The RBA’s reasoning is spot on

Here is Glenn Stevens’ statement:

At its meeting today, the Board decided to lower the cash rate by 25 basis points to 3.25 per cent, effective 3 October 2012.

The outlook for growth in the world economy has softened over recent months, with estimates for global GDP being edged down, and risks to the outlook still seen to be on the downside. Economic activity in Europe is contracting, while growth in the United States remains modest. Growth in China has also slowed, and uncertainty about near-term prospects is greater than it was some months ago. Around Asia generally, growth is being dampened by the more moderate Chinese expansion and the weakness in Europe.

Key commodity prices for Australia remain significantly lower than earlier in the year, even though some have regained some ground in recent weeks. The terms of trade have declined by over 10 per cent since the peak last year and will probably decline further, though they are likely to remain historically high.

Financial markets have responded positively over the past few months to signs of progress in addressing Europe’s financial problems, but expectations for further progress remain high. Low appetite for risk has seen long-term interest rates faced by highly rated sovereigns, including Australia, remain at exceptionally low levels. Nonetheless, capital markets remain open to corporations and well-rated banks, and Australian banks have had no difficulty accessing funding, including on an unsecured basis. Share markets have generally risen over recent months.

In Australia, most indicators available for this meeting suggest that growth has been running close to trend, led by very large increases in capital spending in the resources sector. Consumption growth was quite firm in the first half of 2012, though some of that strength was temporary. Investment in dwellings has remained subdued, though there have been some tentative signs of improvement, while non-residential building investment has also remained weak. Looking ahead, the peak in resource investment is likely to occur next year, and may be at a lower level than earlier expected. As this peak approaches it will be important that the forecast strengthening in some other components of demand starts to occur.

Labour market data have shown moderate employment growth and the rate of unemployment has thus far remained low. The Bank’s assessment, though, is that the labour market has generally softened somewhat in recent months.

Inflation has been low, with underlying measures near 2 per cent over the year to June, and headline CPI inflation lower than that. The introduction of the carbon price is affecting consumer prices in the current quarter, and this will continue over the next couple of quarters. Moderate labour market conditions should work to contain pressure on labour costs in sectors other than those directly affected by the current strength in resources. This and some continuing improvement in productivity performance will be needed to keep inflation low as the effects of the earlier exchange rate appreciation wane. The Bank’s assessment remains, at this point, that inflation will be consistent with the target over the next one to two years.

Interest rates for borrowers have for some months been a little below their medium-term averages. There are tentative signs of this starting to have some of the expected effects, though the impact of monetary policy changes takes some time to work through the economy. However, credit growth has softened of late and the exchange rate has remained higher than might have been expected, given the observed decline in export prices and the weaker global outlook.

At today’s meeting, the Board judged that, on the back of international developments, the growth outlook for next year looked a little weaker, while inflation was expected to be consistent with the target. The Board therefore decided that it was appropriate for the stance of monetary policy to be a little more accommodative.

In short, the world sucks right now, bulk commodities have sunk, the resources investment boom is almost over and will be much smaller than thought, you can’t believe ABS unemployment figures, the dollar is too high and there’s no danger of inflation. I apologise for doubting!

Comments

  1. This and some continuing improvement in productivity performance will be needed to keep inflation low as the effects of the earlier exchange rate appreciation wane.
    REAL productivity is going backwards…more rules, more regulations, more costs to employ all mean any real productivity measure should be headed for the ditch.

    The Bank’s assessment remains, at this point, that inflation will be consistent with the target over the next one to two years.

    Now contrary to all and sundry opinions what the RBA is saying here is that they believe they can cut without a significant fall in the A$

    So why are we cutting again? Straight answer is to stimulate retail spending and house prices.

    • Rubbish. They mention the dollar very explicitly. There is zero inflation risk at the moment and the labour market is weakening, making it even less so. There is also a good move on in prodcuctivity and it will continue as the mining boom slumps.

