Many years ago Australians were less arrogant but I think the commodities boom has made us feel we are more important than we actually are. We are just a nation of 20 million odd people…on a global scale that is nothing.

Because manufacturing exports are not a major part of our economy. I am not sure this is something we should be happy about.

I recall how pleased Australia was to escape the dot.com/tech bubble. Yes it was good we dodged that bullet, but it was also a reflection of the fact that we do not have a significant tech sector.

So maybe China and Japan will both look towards Russia more in the years ahead? Seems logical, Russia is a lot closer than Australia.

Ned:

I guess one could venture the opinion that Australia doesn’t have an especially well balanced economy.

Good points! I like your link Ned.

I know I come across as overly pessimistic (i’m a cynic), but I really do think it is unwise for Australians to make any assumptions on a return to 2008 resources boom. There are so many things that could derail that completely.

And whilst I don’t have anything against the sector, it is really the ‘all eggs in one basket’ approach that I am against. Our stupid Gov. and lot of Australian investors seem to have their eggs quite neatly stacked in the iron ore basket.

As for investing, the approach I am taking is the anti-base minerals approach. See the way I figure it is if the resources boom does (miraculously?) return, then money will be forthcoming anyway. If it doesn’t, then hopefully I will do okay out of it. So it is a bit of a half-win/win strategy for quality of life (in my opinion).

Besides, China doesn’t like us much now (surprise,surprise – screw them over enough times and they don’t like us?)

Beijing backlash against Rio deal
http://business.smh.com.au/business/beijing-backlash-against-rio-deal-20090611-c4xv.html

Sometimes I think we are just a small, immature country playing silly games with the big boys. With a little bit of effort I think China could sink us into one of the nastiest recession/depressions we could ever imagine (by removing credit facilities, majorly reducing trade).

So maybe China and Japan will both look towards Russia more in the years ahead? Seems logical, Russia is a lot closer than Australia.

“Russia is the fifth largest iron ore miner and accounts for about 6% of global production, though its reserves are unlimited because of the huge land mass.”

Source: http://www.bulkmaterialsinternational.com/htm/w20080903.243705.htm

Oz begins to sound a bit like Ireland in a potato famine. I guess the pollies might describe the result as “negative” population growth? Could help make Oz housing affordable I guess – Smile!

I recall how pleased Australia was to escape the dot.com/tech bubble. Yes it was good we dodged that bullet, but it was also a reflection of the fact that we do not have a significant tech sector.

I am pleased of course that our soft and hard commodities exports helped the economy but imagine what will happens if these are soft over a long period…how are we going to earn the money to pay down debt? Are we relying on commodities always being able to prop up the economy?

Great point Greg – I hate how the Government keeps running the “our debt is smaller then theirs” line. What the hell is the point of that? Our debt is MASSIVE and as Pete said, the scenario to recovery is a fairytale as it stands.

We might be heading towards 10% unemployment, but hay, Kev says we avoided “technical recession” so everything is OK now, right?

Especially since the Gov. is constantly using it as a measuring stick when saying how much debt it will take on.

If the measuring stick changes…the values can change dramatically.

Eg: If our GDP went from ~1.2T to 900B, would 300B of debt still be the same proportion? Not even close. Without increasing the debt, the proportion would change from 25% to 33%. If you increase debt and lose GDP at the same time, then the change is naturally even more dramatic.

The Gov. should definitely not be boasting about saving the economy yet. This will come back to haunt them in election time, or at the election after that. Think of the smear campaigns they could run on TV. Ouch.

Isn’t it a bit strange that money was taken out of the economy via higher interest rates in early-mid 2008 and then to counter the slowdown the government had to pump money back into the economy? Seems to me that so far we are down billions simply because the Government and RBA messed up in 2008.