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The consequences of a Donald Trump win are disastrous for the Australian economy
Topic Started: 10 Nov 2016, 08:10 AM (8,609 Views)
Rufus
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The consequences of a Donald Trump win are disastrous for the Australian economy
Peter Martin
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President Donald Trump will declare economic war on our biggest customer, wipe unprecedented amounts off global stock markets, usher in extraordinary financial instability, and risk turning the world's biggest economy into a basket case by pushing its national debt past 100 per cent of GDP.
And that's just what's known about his economic program. The Economist observed in the leadup to the election that while his policies were unusually short on detail, their direction "could not be clearer".

China takes 1 in every 3 shiploads of Australian exports, more than any nation has since Britain in the 1950s according to consultant Saul Eslake. Even small variations in what it wants sends our budget into conniptions.

Trump has promised from "day one" to designate China a "currency manipulator". That would allow him to whack a giant 45 per cent tariff on everything it tries to sell to the US, a prospect he has mentioned with relish. The US is China's biggest market, taking 18 per cent of everything it sells. China would have to retaliate (somehow), raising the prospect of a trade war that would damage both China and the US. War gaming by the respected Peterson Institute says it could push the US into recession by 2019. The last time that happened, during the global financial crisis, Australia avoided recession with help from China. We mightn't get it a second time.

In answer to questions after his first speech as Reserve Bank governor last month, Philip Lowe described the prospect of a Trump presidency as less than benign.
"We don't have a Trump plan," he added. "What we do is have a generic response plan to a whole range of shocks."

Financial markets lost $US2.5 trillion on Wednesday as it became apparent Trump was likely to win, just as they slid on each of his successes and surged on each of his setbacks throughout the campaign. US-Australian economist Justin Wolfers and his colleague Eric Zitzewitz have used those gyrations to put numbers to the Trump effect. They say a Trump win will knock 15 to 30 per cent off the value of the US stock market (during the global financial crisis it lost 50 per cent) and do much the same to other markets. US interest rates will climb 0.25 points.

It wasn't all bad for Australia on Wednesday. Shares in the gold miner Newcrest shot up 9.8 per cent.


Importantly Wolfers and  Zitzewitz say markets will become far more volatile, making it harder to plan, in what appears to be a first for a Republican win. They've analysed the market reaction to every presidential election going back to 1880 and found either a Republican "premium" or a "discount" whenever there was a significant move.

This is the first Republican discount, or as they call it, "Trump discount", a result all the more remarkable because Trump's policies are explicitly pro-business. Trump has promised to cut the US company tax rate from 35 per cent (a good deal higher than Australia's 30 per cent) to just 15 per cent.

But he'll spend big. The National Australia Bank and the US Tax Policy Centre say his promises will add $US7 trillion to US government debt over the first decade. His expansion of the military alone will add $US450 billion. Clinton's would have added just $US200 billion. The Economist describes her budget plans as "fiddly". It describes his as "absurd". The Committee for a Responsible Federal Budget says after 10 years US national debt will hit 105 per cent of GDP under Trump. Under Clinton, it would hit 86 per cent.
In an open letter, 77 US Nobel Prize winners have condemned Trump's platform, 20 of them winners of the Nobel for Economics. They are concerned about more than trade and more than recession. Trump says he will walk away from the hard-won consensus on the need to tackle climate change, describing global warming as a hoax "created by and for the Chinese". Australia's commitment to adjust its emission targets in line with those of its trading partners is about to become less onerous.
And he intends to build a wall along the Mexican border at a cost of $US5 to $US10 billion (funded by Mexico) in order to keep out illegal immigrants. Those already in the US would be deported (as happens here) rather than periodically made legal (as has happened in the US up until now).
On election eve the Economics Society and the Monash Business School polled 36 leading economists on whose presidency would be best for Australia. Thirty said Clinton, none said Trump.

One of the most stridently anti-Trump was 89-year old Max Corden, the doyen of Australian economists who is still working at Melbourne University. He said Trump would be a disaster for the world, "like another Hitler or Mussolini".

Unlike many who evoke Hitler, Corden has experience of him. He remembers the excitement when as a tiny boy in Germany he snuck out of his home to wave at Hitler's motorcade. He remembers his dad being interned in a concentration camp, and he remembers the incredible good fortune that allowed him to escape to Australia.