      • HnH
        Rubbish??? Pull you head out of your ideology and look at numbers. I’m not the only one in Aus who actually looks at the ABS figures for the CPI. The RBA has previously recorded in its minutes the dangers of rising imported prices.

        We have, and will continue to have, domestic inflation. The powerful in the society…Unions, Businesses, Public Servants, Utilities etc make sure they are adequately compensated even in a ‘soft’ environment’
        To suggest containment of inflation in the target range necessarily presumes that the dollar is stable.

      • Not arguling about official figures capturing price rises. The truth of the matter is contained within the ABS figures as published.
        You have Rumples posting on just the problem I’m pointing out.

      • “credit growth has softened of late and the exchange rate has remained higher than might have been expected, given the observed decline in export prices and the weaker global outlook.”

        JMO They’re not saying the exchange rate is high and we’re sure as hell going to fix that.
        It can be interpreted that teh exchange rate is extremely sticky and we can get away with a lowering of interest rates causing any significant fall in the dollar that would cause runaway imported inflation.

        Most of the statement looks, to me anyway, to be skewed towards that observation.

      • Is it possible that the RBA are deliberately trying to gradually bring in imported inflation by lowering the AUD ? Lots of 0.25% changes so that no one gets too scared and the AUD does not fall too much too quickly.

      • Tend to agree Flawse. Suspect the RBA is strongly a swings and roundabouts player when it comes to the AUD, moderate the AUD a little, but no too much – also takes a bit of heat off RBA itself.

        RBA does not want to see a low AUD.

  2. * “historically high” ToT
    * Low unemployment
    * Rising house prices

    Looks like a formula for a rate cut to a man with poor maths skills

    • That’s a very selective list. House prices have risen a bit. Unemployment is clearly worse than official stats and falls in the ToT are a massive problem because we spent the windfall.

      • I never believed the official CPI reading by ABS and always think that the true rate should at least double it.

      • It isn’t that unemployment data is suspect. The most common measure for unemployment only reflects those without a job that have actively searched for work in the survey period. It isn’t a perfect method but it makes sense most of the time, that is, when the participation rate is relatively stable. The problem lately has been a falling participation rate, meaning the printed unemployment rate isn’t properly reflecting recent job losses. There isn’t anything wrong with the data, it just needs to be read correctly.

      • Ok HnH, How about we add to the list

        *Record new car sales
        *Bouyant auction clearance rates
        *Strong online retail index
        *inflationary effects of carbon pricing yet to come
        *solid GDP number

        Yeah, nah still looks like poor maths

      • The inflationary effects of carbon pricing are not backward looking!

        Oh and all for a grand total of a 0.5c drop in the AUD.

        Madness.

      • i would add to the list, strengthening GDP and rising inflation. ( see yesterdays MI reading)

        yep, cut those rates governor!

      • really? i told you this time last year, when the asx200 was 3900 points, the stock market was going to rise. you told me it was going to keep going down. if the market can hang on to these gains it will close at 14 month highs. so who is the contrarian indicator again?

        if the RBA is going to to keep cutting rates while UE is falling and GDP and CPI are rising you better just put all your money, and what ever you can borrow, into stocks.

        market is up, so im happy, bears are wrong…..again, but these arent the sort of reasons i like to see equity markets rising.

  3. Savers are sacrificed again. I propose a boycott movement for this stupid move.

    NO property buying
    NO shopping
    NO additional income / business activity
    NO hiring

    To

    get-even to this corrupt government so that they won’t get anymore than necessary of my income tax, GST and stampt duty, payroll tax and local council rate, etc.

    Let’s all capital owners revolt 😉

    • It’s funny, you used to get the retiree lobby groups squeal every time rate cuts were delivered. They are so quiet these days. I wonder why!

