Astonishing!
An unexpected 4.5% surge in the Australian economy, and, as all today's papers are reporting, driven mainly by an equally unexpected jump in mining investment.
I wonder if we shall see an acknowledgement of their error from those OLOers who have been direly predicting that the MRRT and the Carbon Tax would drive mining investment away from Australia.
These Chicken Littles may now perch themselves alongside Tony Abbott, who is running away from his 'end of the world as we know it' Carbon Tax predictions as fast as his little legs - and large mouth - can carry him.
Anthony
http://www.observationpoint.com.au

500 billion worth of investments, The Carbon tax and MRRT is a pie in the sky.
The nation of au will not default any time soon.
Imagine what the investment figures would be if it was not being talked down by noalition scumbags.
Abbott has been spreuking investment going elsewhere for 2 years or more
That shows the economic credentials this mutated individual has.
Costello was correct, Turnbull should be handed the position for the betterment of the coalition.

...Look, irrespective of what Abbott does or says, the Liberals are to be given the "baton" by the Australian electorate at the next election.

...This predicted result, has not the slightest resemblance to any other reality, other than Labor have thrown away every chance of reelection by their rule of stupidity.

We can only hope that we shall continue to
prosper economically as we have done thus far.
The current figures are great - and prove at
least one thing. We're doing better than allright
currently. Even Joe Hockey has admitted - "you
can't argue with these great figures!" Although
Mr Abbott will certainly try. Malcolm Turnbull -
where are you?

I get no joy, only unhappiness, in saying Diver Dan is quite right.
NOT that Labor has got every thing wrong, but far too much wrong.
Gillard was, and is wrong, after she leads us over the cliff, so many straw men will come forward AND LIE TO US the party faithful!
They will say we tried to stop it, but it will be a lie.
Anthony/LEXI/579 1972, a similar joy, the big bloke took us out of 23 years of losses.
We scraped in a second election, just.
Then as now, we contributed to our defeat, some today refuse to see the idea of buying back our country was great, its implementation pure insanity.
ALL THE time, believe me! media let us have it, today even the ABC radio for sure, female announcers ask a question then answer it by interrupting EVEN EXPERTS to give their own view!
Labors policy's are brilliant, our country has never been better served by a government.
NEVER had a worse opposition.
Yet until we get Gillard out we can not defeat Tony Abbott? not the worst ever?
With honesty with thoughtfulness ask your self this, not how bad Abbott is,he is that and more.
Ask why Gillard once highly respected, not by me, can not get close to him, she never can win an election,so why is Labor trotting behind her?

It's a mystery, Belly, no doubt of that.
If one calmly counts up this government's successes, it adds up to a result to be proud of.
And our continuing economic performance alone would justify reelection.
But, like you, I'm resigned to a loss, perhaps a large one.
Losses and victories come and go in politics - it's part of the process.
What really troubles me is the thought of how much damage an unfettered Abbott government will do to our nation and our society.
Anthony
http://www.observationpoint.com.au

I very much agree Anthony.
Life can be strange, and age teaches us different lessons.
I feel young, health is back, but understand near 67 is not so.
But I have lived these days before,almost exactly in the 1970,s.
Some follow blindly ,form opinions based on failure to even begin to understand.
Carbon tax is one,extraordinary! that the worlds rich and influential have muddied these waters.
Even here, Rudd's commitment to action in part won him the election, yet now it threatens our wipe out.
And history, with no doubt,will endorse it.
Of greatest concern to me, is my fellow travelers,those around my age, who built the ALP and union movement.
But condemn me,for demanding better.
I yearn to see ALP ministers, confronted by ABC females interviewers, intent on getting their view not the ministers over,HIGHLIGHTING extraordinary bias from these green leaning commentators!

*And our continuing economic performance alone would justify reelection.*

Hehe Anthony :) Parts of the economy are doing ok despite the Govt,
not because of it. That part is mainly NW WA and parts of Qld.
The RBA is not dropping interest rates for no reason.

You want to read the economic tea leaves a bit, such as what the
head of BHP is saying. You might or might not know it, but coal
prices have dropped a great deal and iron ore prices are down.

