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I believe we are misreading the signals created by Chinese demand for Australian commodities. Firstly it hardly seems fair to punish Aussie mortgage holders with high interest rates when they are only a minor contributor to the Asian boom. Secondly in echoes of Howardism the new lot seem to be saying we need more population, more infrastructure, more economic backbone and more resource depletion to maintain the pace. That could look silly one day.
For starters I'm sure the Chinese would like to send their own people to work the mines. Buying big chunks of BHP and Rio Tinto could be a first step. Yes that does sound like Arthur Caldwell. One day either the rich deposits will be run down or the Asian boom will have run out of steam. We will be left with holes in the ground and a bunch of clapped out plasma TVs with few jobs or money to buy new ones. So I think it may be a good thing for everybody if the Asian boom slowed and both economies moved to a more sustainable footing.
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Changing tack I'm not writing off Geodynamics yet as they still have a year to supply the outback town with geothermal electricity. If that doesn't pan out no doubt supporters will say they were shafted somehow.
Agreed - I don't know why the RBA thinks making interest rates rise will affect inflation when all the driving forces are international.
The only thing I can think of is that they think putting people out of work in the south east will make them move to Queensland and WA and reduce cost pressures and labour constraints for all the new infrastructure / extraction development.
In which case I think they are going beyond what they should be doing.
As for Woodside, they are dropping off all there alternative energy investments (Ceramic Fuel Cells too this week), not just GeoDynamics. They've decided they are happy just being an Australian LNG company - classic American management - focus on the next quarterly earnings statement.
The sooner we outsource all economic advice to an Indian call centre the better.
We will probably get the same advice, and given it will be at least 50 times cheaper the probability of some financial gain is vastly increased.
Soon to be made redundant Australian economists should of course relish the opportunity of demonstrating the overall economic benefits of this proposal as a demonstration of Ricardos Theory of Comparative Advantage: it would be hypocritical not to.
Note: the wiki entry has an interesting reference that suggests that this theory is impossible to falsify which to those who know their Popper, means it is, to put it nicely... outside the realms of science (possibly). discussion starts at p 13(15)