      • They are all property infestors now, sitting in their retirement homes and negative gearing against god knows what 🙂

      • Well the retirees have got their bribes in the last couple years both by Coalition and Labor governments e.g. increased pensions, a few one-off payments etc

      • Asset deflation is the greatest fear of the world! Central banks have shown thy will rain money from the sky before this happens.

      • Indeed. In the boomers’ minds, they are world. And for as long as they effectively hold the global reins, this will be the reality for all younger generations. They are unable to acknowledge that their prosperity, in large part, is the result of a unique confluence of historical forces. But this is the generation to whom everything was served on a platter, should one really expect anything different?

      • thats because they pulled all their cash from savings and are keeping it under the mattress in order to qualify the pension

      • DelraiserMEMBER

        I fear you will be proven right…..we have a bad habit of repeating the mistakes of others

      • Damn, nobody told me to buy gold in 2007.

        Best advice I read recently: “Lower your expectation.”

      • I was buying PMs in 2006. Plenty of good reasoning in various blogs.

        This is still good advice I reckon.

        Each interest rate cut is a marker on the road to inflation.

        Unfortunately they only understand one useless strategy in politics and banking at present.

    • Well hang-on there. Holding cash isn’t a licence to earn an income is it? Best you can reasonably expect is an inflation linked return and their ain’t much inflation.

      (subject to flawse counter points of course)

      • Well, yes it is aj. That’s how the monetary system is designed.

        “Savers” are granted the power to earn a certain rate of usury prescribed by banksters; banksters are granted the power to earn MORE usury on their loans of electronic digits, than they pay out to said “savers”.

        Wonderful system. For banksters.

      • But don’t forget that interest is taxed so it ends up being less than inflation so savers are loosing money given that real inflation is higher than the CPI number.

  4. This will give the banks another chance to increase their net interest margin and to maintain their profits.

    Seems strange that it was only international developments that caused the rates to decrease. The RBA must like the Aust. economy the way it is.

  5. I’ve a couple of questions:

    What to stop freed up liquidity from flooding into the property market?

    How many more cuts are needed to actually bring down AUD?

    Thanks

    • They should be using macroprudential policy as well. That means raising LVRs etc when cutting rates. Either that or cutting negative gearing.

      That is if there is a need to break the nexus between rates and credit growth. It may already be busted.

      • Don’t worry – the boomers don’t need it any more (as they move into their no income phase) so they’ll be more than happy to scrap it.

        They’ll need those tax dollars to pay for their dementia 😉

      • You just crossed the line into spruiker territory with that one Pete. How’s that look with 2-3% gross yields? Welcome to Melbourne.

      • See! Yields may go to 2 to 2.5%…property prices double! Off to the races!
        This makin money is easy stuff!

      • “They should be using macroprudential policy as well”

        Yeah they should….

        …except..oh yeah…they aren’t…

      • They should be using macroprudential policy as well. That means raising LVRs etc when cutting rates. Either that or cutting negative gearing.

        .. should be.. Could be.. But they didn’t, did they?

        This is where you are wrong in heaping the RBA with praise they don’t deserve.

      • Yes,

        The Australian rate growth Nexus is showing some damage to its drivetrain but it is probably still more serviceable than the Japanese, US and European models.

        Hopefully, it is nice and busted as that will demonstrate that the average Australian is finally getting the message about the dangers of debt.

        That the RBA is still laying ‘debt’ bait for the unwary is a disgrace but do we really expect more from the RBA – they are a one trick pony?

        Macroprudential controls by the RBA?

        Very droll. It is too hard to obfuscate, tin plate and cover your tracks using macroprudential controls. Very important when trying to maintain a veneer of independence.

        ZIRP or near enough (2% for Oz) is the controlled flight into terrain of central banking.

      • pfh…sorry to belabour the point. The only thing that makes our situation better is our ability to flog off the assets of our richness of resources.

        Without that little number on our Balance Sheet we’d have been stuffed and roasted long ago.

