Category: Economics

1-30 out of 59 results.

Cash rates are already too low to contain inflation - why central bankers are in a pickle

The tremendous 2-year rally in share markets (even after this week's mini-fall) has been based on the assumption of several more rate cuts soon. Even if inflation is back to target (it isn't yet), current cash rates are already too low to contain inflation in Australia, the US, and other markets, Be careful what you wish for - the only reason for rapid rate cuts would be a sharp recession - and nobody wants that!

Ashley Owen Dec 20, 2024

Financial MarketsDebtGovernment – deficits, debtBonds

Who wants to buy US debt? (lend to Uncle Sam?) Most of the world but me! Who’s buying, selling, why?

Just about everyone is rushing in to lend more money to the profligate US government – except China, Russia, Iran (and me). China has dumped $413b of US debt (one third of its peak holdings) since Trump started his trade war in 2018, and accelerated since Russia’s invasion of Ukraine. But the UK soaked up all of that and more, increasing its holdings by $515b.

Ashley Owen Dec 13, 2024 4

Commodities & MiningExports, tradeChina

China’s 4-year trade war with Australia is over. It was the wake-up call we needed!

It was a much-needed wake-up call for Aussie exporters to diversify into other markets and reduce their heavy reliance on China. China's share of exports fell from 42% to 32%, taken up by increasing exports to the rest of Asia, and USA. Australia's exports continued to

Ashley Owen Dec 08, 2024

EconomicsSocial & EnvironmentalAustralian economyPopulation, demographics, immigration

Big changes in the world since Trump 1.0 – Part 1: Shape & distribution of Economic Growth

In the 8 years since the start of Trump’s first term, the global economy has changed fundamentally. Part 1 looks at big changes in the shape and distribution of economic growth: There are 600 million more people in the world. That's more than the entire 19th century! Populations are aging everywhere. The global economic pie is US$10 trillion larger.

Ashley Owen Nov 24, 2024

Real Estate and PropertyInflationInternational shares

House prices -v- other Real Assets part 2: Microsoft & US shares

House prices have soared – but that’s mostly just inflation due to continued debasement of paper money. Compared to other 'Real Assets', house prices have fallen in value over time. Case in point: US shares.

Ashley Owen Nov 15, 2024

Commodities & MiningReal Estate and PropertyInflationMoney

The house price myth: Sydney house prices -v- other Real assets part 1: Gold

House prices have soared to astronomical levels in recent years, but have they really? No. Only if you measure them in terms of the increasingly worthless paper money that governments are deliberately debasing. Comopared to other Real Assets, house prices have actually fallen in value! For example: gold. &

Nov 13, 2024 2

Financial MarketsInflationInterest ratesAsset classes, asset class returns

October 2024 snapshot: shares & bonds fall as Trump takes lead in polls

Here’s my snapshot on global markets for Aussie investors – including my Top 5 factors moving markets. What is the big policy difference between Trump and Harris that is moving markets? Why have gold and bitcoin been the best asset classes this year? Will the Fed and RBA cut rates this week?

Ashley Owen Nov 04, 2024

Commodities & MiningFinancial MarketsChinaInflationInterest ratesAustralian shares International shares

September 2024 snapshot: Fed’s first rate cut + China stimulus boost markets – is it enough?

Here’s my quick snapshot on global markets for Aussie investors Essential 1-page chart covering share markets, cash rates, bond yields, and FX + my Top 5 factors moving markets

Ashley Owen Oct 01, 2024 4

InflationCommoditiesInterest rates

Gold price pointing to US inflation rising next year - the Fed may not be done yet!

Gold has been the best performing asset class this year, but what is it saying about the outlook for US inflation? It is pointing to rising US inflation in the year ahead, so the Fed may not be done yet with rate hikes. This would be bearish for US and global share and bond markets. How does this sit with fears of recession in the US? Why I'm still bullish on US shares and gold - for now.

Ashley Owen Sep 23, 2024

InflationInterest ratesInternational sharesRecessions

Let the US rate cuts begin! Usually good for shares, but it will NOT be plain sailing!

In rate cut cycles, shares have usually posted higher returns, but also higher volatility The big issue is inflation - has it been solved or will it revive like in past cycles? With monetary policy now being eased, can we rely on Trump or Harris for fiscal restraint to contain inflation?

Ashley Owen Sep 18, 2024

EconomicsFinancial MarketsAustralian economyInflationInterest rates

5 Reasons the RBA is not cutting rates like the rest of the world - Why I'd rather NOT see rate cuts

Several other countries are into their second rate cut already - why hasn't the RBA cut rates yet? Here are 5 fact-based reasons When will we get rate cuts here? Why I am NOT looking foward to rate cuts!

Ashley Owen Sep 14, 2024

Commodities & MiningCommoditiesExports, tradeAustralian shares China

Iron Ore – biggest driver of ASX market returns, profits & dividends – where are we now?

The iron ore price is the biggest driver of ASX market returns, profits and dividends, and the biggest contributor to the wealth of all Australians, but iron ore prices have sunk back below $100, taking the big miners with it. Where are we now in the cycle? Why I am bearish short term but reasonably bullish longer term. How I found a 'thousand-bagger' but am no longer invested.

