Australian Resource Boom in a Bubble - article

Discussion in 'Markets & Economies' started by Blockhead, Jun 29, 2011.

  1. Blockhead

    Blockhead Active Member

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    Article Here

     
  2. Lovey80

    Lovey80 Well-Known Member

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    It is interesting this hype but it really is making our standard of living maintainable for the time being. Me thinks it is time to let the resources sector run it's course, and the rest of us need to start looking at other areas where Australia can be world beaters.... Agriculture I think has the biggest headstart, but of course every gov't we have had in a long time has neglected this.

    With the world punching 7 Billion and rising, we have the arable land to make Australia the bread basket of the world long term. Hell with some significant innovation in this field we should be able to turn non arable land into arable land..... Water is the key and I am sure there is a solution..... Just one sector that needs looking at.......

    The resources sector isn't going to carry us for ever.
     
  3. errol43

    errol43 New Member Silver Stacker

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    Blockhead...I think you are right on the mark..It should always be remembered that China is surrounded by countries that all have exceptional mineral deposits,namely Mongolia, Siberia(russia) and Tibet. Once these countries have the infrastructure in place, price then becomes an issue.

    We used to ride on the Sheeps back and now it seems it is the pandas.

    A few years is a long time in trade circles.

    Regards Errol 43
     
  4. jpanggy

    jpanggy Active Member

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    Highly likely to happen. Every boom will have to have a bust. China is slowing down voluntarily to make the eventual downturn not too violent.

    In regards to agriculture:
    Research Israel's foray into making the desert bloom. (dead sea is shrinking because of this).
    At the end, the water subsidy is environmentally damaging in the scale of Australia.
     
  5. hem9

    hem9 Active Member Silver Stacker

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    I strongly agree with this sentiment. This is the ONLY issue I agree with the greens in.
     
  6. jpanggy

    jpanggy Active Member

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    I agree with agriculture, but australia as a continent is too arid.

    To make it green and more humid will be something akin to terraforming.

    Which will take water either from:
    The ground, which is really not that much for the whole island/continent.
    or Desal
    Expensive(negatable as food price rises), environmentally damaging if done in scale of Australia (that extra salt goes back to the ocean).
     
  7. Lovey80

    Lovey80 Well-Known Member

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    Care to elaborate on which part of the greens policy you are referring to? If Bob Brown had his way the resources sector would choke. I do agree with him that Aussie farms should not be sold off shore. That is the only thing I agree with them on. He is a hypocrite though, he was a loud proponent of banning live cattle trade to Indonesia but is unhappy the farmers are selling out to the Chinese because they are going broke.

    I think the govt should have subsidized them until a solution was reached. Hell it would have been worth it if we flooded our market with the cheap beef to benefit us.
     
  8. Shaddam IV

    Shaddam IV Well-Known Member Silver Stacker

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    It's my understanding that the region below the Gulf of Carpentaria is a rich, well watered black soil area, but it is regarded as "too remote" to use for agriculture and to set up farming infrastructure. Does anyone know more about the geography up there?
     
  9. Lovey80

    Lovey80 Well-Known Member

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    Good points mate but I think we could take this into consideration and overcome these challenges. Terraforming doesn't have to happen over night. Arid regions will support a lot of plant life. Plants like old man salt bush could be propagated on a wild scale (suppressing salt rises) and trapping top soil nutrients from being blown away. It could be engineered over decades.

    While such a thing would change the environment ( arguably for the good) locally, on a global scale making areas previously Barron into green areas would just be reversing a global trend.

    As for water, solutions can be found there also. Diverting water from the north during flood times (only runs out to sea now anyway), desal salt could be dumped in super deep areas of the ocean where salt is already too high for life anyway.

    I am sure there would be many many challenges to pulling something like this off but mankind has a good track record of meeting seemingly impossible challenges.

    Back on subject: I say let the resources sector be! don't strangle the golden goose!
     
  10. jpanggy

    jpanggy Active Member

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    I agree, trying to buy a farm land now. Just waiting and hoping for prices to go down a bit.
     
