Video Transcript 2
Yesterday, I talked about Australia’s looming recession. Today, I actually want to demonstrate how serious this recession could be. The last time Australia was in a recession, I was nine years old. So that means I’ve gone my entire adult life without seeing a recession. So that was nearly 30 years ago. I think that goes to show how much Australians are underestimating not only what a recession looks like, but the impact it’s going to have on us.
Now, when you have uninterrupted economic growth for nearly three decades, you actually distort people’s memory of the impact it can have. When I’m talking about this recession — that I believe we will be seeing come our way soon — I’m not talking about a recession that will impact us like the 1991 one did. I’m talking about a Great Depression-era like recession. I come back to this whole two pillars idea in our economy. We sell rocks to China and our houses to each other. That’s it. These are the things that drive the Aussie economy and they’re not going to save us and get us out of a potential recession.
Not only that, we’re starting to see the limitations of local monetary policy. The Aussie dollar is already falling. But if it goes too far into freefall, around that 50 cent mark, it risks importing inflation. Now, that’s something that the Reserve Bank of Australia can’t really control. And if we look at importing inflation, that means prices are rising, but people’s wages don’t rise to be able to buy those things. And that reduces spending even further. And that sort of doubles down on the impact a recession would have on Australians.
Not only that, when recessions hit economies, governments try to do all these stupid things and start stepping in. And they step in with things like austerity measures and tax hikes. But sometimes they’re indirect tax hikes. So it could be that we see fuel hikes going up. These are things we’ve seen happening over in Europe that has actually led to rioting in the streets. Now, I’m not being extreme. I’m talking about real-world things that have actually happened to individuals on the other side of the world. And if we do see our government try to implement these measures, even though as Australians we might be a laidback bunch, eventually we’re going to stand up and we probably will start demonstrating in the streets, if these sorts of austerity measures are put on us.
What I’m trying to do is actually help Australians prepare for this recession. We get a lot of noise coming from the mainstream media and our government that ‘No, no, no — everything’s fine.’ It’s not fine. There are things that are building in the economy and I can see how the long-term consequences of ignoring these things is playing out right now. So what I’m trying to do here is help Australians prepare so their life can continue with relative ease, should this recession hit us.
Simple things like travel plans can change, retirements change, whether you upgrade your house or downgrade your house, etc. I’m trying to give people the tools to plan for a very uncertain future. That’s what I’m trying to do over the next couple of days.
The same structural issues that caused the economy to crash in 2008 are still very much in play today. The reason why we don’t see them right now is mostly ignorance. We’d like to think that that issue is being dealt with, and that we’ve learned our lessons and we can move forward. That’s simply not the case. The difference is that this time around, the problems are going to be even bigger. The debt is bigger, the asset bubbles are bigger. And because we’ve been complacent for the past 10 years, there is a chance that some people could be walking, sleepwalking, into a looming crisis basically.
One of the arguments I keep hearing is, ‘Well, China’s saved us before. Don’t worry — they’ll just come in and they’ll save us again.’ That’s not the case this time. Now, regardless of the fact that they’ve created their own debt problems there, and they’re running out of the ability to just flood more hot money into the system, our relationship with China isn’t what it was a decade ago.
Not only can they buy resources from elsewhere, we’re not their only supplier of rocks. But our government’s starting to step on their toes. But it’s not just our government. As well, we’ve got the US, which has essentially started a trade war with China. So we’ve basically got our biggest ally picking on our biggest customer. And in the middle of that is Australia, who sells things to China. And on top of that, we’ve got our own Aussie government accusing the Chinese government of espionage.
They haven’t really liked that. So Scott Morrison recently just accused Chinese authorities, or an unofficial branch of China, of trying to hack our parliament. That’s the sort of thing that ruffles officials’ feathers. And with regard to Chinese telco provider Huawei, we’ve banned them from being part of our NBN building infrastructure. And furthermore, when China were trying to build a subsea cable underground for some of our Pacific neighbours, our government came in and actually pushed China out of that conversation as well.
So, we’ve gone from selling them things to saying, ‘Actually, no, we can’t have any more Chinese business here.’ These might only be two things, but that does damage these relationships. And it is going to stop China from wanting to come in and buy things from us, basically.
I’m doing another video tomorrow, and I’m going to show you exactly what you need to be worried about. And in two days’ time, I’m going to release my personal recession survival strategy report, which shows you what I’m doing to protect me and my family from this coming recession.