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Monthly Archives: January 2013

January 2013 – Points to Ponder


A new year is upon us ……. How will the economy perform this year …….. How will financial markets perform ……… What about the property market ………..

Dear Readers,

Welcome to 2013 and may we all have a healthy, prosperous and fulfilling new year. Thanks to all of you for your continued interest, support, participation & feedback to this blog. Your positive feedback inspires me to explore new ideas & topics. I look forward to more of your active participation.

There has been a lively exchange of comments over my observations in the November 2012 articles (“What is the Value of my Property”) and December 2012 (Is your Home an ATM”) ……. Some of it quite emotional, others hilarious, and a few insightful ………. It made the year end get-togethers a bit more interesting.

The Big Picture

The US FED policy of ‘Perpetual Quantitative Easing’, along with ‘Interference in the money & bond markets’, continues with no end in sight. It is as if the only consistent theme behind the FED’s thinking is “Let’s learn & improvise as we go along ………….. and hope for the best”.
The US Government’s Fiscal position is not getting any better, amidst all the dramas of Cliffs & lemmings ……… Mind boggling figures of Trillions (more than 16 of it) continue to do the rounds, with farcical arguments over balancing the books in 20 or 50 year’s time ………
Is the US dollar being world’s De-Facto Fiat currency make it possible for the Fed to ‘Create USD out of Thin Air’ and get away with it ??
Is the Fed’s actions encouraging investors to accept more & more risk, with ever diminishing returns ??

What is all the ‘Daily Media noise’ telling us ? …… What are you hearing ? …… What do you think ?

Europe continues down the slippery slope ……….. More bailouts, stimulus packages, in short – Band-Aids on deep rooted fundamental political & economic problems ………………
Alarming unemployment & underemployment numbers, with youth unemployment closer to 50% in some places.
Major participants reconsidering their commitments towards the European Union ……… while mounting pressure building up in the UK for a referendum ………..

The ‘BRICS’ seem not to be as firm as they are claiming to be. Most of them seem to have played the same game as the US …….. Bailouts, economic & fiscal ‘support’, and ‘managing’ their currency & money supply …….
Some see a ‘Currency War’ coming, and others say it is already in progress.

Australia – We seem to be doing OK, in spite of our political & economic leaders doing all they can to undermine confidence, sound fiscal management, less govt intervention and a freer market economy.
Commodity prices, mainly Iron Ore & Coal, have seen huge volatility in price and uncertain signals on consistency of demand, from our major trading partners ……. and many say there is more volatility to come.
We seem to be thinking up more creative taxes, and gearing up for more and more ‘Redistribution of Wealth’ ……… hoping for a perpetual commodity price boom ………
There has been ever growing investment, worldwide, in ‘Mining & related infrastructure’, over the last 25 years or more.
Slackening of demand for, and volatile price swings of, commodities, combined with all this ‘Infrastructure’ …… Does not look good, does it ??

What are you hearing ? …… What do you think ?

Our ‘Property Market’ seems to be holding up OK, for now, but what about consistent growth in volumes and sustainable long term prices ??

Topic of the Month

Some interesting questions emerged, over the Xmas holiday break, in reaction to my observations in the November 2012 articles (“What is the Value of my Property”) and December 2012 (Is your Home an ATM”).

One of them was a lively discussion on how a young couple’s savings/investment/lifestyle choices, over a period of 10 years, affects their ‘financial health at the end of this period ………

Look out for some interesting, and sober, facts in the February 2013 blog ……….

Let me throw open the discussion to you. I look forward to your opinion, counter argument, response, constructive criticism, feedback, etc.

Looking forward to hearing from you …………

Hari

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Posted by on January 25, 2013 in Uncategorized

 

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