Bugger, now Australia is getting affected -world economy

[robm3]

Lots of mining projects getting cancelled at the moment, and our dollar starting to slide.
Basically on the back of revised China growth projects and a predicted commodity slump.
Lots of stories starting to emerge now;

http://www.shareswatch.com.au/blog/economy/where-i...

http://www.smh.com.au/business/weak-australian-eco...

I had hoped we'd be fairly immune by hooking our cart to the Asian mules..

On a positive note we're a handful of weeks from winter and had our best May sun and rain wise since records began (8.5 hours of sun per day, temps of 22).

Edited by robm3 on Monday 21st May 01:54

[robm3]

Pommygranite said:

pilchardthecat said:

Pommygranite said:

We're a good 3-5 from a bust. There's a shed load of cash about, large amounts of cash savings with many having paid down debt and literally thousands of resources jobs.

Ignore the. Panic, it's just the newspapers,unless you live east then you're screwed

http://www.perthnow.com.au/news/wa-threat-to-split...

"There is not an understanding on the east coast how significant the growth of the WA economy is," he said.

"The WA economy is growing at quite a different pace than Australia as a whole and to some extent the strength of the WA economy is concealing the true weakness of the national economy.

"One statistic proves that.

"In the last 12 months there were 50,000 new jobs created in WA.

"China is now Australia's No.1 trading partner (but) WA produces 73 per cent of all of Australia's exports to China.

"To put it in another context, exports from WA to China are about half of the value of all of the USA's exports to China."

Misses the point. Almost all of those exports are raw materials, which China needs to build things to sell to the Americans.

China's mercantilist strategy places them at the mercy of American consumerism, and they will suffer for it. Australia is one step lower in the supply chain, and is even more vulnerable.

Actually you miss the point. A large proportion of the resources buy up is for chinas own infrastructure, not just to sell tat to America. If you look at their internal spend it's huge and their ramping up of cities is vast.

Actually I think all the points are valid. China is slowing down, both in construction and export and Australia is exposed to this. I'm actually in Xiamen right now on at a Buyers Forum with KKR. Lots of peapole talking about this.

[robm3]

pilchardthecat said:

Just wait till their housing crash kicks off properly

this is just a small side effect of the chinese mercantilist over-capacity bubble beginning to burst

I do think a price correction is overdue.
We were sitting on cash (earning 6%) and renting for less than the interest but sadly my wife was desperate for a house so we brought last month.

4 bedrooms, modest house = Aus$1.1m or £700K

Mortgage at 6% (thankfully very small).

I knew in the big picture it was a lousy commercial deal but hey ho.

Oh, you should see the cost of tradesmen as well, a plumber came out to tap a downpipe for a washing machine, 30 minutes work, $240 bill. (£150).