Kloppers made it clear that Australia is becoming an increasingly
expensive place to do business. So its all very well if iron ore
was at 200$, etc, but with iron ore dropping back to 135$, headed
for 100$, BHP is putting 80 billion $ of investment plans on hold.

If a few other companies do the same, those figures might not
look quite so good. Meantime dairy farmers and others will be bled by
the carbon tax, more manufacturers will close due to more nails
in their coffins.

Unless you live in limited parts of Australia, things really arn't
too rosy.

See Yabby, here's where you get yourself into bother.
You equate Marius Kloppers' comments with the economic tea leaves.
Marius Kloppers is paid to represent one and only one constituency - BHP shareholders.
Now, I don't have a problem with that, especially as I am a BHP shareholder, but my point is that what he says has no - I repeat - no bearing on the state of the economy other than to the extent that it affects BHP performance.
If he spoke differently then he may very well be in breach of his obligations to shareholders as a director, i.e. he is obliged in law to put his shareholders interests first.
So, hypothetically, if the economy was doing wonderfully well for Australia generally, but not so good for BHP, Kloppers would do his job, and paint the most negative picture he could in order to create change more beneficial to BHP, even if that meant hurting every other Australian.
Because he isn't paid to consider what's best for Australia; he's paid to consider what's best for BHP, and rightly so. That's his job.
But you need to factor that in when digesting is comments.
You certainly should not take them as being a comment on what is best for Australia, or as a balanced assessment of the state of our economy.
Cheers,
Anthony
http://www.observationpoint.com.au

*You equate Marius Kloppers' comments with the economic tea leaves.*

Anthony, people like Kloppers decide where to invest the next
80 billion $, so they matter. If you can't grasp that they matter,
then frankly neither I nor anyone else can help you understand
the economy and how it functions.

Hi Anthonyve,

No retractions from me, sorry. I was told recently man-to-man by a Chinese mining executive that his company wanted to invest in the Australian resource industry but were put off by the mining tax and the implied (sovereign) risk of further punitive changes to that market.

Rio Tinto have pulled out of the Abbot Point coal harbour expansion and BHPB look like doing the same. Both these have recently issued statements that they will be keeping their powder dry on future Australian mining project investments.

Feasibility studies on mining project costs are almost out-of-date before the ink dries and many investors are getting skittish. I have seen operating costs projections increasing by up to 20% pa. CEO’s of juniors are offering their first-born to secure funding. It would be stupid to suggest that this is all due to the mining & carbon taxes but its death by a thousand cuts. Yabby has is pegged pretty well I think.

The devil might be in the detail. Do we know what the “equally unexpected jump in mining investment” means? I haven’t seen the newspaper articles to which you refer – is there any further information?

Anthony we have to confront this truth, we spar in our verbal combat's here with all types.
Some are committed to anti Labor paths, and never let the facts get in the way.
NO SHORTAGE of investors in our mining exists.
We a tiny nation of 23 million are way out in front of? THE DEVELOPED WORLD.
Abbott and his team, said our bailout was wrong/wasteful so if in power? we may well be bogged in major unemployment still.
Carbon tax is being paid by many country's.
Still more will pay.
Mining tax is a SUPER TAX, on this country's once only product, other country's are developing them.
It is painful! embarrassing! to hear Abbott and Hockey yesterday!
More so that they gather followers, so uninformed they chant mindlessly such as Peter Mac and yabby here.
History will after shaking its head in disbelief, look favorably on the governments handling of our economy after being way laid by the GFC just months in to its first term.

How true, Belly.
But it seems that Yabby, Peter, et al, aren't the type who let facts spoil a good theory.
Personally, I think I'll stay with the facts and be happy about my country, instead of endlessly whining.
Anthony
http://www.observationpoint.com.au

<<Astonishing!
An unexpected 4.5% surge in the Australian economy>>

Yep, I couldn’t agree more.

We really need to recognize and reward the man responsible for the OZ’s economic miracle.

