“Prime Minister Kevin Rudd and Treasurer Wayne Swan have been happily espousing the need to forget the doom and gloom mongers and go out and spend, spend, spend.”

Yes, because they don’t know what to do, being the economic illiterates they are. They use the old mumbo-jumbo of ‘thinking positively’ in the vain hope that, magically, something will turn up that they can take the credit for.

There are many, many people out there who saved and saved so that they could retire in some comfort who would be only too glad to tell the Government where to stick its positive thinking. These people, incidentally, are not the ones sharing in the $10 billion hand out which has apparently added to Rudd’s popularity among people who haven’t saved a cracker, or done much else to help themselves.

People who should be saving are being told to spend, spend, spend. As the author points out, all of this spending is likely to be on imported goods, our industries having been “decimated” by successive governments.

This article is the most sensible on its subject to appear on OLO. The author doesn’t claim to be an economist, and the usual carping idiots will have to work very hard to find something to criticise in this excellent presentation of cold, hard facts.

Well said Arthur, I absolutely agree with all you have said. The Dud should cancel the school computer program as most of that money will go offshore. What are the chances for import replacement?
Bruce Haigh

A fine demolition job on the Rudd government's response to the global credit crisis.

Now how about outlining a more appropriate response?

I would be very interested to read it.

The Rudd governments attempts to "fix" the Australian economy has resulted in another government inspired recession we "had to have".
The complete lack of industry consulting (with the possibly exception of the major Australian owned banks) for the testosterone loaded grand gesture to guarantee all bank deposits and borrowings has all but killed off major sources of competitive mortgage originators funds and all sources of borrowings for the states since the banks now have a higher credit rating while the states have no repayment guarantees. This has led to the torrents of investment funds being extracted from the various investment firms that buy mortgages and flowing into bank deposits for only Australian banks as non-Australian banks do not get the benefits of the governments bank deposit largess.

A solution adapted long ago by some other countries was to put a much more modest cap on the level of deposits guaranteed. A cap of $100,000 to $250,000 seems to be common and it has not lead to the near demise of the lower cost mortgage origination market. This was the proposal of Malcolm Turnbull a few weeks before the Rudd announcement.

The most recent grand gesture (timed for just before the latest poll) was nothing more than another testosterone laden give away program that again did not suffer from any significant planning or historical data comparisons. The US has had 2 similar taxpayer giveaway programs, the most recent earlier this year. Neither has had anywhere near the desired effect. The money was saved or bills were paid. What did Rudd think was so different about his pay out?

Our government leaders are in way over their heads in this economic breakdown. Rudd is jetting around the globe (leaving behind great plums of green house gas and huge piles of Australian dollars) telling all the political leaders (while having his picture taken with them) how they should manage their store while his is heading for a shambles even though we started out as one of the least likely countries to be affected.

The biggest pitfall in a depression is protectionism. One must not diminish trade and one must not protect weak corporates. The complement is thou shall not borrow, Governments included. Else put, don't allow the size of potential markets to lessen: Dont't fund poor performers, as they will be returning cap-in-hand very soon. Shoulder some bad news/events and let market demand pull correct the situation.

Don't talk up the economy. Don't talk down the economy. Spend your cash. Save your cash. Increase super. Decrease super. Remvoe tarrifs. Impose tarrifs. Work towards a better credit rating. Ignore your credit rating.

DON'T YOU LOT EVER AGREE??

In a previous post I suggested economic commentators seem to be paid by the word. Now I'm sure of it. The article states the bleeding obvious for the nth time, then makes unique predictions based on the bias of the author. A lot like bible study classes, really.

as major economists supposedly had 'no idea'

AND as we are run by beu-roc-rats[who dont get voted in NOR OUT] it is the beurocracy[autocracy, plutocracy[big buisness and lobby running things [NOT RUDD not howhard]

its the treasury , controled by the [private franchise];fed , who set govt policy
it was the fed raised intrest rates[not rudd]when kevi was BEING TOLD by treasury INFLATION is the problem

it was the people that created the surpluss NOT HOWHARD ,that treasury advised rudd to spend on whom how much and the timming [rudd/howhard dont 'DO' nuthin
dont run nuthin

we are convinced that it is them
BUT its their 'advisers' who are doing this stuff deliberatly for the
govt can only do what the beuroc-RATS do FOR them,

we can lay blame at the feet of those who really run things [including the 2 party SUSs-tem[system]RUN by the transgenerational PUBLIC serve-ants[pub-lick sur[sirVICE]

casting blame[or credit] on the figure heads dosnt put the REAL credit [nor REAL blame] on those who REALLY runs things, who own the banks [the fed is run by 12 banks] the worlds feds are run by the world bank etc etc[our fed dont run things [nor does rudd]

hitler didnt gas the jews [nor did ghouring,or mendler]it was the zionist capoes[their own]who picked who went into the chambers and who pulled their ashes out[obeyance of orders is not a valid excuse

