Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
Our latest chat about property focused on migration increasing, as announced by the Government over the weekend, and the impact on the markets – especially the rental sector. Plus of course Edwin’s regular updates on Sydney stats, and latest news.
https://www.ribbonproperty.com.au/
Go to the Walk The World Universe at https://walktheworld.com.au/
We all know interest rates are rising, and this is having a significant impact on mortgage underwriting, and so home prices and listing are rising.
But never fear, as the Government has a plan to save the market. Because now we know Labor will use the upcoming Jobs & Skills Summit as cover to launch Australia’s biggest ever immigration program.
So in today’s show we look at what they say, and also discuss the latest negative indicators on listings and auction clearances.
Go to the Walk The World Universe at https://walktheworld.com.au/
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This week Australia’s living God made international headlines by declaring a research project into crypto currencies.
The Digital Finance Cooperative Research Centre (DFCRC) on a research project to explore use cases for a central bank digital currency (CBDC) in Australia.
https://www.rba.gov.au/media-releases/2022/mr-22-23.html
The RBA announce coincides with the announcement by the Senate Select Committee on Australia as a Technology and Financial Centre.
Australians need to ensure that the RBA and the Federal Parliament does not impose totalitarian control through the Central Bank Digital Currency. Australia is headed down a path with little democratic consent and there is a lot of uncertainty were public policy is going in Australia.
There is a possibility that CBDCs will improve economic life in Australia, but there is also a possibility that it may not. The RBA cannot be allowed to alter economic life in Australia without a democratic mandate.
The Prime Minister and Treasurer need to explain why CBDCs are being developed in Australia and what is the public policy case.
The Australian people must ensure that physical cash is never eliminated and that freedom and privacy remains the corner stone of Australia’s payment system and economic life.
Go to the Walk The World Universe at https://walktheworld.com.au/
The UK is an object lesson in stupidity as energy prices go higher and bills to households more than double in a few short months. Some are threatening to start a payment strike, as people will be forced to trade off heating versus eating.
But we in Australia are, according to the recent RBA Statement, also exposed to persistently rising energy bills. This is of course caused by the gas cartel as I have been highlighting. But the truth is, where the UK is going we may well follow, so expect persistent higher inflation in coming months. UK inflation is predicted to reach 13%, thanks to high energy costs – so just how high will we be going?
Go to the Walk The World Universe at https://walktheworld.com.au/
This week Adams went to Canberra in a whirlwind sweep of the Federal Parliament to discuss a variety of topics. Adams had the opportunity to speak to people within the Coalition, Labor, the UAP and One Nation.
Adams had a number of very frank conversations about the nature of Australia’s economic problems. In total, Adams had more than a dozen meetings over the course of 2 days with political figures and the media.
Australia is in the biggest economic mess since becoming a country. Politics is stopping sensible discussion of our national problems and the considering of the correct policy solutions. So in fear of the Australian people, politicians believe that as a community, the debt bubble is not able to be discussed.
The position of some in Parliament is that the unvarnished truth and common sense is beyond the Australian people. Accordingly, democracy is the problem. This was foretold centuries ago.
Go to the Walk The World Universe at https://walktheworld.com.au/
A segment broadcast Tuesday night after the RBA rate hike on 2nd August, as I discuss the implications of the rises on ABC Illawarra.
Go to the Walk The World Universe at https://walktheworld.com.au/
Join us for a live discussion about the current state of economics and politics, with a focus on the busted energy markets with David Llewelln-Smith Chief Strategist at @NucleusWealth and founding publisher and editor for @Macro_business. You can ask a question live.
Go to the Walk The World Universe at https://walktheworld.com.au/
Like it or not, we have been caught up in the global boom in gas prices, which have been driven by bad Government policy locally, and the Ukraine Russia conflict, with the latter using gas as a lever of coercion, reducing Nord Stream flows to 20% and forcing up the price of the commodity and for European countries to grab supplied at any cost from anywhere else.
Data from the Australia Energy Regulator highlights how much prices have risen, with prices significantly higher than a few years ago, based on $ per gigajoule. last week Natural-gas prices soared in European with the benchmark gas prices rising 12% to 198 euros per megawatt-hour.
There will be a very timely DFA Live show tomorrow night with David Llewlyn-Smith, the Chief Economist at Nucleus Wealth, where we are going to explore these issues and ask what can be done. There is, he says an answer which would reduce energy prices substantially across Australia, it just takes political will.
So today we look at the state of play and some of the levers which might be pulled. The ACCC has today released forecasts showing that the east coast of Australia could face a shortfall of 56 PJ in 2023. At the same time last year, their Gas Inquiry interim report found 2022 could face a 2PJ shortfall. “Our latest gas report finds that the outlook for the east coast gas market has significantly worsened. To protect energy security on the east coast we are recommending the Resources Minister initiate the first step of the Australian Domestic Gas Security Mechanism (ADGSM),” ACCC Chair Gina Cass-Gottlieb said. “We are also strongly encouraging LNG exporters to immediately increase their supply into the market.” The root cause problem is that much of the gas produced in Australia’s east coast is produced by companies that are also LNG exporters.
Thus, we are exposed to the worst of the global markets, as LNG (the liquified form of the Gas) is sold internationally. In fact, by value it recently became one of our biggest exports – especially to China. The ACCC’s report raises concerns about the high level of market concentration, noting that LNG exporters and associates had influence over almost 90 per cent of the proven and probable (2P) reserves in the east coast in 2021 through direct interests, joint ventures and exclusivity arrangements.
Go to the Walk The World Universe at https://walktheworld.com.au/
My latest Friday afternoon chat with journalist Tarric Brooker, in which we explore home price dynamics, politics, and much more besides.
https://avidcom.substack.com/p/charts-that-matter-22nd-july-2022 for copies of the slides.
https://avidcom.substack.com/p/rising-rates-and-australias-over
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Have you noticed how everyone is now trying to pass the buck for the failed monetary policy, the disastrous results of which were magnified by the COIVD response. Politicians are pointing to the Central Bank.
Central Bankers point to conflict between Ukraine and Russia, and then also point to the COVID caused supply chain disruption (which was largely created by households and businesses suddenly being given cash to buy stuff, creating high demand as the lockdowns took a toll.
In effect no-one in authority wants to accept they helped create the problems we are now facing. And because of that reflex, we may not get to first understand the root causes which created the issues, and so how to address them correctly, and avoid similar issues down the track.
On just this theme, Bernard Hickey wrote an interesting piece on the New Zealand Site interest.co.nz titled “Reserve Bank may have lots of good company in the money-printing dog box, but that doesn’t let it or the Government off the hook on inflation”
Go to the Walk The World Universe at https://walktheworld.com.au/