All Posts Tagged With: "government bonds"

There is a wider intellectual malaise that lazily conflates government spending with the real economy and which conveniently ignores the fact that without a flourishing private sector, there would be no government and certainly no government spending to speak of.

Warren Buffet willingly gives up the protection of gold in order to the get the upside from stocks. We willingly give up the upside from stocks in order to get the protection from gold.

Australia’s future is inextricably linked to China and the commodity “super boom”. Australian economic prospects remain vulnerable to international developments outside its control.

“Adjusting for slippage” is the latest government fashion…and it is expensive. “Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year,” Bloomberg News reports, “with most facing a rise in borrowing costs.”

On Friday, after the close of business in the stock market, S&P downgraded 9 European countries. Spain and Italy were both taken down another notch, leaving Italy with a BBB+ rating and Spain with an A. But the headline damage was done to France, whose triple-A rating got downgraded to AA+.

We’ve battled this argument before, so we apologise if we repeat ourselves. But it needs to be said because the mainstream media continues to talk gibberish about China’s economy. This is the argument: a falling inflation rate in China allows the authorities to ease monetary policy to avert a hard landing.

From The Economist:

The country that invented the compass, gunpowder and printing is also challenging America in the innovation stakes. We estimate that in 2011 more patents were granted to residents in China than in America.

How about that? Contrary to our gloomy disposition yesterday, the stock market has taken off like a rocket this morning. The material sector is up 2.9% today alone. It was the worst performing sector in Australia on the ASX in 2011, down 25% thanks to lower commodity prices.