[but bro its time you KNOW our'leaders are ALL told what to do[by the same 4 percent that controles them [AND US}that own 97 percent of everything ,and are trying to own it all

to franchise to their own their own little fiefdoms ,of total [magubbi like con-trol]

paid for in eassilly deflated printed fiat paper and soon lovely carbon credits [whos value will be set by the bankers[and the death of gods creation]for them its about their power[control credit you control the world
what cant money do ?

rudd is powerless[just as howhard was]

Here, U.O.G., This is for you.

http://conspiracy.top-site-list.com/

"The Truth is revealed in the Ultimate Conspiracy about a powerful World Order and their secret plans to control the people and how they have been pulling the strings on planet Earth for over 2000 years."

You'll just love it!

Seneca

A more responsible and measured approach would have been preferable to knee jerk reactions, policy on the run, borrowed economic solutions and populist policies.

In any crisis responsible leadership exercises caution when facing the unknown. A military strategy also applies to those managing our economy. Don't waste your ammunition until it is needed and only then when you have a clear target.

The same should apply before talking up the economy and motivating depletion of savings when there is clear evidence that things will get worse and over a longer period. Government is charged to provide responsible leadership on economic management. It is those who are the most vulnerable that will respond to government cash handouts assuming that things will suddenly get better. They are the ones who suffer in the end and the taxpayer picks up the tab once again.

Government cannot be a popular and responsible socio economic manager at the same time. In times of crisis, grandstanding is egotistical, reckless and destructive behaviour.

As to what can be done?

This government's knowledge of China appears abysmal and it needs to commit to a steep learning curve in order to manage Australia's economy without a majority China component, especially in the short to medium term.

A better understanding of the Australian economy and its interaction with the global economic community would help with a greater understanding of its limitations and expectations. Most of all, regardless of the outcome, be more honest and open with the Australia people.

Well worn phrases such as ".. it is too complicated for the general public .." or ".. the general public would not understand .." gush from the mouths of politicians when questioned by the media on certain policies? In many cases we find that the facts were beyond many of those proclaiming public stupidity.

Times will be tough and the government will have to make unpopular decisions, but bite the bullet and get on with it. If you can't do it yourself, then seek cooperation.

The objective is to revitalize the Australian economy, not individuals or political parties.

Arthur Thomas

I enjoyed this article and would agree with most of it.
BUT...
Howard government lead us to this moment: surely some spite must be thrown in that direction too?
and...
Some alternatives please?

I am disappointed in Rudd generally: too churchy, still thinks its OK for government to prop up *some* industries (banking, non-secular education, health insurance).
The bank guarentee was a good idea...but should have been limited. Too much "private profit, public risk" now.
We need to build our manufacturing base again, this time properly. Sure Asian labour is cheap, but robotics is cheaper still!
I truly think that generational change is needed before we can proceed.

Its a boom and bust world. They feed into each other. The bigger the boom (this one at least 10yrs) the bigger the bust. Which sets up the next boom.

All this political jousting is very cute to watch and sometimes much fun to play at.

l dont understand why any right-minded true believers would waste time bickering about the falling sky hitting our heads a bit harder due to any perceived fiscal inabilities of the happily waundering Chairman Rudd and his band of Happy Wonderers.

Its a bust. Thats how capitalism works. Dont worry so much, a boom will eventually follow. Thats how capitalsim works. Sitting on the pressure cooker for 17yrs and then acting all confused about the big bang, is not how capitalsim works. Its how the other mob do it.

If govt advances any possible decline, then, heck, get yer ducks in a row, b/c there's gonna be lots of hats to buy at a song, this coming economic winter. And those hats, always come back into vogue when the summer rolls back in.

Would of thought any self-respecting capitalist would be practicing some dance steps right about now.

Isn't it interesting. These self appointed experts on the economy who have never done anything themselves talk about bad tactics. And just as many say the opposite. This particular author appears to have no credentials whatsoever so is talking through his retired hip pocket, his Super no doubt.

Well, sorry about that but it's actually global mate. Part of the cycle you know old chap.

Then you have the right wing loonies who attack because Labor's in charge.

Well sorry right wingers but these people are being advised by exactly the same people Howard was for 12 years. And that advice seemed wonderful to you then. They'd be telling Howard the same today.