      • Indeed, though I was only referring to whether there remains any life in the old trusty debt driven growth model down under.

        Clearly the RBA has not given up on it – yet – notwithstanding HnH’s sterling efforts to find some silky purse amongst the ears of piglets.

      • i like the capital ratio tool too HnH. chinese are great at using this as a macro tool. soros talks about floating reserve requirements all the time and perhaps we need floating LVRs too.

    • If targeting the AUD by cuts is what they are doing we will end up being in a lot of trouble.

      Nothing is to stop lending surging

      • H&H,

        I just don’t feel it in my bones, I think it is becoming increasing likely that people will start to gear up again. That said bigger issues from OS could interrupt

      • I’m just waiting for the official release of the new song by Status Quo to confirm
        “Up Up, Time to Lever Up”
        Sponsored by CBA and Ray White.

      • HnH Re the structural shift you published some graphs a week or two ago showing consumers favoured destinations for money…cash savings, debt repayment, RE, ….I can’t find it but it is relevant.
        Any quick suggestion?

      • I made this comment in reponse to those graphs

        “Note…if you do get a quick shift from saving to spending it is going into Real Estate not into shares or investment in any decent wealth producing enterprise. We can hardly blame people for this attitude.”

        Maybe I’m more married to the notion now than I was then! I reckoned that’s what the graphs showed.

        So yes we need a lot of other changes than just to interest rates. Where we differ is that you think lower IR’s are good even on their own . I view it as digging a deeper hole.

        Anyway ‘Que sera!’

      • I sit amongst a number of property tragics in Sydney who are preparing to load up and move more funds into established houses and flats on the expectation that capital gains will flow as rates fall.

        Expectations are that jobs are safe, incomes rising and returns on cash declining – therefore it’s a no brainer in their minds.

    • Quick answer Hewell

      What to stop freed up liquidity from flooding into the property market?…NOTHING!

      How many more cuts are needed to actually bring down AUD? Who knows but i’ll bet 0.25 doesn’t do it. it hasn’t before so i see no reason why it should now.
      Just my two bob’s worth

      • That’s what I feared…
        Really hope someone from somewhere could do something about this mess.

  6. The RBA’s reasoning is sound, unfortunately though our MP is ransom to a bunch of fruit cakes at the Fed. Commodities have tanked, ToT tanked, China slowing down. In the course of normal circumstances our dollar would already have fallen sharply to 80-90 cents to compensate and kick start the non mining sectors of our economy, also allowing rates to stay higher and take steam out of the dangerously inflated housing market. Unfortunately the Fed pursuing ZIRP means our dollar is still above parity (attractive carry trade and forex reserve diversification) and we have to follow them down to the ZIRPocalypse. Isn’t it great when a soverign nation isn’t in control of it’s blunt instrument?

      • Probably a good time to buy stocks with high and sustainable yields. Healthcare stocks would look good too if they hadn’t risen to the moon in the last six months.

      • Meh i did the trial, and yes it is pretty good. I would recommend it to others, but i like following my own opinion, that way i can be angry at myself when i’m wrong ;-). I see you guys went long on KAR recently (i was on here advocating it at $3.00), and also you guys cover SRX, another i have mentioned on here previously, that has run very very hard in the last month.

        I do like the way the analysis is structured. Basically macro overlay to stock selection, which i think everyone should do. No point looking at the fundamentals of any stock without having some broader picture of the industry structure it operates in or the overall economy.

      • Does beg the question, though: can high and sustainable yields exist in a deliberately inflationary world?

        Food for thought (and part of my Stagnation Thesis, that i keep talking about…sorry…)

      • I think history suggests equities do better than most asset classes in deflationary or inflationary periods for those prepared to hold them. Is the main premise of your stagnation thesis ageind demographics in Westernised economies??

      • JC…my thinking is prosperity and demographics in those countries that have been supplying us with cheap goods and allowing us to live the high life for the last 50 years!

