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REPORTS of prolonged weakness in the Australian economy continue to echo through the boardrooms of some of the biggest companies in the United States as a growing chorus of chief executives bemoan the dour conditions in the region to American investors.
The spreading pessimism around Australia's sluggish economic growth, and in particular a lethargic retail sector, will feed into pressure on the Reserve Bank to slice official interest rates tomorrow with many economists tipping a rate cut of 50 basis points.
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Read more: Weak Australian economy causing US corporate concern
It appears that the Australian economy is slowing. So far there is no recession as of yet but it is not immune to the world economic downturn.
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I've posted in here several times about how weak the Australian economy has been for the last 18-24 months. It seems like it's finally starting to show itself.
I think as Mongolia gets the rail links and decent roads completed into China and expands the iron ore production in their country(Rio Tinto is one of the big companies involved), it's going to have an effect on the Australian economy.
One of the driver training companies in Australia that does a lot of training such as off road driver training for the mining industry, has opened an office in Ulan Bator, Mongolia to train mining industry people there. It's a good example of the shift that is going to happen over the next 10 years.
In China, why get ore from Australia when you can get it next door in Mongolia?
That aside, if the Australian dollar would drop to a reasonable level, then I would be happy to come back down and spend again.
In China, why get ore from Australia when you can get it next door in Mongolia?
That's the nature of commodities, you can't expect to earn an economic super profit over the long run. Eventually new supply comes online.
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Originally Posted by wanneroo
That aside, if the Australian dollar would drop to a reasonable level, then I would be happy to come back down and spend again.
I think the problems run deeper. Productivity has not grown in 10 years, at the same time wages have been climbing ever higher. Even if the AUD comes down below parity, this is still a very expensive place to do business.
REPORTS of prolonged weakness in the Australian economy continue to echo through the boardrooms of some of the biggest companies in the United States as a growing chorus of chief executives bemoan the dour conditions in the region to American investors.
The spreading pessimism around Australia's sluggish economic growth, and in particular a lethargic retail sector, will feed into pressure on the Reserve Bank to slice official interest rates tomorrow with many economists tipping a rate cut of 50 basis points.
[LEFT]
Read more: Weak Australian economy causing US corporate concern
It appears that the Australian economy is slowing. So far there is no recession as of yet but it is not immune to the world economic downturn.
[/LEFT]
Been saying it for a few years already. Australia has a bubble economy and its going to pop sooner rather than later. The Australia bubble will come to an end, especially when the housing sector finally blows up. Prices will NEVER go up in perpetuity, it is one of nature's laws that what goes up must always come down. Australia is no exception, and highly overrated, IMO, just like China
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