So all you are doing is exposing your stupidity by attacking the experts you praised last year by praising Howard. Morons.

ozandy>>bank guarentee should have been limeted>>[australia is the only one who guarenteed ALL deposeted funds]i think that is fine[i dont like the elites[but they dont have their wealth sitting in banks]

our retireees do[in good faith the deposited their fiat-paper[the least banks can do is ensure they get ALL_their paper back[i lobbied for the fed UNDERWRITING this fiat paper deposited in good faith,so those TOO trusting[who lubricate this boom bust by being periodiclly plundered OF their banked funds[didnt get looted this time]

speculators take risks[those who put it in the bank arnt wanting to risk loosing it[thus presumed it safe in a bank,rudd and co saw the fed fiat paper deposited should be insured in full[by the fed]for those who will yet again be set up for legal theft,when the next banker sets his own bank up to fail[WHY should those who bank cash bear this risk?

if fools cant trust banks just who can they trust?[their mattress?][recall at that time in uk alone a few bank-runs had allready killed a few banks]but the idiots took it out of one bank#only to put it in an other[LOL}

they are so innocent they dont know all_banks are controled by the fed franchise that controls all banks,but look at what that money transpher was going to do if it spread here[turn-bull even cashed-in][but simple words did fix it overnight]and yes the capitalists are dancing[as long as they got credit]

wealth is only about how much more credit than debt you OWE[there are very few really got wealth,most just got credit[thus STILL owe the debt]

howhard knew this was comming 2 years ago[thus'allowed'us to top-up our super'just before the market collapsed[LOL}

[it nearly worked,howhard nearly did it to us again]but many still got no clue the damage his reign wrought/brought upon us all[this bubble began with the bailout following 911
#
[a cowards plan]to distract us then from the enron collapse[the enron model is the direct cause of this pain

[note yesterday the 3 rd richest dude confessed it was all in his mind[he just wtote whatever numbers his'investers/sheep'wanted to hear]

Ozandy

Howard cannot escape criticism and was accused of hoarding the surplus instead of spending on infrastructure and other possible priorities. Rudd had once asked, why have a surplus and not use it? 2008 was the answer. Where would Rudd be sourcing the funding for the stimulus package and the consumer Christmas bonus without that surplus?

My intention however in using the term "government" was to refer to any political party.

The term "government" in para 6 on knowledge of China however, should have been "Rudd government".

Regardless of who contributed what and wasting precious time laying blame, what is crucial, is who in the chair and in charge now.

Rudd has started with the accelerator to the floor before checking the track, steering and brakes, with the attention of delivering extensive change and being all things to all people. This only serves to divert attention away from the serious problems facing Australia and not using all available resources to address the urgent economic priorities.

Focussing on political agendas at a time when the focus should be on the economic crisis before setting clear priorities implies immaturity and poor judgement coupled with very poor guidance and advice.

It is only when critical priorities relative to restoring the economy have been positively confirmed and tested, that formulation and introduction of realistic and practical policies can proceed.

If Australia can't afford it all, don't commit to all just now.

Allow reserves to recover on prudent management and then pay for priority socio economic policies after ensuring that funding necessary to ensure that economic growth comes first and there is provision for the unexpected.

Rudd and Swann are correct (along with many others around thew world) there is pain to come and not just in the short term.

You are also right on generation change. There are no magic bullets or quick fixes and the "today generation" will begin to experience life without endless and easy credit. Saving may become a new life changing experience.

For the government, it is a matter focussing on priorities and getting it right!

Arthur Thomas

Don't forget that Kevin is also talking the economy down telling us how bad things will be in the new year.Is Kevin trying reverse psychology here?Perhaps things won't get that bad and we can then thank him for spending the surplus.

The reality is that we have serious structural problems with almost no manufacturing.Taxes kill the incentive to save so we borrow to pay for consumerables.Our State Govts have plundered their economies to pay for fat cats. Balance of payments deficit now $750 billion.We cannot even afford the interest bill.Our infrastructure is run down so our productivity is low,thus we are less able to compete internationally.With the exception of our banking system,we are on par with the US.Spending the surplus is just delaying the inevitable hard decisions that have to be made to initiate structural reform.This reform must include the legal system[litigation],insurance,tax,industrial relations,OH&S,Govt over Regulation,tarrifs,and regulation of the credit industry.

Ordinary people are not sharing equitably in the GDP which has doubled to $1.1 trillion in the last 10 yrs,with an actual fall in real livimg standards for many.