        There’s along-term cycle in the affairs of nations coming to an end. Time scale is the only unkonwn as far as i’m concerned

      • Hi Burb

        Good question! Thinking just now I’d say ‘no’. Bernanke is quite openly saying he is deliberately trying to induce inflation. Hence ZIRP which equals wildly negative RAT rate.
        The self-appointed economic hierarchy, Krugman et al, are calling for inflation rate targets to be much higher.

        By the time we get round to thinking about yields to break the inflation cycle this time inflation and debt will have reduced society, as we know it, to ashes.
        I’m with Marc Faber on this one.

    • JC – If they want to lower the AUD joining the ZIRP (or close to ZIRP) party with our current economy is dangerous.

      If that’s what they want they need to be segregating funds, selling AUD, maybe taxing a la Brazil. Igniting another domestic lending binge is not was Australia needs atm.

  7. Hmmm… I always knew it was a central banks (not-so) secret intension to create asset bubbles.

    Watch wages and housing prices take-off from here. Mark this date 1 October 2012.

    Suppose it’ll just mean a bigger crash further down the road, however I’m not complaining. I’ve personally geared up for RBA over-exuberance and here she is.

    • i admire people who can proft from the system but at the same time realise it sucks. I would jump in with you, but just dont know how much they can reinflate the ponzi, let alone return big enough gains to offset the very high cash loss. I’ve saved 200gs in cash and cap gains losses over the past 2 years by not buying, but then I missed out on 600gs of gains over the previous 6 years. Who knows what the next 5 years holds?

      • Property will likely go up a bit now with Stevens following the Bernanke example. Should be a good 6 months for investing in all sorts of things. Or unloading some things to the greater fool. This economy won’t be fixed until drastic liquidation comes in. Then those in power will say yet again ‘nobody saw it coming, it was a black swan event’.

      • yes – its weird how in the grip of a financial crisis a) in the US, housing tanked, shares holding up well b) in AUS shares tanked and housing took off and despite a correction is still in obscene bubble territory

        thats what Fs me off – central banks and govt fiddling has completely turned true value on its head by rorting the financial system. I am coming to the sad realisation that there is no such thing as a prudential financial decision any more because this implies that market forces (eg profit?) dictates value more than govt / central bank preferences and an ignorant herd whipped into a frenzy by corporate funded media.

        very sad, but what can you do? me, I avoid anything that returns a net yield of < 2%, which pretty much rules out any property in a semi decent area in Melbourne. The big 4 and Telstra will at least give me a franked yield of 7% which in theory means less risk as each div payment brings me closer to paying off the investment.

        … but no guarantees, except that RBA and govt will continue to make screwy decisions and probably in favour of banking and housing.

      • No 3d1k…what you have is negative RAT rates. RE market underpinned by both the Govt and the RBA…..get into debt with RE.

      • 3d1k,

        that implies we are in the right place to start with. we arent, asset prices are OBSCENE and the best way to be steady is to get back to sensible price ranges.

  8. another terrible decision and a slap in the face for savers who now have the privelage of more real price deflation. The RBA serves the property and banking industries and their reasoning sucks.

    … quick everyone, go buy another investment property.

  9. So RBA cut by 25bp…

    If they wanted to bring down AUD, they needed much more drastic cut than that. 300bp cut would have been a shocker that could have trashed AUD.

    Now, it looks like RBA is cornering itself to catch 22 situations.

  10. Deus Forex Machina

    FWIW this is why I reckon they cut

    “Looking ahead, the peak in resource investment is likely to occur next year, and may be at a lower level than earlier expected. As this peak approaches it will be important that the forecast strengthening in some other components of demand starts to occur.”

    They know what a hole we might have in our economy in 2013 and given the lead/lag monetary policy/economic growth relationship they need to go now…

    A bit of AUD weakness would help but they aren’t targeting it specifically

    Anyway just my 2c and good job RBA

    • Indeed. The pipeline of projects that have money spent will happen, but can be scaled back, and those in the piplelines that have the cash committed but not yet spent can be stopped. Not to mention multiplier effects from nat gas projects are overly optimistic.

