Frankly, we don’t have a clue. When the Treasurer thinks it is reassuring to tell retirees not to panic by taking the dollars out of their super funds, we know that he must be getting jittery. Yet that was Wayne Swan on radio this morning. Australians considering accessing their retirement savings as a result of the latest global stock market crash should be very calm, said our Treasurer. Worried investors should remember the Australian economy was in a stronger position than others.
It will be some kind of minor miracle if words such as that reassure anybody. Far better if Swan just told the truth and said something like: “I really have no idea what’s going on in the world’s financial markets but I do know there’s nothing I can do about it. All Australia can do is sit tight and hope that the Europeans and the Americans finally sort out their problems.”
Market madness. So most of the pundits put the stock market collapse down to the actions of a ratings agency in downgrading the credit rating of the US because it has got riskier in lending to the country’s government. Yet, the interest rate wanted by people with money when they lend to that government, actually falls.
And then there’s the little matter of the $A-$US exchange rate. Australia remains a paragon of virtue in the eyes of Standard and Poor’s with a better credit rating than the US and the value of our dollar compared to theirs falls from about $1.09 to $1.01.
Better this time? In May last year, the European Central Bank went in for a little bit of bond buying when panic set in about the ability of Greece to meet its international debt obligations and interest rates began to soar. There was an immediate impact but the benefit proved temporary.
Now the ECB has embarked on the same strategy with the bonds of Italy and Spain with the same initial impact of pushing down interest rates.
But will the final result be any different? There is still no agreement among European nations, who must eventually pick up the bill as to how much should be spent on this rescue mission.
The dictator lingers on. Hopes for a short, sharp bombing raid or two doing the trick have long since past. Muammar Gaddafi clings on in Libya with no early departure in sight.
The odds-makers still fancy he will be gone by year’s end.
Not a good tactic. For Immigration Minister Chris Bowen to be giving public advice to the High Court about when it should hear a case does not strike me as a tactically clever thing to do. It is the judges who have the power this time, not the politicians. And their honours do not need the advice of an embarrassed minister of the crown to tell them what matters are, and are not, important.
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