The major economic news released yesterday is at odds with the way the market behaved. We’re talking about the news from China that exports dropped 25.7% in February. Imports were down 24.1%. If China makes and the world takes, China is making less because the world is taking less. And of course, China takes from Australia to make for the rest of the world….
March 12th, 2009 | Dan Denning | 0 comments | ContinuedAll Posts Tagged With: "export"
How to Prepare for the Coming Devaluation
Well, yesterday the government said the fall in revenues from the global black swan dive will lead to a $115 billion decline in government tax takings (what the government likes to call revenue). That’s a pretty big hole in the budget. It suggests that we’ve entered an era of regular government budget deficits and, if the RBA holds to form, lower interest rates. These lower rates, and not just in Australia mind you, represent the coming devaluation of paper money against real goods…
February 3rd, 2009 | Dan Denning | 20 comments | Continued
Australia’s Next Big Export Industry
It may seem like a strange time to be talking up the resources sector, but while everyone else is running away I’m nipping in through a side door to get onboard one specific area of the resources industry. I’m talking about energy. But it’s not oil that’s grabbed my attention. It’s something much more exciting and potentially much more profitable than that. So profitable in fact, that it could soon be Australia’s single largest export industry…
January 28th, 2009 | Kris Sayce | 4 comments | Continued
A Worst-Case Commodity Scenario
Mind you, even in such a bearish argument for commodities, you might find an exception in gold producers, although not the explorers. The junior gold explorers are fast, like everyone else, running out of finance. Our forecast? Gold production is going to fall this year at the same time gold prices rise. We’ve focused so much on the demand side for gold as an inflation-hedge that it’s easy to forget gold is a mining business. You have to find it and dig it up. It is hard to increase the mine supply of gold…
January 15th, 2009 | Dan Denning | 7 comments | Continued
Terms of Trade Driving Runaway Australian Inflation
“Terms of trade” is one of those terms of the trade that gets throw around by economists all the time. But what does it mean? The simple definition is this: it’s the ratio between export prices to import prices. If you get more for what you sell and pay less for what you buy, your terms of trade improve. And guess what people? Thanks to this particular moment in history, Australia gets a lot more for what it sells and pays a lot less for what it buys (except for crude oil).
April 18th, 2008 | Dan Denning | 9 comments | Continued