Thread by @AlanBixter

There I was quietly swimming in my lane, and next thing I know, Alan Kohler damn near drowns me as he steams past in my lane, asking biomedical/health questions in a press conference. So I'm going to return the favour: Let's talk about the economy. /2

My thesis is that what seems "Fair is foul, and foul is fair:
Hover through the fog and filthy air." Things seem great on the face of it. Unemployment is said to be low; housing and stocks are going gangbusters; there are more luxury cars on the streets than ever before... /3

On the other hand, they cannot be. Our economy is missing the 1 million foreign tertiary students it used to contain - at one time, our largest export. Those students lived in (mostly) apartments that are now empty, and given our failure in vaccination, will likely stay so. /4

Some are owned by local investors, who are now struggling to pay their mortgages at almost zero interest rates. Some are owned by the families of the absent students, almost all as investments, and with the intention of using them. /5

Given the amount empty stock & vaccine failures, neither of these things are likely to be plans that will come to fruition in the medium term, so at some point, the system will break, and the ~300k empty apartments down the eastern seaboard will hit the market. /6

That point is when interest rates rise. But the govt is pressuring the Reserve Bank to keep rates low, so that won't happen, will it? Let me put it this way: the price of houses increased 5% in the last three months; that of food increased ~15% in a year. /7

The possibility interest rates may fall substantially below the inflation rate is obviously a concern for the Reserve Bank, because they have a web page about it: rba.gov.au/education/reso…
/8

Purchasing power drops; workers seek increased wages; purchasing and investment decisions are distorted; returns on investment are reduced; international competition is lowered - all at a time that our fed govt has wounded 4 of our top 5 exports. /9

Another consequence of our 1 million missing foreign tertiary students is the loss of their economic activity. Many of our retail centres have large numbers of vacant shops. The problem compounds itself: With each failed shop, foot traffic declines. /10

With each closed shop, the staff lose their purchasing power, and income of other outlets falls. The traders hanging on are just that - hanging. But the fed govt says unemployment is low. That statement contains two acts of misdirection: /11

1) Unemployment is low with 1 million part time workers removed from the system; 2) People who were largely working full time in retail are now working mostly part time, occupying those part jobs left by foreign students. /12

We are not being told the critical statistics : The DISTRIBUTION of hours worked and incomes. If they insist on giving us a single figure, they should give us the medians, not the means. /13

So we have a situation where interest rates must rise to at least match inflation; where incomes are compressed by fewer working hours; living costs have risen sharply; and hundreds of thousands of investors with moribund investments will have to pull the plug soon. /14

SO: What is the federal government doing about all this? Nothing.