INFLATION has been the big boogy-man

howard got told[or believed]that inflation has three causes
[real estate,petrol price and wages]so removing two from the equation[and oppressing wages
was seen as his_cure]

so all howhard policy must be seen in this light

we get a pay increase[he gives us gst]
we get a pay increase[SUPER he steals it to prop up the market]

we were getting intrest from a bank[that was keating his story set up the inflation boggy man[how hard just run on his lead[keating was offered a loaN AT 3 AND A HALF PERCENT[no said the world-bank we will lend it at 13.3/4 % and by the way YOU WILL PRIVAtise it

THING IS HOW-HARD WAS told THE SAME RE DEATH DUTIES AND TELSTRA,his final coup was to be privatising the snowey-river[that nsw still holds big debt payments for]just to serve his banker masters

just the same rudd rebels against[in giving to the poor]yet props up with credit guarentees,[LOL]its a fithy game[but our puppet_masters DO HAVE REAL POWER

[they could indite and ceaze back all ther looted assets,and restore balance where the poor arnt so badly oppressed their total wage is chewed up in work and rent and food[poor Gmo food killing us[or vacines with mercury/flue-ride?

[or rotted teeth,from the dentist cartel keeping their franchise[because govt hastnt killed off that baCTERIA THAT CAUSES TOOTH DECAY[a simple antibiotic[alone][could send broke the root canal industry [putting mercury next to our blood vessels]

wont get into bligh selling off water[yet us paying for a desalination plant that dont work[or a pipeline so swanbank and mobile refginery can use all the water[or the recycled water plant gifted to mobil refinery lyton]

[or that gladstone magnesium,plant subsidised to the tune of half a bil each[by howhard/beaStlie]to their mate[or the other mate who re wrote the childminding industry

[or packer/murdoch getting that band consuming babndwidth for free[or enron style of charging for web acces[or the web censure

[or the new bankers tax[carbon-tax!,

or selling speed camera franchises[tollways,tunnels;export infastructure
[the deliberate holding down of the au$ to subsidise export[
plus drug laws]

*The reality is that we have serious structural problems with almost no manufacturing.*

Actually not true, its just not in cheap consumer goods that you
see at Woolies or Coles. Engineering companies supplying mining
and agriculture with specialised equipment for instance, have been
booming. Their major shortage has been labour. Meat processing
again can't find the labour. The list goes on.

*tarrifs*

So explain to me how consumers, including the poor, will be better
off paying 60$ for an Australian made shirt, rather then 15$ for a
Chinese made shirt. How will that improve their standard of living?

Again Yabby you've got it wrong.

That non-Australian shirt would comprise a huge component of Aussie materials, cotton currently sold very cheaply to China, a huge component of Non Aussie transport, probably chinese containers on Chinese owned ships, Chinese production costs that exclude all the regulatory cost applied to Aussie competitors, Chinese government regulated financing, ie cheap interest ... if any, and Chinese IR regulations.
Apply the same sorts of advantages to all our trading partners and the answer is no not tarriffs, as all 'the think in the square' mob yell.

Here's the un-obvious, tax exports ... to the point where imported manufactured items are competitive, but barely, with locally manufactured items.

Make the bastards compete fairly.

So what if our exports of ore's, coal and natural raw materials plummet. The locally manufactured items would soon take up the unemployed slack and we'd probably even eventually produce cars to sell competitively in Japan and her export markets. And be reassured our economy would recover if Government assisted manufacturing with cheapo finance, lower taxes and temporary capital subsidies.

Rest assured this what our rivals would do to us if the positions were reversed.

But especially long term our economy and our raw material advantages would be ours and both would ensure an specially strong future for our kids and grandkids..

Radical and it would hurt... of course ... but we're going to hurt anyway and such actions might actually encourage an economy that produces wealth rather than an old colonial model that sees ourselves as temporary Australians and simply strips and sells, the easiest thing in the world, and then imports manufactures, the second easiest thing in the world.

Affect world trade ... of course ... but only until such time as our compertitors producing ores, coal and natural raw materials saw our internal economy recovering. They soon adopt the same strategies.

Here's another idea. Let's find a way of exporting electricity. Sure it's difficult but how the hell ever did we find a way to export natural gas.
We've the coal and can produce electricity much cheaper than our competitors. Maybe not realistic now ... but why not in the future? To all the climate changers... who used to be Global warmers ... errr why aren't the oceansrising and temperatures nolonger rising? Cos global warming is a crock of the human crop.

Now listen to who says these ideas cannot work ... and you'll see only those whose interests are not to get Australia back to work.

Take note pegasus ... some of us right-wingers do actually come up with positive solutions.

*Again Yabby you've got it wrong.
Here's the un-obvious, tax exports ... to the point where imported manufactured items are competitive, but barely, with locally manufactured items. *

Ah Keith thinks I have it wrong. Luckily for us, he is not
our economics minister :)

Your method is of course the quickest way to crash our standard
of living, crash the Australian peso and turn us into a bankrupt
banana republic.

