Quinkana

Looks like MacKay is in for a shower of cash:

Australian Dollar Is Poised for Weekly Gain; Coal Prices Climb

Coal Producers Seek to Double Exports Through Australian Port

MikeStanton

What is this? More evidence of Oz's largely unsophisticated - ie resource-based - economy.

Or perhaps the calm before the storm? With its massive overseas debt, Oz's economy is looking very dodgy. Next year should see contraction - read as job losses - as a consequence. While we're in cut'n'paste mode, try these:

http://sg.biz.yahoo.com/041214/15/3p8pg.html
http://www.abc.net.au/pm/content/2004/s1265184.htm

All would-be emigrants to the land Down Under should factor in far more time to get a job - unless they are corporate insolvency practitioners...

Quinkana

All economies are resource based.

High grade energy in one end - low grade heat out the other. In between is the economy which is comprised of energy transformers.

The British economy is now predominantly service based - it provides services to other economies which perform the actual transformation. Britain has little choice but to specialize in services as it has few remaining economically exploitable resources and a high population in relation to those remianing resources.

The resource boom will kill off Australian manufacturing industry as has been the case before. Australia has a large quantity of resources in relation to population so has little choice but to exploit those resources since there are other economies which will accept smaller profit margins in transforming those resources.

OzTennis

Yet another recent unsophisticated Australian export (bitter almonds which just keep repeating the same theme).

Oh and on the exchange rates, Gordon Brown is just off to the US of A to try and help his counterpart 'talk up the greenback' which is sure to soon
impact on the $A.

OzTennis

Quinkana

Yankism: Money talks and bullshit walks.

Brown might have his 15 minutes of flame but tax and interest rate increases will do the talking.

OzTennis

The market moved a little today at the prospect of talk about talks, let alone the talks, let alone any possible IR and tax rises!

15 minutes of flame? Is that what Andy Warhol said?

OzTennis

MikeStanton

Well, uh..no, they're not : as you'll find if you look for the contradiction in your own post. And another example is Japan; a country that was one of the world's most successful economies and it certainly isn't resource based. Of course, you may have meant that all useable assets - physical,intellectual or otherwise - are resources; but I'm just being far too generous to you...

Tosh. My first degree was in Physics; please explain what high-grade energy and low grade heat are.

It has nothing to do with scale of resources versus population - it has everything to do with comparative advantages. Eg Luxembourg has a steel industry - small population, lots of iron resources. Using your simplistic argument, their only choice would have been to stick to that. No, they thought hard and provided a very favourable tax and confidentiality regime and, lo and behold, made tons of money out of finance and banking - far more so than just ripping stuff out of the ground.

Digging-up resources is a no-brainer and, for most, the low margin option. Real first-world economies sell services, because i) they are usually higher-margin that resources and ii) they don't run out.

Oz needs to move out of the 19th century-way of thinking and convince investors it has a viable vision for its economic future.

odaat

Stanton,

never mind the prickly bards.

Will the oz dollar fall against the Brit pound and why ?

There could be a cheap beer in it for you

wombat42

There will always be stong demand for resources, What resources does Britain have , very little compared to Australias massive suplies of Gold, Oil,
Iron Ore, Coal, Copper, Nickel, etc as well as being the worlds largest supplier of Beef ,any many other foods, as well as wool. Australia does also export many manufactured products and makes alot of money from tourism.

Quinkana

Japan not resource based? Right-o, stop the oil, gas, coal, uranium imports - no longer needed as Japan has transcended the Laws of Thermodynamics. Also, stop the iron ore, nickel, copper, ..., as Japan is now exists in an alternate non-material universe.

Luxembourg's last iron ore mine closed 1981 - they are in the same boat as Britain - bereft of resources. The have nothing to offer but their store of capital and tax dodges - generally can rely on tax dodging to turn a quid. Any lead in the provision of services is being rapidly eroded in developing economies.

If physics was your first degree, and I have to explain what "high grade energy" and "low grade heat" are then I wonder if:
1. you actually have a degree, or
2. just skite about having one, or
3. just how you managed to get one,
4. you live in an ethereal bubble removed from reality.

odaat

on second thoughts make that a cheap weak shandy .... we dont want your mum cleaning up a pissed bed again

Wol

>> It has nothing to do with scale of resources versus population - it has everything to do with comparative advantages. Eg Luxembourg has a steel industry - small population, lots of iron resources. Using your simplistic argument, their only choice would have been to stick to that. No, they thought hard and provided a very favourable tax and confidentiality regime and, lo and behold, made tons of money out of finance and banking - far more so than just ripping stuff out of the ground.<<

Well yes, partly, Mike. But a lot more of its success is due to the EU (or whatever it's called this weekend) being based there, with the massive inbound cash for this "enterprise" coming in from the rest of the "community". It's quite striking how the Luxemboug economy is centred on the gravy train!

bondipom

There is oil and gas and until recently Britain was a net exporter. The world will have to make do with using less of the oil, gas and coal otherwise Oz will become a deserted wasteland with only desalination to quench its thirst.

Anyway in the short term what are good resource stocks?

Quinkana

That would have been a good question to ask 6 montha ago - the answer being coking coal companies - for example Excel Coal. The market has already priced in much of the potential profits. However, valuations could go even higher due to irrational exuberance on the part of international investors wanting to "buy the China story" without leaving money lying around in China.

Quinkana

Yanks need more food - net importers

British self sufficiency in food - about 70% in 2003.