Alan kohler - Look here for Kohler's analysis

[Ausdebt]

Hi, many folk including myself, enjoy the analysis of Alan Kohler. Here is a place to find pretty much anything to do with Kohler's economic analysis.

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"Heavy selling" "They no longer believe in the American recovery" "It's vanishing before their eyes" "Never grew as fast, never fell as fast" "Now predicting a double dip"

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A comparison of shares, property and gold at this end of FY.

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1 July




Kohler briefly mentions sharply declining property sales in the snap shot analysis of this day.


The last graph depicting central bank 'response' to the last depression and this one is revealing in two ways: Firstly, Kohler uses the graph to depict interest rate comparisons of the Great Depression rates in comparison today's (World Depression 2.0) interest rates. Note he doesnt mention the current depression, but he implies it by the first depression rate comparison to today's rates.

Secondly,
So we see two seperate responses to the two seperate depressions. The 1929 response consisted of relatively high 3 to 4 % interest rates from the Fed to banks, while today's Fed rate is below 1% Kohler says this is evidence of the green shoots policy, but what he is really trying to convey here, is that so spooked is the market, that in say California, folks wont even borrow money at a consumer terms of around 3% over a 15 year term!!!!!!!!!!!!!!!!!!!!!!!! The current comparison in australia is 15% over 5 years for such a loan. We have not a better state of affairs, but a lagging sense of urgency. Peter Schiff said in 2006 to a mortgage bankers conference (paraphrase) 'rates arent going to the moon, theyre going to Pluto'. If that is true then the current low rates are perhaps in transit. The salient perspective here, is that sure, rates are lower today than they were, in 1929, sure, but in 1929, debt was large, but not like it is today. Debt today, is so large it defies belief. How do you conceptualise sixty trillion dollars? And that is only a small part of the world wide debt tally. For example the derivatives closet is so full of unmentioned debt that they dont want to reveal it, but it's staggering. I dont know - no one does, but huge numbers are being thrown about like 200 trillion, 600 trillion. etc. Even if we take the most conservative estimate of today's debt level, it is still a giant that dwarfs the debt of 1929. So sure, rates are lower today, but the key thing to keep in mind here is that today debt is incomparably larger than it was in the first depression. So if Shiff is right and if rates climb sharply, then the effect of high rates (or even modest rates) on massive unprecedented debt will be quite the perfect storm. You could laugh if it wasnt so serious. Any wayz my opinion is that smart folk today retire all debts, fools today buy houses with mortgages.

[Ausdebt]

July 2




"our customers are collapsing" reads the graph headline... "their trading partners are cactus" says Kohler. lolz.


This is not surprising, but it is still very disturbing. We see here proof that A, Consumers arent consuming, B, producers arent producing and C, suppliers (Australia) is about to have an epic fail in the mining boom department. To interpolate further, D, which means Aussie property prices are set to crash, whic means E, baby boomers (40% of whom store their retirement 'wealth' in property equity) are about to go from happy to heart attack.

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Kohler talks to a business rep about Australia's reputation and standing as an investment destination from a contemporary post-super profits tax overseas investors' perspective.

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I like the bit about how the Euro has sunk 15 %. This is great news for anyone who owns German assets, such as real estate, because Germany's minimally inflated property market which is located in the German productive economy, will receive price support from the cheapened German exports on the basis of the 75% Strength Euro.

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Kohler reckons paladium is doing pretty well because catalytic converting equipment on new cars in China is fuelling demand for paladium against small supply.

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