I'm not sure what you have in that pipe you are smoking, but it
sure ain't tobacco :)

*Here's another idea. Let's find a way of exporting electricity. Sure it's difficult but how the hell ever did we find a way to export natural gas.*

Well you could always turn into back into coal, then you would have
a great way to export the electricity.

Thinking outside the square does not mean losing your mind, Keith.

Yabby,consider a $15.00 shirt from China.It is made for say $2.00 and Target which has mainly OS shareholders retails it for $15.00.The Aussie worker buys it on credit.This borrowed money is supplied by foreign interests.Both the profits and interest goes OS .Our foreign debt thus increases.Even if the shirt were made here for $9.00,it would still retail for $15.00.

Even Rupert Murdoch in the past has made this observation about Nike shoes.If the shoes were made here,then most of the money would remain here thus reducing our debt.Consumerables are not income producing assets.Compounding debt soon outstrips large profit margins and most sane people reduce debt to ensure long term prosperity.

Look Yabby

Would you only comment on my postings and completely desist from personal attacks. It's rude.

You haven't explained why and how my suggestions would be 'the quickest way to crash our standard of living, crash the Australian peso and turn us into a bankrupt banana republic.'

Since you've made the generalisation I'd like you to explain ... in detail ... exactly how your predicted senario will occur, taking into account todays conditions of course.

Don't bother with anything else as everything else you've said is completely irrelevant to any discussion

*The Aussie worker buys it on credit.This borrowed money is supplied by foreign interests*

Exactly Arjay, that is why our current account is bad and my
suggestion to drop taxing interest on bank deposits. People would
then have a reason to save. Right now they have none, for inflation
and taxation take it all.

As to Target, they are owned by Wesfarmers, who have over 450'000
shareholders, nearly all mums and dads, due to the old Coles discount
scheme. Wesfarmers turned over 33 billion last year and earned
1 billion. So about 3c in the dollar goes to shareholders, the
rest to costs, employing those hundreds of thousands. They are
Australia's largest employer after all.

The reality is that Australia has a very small population and
modern processing machinery, to turn cotton into a t shirt, from
the dyes (huge EPA problems), spinning, cleaning, knitting,
etc, are so expensive, that only huge volumes make them cost
effective. Your cost per t shirt, to pay for all those capital
investments, apart from labour, would be so high, consumers would
be unable to afford t shirts!

That is just one product, out of 100'000 products. Where are
all these people who want to work in factories on a production
line? Why don't they apply for the jobs on offer now?

Keith it would take alot more then 350 words, to explain to you
why your scheme is nonsense and would bankrupt Australia.

Firstly however, overseas financiers would cut your credit off
tomorrow, for it would be clear to them that Australia was going
down the gurgler quickly. Our efficient miners and farmers are
why they still lend us money now. Yet you see no problem if
those exports plummet. Think again.

Yabby,

'Keith it would take alot more then 350 words, ...'

A cop out.

Write for on line opinion refuting my idea. You'd have upto 24 hundred words.

You ask two questions about emploment. Unemployment is comming off a record low, do you think unemployment in this recession has peaked at 4.3%?

You talk about overseas financiers cutting off our credit. Given today our banks borrow 80% of our total overseas debt and lend that mostly for purchases of imported goods and houses why would anything change especially if our unemployment was kept low by the opening and operating of factories that substituted Australian for imported goods?

Other countries would stop buying our cotton even if the price increased as we supply only 3% of the world market but two things would occur. Firstly local manufacturers would take up some of the drop in exports and our production in recent years has been well down, because of the drought, that trend for cotton farmers to enter other crops will continue. Other factors would also change elsewhere eg. there are growing shortages of water and arable land in China, the US subsidies would naturally lift, Brazil would follow our lead as it would have aready jumped on our band wagon with iron ore... Result: cost of raw material would rise, even if not significantly, across the world, and so would the price of imported t-shirts.

The example of t-shirts probably isn't the most appropriate but it does highlight complexities and a direction for us. ie target industries and products where we can have significant effect on world prices.

Benefits: There would be a net increase in jobs in Australia in the production of raw materials, manufacturing and of the production of exportable food.

:degradation of our lands would lessen as would the agricultural demand for water.

Food for thought for you I think.

There might be a few factories in China wanting to sell their equipment ... real cheap ... at the moment.

*A cop out.*

No cop out Keith, more like my response to what I think is basically
a troll, who likes arguing for the sake of it, not because he is
convinced of his own argument, which he has never thought through.

You are free to write your own article on the topic, if you are
so convinced of it. IMHO anyone with any understanding of economics,
would think you were basically joking, or just a little nuts.