Take risks - if you win you will become wealthy, if you lose you will become wise
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Black Panther
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The Anglo Australian Political class will take care of it.

Australia to become a state within America
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Bardon
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Rufus
10 Nov 2016, 08:10 AM
One of the most stridently anti-Trump was 89-year old Max Corden, the doyen of Australian economists who is still working at Melbourne University. He said Trump would be a disaster for the world, "like another Hitler or Mussolini".

So which authoritarian leader can we relate him to at this very early President elect point in time:

Lenin, no
Hitler, no
Mussolini, yes
Peron, yes
Stalin, no
Mao, no
Blair, yes
Obama, yes
Rufus
10 Nov 2016, 08:10 AM
he will walk away from the hard-won consensus on the need to tackle climate change,
The closure of Hazelwood power station is the real things that is disastrous for the Australian economy.
Edited by Bardon, 10 Nov 2016, 10:38 AM.
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Rufus
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Bardon
10 Nov 2016, 10:35 AM
So which authoritarian leader can we relate him to at this very early President elect point in time:

Lenin, no
Hitler, no
Mussolini, yes
Peron, yes
Stalin, no
Mao, no
Blair, yes
Obama, yes

The closure of Hazelwood power station is the real things that is disastrous for the Australian economy.
I think Peter Martin went a bit over the top, but it's a view held by many.

The reference is clearly pointing at Hitler, not the other leaders you mentioned.

I don't believe we are at that point by a long shot, but if Hilary Clinton is jailed I will become very alarmed.

If Mitt Romney and Paul Ryan and co are jailed, I will be digging a bomb shelter.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Foxy
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Zero is coming...

Trump is a great result.

Well done Trump.

The female vote brought him home.

Nothing like money and power to attract a woman.

Well done Mr. Trump.

Foxbat

https://www.youtube.com/watch?v=bGlN8m8SC08

Flash the cash and you will drown in gash....
Go USA...

https://www.youtube.com/watch?v=BIREoy7BViA

https://www.youtube.com/watch?v=uyTHta3YI1g



Clinton voters caught on tape the morning after...

https://www.youtube.com/watch?v=flqoejfrCyI


:D :D :D
Edited by Foxy, 10 Nov 2016, 12:54 PM.
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newjez
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I have moved a large part of my pension into US share funds.

If there is going to be a winner, it will be the US.

At least before an 87 type crash.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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deluded
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Rufus
10 Nov 2016, 11:35 AM
I think Peter Martin went a bit over the top, but it's a view held by many.

The reference is clearly pointing at Hitler, not the other leaders you mentioned.

I don't believe we are at that point by a long shot, but if Hilary Clinton is jailed I will become very alarmed.

If Mitt Romney and Paul Ryan and co are jailed, I will be digging a bomb shelter.
I'm genuinely interested to know how you've gotten to a point where you will become 'very alarmed' when a criminal goes to jail.
Edited by deluded, 10 Nov 2016, 01:04 PM.
Real Trump News -- Real Climate Science News -- Real Democrat Party News
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Foxy
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Zero is coming...

deluded
10 Nov 2016, 01:04 PM
I'm genuinely interested to know how you've gotten to a point where you will become 'very alarmed' when a criminal goes to jail.
Yes that is what i can not understand, who could support a person that if she has done what they say she has done is true??

How,??

Anyway the people did not support her and now Mr. Trump is the winner...

Peter

But honestly who would support Hillary and how did she get incharge of the party???

I think Julian Assange made people aware.

Peter
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Rufus
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deluded
10 Nov 2016, 01:04 PM
I'm genuinely interested to know how you've gotten to a point where you will become 'very alarmed' when a criminal goes to jail.
What proof do you have that Clinton is a criminal, and please don't bore me with idiotic conspiracy theories.
Take risks - if you win you will become wealthy, if you lose you will become wise
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deluded
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Rufus
10 Nov 2016, 01:18 PM
What proof do you have that Clinton is a criminal, and please don't bore me with idiotic conspiracy theories.
Visit Assange's website. Or simply Google search 'what can Hillary be charged with'.

It's all there for you to read. But you're not willing to do it.

However, you have answered my question, so thanks.
Real Trump News -- Real Climate Science News -- Real Democrat Party News
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