Here’s an interesting business news item regarding Woolworths, one of the biggest national supermarket chainstores in Australia. The CEO is reportedly calling for an increase in his workers’ wages so their real purchasing power keeps up with inflation. Calling for? Who is he calling upon?Continue reading
Being asleep at the wheel. Being like a rabbit caught in the car’s headlights and too frightened to move. Struck dumb. Several phrases, none of them polite, but each of them could be applied to the senior executives of Australia’s Reserve Bank, the RBA. No competent person in a position of authority at the RBA would keep in place the current monetary policy settings.Continue reading
Milton Friedman coined the phrase “inflation is always and everywhere a monetary phenomenon”. He would have been aghast, I think, if he were still around to see this chart of the US monetary base:Continue reading
Germany is the largest economy in Europe. Things are not going well there. It is less than four years ago that President Trump spoke at the UN and was openly laughed at by the German delegation. Trump’s laughable comments, as perceived by the Germans, were to warn of impending serious problems since Germany had deliberately wound back its power generation capacity in favour of long term access to Russian gas.
Now look what two stories appear on the same page of the FT:Continue reading
Investing in an inflationary environment is new to me in practical, but not theoretical, terms. It has been obvious for over a year now that this current inflation was emerging. But it hasn’t made the practical decisions of how to invest any easier. The last time the world’s major economies experienced significant inflation was at the end of the 1980s. I didn’t have any money to invest back then, so my understanding was theoretical, not practical. I read about it. Fast forward 30 years, I’m now living on the success or otherwise of my investment decisions in what is turning out to be an inflationary environment. At the beginning of 2021, I made my views clear in public professional circles that inflation was emerging as a looming threat. Many didn’t believe me. But we all have to deal with it now.
So, how to invest?
Did anyone see the report the other day that a study by the Centre for Independent Studies found that university places in Australia could be increased by 80,000 at no extra cost? What? How is that possible? It turns out that the cost savings could be made by removing doubling up in taxpayer supported placements. Double degrees etc. Now, ask yourself this: would removing doubling up in taxpayer support to create savings such that 80,000 extra students could enter university be a good thing?Continue reading
It’s Budget night in Australia. The press used to report “beer up, cigs up” as excises were raised on those products. But the Financial Review was meant to be more adult, more thoughtful, more nuanced, more educated and less tabloid in its reporting. Until now.
The Government has announced a cut in the petrol excise duty. What has the Fin described this as? “Electric vehicle buyers are losers in tonight’s budget because they won’t benefit from the cut in the petrol excise. “
FFS, as they say in the classics.
My coal assets are doing quite well. Anyone who invested in coal in recent times on my advice: good onya, mate!
The Russian invasion of Ukraine remains an act of barbarism. It’s a disaster for many, if not most, of the Ukrainians. It’s also a disaster for the Russian people.
A swift capitulation may have been what Putin expected. It didn’t happen. Putin’s reasons for the invasion have been well telegraphed for at least 20 years and so it’s not really a surprise. The surprise is all on the upside if you are in favour of western civilisation, the nation state and energy independence.
There is a struggle underway for global hegemony. Klaus Schwab, Jinping and Putin wanted to be in charge. Unfortunately for that trio, Putin will fall first, Jinping will retreat to ponder and Schwab will die soon enough unfulfilled. He won’t be missed in this quarter.
Putin has shown: the nation state matters. It is still a thing. Culture and history matters. He has also shown that energy matters. Hence the scramble in Europe to fire up coal fired generators that they previously shut down.
Putin has also shown how hard it is to invade. Jinping won’t have missed the lesson.
Putin is almost out of gas. Ukraine will be supported by the West in rebuilding. Russia will be a Chinese vassal. The fourth turning looks likely to turn out well for everyone outside Ukraine, Russia and China.