Tag Archives: GDP growth

Australia’s AAA Ponzi Rating: What Wayne Forgot To Mention

24 Dec

Everything’s fine.

Nothing to see here folks.

Move along now.

Back to your consumer spending.

Here, have another credit debt card:

Acting Prime Minister Wayne Swan says the reaffirmation of Australia’s triple-A credit rating by ratings agency Moody’s proves the economy is strong and the federal opposition is wrong to talk it down.

The treasurer on Thursday also labelled as “complete rubbish” media reports suggesting the country was on the brink of an unemployment catastrophe.

Moody’s said overnight that Australia’s AAA credit rating was “supported by the very low level of public debt and the country’s strong financial system”…

Uh … Wayne.

What else did Moody’s say?

The government’s debt rating of Aaa takes into account the aim of maintaining a balanced budget, on average, over the business cycle.

Oops.

As shadow treasurer Joe Hockey rightly (for a change) points out:

Without further detail, the government’s projection to reduce net debt to zero by 2020-21 is hardly believable, coming from a Treasurer who this year will chalk up his fourth huge deficit out of four budgets. It would require six consecutive annual reductions in net debt of $22bn. That is six consecutive surpluses larger in dollar terms than has been achieved previously (the largest underlying surplus was the $19.7bn achieved by the Coalition in 2007-08) or very solid growth in financial assets, which seems problematic given the likely continued financial and market volatility across the medium term.

Not. Gonna. Happen.

Even if the Green-Labor government succumb to Joe’s empty threat … which they won’t:

Default threat as Liberals issue debt warning

The Coalition has threatened to block any effort by the government to raise the $250 billion limit on public sector borrowing, potentially forcing the government to run out of money.

“Whilst the Coalition has supported this in the past, the government should not expect a rubber stamp this time,” Mr Hockey says in his article.

The Coalition demands could include scrapping the carbon tax and the mining tax, along with the benefits they are intended to finance, such as personal tax cuts and increased superannuation.

Does anyone seriously believe that the Opposition would force a government shutdown, and default on our public debt obligations, rather than increase the debt ceiling?

Not. Gonna. Happen.

What else did Moody’s say, that Wayne conveniently forgot to mention:

The stable ratings outlook is premised on the expectations that the government will maintain its low debt levels and macroeconomic conditions will continue to support fiscal consolidation.

Any trend or event that caused a long-term shift in budget balances to significant deficits and an increasing public debt burden might put downward pressure on the rating.

In other words, hope like hell that global macroeconomic conditions don’t continue over the cliff, and get back to annual budget surpluses pronto so that you can actually start paying down that “low” (but ever-rising) public debt level … or you can kiss your AAA rating goodbye.

Not. Gonna. Happen.

Mr Swan on Thursday also slammed a newspaper report that suggested the country was on the verge of a jobs crisis.

Sydney’s Daily Telegraph reported Australia was set to lose 100,000 jobs in the months after Christmas.

Not so, according to the treasurer.

“Our economy has strong fundamentals, we have low unemployment, we have strong public finances, we have trend economic growth and we have a huge investment pipeline.

We have “trend economic growth”, do we Wayne?

You’d better hope not.

Because if we do, then your budget surplus soothsaying is in very deep doo doo.

“The Liberals have been talking our economy down. But we have also got the Daily Telegraph today running a story which is simply exaggerated nonsense.”

Mr Swan said neither advertisers or their customers would appreciate the economy being talked down just before Christmas.

Why so much concern about “talking it down”?

You see, dear reader, the simple truth is this.

The word “economy” … in the modern, bankster-debt-driven sense … is exactly synonymous with the word “Ponzi”.

Both need continuous growth.

Generated by lots of fools at the bottom … whose money flows to the scum at the top.

Running a Ponzi is all about con-fidence.

You always have to be “talking it up”.

You can’t have anyone “talking it down”.

Because the moment that participants in the system begin to lose con-fidence … growth slows, then stops.

Horror of horrors … it goes backwards. The Ponzi begins to implode.

And the parasitic scum at the top begin to lose their sole source of sustenance.

You.

Likewise, a bankster-debt-driven “economy”.

Which is why the scum at the top are always so keen to … talk it up.

Australia has a AAA-rated economy Ponzi.

One of the last remaining AAA-rated Ponzi’s in the Western world.

More fool us.

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GDP Growth Hangs On China Thread

7 Dec

September quarter GDP data is out from the ABS.

Prepare yourself for much trumpeting from all the usual suspects (Government, lamestream media, Labor supporters) about the headline figure – “strong” growth of 1% (“seasonally adjusted” ie, fiddled) in the September quarter, thus lifting “annual growth” to 2.5%.

Prepare yourself to not hear any trumpeting of the fact that is still 30% below the Treasury’s very recently revised 3.25% “estimate” for 2011-12 … and now half the year is over.

Or, any trumpeting of the important detail. State Final Demand:

Click to enlarge

All the “growth” in July-September came from the mining states of WA (4.1%) and QLD (2.9%).

The rest of the country is either in (SA, TAS, ACT), or near (NSW, VIC) recession.

Make no mistake dear reader.

Australia’s economy … and Wayne’s “surplus” … is hanging on China.

Everything else is noise.

Is THIS The “Trend” Growth You Are Banking On, Wayne?

1 Dec

Isn’t it wonderful how inveterate liars and deceivers eventually get caught out?

From the Australian:

The Treasurer today declared the government was banking on growth remaining at trend to deliver its wafer-thin budget surplus in 2012-13, despite the threat posed by worsening economic circumstances in Europe and the United States.

Here is the newly-revised MYEFO budget “forecast” for GDP growth that Wayne is “banking on”:

MYEFO 2011-12, Part 1 Overview | Click to enlarge

Er … 3.25% annual GDP growth?

I have one chart for you Wayne.

From the RBA’s latest chart pack (trend line added):

Click to enlarge

So … Wayne.

“Trend growth” for Australia over at least the past 18 years (since 1993), has been slowly but steadily sinking towards 2%.

And yet, you really expect us to believe that we will witness way above-trend 3.25% growth both this financial year, and next? In spite of all the increasing turmoil and volatility in a debt-saturated world right now?

Mr Swan said revised budget forecasts outlined yesterday were based on the “best judgment” of Treasury.

Having confidence in Treasury’s “best judgment”, is akin to having confidence in the “best judgment” of the band playing “In the Shadows” as the Titanic slowly sank beneath the waves.

Rather like Australia’s GDP “trend growth” slowly but surely sinking beneath the waves of a debt-soaked world economy.

And to think this government is introducing a world’s-highest carbon dioxide derivatives trading scheme scam from July next year.

Based on more modelling tea-leaf reading by the same Treasury “bozos” who originally predicted 4% GDP growth back in May.

The same “bozos” who could not foresee an onrushing GFC that even Blind Freddy could see (“Why Would Any Sane Person Believe Treasury’s Carbon Tax Modelling When Its Budget Forecasting Record Is This Bad?”).

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