A great concern I have at the moment is the lack of consistency of reporting across the media. Whether it is the supposed “experts” in newspapers or on television programs of all types, the news is so varied that it could easily send the average punter into some sort of uncontrolled “frenzy”.
The big question that needs to be both asked and answered is how can they all have such different outlooks on the same thing? Well our “experts” generally have University degrees, some boast they studied at the best schools in the world and strangely enough they all seem to have been taught the same thing. They seem to have developed their own styles interpreting data, with their employer being the major influence on exactly how they decide to “independently” report the information.
In short either the “experts” have no idea, missed the class on the topic at University or are under the boss’ thumb and need to report in the way that is either most sensational or best tows the company line.
In the Australian Financial Review last weekend this topic was examined with our Governor of the Reserve Bank, Glen Stevens seeing hope and Prime Minister Rudd preparing the country for the worst – who is right? Both cannot be right, surely. Stevens ignored the world economic downturn for too long and delayed cutting rates until September 2008 – his vision and foresight are therefore in question before we even start the examination.
Australia has the highest interest rates in the G20 (Group of 20 Major Economies) and OECD (Organisation for Economic Cooperation and Development). Japan’s exports have decreased by around 50% on this time last year and recovery looks nowhere in sight. China, whilst enjoying high domestic demand, will continue to suffer as demand for exports continues to decrease as discretion spending abroad continues its downward spiral. The US, in all sorts of trouble, has an ever-increasing foreign debt and has structural issues that require more than an increase in consumer and business confidence to remedy.
I believe that a true recovery is quite a way off. There may be two steps forward, mirrored by two steps back and another 2 sideways as the world restructures and struggles its way out of the mess we now find ourselves in. This is not a quick fix situation and those claiming anything of the sort should be ignored.
There is plenty of pain to come – especially when the Banks have written down over $1 trillion USD in bad debts, with some economists predicting there is over $3 trillion USD to go. Thus, regardless of whom you choose to listen to, the reality is that harder times are certainly ahead.
Michael Marquette, Marquette Turner Luxury Homes