Find below a new and quite comprehensive report on why the Australian economy faces rebalancing not recession. It’s long and very good and I’m sure all of you are familiar enough with the counter arguments to not have to repeat them point-by-point.
Bloxo acknowledges that:
There are some early signs that rebalancing is gradually happening, although it has been slower than expected. This reflects that it has been hampered by the AUD, which had remained high until recently, and by households that have continued to save more than expected. Asia’s growth has also been weaker than expected, dampening confidence.
But reiterates his bullish case.
My only point is this. As in the case of recent bullish Citibank report on rebalancing, Bloxo assumes the following for mining investment:
In other words virtually no rebalancing is required because the fall in mining investment is gentlemanly, at least before the end of 2014.
Obviously I disagree.
130710 Australia’s R-word – Rebalancing not Recession.pdf by James Woods