So, it’s out with (witless) Wayne:
http://tinyurl.com/7vdwb88

and it’s in with (wise) Wen:
http://tinyurl.com/6m5lo2u

PS: his finger salutes are no unconscious gestures--one is for OZ industry and the other is for Oz workers(Wayne concurs with the sentiment).

I suggest we all recap on Keating's "Beautiful set of numbers" and then "The recession we had to have" before we get too carried away.
These figures show how easily money comes in but wait for the inevitable draw-back.
Reflect on good old John Cain, what a great bloke. Cranes all over the Melbourne skyline and then the State of Victoria was found to be broke! It took years to pay all that off and many suffered.
Would not, could not, trust Labour with the keys to the safe again. Especially in the hands of an ex-lawyer!

Labor should be congratulated for briefly reaching the level of growth that was commonplace under the Howard government.

Ant's gratuitous thread forgets that no one here ever claimed that investment in mining would be stopped only discouraged. The % of world wide mining investment in Australia has dropped, but this has been swamped by the massive increase in investment world wide. Simply we have a smaller share of a much larger cake.

Unfortunately I have not seen a breakdown of where this 4.5% growth
occurred. 4% may have been in mining turnover and 0.5% for the rest.

Whatever the ratio, I suspect the rest will not look too smart.
Think about it, mining with no added value processing is highly
productive, and uses very little energy for each dollar value.

If the ratio mining vs the rest, could be applied the story may be different.
The problem is most of us live and work in the rest.

In case you have not noticed we are in the second energy price - economy crash cycle.
This cycling has long been forecast after the occurrence of peak oil.
If you look at it with this cycle in mind it all makes a lot of sense.

Just do not get carried away with your enthusiasm as we are staring
into an unknown chasm.

As usual Shadow Minister needs to be reminded of that annoying little thing... What is it, I'm thinking of? Oh, I remember - reality.
Howard was not managing the economy in the aftermath of the GFC and the European Crisis.
We can add him to the list of those referred to earlier - who are reluctant to let the facts spoil their pet theory, no matter how absurd their pet theory happens to be.
Anthony
http://www.observationpoint.com.au

Just to lighten things up:

As Gina Rinehart said to her children:
"Gimme More!"

As James Packer told 60 Minutes:
"Build Casinos and they (Chinese),
Will Come!"

As Joe Hockey told us on the News:
"There's no denying the numbers are great!:

And as Tony Abbott said on the 7.30 Report:
"Don't believe a word I say!"

Abbott says don't believe a word i say. That has been catching on for some time. I came across a bullsght bag in a souvenir shop, with instructions on how to fill it and how to dispose of it when full.
None of the noalition can recognize good figures, there is no economics in any of them.
Turnbull's time is near. Toni has lost slippers vote.
Economic illiteracy has no place in federal politics
If Abbott gets a chance we will be governed by mining tycoons.
To many chooks in one house.

One of the nice things about OLO is the fact that after the next election we can come back to threads like this one and have a good laugh.

Ant,

You live far from reality in the dream world of Labor spin, where everything positive is due to Labor's stewardship, and everything that goes wrong is someone else's fault.

The biggest minerals boom in the world is underway, and tax revenues are nearly 4x what they were under Howard, and employment here is nearly double. This is in spite of Labor's new taxes, union meddling with the new IR laws and blocking foreign labor. In spite of this Labor has yet to produce a surplus.

The rest of the economy which employs 90% of workers is struggling in particular with the onerous conditions of the fair work act.

To prove me wrong, just show me what Labor has implemented to improve the mining sector. If not I can add you to the labor spin doctors. I bet you even believe Craig Thomson is as pure as the driven snow, and that horrible Kathy Jackson just framed him.

Shadow Minister,
I think Lexi and 579 have answered your - well, I hesitate to call them points, but anyway, I think they have answered them perfectly.

Spindoc,
You're right there.
No matter who wins or loses it'll a good time for a laugh.
(Probably just before I go and drown my sorrows)
Anthony
http://www.observationpoint.com.au

Ant,

Lexi and 579 didn't address anything I said. Either you have literacy issues or you are deliberately ignoring what I asked you. What has labor done to lay claim to the stewardship of the mining boom? I believe that at best they are passengers, at worst they have their feet on the brakes, and the economy is doing well in spite of them.

