All Posts Tagged With: "world economy"

You want money? You want cash? You want something you can take to the bank? Well, you’ve got it!

“A move by the world’s central banks to lower the cost of borrowing exhilarated investors Wednesday” the Associated Press reports.

With the whole world economy in a bit of a funk you wouldn’t expect oil to be over $100 and gold to be over $1,700. Or would you?

The consumers can’t really go back to borrowing, can they? Nope. Not without digging themselves deeper in the hole…or actually earning more money.

The problem is not just the current debt levels of these nations, because the deficits in all the countries are rising. Tax revenues are collapsing at the same time…

“The bankers – whose companies collectively received more than $100 billion in taxpayer assistance to weather the crisis – offered no regrets for executive pay that is now likely to increase…

Maybe we’re wrong. Maybe we’re right. But we’re certainly not in doubt: there is a race for scarce tangible resources (especially arable land) and we’re willing to bet a few Aussie companies can profit from that in the long term.

That is clever to suggest that when rates rise people will have to find another way to say that houses are affordable. But we reckon when rates rise, as they eventually must, a lot of new home buyers will find out that access to cheap credit does not make a house affordable. It just makes the amount of debt you owe to the bank a lot larger.

The US dollar is in bad shape. Over the past several years, the federal budget deficit has shot up like money is going out of style – and maybe it is.