This week has seen our expected continued strengthening of stock, commodity and currency markets. And, dare I say, Australian property prices too.
You see, they are all connected in this modern totally over-connected world of ours. I say over-connected because it really is quite relentless this never-ending barrage of news and social media connections. No matter how much you try to keep it to a minimum, it just never stops.
This is why it is so important to step back and see the big picture…
Well, having done just that, I have to tell you how incredibly exciting the future looks.
While we have been expecting continued strong all time record highs in the US stocks market, which happened several times in just the past week, and for property prices to sustain further strong gains, my concern is, I have under-estimated just how positive the future looks? It could be even better than I have been forecasting for the end of the decade and beyond.
We continue to see very strong economic data across Europe, China and the USA.
Yes, President Trump continues to get bad press, and some of it may even be true. The latest leak of the phone conversations with the Prime Minister of Australia and the President of Mexico is not helpful. Nor is news that a Grand Jury has been empanelled regarding the Russian hacking fiasco. Still, this is unlikely to be directed at the President himself.
Closer to home, Malcolm Turnbull certainly has his hands full. With not much power at all, just a one seat majority, uproar within the party room about same sex marriage, and now the embarrassing at the least conversation with Trump release, it would be fair to say the PM is teetering. The only reason he may well stay PM to lose the next election is that the party room knows how over leadership changes the Australian electorate is. At this point, it is a case of damned if you do and worse if you don’t.
The most likely scenario is all of the Coalition spending most of their time crossing their fingers. As there is not much else they can do really. It is great that the PM is calling in the energy suppliers about sky rocketing power bills. While this can sometimes be a bit of a political witch hunt, it is clear in the current situation that for an energy rich nation, something is badly amiss.
A hero role in this regard could even be enough to cement his leadership, and possibly at a stretch, scrape across the line at the next election as well. It really makes you wonder where we would be if only Tony Abbott had not made those terrible Captain picks, and kept Peta Credlin on? He would still be PM, and we may have even have had a functioning government all this time.
Malcolm Turnbull deserved his chance, but there is a gap between the smiling selfies with fans and real economic advancement for the nation, that cannot be ignored.
It really is a case of looking outside Australia for sound economic leadership, and happily, Europe, China/Asia, and even the USA are all making moves to accelerate global growth even further. Fortunately, and despite the broad failure of our political leaders, the private sector is, at last, getting on with the job of making the most of the global prosperity that abounds.
It would be nice if electricity prices were reigned in too.
All in all, expect on-going economic acceleration because of the rest of the world, and this will be more than enough to continue to send property prices skyward.
Clifford Bennett | Chief Economist