Australian Crash by Christmas 2010

July
China closes 40% of Steel industry for maintenance
August
Iron ore prices and volumes drop
China announces that they are to close by the end of September “762 cement factories, 279 paper mills, 175 steel mills, 192 coking plants and an unspecified number of aluminum mills”

Early September
July maintenance of Chinese steel industry causes large drops in volumes and prices of iron ore and coking coal and trade surplus drops from $3.5 billion to $1.89 billion in July, Analysts had expected a $3.1 billion surplus.

Early October
Effect on over 2000 Chinese factories on August Trade account
Early November
US election, probable Republican landslide.
Negations for quarterly Iron Ore prices, probable massive drop in Iron Ore prices
Effect on Trade account of completed closures of Chinese plants

Main reason for Republicans huge support is their focus on:
Reducing national debt, decrease tax rates, increase nuclear and oil projects.
They want to build the economy not on spending or regulation but by giving business and investors more of their profits to spend on newly opened energy markets.

Prediction December 2010
Improving USA economy
Australian mining industry plummets
Australian property prices following mining industry over the cliff

I would like to go on record as early as November 10, 2010 if there is not a markedly increase in the US economic sediment AND demand for Australian resources are much lower AND property prices are heavily falling nation wide- I will climb “Jacobs Ladder” (up and down as many times as issues I was wrong about) in Perth (as I will be there visiting) and I am so confident that everything is aligned and with a weak Australian federal government the free fall is now on its way.

While I hate predictions, I'd give that a 'plausible'.

You may need to add a government intervention clause, where if the new government starts giving out cheap loans through Aus Post (or something equally stupid) then it doesn't count.

I really hope you're right. After the housing boom destroyed us economically, we've saved every cent over the past 5 years and are really growing impatient waiting for the rectification.

I like the idea of economic sediment. I had visions of a stream that is fine during periods of high activity - it can pick up more and more material. But when things slow, there is a large amount of fallout. It needs constant increases in power to maintain the status quo, any small drop off in velocity has enormous consequences.

I believe that we are entering such a period now, a slowing (even to 'moderate' economic flows) is enough to cause a major fallout due to the excesses that were built up during times of massive velocity.

if the new government starts giving out cheap loans through Aus Post (or something equally stupid)

What's wrong with that?
Signed
Wayne and Julia

I didn't know where to put this observation so I have just put it here for the time being.
With the takeover of Lihir Gold by Newcrest, Andean Resources became Aus second biggest Gold company with HO in Perth. It's activities are in South America. As of Friday Andean is being taken over by Goldcorp of Canada. I thought 'hells bloody bells! Another Aus company being sold off to pay for current profligacy' However I* was wrong...Andean was already 80% owned offshore.
The deafening silence on foreign ownership of our resource companies is quite amazing and, putting on my tin-foil hat, is surely evidence that the nation is run by and according to the wishes and interests of some sinister small power elite.
I can't be too moralistic here...I've taken the money and run!!! I can't hold back the damned tide on my own and I'm getting past it anyway!!

As if we need more debt to prop up house prices.

Its not just house prices that the debt is propping up. Prof. Keen has done some interesting modelling on the effects of debt on total aggregate demand and GDP, and consequently unemployment.

Whoa, a bold call Rob. I hear Jacob's Ladder is not for the faint of heart. But as Gim said, you may want to make it conditional in that all bets are off if the gov (unsurprisingly) steps in again one way or another.

If China does tank like you've predicted there however, I'm not sure how much the gov could do though....

Are we 'it' yet?

So short term good for jobs, long term increased liability?

If you're not fit, three trips up and down is tough.



It does have a great view from the top that you can soak up while resting.



I actually haven't seen it since it was reopened, it has some landslide trouble in our last big storm. Might be worth the trip to see how many runs I can do now.