What can Australia expect?
Warwick Powell | 鲍韶山 | CEO, Beefledger
Projections of Australia's economic recovery have been to date premised on sustained trade with China. That's in doubt now. The RBA on December 2nd reinforced its stance concerning unconventional monetary policy - let's call it for what it is: printing money - as their principal tool to keep the show afloat.
As terms of trade deteriorate, and the national net exports position deteriorates, what can we expect? Here's a thought: (1) more intensive money printing; (2) this hot money will chase assets in the form of shares and housing, keeping the price of these asset classes up (that's good for those with money, and not good for those without); (3) income equality will get worse, not better, in these conditions; (4) private debt to grow; (5) more hot money ...... at some point, debtors won't be able to meet their repayments. These are the conditions for significant social disquiet. We've seen it all before.