2008 in the crystal ball
A new year calls for a new set of predictions from Big Island. Unfortunately, the gypsy lady with the cats who lived out the back disappeared over the break so I have to produce the required prognostications the hard way, by realistic projection from known facts:
Reserve Bank of Australia data shows the average national credit card bill was $2993 in October 2007 and that we owed a total of $41.28 billion, double the amount owed on cards four years ago. To these amounts the Xmas spending must be added, though early figures suggest that shoppers have been cautious with their cards. That caution leads to our first prediction, that Australians will realise in 2008 that the much-vaunted economic growth of the Howard era was illusory - a bubble caused by easy loans - and that they now face higher interest rates on bigger debts.
Groan ... I cant go on with this today. Predictions on jobs outlook, the US, Iraq, Pakistan and Afghanistan and the Chinese Olympics when the cats come back.
Later ... the cats are back, but there is no longer a need for predictions. The international financial crisis which this magazine has been outlining since 2002 is upon us. Investors worldwide have suddenly realised that the US is a shaky and shonky business partner. This is no surprise to the cats since we wrote here in 2003 on the topic of the free trade agreement imposed on us by the US and their friends in Canberra:
Australia's media have so far given too little weight to the seriousness of our being excluded from the recently-formed Asian peace and trading bloc.
As Asia's canniest and most experienced leader, Dr Mahathir, has just bluntly told us, we are out because of our newly-underlined role as cats-paw for the US, which is itself very definitely out.
The choice before us is: join what will be the world's biggest trading bloc, or join the US, which is an empire in decline.
The sum total of Gross Domestic Production on the western side of the Pacific surpassed the total on the eastern (US) side in 1995, and the trend is obvious. True, we pay more money (mainly for interest; military hardware and intellectual properties like movies) to the US than any other nation, but we SELL more to Japan alone than we do to the US. Factor in the rest of Asia including China (our third largest customer and growing fast) and the illusion that this is an equal choice disappears.
Australia, with its resources, primary production and innovative technology, complements the Asian economies - in fact, it completes the set. With the US, though, we have similar and hence competing interests. The proposed Free Trade Agreement will worsen an already unfavourable trade relationship, by further increasing what they make from the Australian market, while increases in our sales into the US remain problematic.
Looks like the cats were right all along. Miaow