Ashley Owen Sep 05, 2024 1

Financial MarketsInflationInterest ratesAustralian shares International shares

August 2024 snapshot: Shares hold up - still waiting for US rate cut(s)

My essential quick snapshot for Aussie investors What happened in investment markets and why? Who were the winners and losers in global and local share markets?

Ashley Owen Sep 01, 2024

Stock storiesAustralian shares MoneyCurrencyAustralian economy

Australia’s big banks: Origin of the Species, or ‘Survival of the Fattest!’

Ever wondered where our big dinosaur banks came from, and how they got so big? And why they are all virtually the same? How Australia became the richest country in the world per capita - without a central bank, without a national currency, and without bank regulation? How the dozens of small, independent, competitive banks became the big-4 government protected oligopoly we have today?

Ashley Owen Aug 15, 2024 2

Stock storiesAustralian shares MoneyAustralian economyFinancial Markets

Labor’s attempt to nationalise all banks in Australia!

Australians have always had a love-hate relationship with their banks. (OK, so it’s mostly hate). But it was not always the case. Believe it or not, there was a time when the Australian public loved their banks so much they kicked out a Federal government that was trying to close the banks down! Here is the remarkable story of Banks -v- Politics, Capitalism -v- Socialism right here in Australia.

Ashley Owen Jul 21, 2024

Stock storiesAustralian shares MoneyFinancial Markets

Which Bank? . . is winning the Battle of the Banks?

Quick 2-question Quiz on Aussie Banks - Q1 - Which of the big Aussie banks has had the largest % share price gain this year? - No it's not CBA, despite all the media attention and hype. Q2 - Which of the big banks has been the best for shareholders over the past one, two, and three decades? - No its not CBA either, despite the widely held belief that it is!

Ashley Owen Jul 17, 2024

Government – deficits, debtEconomicsFinancial Markets

Trump -v- Biden: Economic Report Card on their first terms – how did they rate?

Putting aside personalities, politics, and hair products, what are the facts? What were the actual economic outcomes in each of their first terms? How do they rate on seven key outcomes for investors?

Ashley Owen Jul 11, 2024

Wars & military conflictsExports, tradeChinaAustralian economyCommodities

Geopolitics case study - China: largest export customer + potential military threat - a problem?

Our largest export customer and source of wealth & prosperity - also a potential military threat - is this a problem? My answer is no, but for reasons you may not expect. Here is why I am bullish on Australia’s continued resource-based prosperity as global tensions escalate. Australians have been masters at turning geopolitical shifts and crises into economic advantage!

Ashley Owen Jul 03, 2024

Exports, tradeAustralian economyAgricultureCommodities & Mining

RBA Deputy Governor opens speech with my chart!

A bit chuffed this week. RBA Dep Gov opened his keynote speech at a major economic forum - with one of my charts. What does he see as Australia's three main sources of wealth and prosperity (and why they matter in future)? How does he see monetary policy being managed in future? What are his observations on Australia - as a 'Stranger in Paradise'?

Ashley Owen Jun 28, 2024 2

Australian shares International sharesBondsAsset classes, asset class returnsInflation

May 2024 Snapshot: Inflation, trade wars, but shares stronger. How is your 2023/4 year shaping up?

May 2024 Snapshot: inflation sticky, trade wars escalate, but shares heading for another good year. How is your 2023/4 year shaping up?

Ashley Owen Jun 02, 2024

MoneyRetirement planningInvestment & Wealth Mgmt

‘What’s your Number? Part 2: 17 key factors driving ‘How much do I need’ & ‘How much can I spend?'

Here are 17 key drivers that determine 'How much do I need to retire', and 'How much can I afford to spend?' How do they work, and how do they apply to you? This handy guide will help you come up with your own Number that suits your needs and goals.

Ashley Owen May 14, 2024

MoneyRetirement planningInvestment & Wealth Mgmt

What's your Number? Part 1: 'How much do I need to retire?', 'How much can I afford to spend?'

Here we tackle these difficult questions, and similar questions like: 'When can I afford to retire?' 'Will my money last as long as I do? Here are the two key Numbers to tackle these questions. Plus two quick tests to help measure progress toward your goal.

Ashley Owen May 10, 2024

BondsGovernment – deficits, debtAustralian economyEconomicsChina

The Debt Olympics - How do we rate?

Australia and Australians loaded up on debt in the GFC and again in Covid, but how do we stack up against other countries? How do we rate on: Government debt? Corporate debt? Household debt? Is debt good or bad? When does it become a problem? The answers are probably very different to what you may have thought.

Ashley Owen May 07, 2024

International sharesBondsAustralian shares Asset classes, asset class returnsInterest ratesInflation

April 2024 snapshot - rate cut hopes finally dashed - is this the big one?

