Yesterday we had a prediction that, of all things, property prices would INCREASE (yes, go up) over the next three years. This despite the credit crunch, etc, etc, etc.
The only logical conclusion for this is that "the world demand will continue to grow" (okay, that's my thinking anyhow) - which I think is bollocks. My prediction is that China is about to turn off the tap. It won't be completely shut off, but compared to now, it will be a trickle.
It seems obvious to me that the resurgence of China is largely off the back of the Olympics and the desire of the regime to "look good" before a worldwide audience. But what happens after August of this year? Once the spotlight has moved, why would they keep this up? We already know that they're facing a problem with inflation and they've mooted trying to curtail their rampant growth (back to 7-8% down from it's current level of 13-15%). That's a halving of current growth.
On the flipside, there's only so much of an increase in resource costs that China can stomach. It has no choice at present because they've got a deadline to meet - but once August 2008 has been and done, there will be nothing stopping them.
So, my (rather bold) prediction, is that China WILL start ramping back in the 3rd and 4th quarters of 2008 and that pull back will put the fear of god into the resources sector (which will already had started suffering thanks to global restraint thanks to the oil price) and prices will start to tumble. My guess is that we'll even see Oil come back to "sane" levels - but by then the rot will have set in. Confidence will spiral out of control, the resource sector will start shutting down "inviable" operations and places like Mackay, Perth, nay even Townsville will feel the effect.
Thousands will loose their homes and the damage to the economy will be unrelenting. So by the time resource prices are "affordable", the rest of the economy will be so scarred that it'll lie dormant for many years.
I still don't understand why EVERYONE seems so convinced that China will continue to act like a capitalist economy. How ANYONE can predict what they will do is beyond me - let alone speak with confidence that "they'll grow forever". I'm sorry, but it just doesn't happen like that. China MUST take a breather or they'll hurt their own economy and at 7% it's still "booming" - but when everyone expects growth to keep going up and up, well, we all know how well markets take that sort of news.
So, lets bring it on. Time has come to burst this bubble so we can all get back to normality (well, once we've all experienced the pain that is)...
Tuesday, June 17, 2008
Wednesday, June 04, 2008
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A recent blog on Larvatus Prodeo got me stirred up about a long held whinge RE: how the move to "franching" everything led to team names I had no association with.
Rugby Union lost me as “growing market” when the Super-12’s went “franchise” mode and they became SO obsessed with “branding” that I could never work out who was playing who.
Gone are the days of Queensland vs NSW - we now have “the Blues vs the Crusaders”. I keep expecting to see NSW playing against … well, actually I still have no idea who the Crusaders are. I used to think the Highlanders were from South Africa (instead of NZ) because I kept picturing Tabletop Mountain in Jo-burg (etc, etc, etc).
The same was true of the “Sheffield Shield” (sorry, Pura Cup - geez, what a crappy name for a competition) and the use of idiot names for the State Teams. I still hardly know who’s playing who in these matches as well.
Unless you’re a rabid supporter, these names mean nothing to Joe Public and rather than drag me in, they tend to frustrate me and turn me off them…