Where does Australia stand in the current economic situation?

13 09 2010

Ive been following some well known analysts and economist worldwide closely these past months, and their predictions have not been very encouraging when it comes to the economy.

It has been interesting to see how the Australian economy has been able to withstand some of the direct affects of the 2008 downturn, as compared to other nations worldwide.  A higher dollar, positive growth, lower unemployment figures for this quarter.

But the question is – how long is that going to last?  What is around the corner that we don’t see?  How well is the Chinese economy really doing?  How accurate are the unemployment figures for the US?

Australia was fortunate enough not to experience the full extent of the recession in 2008 as compared to other countries, however  it does not mean that it won’t be affected if/when the Chinese Real Estate bubble bursts or there is a double dip in the US economy.

Three sectors that contain stocks that have benefited most from the China housing boom are industrials, energy and materials. These stocks make up about 40% of the entire Aust stockmarket. Because of huge demand from China for Aust resources, what is going to happen when the Chinese demand slows or even ceases?

http://www.businessinsider.com/the-chinese-real-estate-bubble-is-the-most-obvious-bubble-ever-2010-1

Economists and trends analysts are predicting a stockmarket crash before the end of the year. If the Aust. economy is reliant upon China’s imports of its resources, what is going to happen when everything comes crashing down?

Bottom line is – we should be doing our own research and due diligence to find out what is happening in the world today economically, and how it affects our everyday lives.

Dont rely on mainstream media – they wont tell you what is really going on in the world – until its too late. Aust wont be immune to this next recession, in fact, it will affect Aust. in a big way because Aust is a commodity/resource focused country. Take the demand away, and what have you got?

Bloomberg Businessweek wrote an amazing article about China and its demand on Australian mining resources and what will happen to Aust when it all goes bust.

Here are some things happening around the world that you may not see on the 6 o’clock news:

Russia’s PM Putin has ceased all exports of wheat out of their country until sometime in 2011.. What could this potentially do to the price of bread, pasta and other wheat products?

Australian farmers are bracing themselves for a plague of locusts:
http://www.abc.net.au/news/stories/2010/09/02/3000537.htm

Zimbabwe Food Shortages:
http://www.zimbabwemetro.com/headline/famine-early-warning-system-says-food-shortages-by-september/

US Food Shortages:

http://www.marketskeptics.com/2009/12/2010-food-crisis-for-dummies.html

Natural disasters affect the worlds imports/exports and economies.

The failed banks in the US:
http://www.fdic.gov/bank/individual/failed/banklist.html

Could this happen in Aust?  Do you know how safe your superannuation is? Do you even know what investment option your provider has your savings in?

Wouldn’t it be a good idea to call your superannuation provider and find what investment option your super is in…most people have their super in a default option, which can be anywhere up to 90% in Aust shares, international shares and property. So if the market was to crash, as predicted,  there goes 90% of your super.

People trying to withdraw their money from their bank accounts and the banks don’t have enough money:

http://shadow.foreignpolicy.com/posts/2010/09/03/tackle_corruption_before_a_kabul_bank_bailout

All of this may seem a world away for us here but it does not mean that it can’t affect us in some way or another.

If there was to be a natural disaster in your country – how prepared would you be?

If/when oil prices reach $150-200 US a barrel, what will we be paying for petrol, food, electricity?  Have you ever thought of your life today without ELECTRICITY?  Petrol prices are on their way up.  Have you thought of how these increases will affect your life today? Businesses and large companies that provide our everyday necessities rely on PETROL to operate from day to day.  When oil prices rise, in turn petrol prices rise – what else do you think will rise?  The answer is EVERYTHING!

Keep an eye on oil prices people – when they hit over $100 US  per barrel, its time to get your household in order.

Financial hardship is what is going to hit families hard in the coming months (if not already).  Although we may not be able to stop it from happening, we can prepare our households.

My post is to merely encourage readers to take a good look around and evaluate matters for yourselves and your families.  It’s not about spreading doom and gloom, but taking off our rose coloured glassses every now and then and seeing things as they are.

On a biblical front, God spoke to Noah and he built the ark that saved his family.  God spoke to Joseph about storing wheat and preparing for famine – and what did he do?

My question is what are we doing today to prepare ourselves for tomorrow? The signs and signals are all around us – look up and see.

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2 responses

30 11 2010
Rosetta Stone Irish

After reading this I thought it was very informative. I appreciate you taking the time to put this blog piece together. I once again locate myself spending method to a lot time both reading and commenting. What ever, it was still worth it.

25 02 2011
leilania06

Thank you for your comments. I will continue to source more information to try and assist readers, especially as times are certainly changing – the economy, the weather, geo politics etc.
Thanks for taking the time to comment:)

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