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This posting is provided "AS IS" with no warranties, and confers no rights. The opinions expressed within are my own and should not be attributed to any other Individual, Company or the one I work for. I just happen to be a classic techie who is passionate about getting things to work as they should do (and are sometimes advertised and marketed as being able to?) and when I can I drop notes here to help others falling in to the same traps that I have fallen in to. If this has helped then please pass it on - if you feel that I have commented in error or disagree then please feel free to discuss with me either publically or privately? Cheers, Dave
Thin Clients, VDI and Linux integration from the front lines.... Raw and sometimes unedited notes based on my experiences with VMware, Thin Clients, Linux etc.
While I was back home in Australia the latest Government Budget was released, initially there was a lot of press making a big thing that there was going to be a Surplus announced (i.e. The Government had spent less than they received) and I didn't really think it was that big a deal. It wasn't until the following Sunday when I caught a review of this on a News Program did it really hit me what it was all about - this wasn't just for the year on year accounts - Australia is now debt free!! Just over a decade ago we were at $96 Billion and rising, now the Government is putting money away for a rainy day.
Ref.
Low Australian Government debt

Chart: Sound fiscal management means a reduced government debt burden

Australia is a world leader in reducing total general government net debt

Chart: Australia is a world leader in reducing total general government net debt

So, where did all the money come from? It's not hard to see this in action in Perth, this is the infrastructure headquarters for most of the mining going on in West Australia with some huge Iron Ore deposits, Diamonds, Gold, Magnesium, etc...
Over in Queensland they have huge Coal reserves that are also needed in the smelting process to convert the Iron Ore in to Steel, in North Queensland they also have some massive Bauxite deposits that is the raw material for making Aluminium.
 
(Side note: Australia had 5 Uranium Mining companies 5 years ago, now the Government is thinking about changing strategy and allowing more - all of a sudden we have over 70 Uranium Mining companies...)
 
China's recent push towards industrialisation over the last 5 years or so has had quite a big impact on their demands for raw materials and energy, and as a consequence they have been buying big - in some markets like Iron Ore they account for nearly 40% - and the prices have been rising. The hike in prices of commodities and resources has certainly been a boon for Australia and the good news at the moment is that the Government would appear to be spending wisely on Infrastructure upgrades to Ports and Rail etc. while still being smart enough to put some away for a rainy day, as the conventional wisdom would indicate that the gravy train will come to a halt at some stage?
 
Having said that, I have read some reports in the press that there were periods of high commodity prices in the past relating to the Expanding Industrialisation of the US back in 1900 - 1915 as well as the period relating to Japan post-WWII in 1955 - 1965, and this model tends to predict that we could be looking at high Oil, Iron and Gold prices for some time yet? Don't forget that as China becomes more wealthy it's people will start to want all the other Items it has been reading about in the west for years, TV, Cigarettes, Alcohol, Cars, roads for the Cars? etc. AND then theirs India not too far behind that?
 
More reading on this subject...
 
One anecdote I did hear since returning from Australia, Iron Ore increased in price last year by 75%, this year it has risen by 19%, to the point where old cars "Clunkers" in the US are being crushed, and sent in Containers to China based on their scrap metal price to be melted for steel - I don't know if it's true, but their is a ring off truth about it? 
 
This last one is an advert for spread betting, but it does catch the bullish mood?
China is already hoarding raw resources... like a giant whirlpool, China is swallowing nearly half the world's cement... 30% of the world's oil... and more than double the world demand for copper. In fact, in April their State Reserves Bureau openly said it wants to add a whopping 10,000 tonnes to China's copper reserves in the near future.

    China will also consume 2.2 billion tons of coal by 2010... running a coal deficit of 330 million tons. And China is currently building 50,000 miles of motorway - about the same amount as the entire American interstate network. They're planning to do this in 5 years; the Americans did it in 40!

And finally a note of caution, when and where might this all come to an end?
This article not only deals with food and grain, but the potential for water shortages and pollution could disrupt the grand plan.
Towards a Food Crisis in China and the Whole World?
Posted on Monday, June 5, 2006 8:59 AM IT Management , Real Cool Stuff | Back to top


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