P.S. the previous quarter's growth was 1.3%, and this quarter was 4.3%, so the average is not 4.5% or even 4.3%.

Sorry,

It was 4.3% for 12 months.

Don't count you chickens before they hatch.

I suggest you go out and talk to some who are not involved in the mining industry, either directly, or indirectly,then tell usnthings are rosy.

There is no doubt the numbers look pretty, but may I suggest you take away two things, mining and WA, then see where ae are.

I for one stand by my possition that these taxes will hurt.

As for the surge in mining investment, don't be fooled, these are very smart cookies that run these companies and I would suggest they have something up their sleves we don't yet know about.

Of cause, as always, I hope I'm wrong and you're right.

Let's see where we are this time next year.

*But it seems that Yabby, Peter, et al, aren't the type who let facts spoil a good theory.*

The facts are pretty straightforward, Anthony. WA is growing at
around 8%, or faster then China, whilst most of the rest of
Australia grows ever more dependant on what we do over here.

We do that despite Canberra, not because of Canberra.

If we seceded, you would be a banana republic.

Belly & Anthonyve,

You accuse me of not letting the facts get in the way of a good story but I would suggest that you guys are letting a good story get in the way of the facts.

What I posted was fact (except, of course, the Rumplestiltskin-style contract) – you may have guessed that I am employed in the mining industry and I hope that my first-hand experiences and insights can offer some perspective in this discussion rather than being dismissed as “mindless chants”.

I am not denying that there has been an increase in investment in the Australian resources industry but I cannot support a simplistic conclusion that such an increase is proof that the mining and carbon tax don’t discourage investment. Unfortunately, such correlations have become fashionable lately to replace any proper analysis of causation.

What is the breakdown of the investments? When was the investment committed? In what sector? What investments have been delayed or cancelled and why? I don’t know these answers but this is a simple start to understanding rather that offering conjecture.

Always happy to discuss facts.

What is going on in QLD is not the norm for the rest of AU. You voted for CanDo to fix the problems that exist there so blame yourself.
Won't be long now and you'l be able to relax.
Retail was the big winner in the last assessment, not mining.
Mining needs to slow down, to keep things in perspective. It is overheating.
Even though the figures are good Abbott continues to down-talk the economy. He is yet to say anything positive in this term of govt;.

Hi Peter,
Your questions are perfectly valid, and I confess that I do not know the answers.
I simply couldn't resist the opportunity to twist the tails of those OLOers who endlessly decry this government and who, like their poster boy Tony Abbott, are unwilling to acknowledge the slightest positive about our national state.
Cheers,
Anthony
http://www.observationpoint.com.au

I note the usual suspects are gloating in advance about the Conservatives up coming election victory next November.
Every chance exists,with Labor,the self same gutless wonders who found the guts to dump Rudd unwilling to dump a far worse leader, well let that party Begin.
But be careful,Abbott could stumble even yet, latest hot e mail says he blamed the government for cloud cover blocking some seeing the Venus passage.
And the back hoe cutting that line that was never cut.
I am however much more than amused, every one understands my view about Gillard, may she get a new job, soon.
But every time a conservative calls her a lie teller I ROTFL!
No one gets near Abbott unless it is his boy Hockey.

Amen.
Anthony
http://www.observationpoint.com.au

Ant,

At least we have your measure in that you are prepared to post rubbish in order to antagonise the liberal supporters. I suppose you have to with the complete failure of Juliar to do anything right.

Oh Shad,
Surely it's time for you to have a bex and a good lie down.
Do try not to be such an angry little person.
Cheers,
Anthony
http://www.observationpoint.com.au

Ant,

I am fine since I got your measure. I mistakenly thought you could support your posts, but now I see that you are only a slightly more articulate version of 579 who simply parrots the Labor line.

You all throw mud at Abbott, but if he is trouncing labor so soundly, how bad must the incumbent Juliar be?

