Economics
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PWC’s: The World in 2050
David Buckland
February 12, 2015
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 19th in the world currently, down to 28th position by 2050. continue…
by David Buckland Posted in Economics, Insightful Insights.
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How low can you go? Deflation and negative bond rates
Roger Montgomery
February 10, 2015
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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We’re all in this together
Scott Shuttleworth
February 9, 2015
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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Everybody Loves Raymond
Roger Montgomery
February 7, 2015
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.
by Roger Montgomery Posted in Economics, Insightful Insights.
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What does a five-year global forecast look like?
David Buckland
January 15, 2015
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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Farewell 2014, Hello 2015
David Buckland
January 2, 2015
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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Joe’s mid year economic and fiscal outlook
David Buckland
December 16, 2014
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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Oiling your mind
Roger Montgomery
December 15, 2014
No doubt you’re starting to thinking about puddings for Christmas Day, last minute gift buying, present wrapping and packing for the annual holiday. But spare a thought for the plunging price of oil. There’s a couple of things you need to know, beyond giving the petrol station attendant a smile because fuel is only costing $1.20/litre.
by Roger Montgomery Posted in Economics, Insightful Insights.
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Eco growth, is it slowing?
Russell Muldoon
December 10, 2014
In the past few months, we have noted that retailing – among other sectors that make up the Australian economy – slowed dramatically in the June quarter of 2014. The September quarter reports from many companies over AGM season saw a continuation of that trend.
Further to our recent observations, Australia GDP just printed at 0.3 per cent for the September quarter. By contrast, 0.5 per cent for the June quarter 2014, confirms that economic growth is waning in Australia and the RBA might be forced to cut rates further. continue…
by Russell Muldoon Posted in Economics, Energy / Resources, Insightful Insights, Investing Education.
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Is Europe on the brink?
Roger Montgomery
November 21, 2014
We have made much of the turnaround in markets that began with President of the European Central Bank, Mario Draghi’s ‘what ever it takes’ speech. Those famous words have been cited by many – including us – as marking the bottom for financial markets and the beginning of a recovery for Europe.
But former US Treasury Secretary Tim Geithner made some surprising revelations about Draghi, as well as the stupidity of Europe’s elected leaders as they faced their financial crisis, in his memoirs Stress Test: Reflections on Financial Crises. continue…
by Roger Montgomery Posted in Economics, Insightful Insights, Value.able.