Lets be very clear here, Perth, Western Australia will grow and develop for ever.
I'm sure plenty of myan business men said exactly the same thing. Lets be very clear here. The world's jungles and deserts are full of the ruins of cities that someone thought would last forever.
Shadow was hopelessly wrong about the Gold Bull Market. What else is he wrong about?
Are you still thinking of buying, or are you planning on sitting it out for a bit longer. I see no harm in that, but I guess it depends on your circumstances. Friends daughter has had her place near busselton on for a year now. She can't understand she needs to reduce the price drastically.
Don't flatter yourself skamy - others have you on ignore
If you stopped whining about me in your posts? Then you may not look so obsessed.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
If you stopped whining about me in your posts? Then you may not look so obsessed.
People here are only "obsessed" with you in your own mind. You just draw some commentary - which you enjoy - because you say some pretty ridiculous things. But it's a free country.......
Confidence in the Australian economy right now to take Australian society somewhere significant is bullshit.
Confidence is ultimately about 2 things. It is either an innate sense of ability to be able to do whatever task it is which needs to be done, against the backdrop of known risk factors, or it is the bluff carried out by those wanting to portray a sense of that ability, particularly in a way which influences the actions of others competing for the same outcome.
In Australia’s case the ability in question is the ability to drive meaningful economic growth.
The reason our elites are all of a sudden cottoning onto the idea of ‘confidence’ is that they know that they are dealing with a dictatorship of dullards who’s closest approach to sophistication comes in sporting endeavours, and who will think of confidence as something to be portrayed on a sporting field, a’la Warne at his peak, or Wayne Carey maybe (and there will be for sure a rugby league equal) – the posturing, the aggression, the sublime technical ability, the sense of self, as well as (on occasions) the bluff to shape a contest.
But anyone thinking in this manner about the Australian economy is going to see confidence for what it is in this case – the bluff seen in almost any minor league cricket or football field by a lesser individual. A lesser individual who can invariably be ‘knocked off’ in one way or another, be it a punch at the right moment, discipline, extra aggression, or maybe even something as banal as fitness – A lesser individual invariably seen as a ‘wanker’ by those about to do the knocking off. Australia’s economy isn’t in the Warne or Carey league – our elites want us to be that wanker.
Have a think of the Australian economy and its competitive position. We sure aren’t going to be remotely competitive on anything resembling a currency playing field with the AUD where it is. Then on top of that our national economic and political behaviours have been shaped by 24 years of economic expansion to leave players who are terrified of either being level with themselves or competition.
What Australia’s elites want is the confidence of the result of the game, of retirement, of safety, of the ‘winnings’ safely in their hand – of investment properties rising in value or generating real rents, or corporate responsibility handed off to someone else. They want the confidence to bullshit the game until the final siren sounds. It isnt confidence, it is fear of what may happen if they dont put on the appearance of confidence.
Conventional economic analysis assumes the behaviour of businesses is always rational but, in reality, the booms and busts that cause the ups and downs of the business cycle are driven by emotion more than rational calculation: unwarranted optimism, greed, impatience, short-sightedness and herd behaviour. Consider our resources boom.
The ideology of economic rationalism says private enterprise can do no wrong; ill-advised behaviour by business arises only through its rational response to distorted incentives created by the misguided interventions of governments.
This confers on the demands made by business a sanctity the captains of industry are quick to exploit. But their demands often aren't in the community's wider interest.
Now we're emerging from the decade-long resources boom it's easier to view the process with greater insight and make a more sober assessment of its costs and benefits.
What happened was a huge jump in the world prices of coal and iron ore as China's period of rapid economic development of heavy industry and infrastructure caused global demand to outstrip global supply.
The surge in China's demand caught the world's mining industry unprepared. Like miners in other countries, our largely foreign-owned miners lapped up the huge increase in prices and profits.
But it didn't take long for greed ("the profit motive", if you prefer) and the irrational optimism that drives the world's entrepreneurs to take over, with firms seeking to exploit the high prices to the full by expanding their production capacity as much as possible as fast as possible.
What then kicked off was a multi-billion dollar race - between rival firms in a country, but also with the many firms in other countries, all expanding their capacity as fast as they could.
It takes a long time to build new mines and bring them into production. So the chances of your mine being completed in time to enjoy the super-high prices aren't great - the more so because it's essentially a self-defeating process: the more firms join the race and the harder they try to be among the first to complete, the sooner supply catches up with demand and prices start falling.
If mining firms were more rational, fewer would join the race. But firms are just as subject to herd behaviour as investors in a booming stockmarket. A mining chief who didn't join the comp would be subject to heavy criticism.
This is where the irrational optimism comes in. Each individual entrepreneur is in no doubt he'll be among the race's winners. We're gonna make a motza.
But while the miners are busy gearing up, their foreign customers are just as likely to be coming towards the end of their own boom in investment and construction. The inevitable result is that the global mining industry moves from a starting point of under-capacity to an end point of over-capacity.
This is the eternal story of mining. Only in passing is it ever in equilibrium; it's almost always in either under- or oversupply - probably spending a lot more time over than under, the less profitable of the two conditions.
Mining and energy-related capex has only fallen moderately from its peak and has much further to fall. Iron ore capex has retraced some way already, supported by the the late arrival of the $10 billion Roy Hill project, which will begin to ship by late 2015. The energy spending spike was even larger, with two major gas projects in Gorgon and Wheatstone accounting for an astonishing $80 billion spend over six years from 2010. Gorgon is now 85% complete and will begin to ship in mid 2015. Wheatstone is about 40% complete and will ship from mid 2016. These three projects alone constitute approximately 20,000 jobs that will be reduced by 90% as construction moves to production.
From engineering to construction and ancillary mining services, tens-of-thousands of Western Australian jobs are now under threat as mining projects currently in the pipeline are completed.
Moreover, with iron ore prices falling sharply and Australian LNG uncompetitive versus the US’s shale gas boom, there will be increasing pressure on mining and energy firms to slash operational expenditure for years to come, which will further weigh on jobs and income growth in Perth. It also means that the likely retracement of the mining capex boom is a fall by 2017 to levels similar to those in the period 2000-2002.
According to data published by the Reserve Bank of Australia, the country's decade-long mining boom underpinned a glut of spending on new cars and household durable goods, such as such as furniture, appliances, TVs, cameras and computers.
Purchases in those categories shows the RBA’s study were 30% and 20% respectively higher than what would have been without the so-called boom.
“The mining boom has substantially increased Australian living standards," conclude the paper authors, economists Peter Downes, Kevin Anslow and Peter Tulip.
The analysis shows there were two main factors driving the spending trend. First, a surge in household disposable income per person, which was 13% higher last year than if there had been no mining boom. Second, the increased demand for Australian minerals pushed up the exchange rate, making imported goods such as cars, TVs and computers cheaper for local consumers.
And that’s not all. If the mining boom never happened, Australia’s jobless rate would be 1.25% higher, the researchers found.
A mining boom has never occurred as a result of declining supply, suddenly not meeting demand. Likewise, a mining boom has never ended because of a sudden onslaught of supply overwhelming moderating demand (which all the bearish analysts are implying – although they are closer to the final mark).
This mining boom will end when Chinese housing ends. The prices therefore will not be dictated by moderating growth, but a dramatic decline in demand, meaning that hard-core C1 cost analysis will come to the fore again. And make no mistake, LT iron ore prices will plateau at (substantially lower) levels inconceivable to commodity analysts currently.
Then everyone will re-learn a fundamental commodity truism again; its demand stupid.
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