Unfortunately, the political climate in Australia is so utterly deplorable that it can’t help but have an impact on the economy, and therefore the stock market.
Successive governments have created a system that results in an excessive amount of capital flowing into the property sector. Investors have been rewarded by speculating on land, rather than investing in longer-term productive enterprises. Commodity-based income underwrites this national pastime, which is why the commodity/housing nexus is so important to ongoing growth.
But it has left us with a foreign debt of $1 trillion, and the continued selling off of assets to fund our property obsession. As a result, we have a chronic current account deficit. In the year to 30 June 2018, the deficit was around $50 billion.
Instead of facing these issues, Australian politics is tearing the country apart. One of the chief culprits is climate change. Climate change and what to do about it has been a key destabiliser of national politics since it increasingly became a political issue from around 2007.
The Rum Rebellion is a libertarian voice. While we think all governments are corrupt and self-serving, out of principle we particularly abhor the ‘government knows best’ views emanating from the left of centre.
The adult climate change zealots are creating the fear their cult leader so desperately wanted to cultivate.Last week we saw one of those unpredictable side effects.The climate strike. The brainwashing of our youth…
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This ‘inflate-or-die’ show has a long season ahead. Bailing out the speculators is just a warm-up act. And $200 billion is hardly enough to buy a box of popcorn. Our guess is that they will…
The major news over the weekend continues to be geopolitical. Trump has hitched his presidency to the stock market. This is a very risky and dumb move, in my opinion. It just gives the establishment…
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That’s the trouble with fake money. It creates fake wealth (notably in stock prices) while real wealth creation (in sales and profits) goes down…
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