The Reserve Bank Governor Glenn Stevens, in a speech today (incidentally the boss of the RBA appointed by Howard), puts paid to your mythology SM, about the golden-ness of the Howard years. Describing it as an artificial bubble of private debt. He also went on to say that the mining boom will provide a unique buffer from the global economic situation, and that Australians should feel their glass half full.

It's also true, that it's not that the first time that Wayne Swan has been awarded (internationally) and rewarded now locally with a great set of numbers for his performance as Treasurer Anthonyve, and it seems it wont be the last.

No matter how far the opposition and it's cronies in business go, (as they salivate on the sidelines for more industrial deregulation), more enforcement of their fraudulent self interested ideology upon Australian taxpaying stake holders, the more the economic realities and facts will bite, as we move away from an early election, now not likely to occur until the Govt goes full term.

Anthony is a man of some substance, and unlike myself loath to clash with such as SM.
It is a fact the charges laid against Anthony can never be laid against me, my contempt for some in my party,and the actions of others is clear.
You will find no such words from Shadow Minister concerning his side.
Any reasonable judge,after looking at SM charges will surely find him guilty of the charge he lays against Anthony.
Hockey and Abbott,yesterday and today,turned lies in to an art form, and insulted politics in this country.
Of Eminence interest to me,is how long will it take for SOME to wake up to the fraud these two and a party fighting to regain its path are.
A return to LIBERALISM one day is assured, only after they go however.

Dear Anthonyve,

Keep up the good work.
You're doing a great job.

Dear Thinker 2,

As always - a joy to read.

a great set of numbers for his performance as Treasurer
thinker2,
Yes, that's like celebrating getting a $1000 Cheque whilst the credit card is still $3000 in arrears.

Abbott would be pleased! some contributions here come ,clearly from his family!
The HENNY PENNY School of economics.
If unsure make it up, matters not if it is true, remotely related to the subject, charge on, try however to sit on the horse the right way around.
Frost here this morning! Carbon tax what did it!
Gillard will freeze this country if we do not stop her.
Mr Mad as hell Monk Abbott insults us with his tall tales.

I never expected that there actually would be any retractions, so I'm not disappointed.
I am, however, rather pleased that my position has been supported by no less an authority that the Governor of the Reserve Bank.
In his speech yesterday he did indeed heap praise on how our economy is performing; a tribute to this government's economic management.
Moreover, he pointed out that the much of the cause of structural imbalances sheet home - not to the Labor Government - but rather to the unbridled growth in private sector debt under, wait for it, the Howard Government.
Now, none of this would come as a surprise to we OLOers who support the mature view that governments of all stripes have good and bad policies; and that both the good and the bad should be recognized.
As opposed to those OLOers who maintain the - shall we say - less adult position of heaping unbridled opprobrium on the current government; and who are unwilling to acknowledge even the slightest good deed.
Even to the point of endlessly using, when referring to our PM, a childish epithet that lacks even the virtue of originality, as its origins lie with a witless, eternally angry, shock jock.
But fortunately reality has again demonstrated that the mature view is - as usual - the correct one.
Anthony
http://www.observationpoint.com.au

No idea where SM gets the idea that i push the Labor line.
I just see things for what they are.
I can not say anything positive about the noalition, because there is nothing to comment on.
Facts and figures speak for themselves.
The man driven by religion and billionaires, has not impressed.
The negativity is costing this nation big time.
When Abbott is in jail,doing 6-12, Turnbull will take over.
We will then get some direction as to who we want to vote for.
Gillard is not perfect, but not shy at hard reform.
The woman hater, has not won a round yet.

Dear 579,

I agree with you. Policies do matter -
and politicians should be judged by
what they actually do. Living in
Victoria - trouble is now brewing.
Election promises are not being kept
by the Liberal government. There are
cut backs in health, jobs, education,
libraries, and of course - someone will
have to fix things once the Libs are
voted out. When will people ever learn?

