I think we all agree about the deteriorating trend in the data. Lets make things 10 times harder. Lets examine the other side of the coin.
Reasons to be optimistic:
- Australia has a low total debt compared to other developed countries. This will allow us greater room to stimulate through coordinated fiscal and monetary policy.
- The housing engine may stabilse enough to prevent unemployment rising above 6%.
- population growth will ensure we prosper for decades ahead
- the rba may decide to print money and incentivise spenders to provide an inflationary force. As opposed to encouraging investment in financial assets.
- as we enter an inflationary phase in the decades ahead, debt burdens will be inflated away.
Its the short term, next year or so, that I am struggling to find reasons to be optimistic.
