Whateley calls Abbott dash!

Real Economics here, your one and only source into the world of Australian Economics.

My deepest sympathies for the lengthy and uncharacteristic delay between posts. As it happens I was called away for a luxury weekend to talk economics with the Honourable Wayne Swann. So man your computers as a backlog of economic news and information comes your way. To get us underway is an interesting little article I stumbled upon...

The effects of the dismal conditions in Greece have hit an unexpected group of Greeks, prisoners.

http://greece.greekreporter.com/2012/05/29/food-shortage-in-peloponnesian-prisons-due-to-state-budget-cuts/

Not only are the everyday citizens of Greece being harmed, but as reports show, the Greek Prison system is in urgent need of funds with prisoners starving and levels of malnutrition rising. xoxo Real Economics.

Real Economics here, your one and only source into the world of Australian Economics.

Did someone happen to mention a two speed economy? Retail sales in Australia are shocking and it be frank it is surprising to see the amount of shops still open given the horrid conditions. The best thing that you can do right would be to buy local and support the Australian retail industry in its crippled state. Although WA is booming is it great news given the turbulent nature visible over the past four years? xoxo Real Economics.

Source: TD Securities

Real Economics here, your one and only source into the world of Australian Economics.

Demand factors affecting External Stability:

Disposable Incomes:

When disposable incomes rise, consumption increases as people have more money to spend on their wants. This grows the demand for imports, since there will not be enough goods and services available in Australia. This increases the CAD due to increased debit transactions.

Interest Rates:

When the RBA sets high interest rates this means that it is more expensive to gain access to funds. This results in decreasing consumption and investment (therefore Aggregate Demand) and the Australian CAD should fall as there will be less demand for imports.

Business Confidence:

Increased business confidence attracts greater investment from overseas. As businesses are more optimistic about the future they tend to purchase more overseas capital, increase the Australian CAD.

Consumer Confidence:

When people are confident in the Australian economy they will tend to purchase more imports, increasing the CAD. This is because at times of extremely high consumer confidence the economy is near its productive capacity and the spill over causes an increase in spending on overseas imports. In these times more of the Australian Dollar (AUD) may be placed on the Foreign Exchange market causing a depreciation in the AUD. Therefore if increased consumer confidence causes increased consumption as well as depreciation of the AUD, it is evident that it creates increased external stability.

Overseas Activity:

As we know from earlier this year greater economic activity in overseas countries such as China causes a greater amount of exports in Australia. This increases the amount of demand for the AUD of the Foreign Exchange market and as a result causes the AUD to appreciate. Increased exports also help to improve our CAD as there are more credit transactions.

xoxo Real Economics.

Real Economics here, your one and only source into the world of Australian Economics.

At around 12:45pm today share prices in Bando Industries dipped, the first time since the company went public almost a week ago. The cause behind the minor fall in price was the announcement by Ritchie Holdings, that he and his firm had launched a new blog, due to the immense pressure placed upon them by the “new kid of the block”.

By the close of trade stocks for Bando Industries had risen back up and finished the day with a modest 1.42% rise in price. The rise was due to a press release from the company stating that more time and effort would be placed into their already booming blog.

CEO Martin Bando stated that “the unprecedented move by Ritchie Holdings to move to a new hosting site had not been forecasted”. Bando continued in his press release to say that “although there are two players now, Bando Industries still holds a complete monopoly on the so called blogosphere”.

The Ritchie Holdings IPO which occurred yesterday has been dubbed by many economists as a “failure”. Data from today shows that it has been one of recent history’s worst initial public offerings and the only dispute is which is worse, Facebook or Ritchie Holdings? xoxo Real Economics.

Real Economics here, your one and only source into the world of Australian Economics.

Tonight on Q and A David Marr said that Australia is a "miracle" economy. Perhaps he is right and Australia is in a strong economic position, definitely aided by our powerhouse mining and minerals sector. On the other hand there are many more indicators that point towards the other view that Australia is sitting on the edge of an economic cliff. Retail figures prove that other sectors of the economy are sinking lower and lower by the day, although we may see a change in these figures as the Australian dollar depreciates.

Do you think that Australia is in the dire situation we are lead to believe, or should we be grateful that our economy is still afloat even though coming so close to sinking by the way side?

Yet another Labor policy shambles. 

In other news that has made a prior minor appearance on Real Economics, the Australian Labor Party is again in trouble with their announcement of letting Gina Rinehart import 1700 offshore workers to be employed in the Pilbara region of WA. It seems that the ALP is facing a torrent of decisions which have turned around and shot them in the foot. Do you think that labour will have any chance at the polls next year, and if they do, will it be with Julia Gillard as their leader? xoxo Real Economics.

Real Economics here, your one and only source into the world of Australian Economics.

http://www.abc.net.au/news/2012-05-27/greek-crisis-sees-new-wave-of-migrants/4035548

 The above article from The ABC speaks about a recent influx of Greek immigrants into northern Australia. Many of these Greeks who lost it all back home are making the most of the strong labour conditions in Australia's top end. Do you think we should encourage this growth which is aiding people who want and need to start a new life, or do these jobs belong to the unemployed of New South Wales and Victoria (forget Tasmania). xoxo Real Economics.