My fellow travelers we must never take on the negativity of some supporters of Abbott here.
And not the open display of not under standing others show.
We too must not equip our selves with blinkers.
Just as the polls show Abbott is not trusted or loved they too show the same about Gillard.
The lady has guts, always has, she is welfounded in her wishes for this country.
She however can not win an election.
She often goes well against Abbott but more often leaves the quick return he offers her hanging in the air.
She can not counter punch, she can not win back lost ALP voters.
We must not forget her rise took one of our most popular out of play.
Julie Gillard has a true Labor heart, but can not out box Abbott.
She needs my party needs to under stand what the people think not what we want them to.
And too that Abbott and his front bench should be a push over but know this Julie will never be the one.
Party first but we are heading for a decade of very conservative government gifted to them, by our power brokers
Or are we? new leaders both teams this year!

'new leaders this year'
One lives in hope, Belly, one lives in hope.
Anthony,
http://www.observationpoint.com.au

*There are
cut backs in health, jobs, education,
libraries*

Gawd Lexi, horror of horrors. The bloated public service will actually
have to think about becoming a bit more efficient! That would be
the dread of your average libararian, I am sure. You sound just like
those Greek public servants

Have none of you detected the trend that governments everywhere are
cutting back while pretending that they will be undertaking more ?

With the decrease in GDP they have less money to play with and so must
reduce expenditure even if they pretend to be expanding expenditure.
Remember GDP is not a countries operating profit, it is the sum of all tranactions.
So Wayne's 4.5% GDP is not a country profit, it is a mixture of profit
and expenditure. You can get funds for expenditure by the off balance
sheet tactic of borrowing by selling bonds.
This is why our outstanding bonds are now pushing $0.25 Trillion !
ie, you now owe somebody $0.25 trillion.

Welcome to the post Peak Oil World !

Peak Oil indeed Bazz. You only have to have a look at the Economist
current account figures, expressed as a % of GDP, to see what is
really going on, oil or no oil.

China plus 2.3%
USA minus 3.2%
Germany plus 4.8%
Switzerland plus 13.3%
Netherlands plus 7.6%
Norway plus 13.8%
Saudi Arabia plus 23.6%
Taiwan plus 8.1%
Singapore plus 20.7%
Greece minus 6.9%
Australia minus 2.9%

Oil or no oil, some smart countries are doing really well,
Australia is not amongst the smart ones. As Pericles always
says, just follow the money to see what is really going on.

In what way is current account as a percentage of gdp meaningful?
Australia could be minus because of the importation of capital equipment that may generate billions in revenues and tax intake in future years.
Without knowing what's driving the deficit, no useful conclusion can be drawn.
Here's an example at the perspnal level.
Joe spend 50k$ in a year on a specialised education course.
In that year his earnings are minimal because he is studying. Thus, his "current account" would ne negative for that year.
But , because of his specialised knowledge, in subsequent years he earns big money.
So how was having a negative current account position in that first year a bad thing?
Anthony
http://www.observationpoint.com.au

*Thus, his "current account" would ne negative for that year*

Exactly. So follow Joe's current account over 30 years and if he
is still borrowing more then he earns, he might have a problem.

Despite record commodity prices, Australia still borrows more then
it earns, to pay for our cushy lifestyle and overblown Govts.

You sound a bit like the Greeks. In the future we will make all
this money, but for now we'll just borrow even more to fix the
problem and kick the can down the road for another year. Spain
did the same. Note those countries doing well, they do well for
a reason, oil or no oil.

Yabby,
Slow down, take a deep breath and read my example fully.
I repeat, unless you know what drove the negative current account result, the measure has no meaning.
Economics 101.
Anthony
http://www.observatiopoint.com.au

Yabby & Anthony, isn't the high cost of energy imports which adds to
the current account unbalance to the negative paid for out of the
positive side of the GDP ?

Martin Ferguson recently referred to the import costs of oil rising to
unsustainable levels. The current reduction in price to $102 a barrel
will help but I suspect it won't last long.

This the problem that is plaguing most governments in Europe even
though they have reduced their consumption by about 5%.
This problem of energy raises its head as its cost gets to about 3% of GDP.

Yabby & Anthony, isn't the high cost of energy imports which adds to
the current account unbalance to the negative paid for out of the
positive side of the GDP ?

