Friday, August 01, 2025
RBA Dep Gov opens keynote speech on trade war impacts on Australia with another of my charts!
On 22 May, RBA Deputy Governor Andrew Hauser gave a keynote address outlining his observations from his trip to China in the middle of April, days after Trump launched his 'Liberation Day' tariff war on the world, aimed primarily at China. As China is by far our largest export buyer, it is our largest source of export and tax revenues, and has been the largest single source of wealth and prosperity for Australians so far this century, he was keen to assess first-hand the likely flow-on effects of the trade war on the Australian economy, and the RBA's monetary policy thinking. The Dep Gov needed a killer chart to open his address, and I am once again incredibly honoured that he contacted me for permission to use another of my charts!
Labor -v- Libs: which side has been better for the Aussie share market?
Looking at share market returns under every PM and government since Federation - right-leaning governments win, with significantly higher average returns than left-leaning governments. Left-leaning PMs presided over the worst return periods for the share market, and also the best return periods. However, most of the big differences are due to lucky (or unlucky) timing, and/or delayed causation from prior governments. Our governments on both sides deserve credit for creating favourable conditions for investment.
Company insolvencies highest in 35 years - and we’re not even in ‘recession’ yet!
Company insolvencies in Australia have soared back to levels not seen since the deep 1990-1 recession. Business is doing it tough - on recession footing already. But the rapidly expanding government sector is doing fine - accounting for almost all of the growth in jobs and economic 'activity' (and artificially suppressing inflation and unemployment numbers), while businesses suffer.
Labor -v- Libs: which side has a better record on Deficits & Debts? Here are the facts
'Left' governments have run deficits more often than 'Right' governments, and the Left have also run larger deficits on average than the Right. But timing is everything! - the Left happened to be in power during the big deficits and debts in the two World Wars, when spending was bi-partisan. My verdict? - Equal points to Left and Right - but poor scores for both post-GFC. Both sides could have used windfall revenue gains to put our house in order to better prepare for global challenges, rather than increase spending and debt.
What drives the Aussie Dollar? -Part 3: the long-term inflation effect. Where is it heading?
Exchange rates are driven ultimately by differences in inflation. Inflation transcends and defeats all attempts to peg, fix, or manage currencies. Why the Aussie dollar has been in long-term decline against the US dollar for more than a century. Why I am bullish that this long-term decline is probably behind us.
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.
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!
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?
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.
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!
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'?
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.
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.
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
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.
Feb 2024 Snapshot - early rate cut hopes dashed but shares surge on confidence from US profits
He's my quick wrap-up of key developments in investment markets in Feb 2024.
Australia's 'Misery Index': Inflation + Unemployment
Australia's Misery Index: Unemployment + Inflation. Where are we now?
Case Study: JB-Hi-Fi: Misunderstood growth star, or the next Myer?
JB Hi-Fi: Misunderstood growth star or the next Myer?
January 2024 snapshot - shares climb on hopes of early rate cuts as inflation falls
January 2024 snapshot - shares climb on hopes of early rate cuts as inflation falls. Essential 1-page snapshot for Aussie investors – covering Australian and US share markets, short- and long-term interest rates, inflation, and exchange rate.
Australia's remarkable population-led growth
Australia’s population just hit 27 million, 18 years sooner than planned. Australia has the highest population growth rate outside of Africa, but it is still the sparsest country on earth.
Reflections on Australia - lucky country for investors!
In Australia we tend to take a lot for granted. Australia is the richest country in the world per capita (a record we have held since 1890) - but why? It's not just resource riches and/or British colonisation - there are plenty of resource-rich countries, and plenty of ex-British colonies that are economic basket cases today. How I personally got lucky - twice - in the great lottery of life.
What drives the Aussie dollar? – Part 1: Interest Rate Differentials
Every day (in fact every minute of every day and night) the value of the Aussie dollar jumps around, seemingly at random.
Why do share markets crash? – Part B: Update on Australia
The simple answer is that the Australian share market crashes (and rebounds) because, and when, the US market does. The US is the largest and most influential market that affects all global markets, asset classes, and investors. What happens on our local market is almost always driven by what happens on Wall Street (with rare exceptions like 1907 and 1951), regardless of local conditions, events, or pricing.
Why do share markets crash? – A: Update on the US
Recessions do NOT cause or trigger share market sell-offs. Nor do share markets crash because, or when, they become expensive. Share markets fall when shareholders en masse suddenly start to expect imminent big cuts to profits and dividends.
Australia v US share markets – it’s our turn next!
Australia and the US have had the best share markets in the world for the past 100+ years, but: Why? Which market has generated higher returns? Which has had the bigger booms and busts? Who’s turn is it next?
Australia’s bounty: 400 years of exports. Is it just ‘luck’? Or masterful ability to adapt and pivot
Commodities matter! More than half of the 2,200+ companies listed on the ASX are miners (the vast majority are explorers with little more than a map, a compass, and high hopes, but a small number of miners do actually produce something).
Australian share market has gone nowhere for 16 years? Is it ‘broken’? Has it lost its mojo?
The All Ordinaries index hit a peaked of 6,853 on 1 November 2007, but it is barely above that 16 years later. Why? Is the local share market in terminal decline? Has it lost its mojo? Is it ever going to get back to growth? Is it time to give up on the local share market and look elsewhere?
Market Monitor - October 2023 wrap-up: Central banks not done yet with rate hikes
Welcome to the Monthly Market Monitor for October 2023. First, here is our quick snapshot of Australian and US share markets, short- and long-term interest rates, inflation, and the AUD since the start of 2020
Inflation is not the same for all. What is your own personal inflation rate? And why it matters when
The official inflation figures measure price inflation for a sample basket of items across the whole urban population of Australia. But this is just an average. Inflation is different for everyone.
Australia-v-rest of the world on Inflation & Interest rates. RBA is lagging and has more work to do
Today (25 October 2023) the latest inflation figures for Australia were released (for the September quarter). The news was mixed – quarterly inflation rose from 0.8% to 1.2%, but the annual rate (rolling 12 months) fell from 6.1% to 5.4%. Meanwhile the cash rate has been sitting at 4.1% since June, after twelve rate hikes.
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