whether there are risks to your wealth from Greece’s posturing (and remember the US markets return to work tonight) it pays to understand where we are currently and how we arrived at this juncture. If you would like to know more read on. continue…

by Roger Montgomery Posted in Economics, Financial Services, Foreign Currency, Insightful Insights, Market commentary.

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Chasing yield, wherever it can be found, is a pastime for many baby boomers whose income returns from traditional securities and bank deposits are being decimated.  The fad global and Basel III banking capital requirements are potentially legitimising some securities, that under normal interest rate settings, might not have seen the light of day. continue…

by Roger Montgomery Posted in Economics, Financial Services, Foreign Currency, Insightful Insights.

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PricewaterhouseCoopers (PWC) has recently released a report analysing how the world economy could look in 2050. As countries with large populations; including Saudia Arabia, Vietnam, Nigeria, Bangladesh and Iran, continue the urbanisation process Australia was predicted to slip from 19^th in the world currently, down to 28^th position by 2050. continue…

by David Buckland Posted in Economics, Insightful Insights.

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With everyone getting very hot under the collar or excited (depending on whether you are a borrower or a lender) about the prospect of Australia’s cash rate falling below two per cent, we thought it might be interesting to point to something even more interesting that transpired last week in Europe. continue…

by Roger Montgomery Posted in Economics, Foreign Currency, Insightful Insights.

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For the historically minded reader you will note that this title was a famous quote attributed to John Maynard Keynes, the grandfather of Keynesian economics. The quote is said to have been made by Keynes as he commented on the harsh post-war conditions placed on Germany at Versailles in 1919. In short, one condition required that Germany repay the Allies for the cost of the war. continue…

by Scott Shuttleworth Posted in Economics, Foreign Currency, Insightful Insights, Market commentary.

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A couple of weeks ago at the World Economic Forum in Davos, Switzerland, Ray Dalio spoke with CNBC.  Prominent economic thinkers in Davos believe the U.S. economy is strong, but its ability to deal with the next crisis is in doubt. “The U.S. is growing and I think that’s a non-debatable fact,” Gary Cohn, president of Goldman Sachs, said Thursday at the World Economic Forum in Switzerland. “What I am concerned about is the actual ability of the U.S. to raise rates with what’s going on with the rest of the world.”  Below, we summarise the outtakes.

continue…

by Roger Montgomery Posted in Economics, Insightful Insights.

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John Mauldin from Mauldin Economics has just penned “A Five-Year Global Financial Forecast” and as investors I thought some of those points, which I have summarised below, should certainly be kept in mind.

1. The Japanese experiment with Quantitative Easing is getting dangerous; they are exporting deflation to trade competitors like Germany, China and South Korea.

2. A European crisis at least as severe as 2012 is likely. Italy and France will struggle as the structural flaws in the design of the Euro become apparent.

3. China is “approaching a day of reckoning as it tries to reduce its dependence on debt in its bid for growth, while creating a consumer society.”

4. Emerging markets which have taken on more dollar denominated debt in recent years will suffer as their currencies decline against a strongly rising US dollar.

For a copy John’s full report please click here.

And on other news:

Japanese 5 year Government Bonds hit nil percent earlier this week; and the UK inflation rate in December 2014 hit its lowest level since May 2000.UK Chancellor George Osborne said the drop in the Consumer Price Index (to 0.5 per cent) was “almost entirely driven by external factors such as the oil price” which has more than halved since June, and is “much more welcome than in the eurozone”, where inflation has fallen to negative 0.2 per cent.

by David Buckland Posted in Economics, Insightful Insights.

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With 2014 behind us, let’s take a look at the year that was, and consider what could be in store for 2015.  continue…

by David Buckland Posted in Economics, Foreign Currency.

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Australia is now facing a commodity bust and the outlook is for lower growth and pressure on public finances with the budget deficit for Fiscal 2015 blowing out to $40 billion. Meanwhile, the Australian Dollar has declined from US$1.05 to $0.82 in the past twenty months and a low of US$0.75 is on the cards. continue…

by David Buckland Posted in Economics, Energy / Resources, Insightful Insights.

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