Martin Ferguson recently referred to the import costs of oil rising to
unsustainable levels. The current reduction in price to $102 a barrel
will help but I suspect it won't last long.

This the problem that is plaguing most governments in Europe even
though they have reduced their consumption by about 5%.
This problem of energy raises its head as its cost gets to about 3% of GDP.

Here is our problem.
We use almost 1,000,000 barrels a day.
We import around 50% of what we use.
So for 365 days @ $100 it comes to $18,250,000,000 a year.
So what percentage of our GDP is that ?
I don't know I have not been able to find a figure except a percentage
change on what it was last year.

Bazz, last time I checked, we had something like a 1.3 trillion$
economy, so the 18 billion for fuel would be far less then what
we spend as interest on our trillion $ borrowings, as we have been
running current account deficits for yonks.

Fact is that even with record commodity prices, Australia is still
spending more than it earns.

What the Economist figures show is that plenty of countries are
still doing well, despite high energy prices. But they are the smart
countries, we remain amongst the dumb countries.

Thanks Yabby for the info. Is that 1.2 trillion our GDP ?
To the $18 billion you have to add another roughly $18 billion for the
locally produced oil then the cost of coal and finally the cost of
natural gas. I don't think the renewables are significant enough to be a factor.

Hmm if that $1.2T is our GDP then we are in real trouble as 2x18 = 36.
Plus say $14 billion for all the rest = $50 billion and that is 4.1% !
That is definitely economic crash territory.
The US crashed in 2008 at 4% and it could explain our suddenly rising
non mining unemployment.

So it gets down to this, exactly what is our GDP dollar value ?

This thread was started because the Labor tragics think that the Australian economy doing better than the rest of the world is vindication of Labot policies. When pressed to point out which of their policies have contributed to the mining boom that is propping up the economy, they all remain silent.

Mark Latham summed it up well on Friday when the only positive thing he could say of Labor is that they haven't stuffed it up. Australia is doing well in spite of Labor not because of it.

Bazz, be careful that you don't try to force the figures to fit
into your pet theory, rather than looking at the big holistic
picture and learning from that.

Energy prices are a factor, but only one of them. In much of the
world, if you go back some years, its been more about various
unsustainable bubbles developing and eventually they pop, with
long term ramifications.

In places like the USA, Spain etc, people built ever more houses,
claiming that house prices could only ever go up. The building
industry employs alot of people. When the wheels fell off that
cart, what you had was a collapse of the building industry, a
collapse in house prices, a rise in unemployment. Neither country
has recovered from that.

In Australia, in the last decade, people borrowed money and bid up
real estate, shares and all the rest, as they were all gonna be
rich. People maxed out their credit cards etc. That bubble burst
too. Luckily for us, due to high immigration we have a housing
shortage, so house prices have not collapsed completely.

But people have learned from the GFC. They are saving more, borrowing
less, speculating less, which no doubt affects how many are employed.

Then we have more businesses going broke (the internet effect etc),
poor Govt policies, (Fair Work Act) so less business start ups.

Net result of all this is roughly what you see now.Trying to ignore
all these factors and blaming it all on energy costs, is flawed IMHO.

Yabby, yes the housing boom bust came on gradually during 2007 and
got progressively worse during 2008.
This same rise was mirrored by the price of oil.
As soon as the oil price peaked at $147 a barrel in July 2008 the
economy fell over about one month later.

In the US almost everyone drives to work.
At over $4 a gallon they had the option of paying for food, or petrol
or the mortgage. The mortgage missed out and the real estate housing
collapsed as millions stopped paying their mortgages.
This was the 4% of GDP point and there have been a number of economics
papers that supported that scenario.

Likewise it happened again when WTI oil reached $110.
Our TAPIS was $134 at the same time and we started to hear about the
various plant reductions and closures.

If you get the opportunity read Richard Heinberg's "End of Growth" and
the economist Jeff Rubin's "Your World is About to Get a Whole Lot Smaller".

They may be available on Kindle.

