At The Australian Alan Kohler sagely asks how Australia will grow once house prices stall:
What’s needed is Goldilocks tax reform and fiscal stimulus in the US — not too much capital inflow into the US, but just enough to get everyone’s currency down a bit and stuff up Trump’s plan to make America great again at everyone else’s expense by turning America into a current account surplus country.
…Trump is by nature a stimulator — an economic left-winger — at the same time as the Fed is raising interest rates. As in the early 80s, loose fiscal policy combined with tight monetary policy would mean a strong US dollar, which in turn spells trouble for American manufacturers that Trump is trying to make great again, and for central banks everywhere else. It also would mean significant trouble for Australia, possibly recession.