Here is my essential 1-page snapshot for Aussie investors - covering Australian and US share markets, short- and long-term interest rates, inflation, and the Aussie dollar. Share and bond markets fell back a little as investors finally realised that central banks are not going to cut rates hard and fast. 'Is the is the start of the big correction?' - or 'Are we done for now?

Ashley Owen May 02, 2024

Managed fundsInternational sharesExchange Traded FundsBondsAsset classes, asset class returnsInflation

The Low Inflation era of great returns is over. Investing just got a whole lot harder!

Investors enjoyed unusually high returns in the past couple of decades because EVERY asset class posted above average returns when inflation was low. A blind-folded monkey with a dart board picking any random mix of asset classes would have done well! But that era of great returns from low inflation is over. What types of assets do best in different inflation conditions? What is the best inflation hedge? How to build long term portfolios for high(er) inflation?

Ashley Owen Apr 16, 2024

International sharesBondsAsset classes, asset class returnsAustralian economy

March 2024 Snapshot - Shares keep rising despite strong economy + sticky inflation

March 2024 snapshot – Fed + RBA warn inflation not yet contained, but shares keep surging Here is my essential 1-page snapshot for Aussie investors – What is happening in local and global investment markets and Why.

Ashley Owen Apr 01, 2024

Exports, tradeChinaCommoditiesCommodities & Mining

Chinese Steel Production - the Sydney Harbour Bridge Index

China builds another 'Sydney Harbour Bridge' worth of steel every 10 minutes! That's 26,000 Harbour Bridges per year - with our rocks. China's steel production has been single biggest driver of Australia's prosperity this century. But with China's construction market collapsing and economy stagnating, how will that affect us? ·

Ashley Owen Mar 25, 2024

RecessionsAustralian economyInterest rates

Company insolvencies up 100%! - 3 reasons not to panic

Yes, company failures are up 100% - but here are three reasons not to panic Insolvency rates tell us about the Business Cycle - Where are we now? Where to next? Which industries are under most pressure? Why the next recession will see fewer company failures than past recessions Why I'm bullish on Aussie companies as a whole, recession or not

Ashley Owen Mar 21, 2024

MoneyInflationCommodities

Gold: Curious case of the '31-year itch'?

Gold is hitting new highs lately, so everyone is looking to jump in. It's time to step back for a moment and look at the big picture: Gold goes through regular 31-year cycles - so where are we now in the cycle? Why gold is a lousy inflation hedge most of the time. Is it cheap or expensive? When it is 'good value'?

Ashley Owen Mar 15, 2024 2

Wealth, InequalityPopulation, demographics, immigrationAustralian economy

Australia's shrinking growth - mostly just population growth

Australia’s economic growth has been increasingly reliant on population rather than real reforms to improve productivity and living standards. It has been deteriorating for several decades through governments of all types. Here is the Big Picture you will not find anywhere else.

Ashley Owen Mar 07, 2024

‘For many years, Ashley has been my go-to source of information and analysis on what’s going on in financial markets and why.’

“Ashley has an encyclopaedic knowledge of the markets – I call him Mr Google!”

Noel Whittaker, AM – Australia’s best-known personal finance writer, columnist, and media commentator for the past three decades. He has written more than 20 books on personal finance, his columns appear in almost every major Australian newspaper, and he appears regularly on radio and TV as an expert on finance and investing. Noel Whittaker AM

“Over the past 20 years, Ashley has been an invaluable assistance to me, as a reliable source of unbelievably strong and interesting data, and many good investment ideas.”

"The depth and quality of Ashley’s research and analysis of investment markets is the best in the business.”

Dr Don Stammer - Australia’s most respected economic writer, commentator, and speaker for the past 40 years, with a distinguished career including the Reserve Bank of Australia, Chief Economist at Deutsche Bank Australia for 21 years, chair of nine ASX companies, plus numerous non-listed and not-for-profit boards. Read more

“What sets Ashley Owen’s analysis apart from investment banks and the financial press is his deep fact-based understanding of long-term financial data, rather than getting caught up on the daily noise over issues that may generate trades or sell newspapers today, but will be irrelevant and misleading two years from now.”

Hugh Dive, CFA. Chief Investment Officer, Atlas Funds Management, and frequent expert commentator quoted in the AFR.

“Ashley’s unique fact-based analyses and insights into Australian and global markets are always worth reading. He has an incredibly deep and comprehensive store of financial markets data.”

Chris Cuffe, AO – One of Australia’s best known and most experienced investment managers – former CEO of industry giants Colonial First State, then Challenger Financial; founder and Chair of Australian Philanthropic Services, and Third Link Growth Fund; current/former chair, director and/or investment committee member of numerous funds including UniSuper, Argo Investments, Hearts and Minds Investments, Paul Ramsay Foundation, and many others. Read more.

Ashley is one of the best writers and thinkers on financial markets in Australia. His unique analysis and research is always fact-based and insightful, not the usual uninformed market noise and waffle that infects the mainstream financial media.

Graham Hand - Editorial Director of Morningstar Australia, including Founder/Managing Editor of FirstLinks, Australia’s leading newsletter and publishing service on wealth management, superannuation, and personal finance.

Economics

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