*At over $4 a gallon they had the option of paying for food, or petrol
or the mortgage.*

But Bazz, people have lots of options. Like buy a smaller, more
fuel efficient car for instance. When the oil price dropped back
to 30$, it did not create a booming economy, so I think you are
skewing the data to suit your pet theory, rather then examine all
the factors.

One of the factors in America which is the problem, is in fact
Govt regulation. So people are not liable for their housing loans,
beyond the value of the house, unlike Australia, where you will
be declared bankrupt. So for many who overpaid for houses, it
was a question of jingle mail, send back the keys, to get rid of
the pesky mortgage. Nothing to do with fuel prices.

Right now, alot of global uncertainty is the problem. Alot of
business people are sitting on their hands, unwilling to risk more
capital in ventures. That means less jobs. The oil price has
nothing to do with it.

Yabby said;
When the oil price dropped back
to 30$, it did not create a booming economy,

Well that is the point, the lower price caused a pickup and then they
all started to talk of recovery and the price started back up.
It finally reached the $90 to $100 range and it all stopped again.

This is the time of the infamous "Double Dip" that they all worried about.
This cycling was predicted quite some years ago. Like all oscillations
something will dampen it after a few cycles and it will stabilise at
a lower level.

There is a graph that shows that every recession, except two, have
been preceded by a peak in oil prices.
It is not related to the peak oil cycling, because it was before peak.
It does illustrate the effect of oil price on the economy.
I have a copy here but we cannot put it on here. One exception was
the dot.com boom recession.

I still have not been able to find the dollar value of our GDP.
All the Stats Dept talks about are relative percentage.

Whoops, forgot to comment on this;

send back the keys, to get rid of
the pesky mortgage. Nothing to do with fuel prices.

And that is what got the banks into so much trouble as the CDOs which
were an insurance policy in effect sent them broke.

Bazz, I have an Economist app on my Ipad, which is about various
country figures and the figures are a couple of years old, but
quoted as around 1.2 trillion for our GDP. So 1.3 trillion should
be close.

Yes oil prices matter, but they are not the only thing that matters.
America crashed when many things came together, which had been
bubbling under the surface for a while. GM did not get into trouble
overnight, it had been building up for a crash. The GFC forced the
issue onto the table.

The turnaround happened for a number of reasons too, not least
Bernanke's stimulation, which has made a huge difference.

Recessions as such are not such a bad thing. They clean out some
of the dead wood and as Buffett says, its when the tide goes out
that we see who is swimming naked.

At the moment a lot of companies in the US are thriving due to
record low gas prices, at 2.50 $. In Asia they have to pay 14-15$
for the same gas. Already fleets of trucks are being converted to
gas, stay tuned.

My problem with your pet theory is that you only focus on energy and
seem to ignore all the rest. That is simply not reality

Yabby said;
My problem with your pet theory is that you only focus on energy and
seem to ignore all the rest. That is simply not reality

Possibly, but I think it is the one overriding parameter that affects
all others.
"They" can play all sorts of games with money but without energy
nothing but nothing happens.

Anyway, an interesting discussion and as that $1.2T figure looks to be
correct and allowing for my approximate figures then we can watch and
see just how much trouble our non mining sector is in.

Cheers Bazz

*"They" can play all sorts of games with money but without energy
nothing but nothing happens*

Well yes, without energy, life as we know it, stops. Back to
Daisy the cow and 5 acres, which is actually not such a bad way
to live, IMHO.

The thing is, don't try to use energy as an excuse for everything,
for of course it is still available and people are constantly
developing more efficient ways to use it. Jobs and economic growth
can happen with service industries which use very little energy.

As the list of countries showed, some are doing very well with
present energy prices, so its clearly not all down to energy.

On Monday for instance, we had a public holiday here in WA. I
went to the local roadhouse and he was just busy closing the doors.
It's a country roadhouse, so not that busy. The owner explained that
he could could not pay people 40 bucks an hour to sell the odd
2$ cool drink, as it was double time by law for any staff. So he
closed, as the numbers did not stack up. Now I know plenty of women
who would have loved to work a few hours for 20$ an hour, but Govt
legislation prevents them from doing so. The result is less
economic activity and you can't blame energy prices on that one,
just political stupidity.