    • DFM – if that is their prime aim what ‘other components of demand’ are likely to kick in. The obvious one in most economies is housing/construction – big employer, big flow-on effect. Can’t see anything else in this houses and holes economy filling the void. Can’t see housing either.

      If the boom ends, we will be no different to others.

      • Housing can more than fill the Holes “hole”, IMHO – it is just an issue of sustainability.

        And if property prices were not already crippling (or majorly inconvenient), then I would pick another surge in the housing bubble.

        But since I think debt saturation is “in”, any reflation, IMHO, will be relatively short-lived.

      • You mean the one Mr Stevens ensured occured to make way for the temporary construction component of the mining boom (which always occurs, followed by oversupply and smashed prices). Great pun, investment hole.

      • Deus Forex Machina

        agree 100% – Australia faces a more difficult economic future than many still grasp

      • Yes. Semantics really, we use ‘boom’ for shorthand reference to (1) prices, which have passed peak (2) investment activity, still to peak. All depends on the scale-back: timing, commodity prices and China. Still a way to go.

      • Yes – very good point.

        We keep hearing about cutting interest rates as offering support to demand, a “little insurance”, providing a boost, yada yada yada, but very little detail on how that mechanism will actually work.

        If the rates/growth nexus is not busted we are talking about the sugar hit of debt growth and asset speculation.

        After all how many legitimate business investment opportunities, apart from speculation, only make sense when rates are cut to the bone.

        As for the household sector, by transferring interest receipts from savers to debtors the real likelihood is that we are draining the one remaining source of potential fuel for consumption activity (those without debt) and handing it to those who may just use it to pay down debt and thereby stimulate no economic activity (balance sheet recession style).

        When mining does slow down – both the investment and the earnings on sales – we will be facing the same problem as everyone else.

        An economy reliant for too long on low interest rates and debt and desperately looking for some new magic pudding to replace mining and to avoid the inevitable.

        The solution, to the extent there is one, is not within the power of the RBA and they should stop pretending that it is.

        The days of a debt fueled economy are over.

        Just saying.

      • Very possible. We’re about to find out how different the OZ economy really is – the rest of the world slashed rates to no avail. Anything can happen.

      • Deus Forex Machina

        there is however an alternative theory that would say that perhaps australian might not rush out an buy houses this time but will take the extra income in the pocket from lower mortgage rates plus the increase in income many get each year, save some and then spend the rest on consumption

        consumption whether its in cafes and restaurants or wherever is still more than 50% of the economy so maybe we might get that???

        just hoping??? 🙂

      • look at there’s your answer Graph 17. Throw onto the graph a couple of interest rate cuts and the natural propensities.

        http://www.macrobusiness.com.au/2012/09/genworths-housing-confidence-report-rises/

        Also look at the past few years…consumption…cars cars cars,,,then Real Estate!

        What’s that old line about doing the same thing over and over again and expecting a different outcome?

        consumption whether its in cafes and restaurants or wherever is still more than 50% of the economy so maybe we might get that???
        50% nah! higher I think!
        In any case that just means more debt!!! Higher CAD more foreign debt or more asset sales. You have to think right through the flow of money.

        I’m serious here….lowering interest rates doesn’t just reduce the weight of all the debt. It’s not just a magic elixir.
        In the case you are proposing you get higher foreign debt and your debt denominated in USD or whatever grows. There is no way out of debt without re-orientation towards a more productive society.
        Sorry but that means dislocation,…i.e. austerity, because we don’t have the savings to pay for the re-orientation.

      • Deus Forex Machina

        i agree – thats why I think rates are going to 2.5% if not lower.