Resource developments don't just happen, companies invest 10s of
billions of $ to bring them onstream. If you then wanted to restrict
exports with large taxes, to suit your political agenda, they
would take their money and run. Africa and much of the third world
are full of resources, undeveloped because companies don't trust
the Govts. So they don't invest. The same would happen here.

So what if unemployment increases in the short term? What we have
been down to is largely the unemployable. Australians choose to
work, they don't have to work. When all those jobs now being done
by new migrants, 457 workers and unfilled positions are snapped up,
then we can get serious about unemployment. Meantime much
of our infrastructure is run down in Australia, so its a great time
to use those people to rebuild some of it.

The biggest beneficiaries of cheap Chinese t-shirts and other
consumer goods, is in fact consumers. If the poor had to pay
alot more for Australian made clothes, due to higher labour costs,
the poor would be the first to see their standard of living drop.

The very fact that China and India have a couple of billion
people who want to join the middle class, own new homes, new cars,
etc, will underpin the price of resources in the longer term.

Short term anything can happen, as we see with the price of oil.
All that low oil prices will achieve is less investment in new
developments, so when demand increases once again and lead times
for new projects can take 5-10 years, prices will skyrocket once
again.

Yep a cop out followed up with the usual further personal abuse when your positions are questioned and fanciful arguments totally debunked.

Why do you always follow my lead. I gave you a suggestion that you could write an article if you had insufficient space here, and you you respond by asking me to do the same. I don't need too. I understand my positions and have thought through the various senarios and offered an opinion. You however responded with wild generalisations simplistic attempted explanations and personal criticisms. I respond to that with a thorough debunking of your ... uhmmmm ... theories.

Why don't you answer the questions I've already posed instead of going off on another tangent with another argument that can be simply and easily debunked.

The simple argument about building or repairing infrustructure is going down that road doesn't produce wealth.

Oh and would you be so kind as to explain your definition of a 'Banana Republic'?

You simply cannot compare politically stable Australia even with a tax on exports to the politically unstable, corrupt, war-mongering, tribal regimes in many countries in Africa. To do so ignores the reality that Australia has a history of being able to adapt to major change with little disruption ... among other basic cultural norms which highlight our differences.

*The simple argument about building or repairing infrastructure is going down that road doesn't
produce wealth.*

Ah Keith, so a wealthy, efficient nation, does not require good roads, railways,
ports, communications, power, water etc.?

Go and tell that to those exporters who are battling to move their cargoes to
the coast, to create export Dollars! Go and tell people in a wealthy nation,
that it does not matter if their bridges are collapsing. Keith, you just
have to be a troll, wasting everyone’s time.

*I
understand my positions and have thought through the various senarios and offered an opinion.*

Keith, I remind you that my position concurs with what most economists are saying,
ie. that market economics and globalisation ultimately benefit Australians, including the poor, by increasing their standard of living. It is your opinion that
your voodoo economics would be better then what we have. You are making the
assertion, you explain it. You will need more then a bit of wild speculation to
assert your claims and have anyone take any notice. Otherwise you will
be dismissed as yet another internet crank, best to be ignored, wasting everyone’s
time.

God you are hopeless.

My point was that infrustructure doesn't produce wealth. I did not claim it did not assist with the movement or handling of the material wealth others created.

Comprrrrrrhension skills of a manic.

And once again the 'strawman argument' from 'snip snip whoosh'.

Lets deal with your latest claim :
'I remind you that my position concurs with what most economists are saying, ie. that market economics and globalisation ultimately benefit Australians, including the poor, by increasing their standard of living.'

Firstly "You haven't explained why and how my suggestions would be 'the quickest way to crash our standard of living, crash the Australian peso and turn us into a bankrupt banana republic.'"
So you haven't actually explained nor justified your .... uhmmmm theories.
and
I know of no economist who has dismissed my suggestion as likely to turn Australia into your (undefined) banana republic.
Until that happens laddie you out there all on you pat malone with nobody suporting your previous theories and how they are incorporated into your now newly aped view.

And secondly I've never advocated abandoning market economics nor globalisation nor even an introduction of tarrifs. I've suggested a federal tax on some exports ... in regard to minerals and coal that simply means an extra impost over and above the existing state royalties on those products. Which in Queensland were recently doubled.

So yet again you've retreated to your usual pointless strawman argument. Why do you bother? ... you're only showing yourself as bumptious and pompus.

*I did not claim it did not assist with the movement or handling of the material wealth others created.*

In that case Keith, it is clearly required as part of wealth
creation in a modern economy. Recessions are a great time to
bring it up to scratch, which was my suggestion.

