If you have money at risk in asset markets then I suggest you listen to and view the below longish presentation in full. It may be the most important hour for your financial health of your lifetime. It is a presentation by economics Professor Ross Garnaut, former economic advisor to Bob Hawk and Ambassador to China and Peter Jonson, former head of research at the RBA and Head of the Melbourne Institute of Economics. Both have also held various senior corporate roles and nicely compliment one another politically as well.
These two thoroughbreds of the Australian economy have seen it all before several times over. In this presentation they outline the severity of risks surrounding Australia’s economy as the mining boom winds down in a world of competitive devaluation, as well as what we must do to avoid a serious economic accident.
The podcast is here. The Garnaut PDF presentation to follow is below. And the Peter Jonson story is here.
Many of the points will be familiar with MB readers:
- Chinese metal and energy consumption is set to slow
- we’ve over-invested in bulk commodities and a bust is coming
- the dollar has been far too high for far too long
- non-mining tradables must be resuscitated
- interest rates must fall heavily or Tobin taxes be installed to bring the curency to heal
- a long period of wages restraint is needed
- housing and government spending are not the answer given constraints on the external payments.
When one looks around at the quality of our current leadership, it’s hard to avoid a dark conclusion.
Monetary Policy Ross Garnaut Uni Melb 240513v1.pdf by Timmy Carey