        It’s the debt bomb – perfect world would be the mining/investment/whatever you want to call it boom to throttle back a little so its still a strong positive while households pay down their debt

        we may not get that though

      • so the numbers tell us inflation is then about 18%…what do you propose for interest rates then?

  11. Greg
    We’d need a lot of other policy changes to bring about “As this peak approaches it will be important that the forecast strengthening in some other components of demand starts to occur.”

    For the moment any extra liquidity must inevitably end up in retail or houses. As I’ve tried to point out elsewhere the development of factories etc takes years of planning and perhaps decades of training. The whole economy is tilted to Real Estate and all we are doing at the moment is putting stays under the tilt.

    • “All we are doing is putting stays under the tilt”. Nice turn of phrase, minebot, and so true.

      • dilligence…thanks…but don’t care 🙂 I’m too bloody old 🙂 for this c..p! The message is the only thing that is important and it’s good to see others on the same train!

    • Deus Forex Machina

      Yeah – its a difficult one.

      I’m sure if the RBA could also impact on fiscal policy and where we spend R&D money and things like that they would deploy those weapons too – but they just have monetary policy while the pollies control the other stuff…

      i could go on for hours but I’ll leave it there

  12. Ive had enough of saving, there is little incentive now.

    Coming the next few months if there isnt any big changes in economic situation i will be buying a house.

    Ive been renting in perth for 2 years, have saved up 30% and will be picking up a cheap place to live(this will not be an investment but my home).

    With interest rates as they are it will be easy to pay off…ive tried to hold off for so long but it just doesnt make sense anymore if things arent changing from the top….

    • Renting may not offer long term stability but offers flexibility, both financially and location-wise. And financial flexibility is much more *valuable* than people think. If you cannot properly *value* what you already have…

    • As I posted elsewhere prophet…we (family) bought a house on the Gold Coast on Saturday.
      You save you get it confiscated and everyone sits around telling each other how smart they are that interest rates are so low….Gawdalbloodymighty!!!!!!
      Please forgive the divine imprecation!!!!

  13. Any number of things can go wrong from here, don’t be suckered by the Central Bank:

    1) US attacks Iran
    2) Israel attacks Iran
    3) Japan and China
    4) Riots in China presumably due to inflation
    5) Eurozone breakup – which country will be first take your pick
    6) Fiscal cliff in US
    7) Liquidity crisis (collapse of a another major financial institution or country)
    8) Hard landing in China – wide spread unemployment in Australia (it’s already started). Who cares if the rates are zero if you don’t have a job
    9) Another inflation induced Arab Spring (the pot is still boiling)
    10) Currency wars
    11) US attacks Syria (it’s already happening)
    12) Inflation in the US

    Gee the world is in great shape come to think of it. I might listen to Glenn Steven and go out and load up on debt to buy into a bubble. I know Glenn’s looking after me.

    • Yeah but when one of those or a thousand other things goes wrong…they’ll all say, again, ‘hoocouldanode?’

      • Mirage re No 9 How long do we give Saudi Arabia? 3 months?, 6,12? What comes out of that will NOT be pretty.

      • Flawse the whole region/world is unstable – Libya, Egypt, Saudi, Iran, Iraq and even Israel. It’s hard to know what will spark it and when but as soon as enough people can’t put food on the table, that’s when it will blow. Inflation is such a wonderful thing isn’t it?

      • I think North Koreans have had trouble putting food on their table for some time now. It is hard to know, because North Korea is shrouded in secrecy.

        After the leadership change, and the instability within the regime, nobody should be surprised if the North launches a suprise attack to the South in not so distant future.

        Oh, BTW, they have nukes, too.

  14. When will someone with courage conduct the great purge, the world is full of gutless leadership. We all know it is coming – even the spruikers.

  15. Seriously…. why don’t they just leave the friggin thing alone for 6 months?

    How much Australian productivity is wasted just speculating and spectating on the monthly RBA call… ? A ridiculous waste of time!