*I know of no economist who has dismissed my suggestion as likely to turn Australia into your (undefined) banana republic.*

Err I don't think that all those economists read your every word
on OLO Keith :)

*And secondly I've never advocated abandoning market economics nor globalisation *

No, what you suggested was that Govts use exports as a weapon
to manipulate trade, to try and force more production of t shirts
and other things in Australia. That is hardly market economics,
more like a crazy Govt out of control.

Investors, lenders would run like hell, leaving you with your
banana republic and all which that entails. Go and ask Argentina,
they just tried your hairbrain scheme and failed.

Ahhh now for todays comic relief.

So accouding to your logic you think royalties might cause us to become your, sill undefined, banana republic?

Uhmmmm how much of world share of iron ore or coal does Argentina have and what are their % share of world exports?

Try to answer ... but I know you won't and we'll see you divert into another hairbrained strawman argument.

Argentine tried it with farming exports, they failed miserably.
Now try playing those games with big mining companies, when you
want their investments and skills! They are not the plaything
of politics you know. You would soon learn the hard way.

As you stated, this is not just about a few royalties, but about
manipulating our resources and their availability to China etc,
for your political benefit.

So you think that China would just play meek and mild and
be submissive, as you played your games? Think again.

Our market share only matters in the short term, not the long
term. So what do you think China would do in response? There
is plenty of iron ore around the world, plenty of coal too,
it just needs development. China is scouring the world,
particularly the third world, for resources and they are there,
they just need development.

If you tried to put pressure on the Chinese with your little
schemes, do you know how quickly 1000 million beaverish
Chinese can react to your threats? They know how to play
the third world game, they don't need to worry about human
rights, or corruption accusations, or anything else for that
matter.

You clearly don't understand the law of unintended consequences
and it would smack you in the face. Even Opec had to learn
that one the hard way, when they thought that they could hold
the world to ransom with oil, a far more important commodity.

Ahhhh Yabby check your figures in relation to supplies of iron ore and coal. You'd clearly be shocked at how few countries not only supply both for export but have 66% of the known reserves. And also while you are about that minor task check also the fe content of the ores of the various major holders of iron ore.
An iron ore organisation controlling more of the raw material than opec controls of oil would need only two members. You really think the Chinese might invade Australia eh?

Ahhh another comic relief indeed.

You totally misunderstand the panic engulfing the operations of big companies and governments in todays worsening economic environment...especially those dealing in iron ore and steel.

Now here's a prediction for you:

After the impact of a huge reduction, of at least 50%, in prices for coal and minerals in April 09 the world will see and endure another financial crisis larger in size than the sub-prime collapse. It'll be termed the Alt A crisis.

Those BHP shares took another battering last night, gold rose, and the US dollar fell. And look at that oil price tumbling towards US$20 a barrel. Now it's about supply and demand not speculation. What's the price of minerals when oil does reach that price?

Now tell me, right now, would you rather be holding gold and watch your global wealth increasing or BHP shares and watching your retirement contract?

*Ahhhh Yabby check your figures in relation to supplies of iron ore and coal.*

Ahhh Keith, but I have checked my figures and Australia does not
own 66% of known reserves. So stop kidding yourself.

I am more then happy with my BHP shares as one of many investments
in all sorts of things. I have no intention of holding gold,
I'll let you do that. Did your granda never tell you not to
put all your eggs into one basket? You should have paid attention
Keith. Diversified assets are the best strategy in uncertain
times.

Yabby,

Today is a first. I'm going to tell the world of something I own.
I inherited from my grandfather some 1916 English Gold Sovereigns and some minted in Perth in the 20's ... and from my father some Kruger Rands. Both told me that at sometime in their lives they had all their worldly possessions in gold... and that resulted in an overall increase in their wealth in periods of turmoil... while others lost plenty.

It was one of those lessons I've never forgotton. ie Flexibility especially in times of crisis is essential.

Oh and read my earlier post properly ... I think you've missed something... that comprehension has let you down yet again yab...

you guys been talking a while[but are basiclly talking about commodities ,shirts, iron ore , gold krugerands ,thing is each is a basic commodity

but here is an angle on commodities your guys are perhaps missing[umbrellas sell when it rains] meaning when food hyperinflates out of its true price range ,it will yet cost about the same in gold[silver] and other commodities
[to its base value [as set by demand] ,i cant buy gold ,so i bought up silver , nickle[coin] AND FOOD

but that aint the topic

[the topic is as i recall about talking down the ecomnomy[well here is the scoop[ya gold is going up[your steel stay the same or go down marginally for the imediate future

[but the thing is petrol[it is measured in inflation, the second some idiot makes war it will shoot back up[YOU KNOW ITS PRICE re inflating AFFECTS OUR INFLATION
,so expect while the economy stagflates ,the petrol re inflation creating hyper inflation

