All Posts Tagged With: "banking crisis"

What Australia has – commodity wealth – is strategically important. But what it doesn’t have – capital – is economically urgent.

The banking crisis will mean small Aussie businesses may start to feel the crunch of Europe’s credit crisis in 2012.

Europe isn’t a huge customer of raw commodities. But China is Europe’s largest trading partner. So there is a knock-on effect…somewhere down the line.

Is this a little correction in the long upward climb of stock prices? Is it a pause in humanity’s march to perfection? Or is it a resumption of the bear market that began 2 years ago?

You probably know the old Chinese curse, “May you live in interesting times.” I heard it first 30 years ago from an economics professor – my mentor, in fact. He was lecturing about the problems Austrian economic models predict when banking is controlled by government.

During the big run up to $150, national oil companies were cash cows. But it now appears that little of the oil bounty was reinvested in new production or even maintenance of existing production. So what do we have now? We have a situation here. A situation where the falling oil price is leading a big reduction in oil production. This will match, for a while reduced demand for oil. But we also think it’s baiting the trap for a huge blowback in oil prices. And the spark for that could be geopolitical…

How to keep your head when all about you are losing theirs? “Steer clear of the new gold rush,” urges Jason Zweig, a senior columnist at Money Magazine. “Aw, just lend! Lend! LEND!” screams the Federal Reserve. Sporting its usual crystal-meth grimace, it’s stumping up $200 billion in Treasury bills for desperate New York brokers to kick-start the world’s capital markets. And now they can use flakey mortgage-backed bonds as collateral.