Global growth is slowing. China has downshifted to 3% growth, not the old 7%-10% tossed around. Commodities are still trending down. I think it will be several months before it comes back. IMO Australia is not very forward thinking. Wait a few months and see if commodity prices strengthen.
HOLE = MINE (iron, coal, etc.)
HOUSE = Overvalued real estate
Housing values make/made many Australians feel wealth. But this can change for the worse and for a long time. Two big reasons contributed to high housing values: the commodity boom and wealthy Asians parking money outside of their country of residence. Commodity boom is now a long term bust, as there is excess global capacity for for these commodities; and, because the global economy overall is slowing down.This is actual worse than it now seems, because our entire economic model is dependent on growth. We are approaching, probably in less than 10 years, a time when the growth model fails: falling productivity, unfavorable demographics, corporate ethics (VW and buybacks), diminishing returns across the commodity sectors general and for oil specifically, and because the entire system is burdened with excessive debt and in particular nonproductive debt (houses, vacations, cars, etc.) because they don't produce future output and destructive debt (almost all government debt (military, social security, medicare, etc.) again because it does not produce future production. All companies hit diminishing returns when they become gigantic, so why doesn't the same apply to the global economy or contry specific economies. Canada, same story. Brazil same story. Latin America generally same story. Emerging markets generally same story. OECD countries too much and growing nonproductive debt. Everybody everywhere lacks political will, because it would be terrible to throttle this thing back and devise a sustainable model. Ultimately, WW III ?
EWA = down ~30% in past 52 weeks.
EWC = down ~30% in past 52 weeks.
EWT = down ~25% in past 52 weeks.
EWY = down ~25% in past 52 weeks.
EWZ = down ~58% in past 52 weeks, on its way down to ~65%
EEM = down ~28% in past 52 weeks.
HOLES everywhere, including the global economy.