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I don't understand your thinking , why do you see that Australia has a long way to go?

For the simple reason that the US has outstripped it's natural resources to a large extent - it has to import 30% of its energy, huge imports of practically everything else required to run the country. If it wasn't for the fact that it is the world leader in technology it would be in trouble. The US relies on consumer spending to keep the economy afloat. Australia is still a young country with enormous resources - look at the mineral finds recently - they range from natural gas to tantalum to gold to bauxite etc etc. All of this wealth is contained within Australia - it doesn't have to be imported. Therefore, I say that Australia has a long way to go in its growth cycle and wealth creation.

Interesting or just a wild prediction based on past economic data?

I think you have to give some credence to the economic indicators - the last report I read gave a 3% growth rate in 2002 and 4% in 2003.

Well it's been pumped for years so whats the dif?

I don't agree. For the last ten years or more the US has not needed to prime the economy - it carried itself forward on what Greenspan called "irrational exuberance" - as a result Greenie was forced to raise interest rates to curb this. The result of rising interest rates then caused the bubble to burst and he is now trying to pump the economy with a continuous string of interest rate cuts.

Increase in market prices is caused by more buyers than sellers nothing else.

Of course !! - but what causes more buyers ?? To buy they have to have more money in their pockets or to have access to more credit. If you continue to pump liquidity into the market ie make it easier to get loans through lower interest rates, then people will spend that money. Either through direct investment in the market or else through buying consumer goods. This is what Greenie is trying to do - make people take on more credit to pump the economy.


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