  11. jnkmbx

    jnkmbx Well-Known Member

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    I've expressed my views on this before :|

    The mining boom is full of greedy unproductive companies fuelled by investor sentiment.
    So much money is being burnt up and people don't for one second consider if maybe the fat cat behind the company just floated it for the capital raisings rather than to seriously get productive.

    Of course the day traders don't care, as long as they can gain on the movements. >_>

    Anyway, I'm glad some people out there are taking note :)
     
  12. Lovey80

    Lovey80 Well-Known Member

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  13. jpanggy

    jpanggy Active Member

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    You are right about the labour cost, it is not feasible to set up farm here with the current labour cost. however a crisis opens doors to many opportunities.

    Australians makes one of the worst labourers ever. High wage demand, low working hours, still susceptible to corruption (time) union strike etc. They are excellent business owners though.
    Maybe in crisis time labour cost will drop or they will allow foreign labour in?

    If not, I know of another place that has better labour rate and does not have problem with water. Malaysia.
     
  14. errol43

    errol43 New Member Silver Stacker

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    Mate! during the wet season all the rivers are one..500k wide with little pockets of land sticking out hear and there...If we ever have to feed a larger population, the best idea IMHO would be to stop growing sugar cane and use the land to grow vegetables and fruit and high value crops. 90% of sugar gets exported. Oh I forgot about bio-fuel made from sugar...No it just want happen... the might dollar! :) :)

    Regards Errol 43
     
  15. Old Codger

    Old Codger Active Member Silver Stacker

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    Jonesy,


    "Does anyone know more about the geography up there?"



    The area from Cloncurry to Normanton and Karumba is classic 'savannah' country, as flat as a tack and it goes on forever. We have been there 3 times with the caravan and loved it, in particular Karumba.

    The roads are not all that flash but getting better and once off the beaten track get a bit tough and even dangerous, and when the signs say "Estuarine Crocodiles inhabit this area" I suggest you believe them.

    The Cloncurry area and of course Mt Isa have a lot of mining, but not sure about the area around Normanton, I am not aware of any. AFAIK, it is mainly beef cattle. Karumba is a major prawn fishing port, and also it has a large scale live cattle trade. There are quite a few cattle stations up there.

    Well worth the drive.



    OC
     
  16. Shaddam IV

    Shaddam IV Well-Known Member Silver Stacker

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    I wish that I had had the opportunity to see that part of our country, it must be amazing!
     
  17. Old Codger

    Old Codger Active Member Silver Stacker

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    PS,

    The drive east to Croydon is interesting. Croydon was a gold mining town in the 1890s and is not much more than a ghost town now. The 'Gulflander' is a classic old 'Rail Motor' and it services Normanton and Croydon about 150 kms east. From there it is Georgetown and then SFA all the way to Innisfail.

    Make the effort! Stay at the 'Purple Pub' at Normanton.



    OC
     
  18. Old Codger

    Old Codger Active Member Silver Stacker

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    Does anyone here feel that the word "bubble" has been flogged to death of recent months and years?

    Every time a market has a bit of a run, they call it a bubble.

    Yes the Australian mining industry has been going gang-busters, but that is purely based on surging demand and will of course fall back, nothing goes on forever. I am sure the miners like BHP understand that, even though they do announce to the media that they see no end to it.

    All those minerals are known reserves, and will stay in the ground until required. They will be the basis of the NEXT boom, when the economic rubble is finally cleared around the world.

    We really ARE the "Lucky Country".



    OC
     
  19. JulieW

    JulieW Well-Known Member Silver Stacker

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    I think the 'bubble' mentality is in a 'bubble' and a downturn is long overdue. 'Bubbles' are a relatively modern phenomena, prior to the sixties 'bubbles' were called 'boom's and everyone knew about the 'boom bust cycle'.

    Now that 'booms' have been replaced by 'bubbles' everyone is recognising that there are actually more 'bubbles' than 'booms'. So much so that most Australians now realise that it only takes one prick in Canberra to cause any bubble to burst.
     
  20. Old Codger

    Old Codger Active Member Silver Stacker

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    Julie,


    'Bubbles' are a relatively modern phenomena, prior to the sixties 'bubbles' were called 'boom's



    Do a 'Google' on "South Sea Bubble" and "Tulip Bubble", and that will show what a REAL bubble is like.



    OC
     

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