S M J

Waiting for the U.S. Treasury Bubble to Burst

"Bubbles don’t happen when many call it so - the sign would be when a number of new treasury funds are floated". Really ? What about self fulfilling prophecies in economics ? It is generally accepted by all economists that when a growing number of people believe in an event, it becomes very likely because everyone contributes to it by acting accordingly. Just a thought !

Artificial U.S. Dollar Rally Is Coming to an End

I agree with the author to the extent that while US$ is probably in for another round of decline and given the upcoming lower unemployment figures that economists are predicting for Europe, it is likely that Euro will also follow the suit later on, perhaps by mid 2009, the best bet is the Asian currencies (rightly argued by one commentator except Yen). Warren Buffet is no stupid when he moved most of his stock holdings to South Korea by pulling out of the US and China.

Australia's Economy Sinks Further into Recession: Old Fallacies Abound

Beautifully written piece. I agree with your conclusion that economies are driven by businesses and production; not end-user sort of consumption. With the confidence of businesses and manufacturers drowning not only production will come to a halt but any consumption incentives such as Rudd's stimulus package, will only cause the money to be saved by the consumers because they would like to secure their future in case they are fired from work of which the possibility is increasingly high in these times. I tend to disagree with you that supply side economics hardly ever pulls an economy out of trouble because this is what Keynes made happen in 1930s. However, these are different times and I agree with you that little can be done about this recession where mood in both the manufacturing and working classes is at best pessimistic. If a higher minimum wage rate is fixed by the government as well as other conditions are put in place which will make hiring expensive and riskier for the manufacturers, then we have certainly had it. We are certainly talking about unemployment rate leaping at 12 percent or more within few months. Already the government's low unemployment figures are being disputed by various experts and institutions. Anyway, a very well written piece. Please keep it up. It will be good to know your thoughts as economic crisis deepens worldwide and affects Australia.