That's what Dr Philippa Malmgren a previous economic advisor to George W Bush has suggested that Australians do.
In fact, she believes that Australia could lose its 'economic bargaining power' should we allow China to become a direct investor in our resources.
She also went on to say that China is gobbling up all these resources via investments and this could eventually enable them to control the global supply chain.
Er, this is probably exactly what China wants to do.
But let's be honest, you can't expect that China was investing in Australia purely for our interests? I mean can you imagine Chinese government officials sitting around saying 'I know, let's go give money to the Aussie's. I'm sure they could do with some help during the GFC'.
No. Any investment into Australian mining has been a very strategic move from China, and it's all been about the end gain for their country. Any money
Friday, 3 September 2010 – Melbourne, Australia By Kris Sayce
Money Morning reader Wilson sent your editor a shocking video yesterday.
So shocking we could barely believe it was true. We even thought that maybe some nerdy tech wizard had dubbed the video.
But no, it appears to be the genuine article. Here's what shocked your editor so much, and why it's proof that you must never trust what you hear from the mainstream...
You see, there's an online financial video channel called RainmakeriTV. As best as we can figure out, it compiles interviews of various people - CEOs, economists, brokers, etc. - and then posts those videos on its website for people to view.
As it happens, just yesterday RainmakeriTV interviewed a chap called David Wyss. Mr. Wyss is the chief economist for [cough] respected ratings agency
September 03 2010 - Australasian Investment Review – (AIR) The market is up 9. The SFE Futures were up 20 this morning.
Wall Street closed up 50 overnight. The S&P 500 rose 0.9% for a 2-day gain of 3.9%, the most since July 8. Positive economic figures help markets. Unemployment claims fell by a higher-than-expected figure, but remain well above the long term average. Pending home sales rose after June’s record low, while factory orders were lower than expected. Eurozone GDP rose 1% for the fastest growth in 4 years. The ECB upped its GDP growth outlook but kept rates on hold at 1%. Metals were up on the LME. The oil price gained $1.11 to $75.02 and Gold was up $5.30 to $1253.40. The Aussie dollar was at 91.93c up from 91.10c yesterday morning.
Today’s main points…
Fortescue Metals Group (FMG) is being sued by their major shareholder Leucadia National. Leucadia is trying to prevent a dilution of royalties from
September 03 2010 - Australasian Investment Review – (AIR)
While the risks have increased, we remain of the view that the US and global recovery will continue.
However, whether there is a US double dip or not, it’s clear the growth outlook in the US and other major industrialised countries will remain fragile, constrained and volatile until the imbalances of high household gearing and public sector debt are worked off.
However there are still opportunities for investors to make decent returns by focussing on high yield assets or assets which don’t suffer from growth constraints.
The AMP's chief strategist, Dr Shane Oliver says attractive assets on one or both of these grounds are Asian and emerging market shares, Australian shares, commercial property, infrastructure and corporate debt.
Double dipper
The big investment issue for the last few months has been whether there will be a double dip back into recession for the US/global
September 03 2010 - Australasian Investment Review – (AIR)
So if we do suffer a sharp correction from international or trade-related factors that punctures our rebounding economic boom, can we do anything about it? Can the Government have a stimulus Mark 2?
We already know what the Reserve Bank will do if there's a sharp fall in confidence, export income and demand globally, as there was in late 2008; it will cut rates as quickly and as deeply as possible to provide a monetary policy buffer to cushion any hard landing.
Then it would be up to fiscal policy to counter falling Government revenues, under pressure from weakening tax revenues as unemployment starts rising and corporate profits fall, as we saw in 2008-09 and 2009-10.
To counter that, can the federal government again lift spending (even if it increases debt and the size of the deficit)?
After the phony campaign on debt and the deficit in the recent election campaign, a government from either side of the political fence
September 03 2010 - Australasian Investment Review – (AIR) There's a big question to be asked after this week's June quarter growth figures and the end of the reporting season.
How come the share prices of our local (and internationally facing) companies aren't higher is our economy is performing so strongly?
And why is there this silly knee jerk reaction to every bit of poor or indifferent economic or corporate news from the US.
Why, for example, will the reaction of the US market to Apple's new internet TV service, or its updating of its IPods (whose sales are sliding, like those of
September 03 2010 - Australasian Investment Review – (AIR)
Two days after the June quarter current account figures confirmed the rebound in our trade performance, we've got a timely reminder of how ephemeral things can be in global trade.
The Australian Bureau of Statistics revealed in the July trade figures yesterday that we suffered a sharp fall in export volumes and prices of iron ore and hard coking coal in July.
They show there was a $1.5 billion fall in our trade surplus from the record $3.4 billion in June, to just over $1.8 billion in July (which is still very high).
Iron ore and hard coking coal are our two most important exports.
And the falls came in shipments to two of our most important customers, India and China.
Some commentators claimed that shipments to China fell because the steel industry there was closing much of its capacity for
September 02 2010 - Australasian Investment Review – (AIR) It was good news, no matter which way you look at it.
Growth in the Australian economy is approaching boom-like levels and fears of another dip well are now well behind us, or they should be.
Growth accelerated to a quarter on quarter rate of 1.2% in the three months to June, the strongest for three years, topping the 1.1% rate in the December
September 02 2010 - Australasian Investment Review – (AIR) As strong growth in the June quarter was confirmed for Australia, we had news from China with news that two surveys of the country's huge manufacturing sector have shown a small recovery in momentum in August.
That's good news as China is by far out biggest export market and the sole reason why the Australian economy grew at 1.2% in the 4th quarter and 3.3% for the year to June.
Elsewhere in the region, PMI survey results (Performance of Manufacturing Industry) fell close to their lowest points in a year and a half.
The HSBC PMI index for Taiwan fell below 50 for the first time in 18 months, sliding 1.3 points to 49.2 in August. Japan’s Nomura/JMMA PMI eased 2.7 points to 50.1.
South Korea’s PMI fell 2.3 points from July to 50.9 despite data released on Wednesday showing exports rose 29.6% in August compared with the same month in 2009.
Australia's survey saw a contraction in August, down 2.7 points to 51.7. Sub-indexes measuring orders and shipments both fell, but employment again
Yesterday, the S&P/ASX 200 added a huge 91 points (2.08%) to close at 4,495.70. And the index has been potentially predicted to do again today, already 1% higher.
The June quarter gross domestic product (GDP) figures released yesterday and were one of the main drivers of the rally. The economy grew 1.2% for the second quarter which was higher than the 0.9% predicted by economists. Annualised, GDP growth for Australia is now 3.3%.
Overnight, the Dow Jones Industrial Average had a massive 254 point gain, closing at 10,269.47. The ISM Factory index rose to 56.3 for August, up from 55.5. Anything above 50 is considered growth.
Adding to the optimism was China's Purchasing Managers Index (PMI) rising to 51.7, up from 51.2 in July. 'Investor sentiment was so negative that any flicker of light was going to move sentiment with quite a roar, and that's what we got,' said an economist at JP
