Banks Economic Warning

Commonwealth Bank stark economic warning. Let's have a look. Hello everyone, Florian here and welcome to another episode of Heiser Says. Grab your hashtag not sponsored cheap ass coffee and let's have a look at this article discussing a warning from the Commonwealth Bank because it wouldn't be a day in the news here in Australia when there isn't another warning or concern about the economy. Now depending on who you talk to and what circles you're exposed to you might be having or living quite different experiences because certain parts of the economy seem to be going gangbusters no problem and other ones are on well struggle street that's the k-shaped economy here you've got half the people shooting up to them well half shooting down we're getting a class divide and in Australia it's just growing and a big part of it is tied to property and there's so many people who are hoping and expecting a correction in the property market but you've got to realize we really should be pricing Australian property in USD because you can have foreigners from all over the world coming over here as either a way to retire a place to educate their children to get them to sell here or just a way to stash your wealth in a nice safe country or colony on the edge of the planet that isn't as as much risk as other parts of the world we're a safe haven in many regards stable boring good old Australia and how we're housing only ever goes up so let's look at this article guys so Commonwealth Bank issues a stark warning to buckle up as Australia faces a new economic era okay what's this this new economic era going to be let's have a look so Australia and the world faces a new economic era as a breakdown in trust among key countries has led to a surge in policy uncertainty and a quiet unease in the international markets so we're moving away from the rules-based order to more traditionalist maybe we're going back to a mercantile age where you have countries looking at protecting their own national interests and industries will that impact Australia yeah definitely would a big chunk of our economy is fueled by our exporting of natural resources now if countries start tariffing to protect their own well I still think we'd have I still think we'd be an attractive source for a lot of materials and products or materials not products we don't make products here we're not that economically complex so that is the ominous assessment by the chief economist at Australia's largest bank who says the new norm is here to stay and it potentially means lower productivity and higher interest rates he warned we've added a new economic era one with rules that are very different to the last comeback economist luke yeeman wrote on a note to investors on wednesday economic security now trumps economic efficiency economist richard dennis from the australia institute told yahoo finance there's no doubt we're in a new phase for global relations and markets or are we just going back to an earlier time i know so many people want to well seem to not understand the at least in the us the impact of tariffs all they are is a tax on goods to make your internal local industries that can't compete with foreign industries competitive to the consumer level but you've got to understand you could have rules regulations and requirements that you as a civilization deem necessary and ethical for certain manufacturing processes or employment that you have instituted in your civilization that means that the businesses can't compete with those outside of your civilization that flout those rules so if you make an argument that you want to have you know these type of environmental regulations or these type of of wage laws and requirements or mandatory holidays or mandatory work from homes all of all of these things that add cost and challenge to running a then if you're arguing for that you need to also appreciate the fact that you need to bear that cost and that you need to accept those tariffs charges or make the choice to buy the more expensive product now this is where it all falls down because people love love talking and voting for more rules and and the good old or if you can't afford to run a business you shouldn't and then they'll run off and buy the products goods services or whatever from countries that don't have any of those rules that haven't implemented those restrictions or will those that will artificially give their own industry an advantage compared to other nations to the point where you could have some countries using forced labor you gotta love the hypocrisy of the champagne sipping blue herd crazy leftist tweeting on their iphone criticisms of their own country on a device that may be made with uh with labor or policies that never agree with so anyway back to this he noted that countries have always maintained trade barriers and protectionist policies there was never really a free trade era there was a freer trade era but that's over he said i think that raises bigger challenges for australia because rhetorically we still kind of talk as if the free trade era is with us and economically we're not as good at making sure that australians get value out of australian production we've just hitched ourselves to the kind of free train trade wagon and it served us well when we got security from the u.s and prosperity from china but now the world's more complicated so the new economic era could see sustained upward pressure on interest rates so the new era will see sustained high levels of economic and market volatility greater domestic investment added structural pressure to government budgets and drive more government intervention in the economy creating bright bifurcated markets the cba economist wrote overall these changes were a net negative for global growth and productivity reversing some of the gains we saw during the era of globalization well here's a question for you have you or do you appreciate the benefits you've achieved from the era of globalization or from a freer market look at all look at what we're using now for me well to record this video the microphone is from an australian-owned company but manufactured in china the software i'm using vmix that's from a gold coast australian company so that's australian made but everything else is from pretty much america the software i'm using to take my notes on the streamings platform that we're putting it up there i mean i'm assuming who invented the encryption protocols for the videos i know the camera's made in china so every everything nothing's made in australia anymore nothing is manufactured in australia anymore but we also have access to more opportunities more information more technologies than we ever would i don't know if our culture here in australia could actually generate a silicon valley like america could like california could just look at the top 10 companies on our stock exchange where's the innovation why do you think everyone just goes into housing here in australia why start a business buy a house so they'll put upward pressure on neutral interest rates the comeback economists cited the large spike in policy uncertainty and specifically trade policy uncertainty in the past 12 months to argue that markets appear to be underestimating the potential of further shocks in the world increasingly dominated by geopolitics so there we go so let's have a chat about all of this guys do you remember when dick smith tried to make his australian branded products and he would sell his own knockoff vegemite and other other little household things that would cost significantly more than anywhere else but it was made in australia and it would donate money to charity and it sounded all good and he was in the media every now and then cautioning about well it's significant population growth and migration growth here in australia and wanting to get manufacturing and production back here in australia but the thing is people will say one thing and they'll act different at the checkouts i went shopping the other night it is insanely expensive to get your food and goods it's insanely expensive to live cost of living are going up do you think australians who are struggling to get by now are going to be able to handle the burden of extra costs taxes and impositions or are they going to throw their australian companies aside the ones that they impose all the rules on and get cheaper imported alternatives what do you think the average aussie would do they'll talk you know they'll talk and sing and argue for one thing but they'll act in a different way anyway let me see well let me know your take on this one in the comments below everyone take care have a great time and i'll see you next time bye for now