xjo weekend zoomba lounge, page-259

BiggDaddy,

A snippet from McLaren's ASX weekly roundup. Comfort for you and I believe Volt will agree with most of these conclusions about China as from my understanding of his writings he has already stated same many times:

Do not believe the propaganda that Australia is ?well positioned? for a recession. China is running a business model that is not sustainable. Personal consumption is 30% of GDP and fixed investment is 50% of GDP. So this is not an economy that can sustain itself. They have built a large overcapacity in just about everything from housing to manufacturing. A world recession will hit China in a significant way and will flow to Australia. Remember the Australian dollar and assets where part of the commodities play. There may be more of that trade to be unwound?I do not know. Every week I hear someone saying Australia is perfectly positioned for this economic decline and China will save our economy. That is nothing but propaganda. Why has the Australian stock indexes performed so poorly on a relative basis for the past two years if a booming China was our salvation? Remember this was with booming commodity prices and a booming China. Commodities will decline and possibly significantly due to the 60 year cycle. This could cause a panic out of Australian assets and the Aussie dollar. The Aussie dollar back to 70/80 cents would be our greatest blessing. Can you believe the RBA is still talking about inflation! Stevens is so out of touch with reality he may not be on this planet or is there a reason he wants the Australian dollar higher? Inflation is an end of cycle phenominum and not something that will occur now?absolutely, positively not. The problem for the world economies is still deflation. The central banks can print as much money as the presses can handle and it will not affect inflation. The US Fed has been expanding the money supply by 30% as far back as the eye can see and they are still looking at deflation. Until credit is expanding rapidly there is no chance of inflation.