I haven't been posting as trying to prepare for my teaching year - research and golf had high priorities this summer and the procrastination finally caught up with me. Also I am heading off to New Zealand tomorrow for a few days for the annual Economic Theory Workshop at Massey University in Auckland.
To two things that stood out economically this week for me were (i) the apparent disasterous decline in the Japanese economy - it is entering a depression* and (ii) the worsening economic/financial situation in the UK with growth likely to fall to its lowest level since 1931. It is interesting that the worst economic responses are being experienced outside the US. In Europe investors fear a Zimbabwean response to economic problems - inflate them away via comnpetitive devaluations - and are dring gold prices to record highs. It is frightening.
I am fearful of Australia's economic future particularly irrespective of who is in power. Desparate times can lead to panicky, foolish policies that reduce long-term living standards without helping those who will cop it in the neck (in the main those already disadvantaged) short-term. Eventually the tide will turn,both economically and politically, but my feeling is that this recessed state will take several years at least to correct itself.
* As The Australian points out it is Japan not China which has been the major source of Australian export growth in recent years.