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:

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?

It is normal around this time that people consider the upcoming year and even make predictions about what may happen. This year, I’m not going to do that. Instead, I will make predictions about what won’t happen in 2022.

It seems that suddenly everybody is talking about inflation. Better late than never, I guess. In Australia, the inflation rate for the full year to 30 September 2021 was 3.1%. The September quarter price index rise was said to surprise economists and the bond market traders. Some Chief Executive Officers of large Australian companies have begone warning their consumers that price rises will be on-going. I know that in some industries, suppliers are giving notice of impending price rises closer to 10%. Producer prices are increasing rapidly and that will eventually feed its way into consumer prices. The Consumer Price Index is the favoured inflation measure of many people, but producer prices give a better lead indication. Continue reading →