[and that empties the stores of all produce]
get it?

it is written that in the end time people will eat money[fiat paper]
it dont get dug up [but its only created at whim , controled only by the banking system[who have such a fine exclusive cartel franchise that they lend govts their OWN money[govt dont issue money the fed does]

the fed needs hyperinflation to reset its money 'market' ,the boom needs a bust so those in on the scam[at fixed rate intrest] can pay off their debt with hyper inflated currency[see?]

but with out money ok no job [no one else either]
no food thats another matter alltogether
how much gold you going to pay for my last can of baked beans?

the rich let them eat paper [or gold]
the poor will just eat the rich

*It was one of those lessons I've never forgotton. ie Flexibility especially in times of crisis is essential.*

Keith, sure flexibility is essential, but there are many ways
of being flexible, not just by owning gold. Not having any
debts to start with, is a pretty handy way to start.

Note those people falling over everywhere, nearly all of them
borrowed too much.

Now you get your feeling of security from gold, but a friend
of mine who went through hard times as a child, his mother
swapped her golden wedding ring for a bag of potatoes to feed
her family.

This little hobby farm here has just harvested around 300 tonnes
of grain. Now in the scheme of things that is not much, but its
enough to give me some kind of security. You can't eat your
gold after all. Next year, we should have another 300 tonnes.

Rather then gold, I simply prefer to own productive assets, that
will still be there when whatever crisis has come and gone.

Good farmland is one of those assets. The problem with gold
is that every ounce ever mined in the world, is still there and
its essentially useless. Central banks are full of the stuff
and the price of gold is governed by how much they decide to sell.

I've seen people do really well out of gold and lose their shirts
over gold, for they can't predict what those central banks will
do next week.

There is no shortage of gold, but there can be a shortage of
food, for the ever increasing global population needs to eat

Hey under one god,

Why do you assume you'll have the last can of baked beans?

Yabby,

You'll have your farm and crops to protect from people with only one can of baked beans.

I'll have a fishing line, crab pots and an ocean.

gold'a facinating'thing'[we'trade'in it[but]we dont actually trade in'gold]but in'gold-futures/certificates'[securities]

as it is almost impossable to cash in'the certificate'for'the gold',the[DRAWN OUT]process of conversion of the'promise'[fiat]paper for the gold,we have reached the absurd position;we trade more gold in one day than'ALL'the gold we scavanged over many lifetimes

[THEpaper is produced on a fraction of the worlds'real/gold']and paper-gold'futures'is a market of its own[one'firm'controls the whole'franchise'via its paper-promises][but one day those who paid'good-money'for the gold will have a'run-on it'[the REAL-STUFF[not the paper/promise..[like what happend to silver]

A bag of potatoes[worth about twenty bucks][it was a sack?]and that gold ring possably fed the family for a month?[not bad selling a twenty dollar bag off'pot'[for the'price'of gold*]+or- $800

except for back then[depression 1930's?]a pound was a POUND OF GOLD/the ring bought for about half a pound[12 shillings WEIGHT worth of silver[but the shillings[pre 1948]was sterling silver[these shilling aRE WORTH ABOUT $600 a pound[silver scrap value]today

even so its facination noting the theft of our only'constitutionally'LEGAL tender[gold/silver/coper]coin for paper]i note silver was stolen from us in 66[when our silver coins became cupea nickle]in fact the only printing of REAL SILVER COINS was the round 50 cent piece[worth about'7'bucks[silver price today]talk about two bob each way

anyhow the big theft was for those who held the silver coin and turned it in to the common wealth bank for nickle[it is interesting that by using the gold price of that house[farm]your parents bought for$200 pounds is[today]still worth 200 pounds of gold,[its only that in dollars[two dollars=one pound][note]the house[today]is worth more than'400 bucks'[so where the rest go to?]

inflation;further theft[facilitated by the fed raiding the treasury]of course we can still buy'special'coins from the mint for hundreds of'dollars'[funily enough;a unit of weight/measure[like'shilling'was a unit of weight/and'penny'was a weight]

but we can still buy a'silver'coin by weight[WITH A FACE-VALUE OF ONE DOLLAR{OR 5 DOLLARS]but its silver/gold weight[value]is far more

wealthy people get paid in'face-value'then cash it in for'real-value'thus able to hide what they are REALLY EARNING,is nonFACE VALUE

so why ever pay real-value for your tax?[but then tax isnt on wages
its'INCOME'TAX{FROM INCOMINGS;not wages]but hey if you dont know,just pay'wages-tax'it aint'income'but'people'never know