By Dee McLachlan
Is there really enough iron ore sitting in the ports of China to build 13,000 Eiffel Towers? And isn’t iron ore, Australia’s biggest export, the country’s main driver of a trade surplus and GDP growth?
I have, in past articles, commented on manufacturing industries in Australia collapsing, and that we are becoming a nation of tour guides and baristas. The main business and wealth earning industry, it seems, is sitting on property — and waiting for asset prices to rise.
I have little understanding of economics and had never heard of something called the Economic Complexity Index. Apparently this measure ranks countries based upon their economic diversity — the diversity relating to how many different products a country can produce, versus how many countries are able to make those products.
I was shocked, but not so shocked to learn, that Australia ranks way down at 77th place. Worse than Mauritius, Macedonia, Oman, Moldova, Vietnam, Egypt and Botswana. Worse than Georgia, Kuwait, Colombia, Saudi Arabia, Lebanon and El Salvador. We sit between Kazakhstan and Jamaica, and worse than the Dominican Republic at 74 and Guatemala at 75,
I was sent a link to the Medium the other day — and read it in this article, Australia’s Economy is a House of Cards, by Matt Barie and Craig Tindal. I quote:
“I recently watched the federal treasurer, Scott Morrison, proudly proclaim that Australia was in “surprisingly good shape”. Indeed, Australia has just snatched the world record from the Netherlands, achieving its 104th quarter of growth without a recession, making this achievement the longest streak for any OECD country since 1970.
For over a quarter of a century our economy mostly grew because of dumb luck. Luck because our country is relatively large and abundant in natural resources, resources that have been in huge demand from a close neighbour.
That neighbour is China.
Out of all OECD nations, Australia is the most dependent on China by a huge margin, according to the IMF. Over one third of all merchandise exports from this country go to China- where ‘merchandise exports’ includes all physical products, including the things we dig out of the ground.
As a whole, the Australian economy has grown through a property bubble inflating on top of a mining bubble, built on top of a commodities bubble, driven by a China bubble.
Unfortunately for Australia, that “lucky” free ride is just about to end.”
I wonder if the authors are really correct when they say “China isn’t as desperate anymore for iron ore,” and that in May 2017, “stockpiles at Chinese ports were at an all time high, with enough to build 13,000 Eiffel Towers”?
The full article is worth a read — but make sure you’re sitting down before you do so.
If only workers wages had kept up with the inflation of property prices , in Sydney Melbourne and other capital cities , then the dream would not have become unattainable . In reality wages have been close to stagnant for thirty years . Therefore we are not different here .
The bankers system has milked the people of this country dry . Repeating , borrow 1 million payback 2.5 million over thirty years . The only survivors today are cashed up investors , many with money from questionable activities . Truly our fall has been spectacular .
I speak to teenagers and those in their early 20s.
These are smart young adults… and they are scrounging for jobs… that wouldn’t allow anyone to live on their own in a Melbourne 1 br flat. ( hours shifts with 10 min break deducted from the time. A common story. I had a discussion the other day with an ex army man in security working for DFAT. Earning 60% of what he earned in early 2000 (not counting inflation). And I won’t go into the film industry… the people that work for nothing (on hope) I believe is bigger than the those getting paid.
A fly over with Google maps should verify the claims that China has massive stock piles of iron ore.
I DO know, Rio Tinto in W.A.’s Pilbara are still pushing to get as much iron ore out of the ground and shipped to China A.S.A.P. Kinda contradicts alternative claims being made by the highly suspect M.S.M.
Secondly, the IMF and the World Bank will not allow Australia to ever build such manufacturing industries on shore to compete with their own investment manufacturing facilities off shore.
Recently, there was a proposal before the Federal Government by a consortium to build an East-West high speed railway across the center of Australia bringing coal from Queensland to W.A. to power smelters to produce steel here in W.A. rather than sell our iron ore, the return trains were to bring iron ore to the East coast to turn into steel for the Pacific and Eastern states.
We were told the whole consortium had it’s finances sorted out and all it needed was the go ahead from the Federal Government…………………… Nothing happened, it just disappeared, like many such proposal before it.
We also had similar proposals in the 1970’s by none other than the late Lang Hancock, who proposed similar mills, only to blocked at every turn by our own State Government.
Note, BOTH these developments did not, at any stage, ask for Federal funding as the Adani crowd, which our Federal and State Governments seem to be licking at their heels.
We really need to ask ourselves, why would our Government that is SUPPOSED to run Australia for the Australian people, refusing to even consider such as the the above proposals, yet bends over backwards trying to hand over our taxes to a pipe dream that the banks will not
touch.
It’s bloody obvious, our Federal Government is incapable to developing Australia to it’s fullest potential thereby challenging it’s rivals over seas.
From Eddy:
“Secondly, the IMF and the World Bank will not allow Australia to ever build such manufacturing industries on shore to compete with their own investment manufacturing facilities off shore.”
Eddy, I have no awareness of the IMF’s mfg facilities. Pray tell us more.
Similar article on Zerohedge Last week. We all know what’s coming, they will keep smiling and saying everything is ok until the last minute. Then feign ignorance.
The transfer of wealth from west to east is nearly complete and won’t be long before the plug is pulled.
IMF vs BRIlCS.
Petrodollar vs gold.
I remember the “recession we had to have” and I have no doubt that what is coming will be much worse.
And prep.
And we pay these traitors, and give them huge pensions and perks. Australia lost it’s sovereignty in 1959 with the passage of The Banking Act of that year, which created our very own mini-Fed, The Reserve Bank of Australia, by which we got to pay interest on own own currency.
Brilliant.
In 1972 my Mum bought a 3X1 house on a ¼ acre block in Bayswater WA for 10,000. At the time she was earning about $100 a week.
But back then household appliances & cloths were 5 – 6 times dearer than today’s equivalent. Seems like an artificial sense of well-being is held together by cheap commodities.
Berry ,
yes two years net income , if saved , bought you a house .
The good old days .