I didn't know that about the Labour gov's. Poor things. I really do feel for them, getting the rotten end of the economic stick as soon as they are in power.

Not to suggest in any way that Rudd is doing a good job. Because he's not. But what would Howard, Costello, or Turnbull be doing? Its easy for them to say they'd be doing great by comparing the last decades growth figures. The reality is that any Australian Gov. would have gone along for the ride on that bull market.

Two of those Labor governments have immediate relevancy for Australia today.

The Scullin Labor party came to power an the end of the post-WW1 war boom. The nominal high in the Dow Jones peaked six weeks before Labor took office in 1929.

The Whitlam Labor party came to power at the end of the post-WW2 war boom. The nominal high in the Dow peaked four weeks after Labor took office in 1972.

The Rudd government came to power just as the post-Cold War boom, arguably, came to an end. The nominal high in the Dow Jones peaked eight weeks before Labor took office in 2007.

"In sum, the Fed thought it had learned the lessons of the 1930s, but it had not learned the lesson of the 1920s, that allowing asset prices to soar to absurdly leveraged heights could lead to a financial collapse as the need to repay loans forced sales that drove prices lower, resulting in the need to repay more loans, and so on and so on" (Floyd Norris, Failing Upward at the Fed, nytimes.com, February 27, 2009).

In the three instances above, the Australian Labor party came to power as the asset-bubbles that ballooned during the previous conservative governments that were to aggravate the recessions.

The two quotes below put it into perspective:

"Scullin had tried to grapple with the financial and social problems thrown up by the Depression but he failed. The Australian electorate was unable to associate Labor with financial expertise - a quality more readily seen in their opponents. Furthermore, the Labor Party had not been in power since 1917, and it came to the Treasury benches precisely when the profligate spending in the 1920s had begun to reap its fruit... Nonetheless, the inability of the Federal Government under Scullin to present to the electorate a carefully thought-out plan for economic recovery, even if it were defective, was a major cause of its downfall" (John Molony, History of Australia, (Ringwood: Viking, 1987), p.264).

"This recession, the end of one era in the international economy and the beginning of another, was fully global in scope. No Australian government could have withstood the shock of 1973-75. Accordingly, one cannot agree with those who argue that sources of the economic difficulty facing the Whitlam government after mid-1974 were fundamentally domestic or that if a coalition government had held office at this time the difficulties faced might have been avoided. Yet more here needs to be said. It was Whitlam's great misfortune that he came to power at the moment when the postwar capitalist Golden Age came to an end. It was his great weakness that he lacked the political skills to prevent this misfortune from turning the last eighteen months of his government into a period of high constitutional crisis and low political farce" (The Australian Century, Edited and Introduced by Robert Manne, (Melbourne, Text Publishing Company, 1999, p.204).

Rudd finds himself in a similar boat as Scullin and Whitlam before him.

The reason that we are in such a precarious situation is that there is no financial infrastructure to regularly pay off short- and long term debt.

A third bubble, that is a government debt bubble, is required to bring the global economic/financial system to the point of overindebtedness that when the next crisis occurs governments and central banks will not be in a position to resist, for too long, the economic, technological and hegemonic restructuring that the markets will impose.

"Our federal government has set a course to issue Trillions of Treasury securities and guarantee multi-Trillions more of private-sector debt. The Federal Reserve has set its own course to balloon its liabilities as it acquires Trillions of securities. After witnessing the disastrous financial and economic distortions wrought from Trillions of Wall Street Credit inflation (securities issuance)... the critical issue is whether the Treasury and Federal Reserve have set a mutual course that will destroy their creditworthiness - just as Wall Street finance destroyed theirs" (Doug Noland, Mistakes Beget Greater Mistakes, prudentbear.com, March 20, 2009).

Following the pattern of the 1930s and 1970s - Contraction, Expansion and Contraction - the first contraction for Today is nearly over and an inflationary ending expansion is about to begin, to be followed by a debt-deflation contraction - the Next Great Depression.

"Despite today's histrionic fixation on 'deflation,' current dynamics have some similarities to the post-tech Bubble period. Granted, the collapse of Wall Street finance is of much greater scope and consequence than the bursting of the tech Bubble. Yet I would counter that The Burgeoning Bubble in Government Finance is poised to make the Mortgage Finance Bubble appear tiny in comparison...

"The Government Finance Bubble is enormous and powerful - and should be anything but underestimated. Akin to the previous Bubble in Wall Street finance, the epicenter of this Bubble is here in the U.S. But I would argue that this unfolding Bubble dynamic has greater potential to engulf the entire world than even U.S.-style mortgages and derivatives did starting back around 2002. Welcome to the new world of synchronized stimulus, deficits, and reflationary policymaking. I don't believe true systemic deflation (as opposed to collapsing asset Bubbles) is a high probability scenarios as long as the Government Finance Bubble is rapidly inflating. All bets are off, however, if confidence in government debt falters. The worst case scenario - that should be avoided at all costs - is a massive inflation of government claims that sets the stage for a devastating bust.

"It is imperative for policymakers to ensure that the Government Finance Bubble does not follow in the footsteps of the runaway excess associated with Wall Street/mortgage finance. Yet it's clear that policymaking (monetary and fiscal) is setting a course to guarantee just such an outcome. And, as has been the case for some time now, markets are keen to fall in love with - and aggressively accommodate - whatever might be the Bubble of the Day. The Wall Street/Mortgage Finance Bubble ran to such incredible extremes that its subsequent implosion has created the near ideal backdrop for the explosion of Government Finance (as the tech implosion did for mortgage finance)..." (Doug Noland, The Government Finance Bubble, prudentbear.com, February 6, 2009).

A January post to this forum stated that “History suggests that the Dow Jones Industrial Average is on the cusp of a 70%+ rally over the next couple of years. It may even pass the 2007 high.”

That rally appears to have began on March 9 and hopefully the Coppock Guide will turn up at the end of the month confirming the bull market:

“Its historical value lies in signaling or confirming the best, low-risk buying opportunities in history – and it is one of the few technical tools that would have kept anxious investors from stepping prematurely into the middle of the record 1929-32 debacle or the 1973-74 bear market” (James Stack, Subscription Newsletter, May 8, 2009 - http://www.investech.com