Ok Rehctub, I will correct you. With things like iron ore and in
WA generally, royalties are a percentage. Qld uses a different
system again, AFAIK, which is a mix.

People forget the historic perspective of all this. For decades,
the miners were screwed into the ground by the Japanese, who controlled
demand. Mining iron ore and coal were seen as backward
industries and profits were low. The only way the miners made anything,
was by becoming more and more efficient with ever larger
machinery. Along comes China and its a complete game changer.
As demand soars, there is no ready supply to meet it, so prices
skyrocket. So the miners which hung in there for decades are now
getting their just rewards. But of course now the Federal Govt
wants in on this too, as rising company taxes collected by the
Govt are seemingly not enough.

Something not being discussed here is the real state of the banks.
The banks have been asked by AAPRA to report on the results of a
"stress test" on their financial robustness.
There is a real question implied here.
With their very large home mortgage exposure, the removal of EU funds
by Eu banks from Australian banks, will they stay viable if
unemployment rises significantly ?
Their overseas funding has dried up as banks around the world are not
lending to each other. The EU central bank pixel generated a big slice
of money and gave it at low interest rates to EU banks for them to
buy EU country bonds. Instead they just invested with the EU central
bank at a higher interest rate !

In these sort of circumstances is it any wonder there has been no
discussion of our banks stress tests ?
I don't think any banks are very safe until they recognise that we
are operating under different rules from now on.

*I don't think any banks are very safe until they recognise that we
are operating under different rules from now on.*

Well that's the thing, Bazz. The whole global financial system is
kind of interconnected and politically interfered with. So its
hard to predict the next black swan, as they call it.

Now if you take European banks, one would think that they would have
been ok, lending to Govts. That is clearly not the case, as Merkel
and Sarkozy tried to force them to take a 50% write off, which would
send most of them insolvent. OTOH countries like Greece and others
simply can't repay the loans and likely not afford the higher
interest rates which they now face.

IMHO, Australian houses are greatly overvalued and Australian
commercial real estate is too. The effect of the internet is yet
to fully play out, as shopkeepers go bust and landlords will be
forced to drop their rents. That will lower commercial property
values. Add a crisis in China and our banks could have all sorts
of issues to deal with. Which is exactly why they need lots of
reserves, to be ready for the unknown. That is especially so right
now, given so much economic uncertainty.

Yes Yabby, I agree, the whole situation is, world wide, very dodgey.
The whole system has been based on credit and the borrowing of very
large amounts by governments and the use of credit on a large scale by
individuals. The only polly worrying about it is Barnaby Joyce.

The very low GDP and growth has removed the surplus needed to repay
the loans and interest. Now we need a new type of economy that can
operate with zero growth and GDP.
This is a very different animal than the present system.

Very few economists have twigged this new situation and those that do
while they realise the size of the job don't know what to do with the
outstanding debt.
They cannot see a way to fix it without inflating it away.
If so money in the bank, like most small investors, is a problem.
Just go and buy enough food for the rest of your life or land.

It is interesting to read the antics of the financial advisors in the
papers or TV, including my son, who are of the firm opinion that all
will be right when growth returns.

Pigs might fly !