Latest News from Newealth

16 Jun 2021

The Global Liveability Index 2021

The exciting news is not just that Auckland, New Zealand came in 1st but that Australia has 4 cities ranked in the top 10.

They are Adelaide ranked 3rd, Perth ranked 6th, Melbourne ranked equal 8th and Brisbane ranked 10th.

And this during the COVID-19 Pandemic.

Click to read.

 

8 Jun 2021

Australian Economy: We are flying

It is amazing how fast Australia is recovering from the impact of the COVID-19 Pandemic.

For example, Australia continues to retain its AAA credit rating with S&P Global Rating having taken us of the downgrade list and moving our AAA rating to ‘stable’.

The Australian unemployment rate has fallen to 5.5% in April with ANZ reporting that May recorded the highest number of job advertisement in over 12 years.

Australia’s real GDP (Gross Domestic Product) is in positive territory and growing ahead of most countries.

Click for chart.

This is all good news. What could go wrong?

Well, we will have to wait and see.

 

3 Jun 2021

Iron Ore: We live in a material World

If you were not aware, it was not the Federal Labor Government that economically saved Australia during the 2008 Global Financial Crisis, it was China.

China needs steel to build and the key ingredient for steel production is iron ore which the Australian continent has in excess volume.

China’s demand for iron ore began to accelerate in 2000 and accelerated faster again during the 2008 Global Financial Crisis and continues to grow.

This trading partner (China) has just kept buying greater and greater volumes of iron ore which is economically fantastic news for Australia.

Again, it is not the Federal Liberal Government that is economically pulling Australia through the COVID-19 Pandemic, it is China’s insatiable consumption.

Click for chart.

China has publically announced that it is vigorously working on finding alternative supplies of iron ore to reduce its reliance on Australia.

It is more than likely that they will have success but to what extent is the question.

If China completely stopped buying iron ore from Australia we would go into an economic recession because currently there is no alternate export revenue item big enough to replace AU$136 billion in earnings and which employs an estimated 262,000 workers directly and supports 1,000,000 workers indirectly.

It is extremely unlikely that China can immediately stop buying iron ore but the future is an unknown and so as Benjamin Graham taught, remain invested according to your appetite for volatility and when fear and panic take hold, then react by buying more quality assets at discounted prices.

 

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