RESERVE Bank board member Warwick McKibbin has warned that Australia is being caught up in a global bubble that could hit us much harder than the global financial crisis and expose the weaknesses of Labor’s economic settings.

Professor McKibbin told The Australian the bubble in global commodity prices and property markets in Asia threatened to dwarf the US housing market bubble that led to the GFC in 2008.

He warned that the inevitable bursting of the bubble would reverse the surge in Australia’s record high terms of trade, push down the dollar and leave the Reserve Bank struggling to fight off rising global inflation pressures.

“This is shaping to be much bigger than 2004 to 2007,” he said in comparing the new excess of global liquidity with the global financial bubble that led to the worst global financial crisis since the 1930s.

The Reserve Bank meets tomorrow and is expected to keep official interest rates on hold following a week in which political instability in North Africa and the Middle East has pushed oil to more than $US100 ($98) a barrel.

Read more: http://www.news.com.au/business/bigger-bubble-is-building-says-rba-director-warwick-mckibbin/story-e6frfm1i-1226013248289#ixzz1FFipkr1m

China & Russia have dropped the USD in Bilateral trade (trade between the to of them)

China and Russia will stop using the U.S. dollar to settle bilateral trade and instead use the ruble or the yuan, though the move is not meant to signal a challenge to the dollar, according to reports Wednesday. China’s Premier Wen Jiabao and Russian President Vladamir Putin made reference to the new currency trade pact late Tuesday, following meetings in St. Petersburg that also saw the signing of bilateral trade and energy-cooperation agreements, according to a report in the state-run China Daily. “About trade settlement, we have decided to use our own currencies,” Putin told reporters, according to the report. Earlier this week, China added the ruble to the list of currencies that can be traded against the yuan on its domestic exchange.

Source, Source

This is not a big deal at the moment because there is not a great deal of trade between Russia and China (approx $40bn – $60bn per year). However this could be the first step of the demise of the USD  if other countries follow suite and I believe they will, eventually rendering the USD worthless and will cause prices to sky-rocket for US residents.

I have mentioned this would happen approx a year ago:

US dollar set to be eclipsed, World Bank president predicts Posted 06/10/2009

The United States must brace itself for the dollar to be usurped as the world’s reserve currency as American dominance wanes in the wake of the financial crisis, the World Bank president, Robert Zoellick, warned yesterday.

The demise of the dollar Posted 06/10/2009

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Is tomorrow the end of The USA’s Economic Power?? Posted 27/09/2009

In remarks set for delivery tomorrow, Zoellick said the “next upheaval” in the international economic order is under way as emerging nations gain greater influence.

“The United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency,” according to excerpts released by the World Bank.

Policy makers from China to Russia repeatedly have called for an alternative to the world’s main currency in foreign- exchange reserves.

2011 is going to be one hell of a ride

Today the AUD hit .99 USD!!! The highest since the currency was floated back in 1983

For some reason this is yet to hit the  MSM?

Keep in mind last time the AUD hit these kind of heights the Market crashed not to long afterwards….

Chart 07/10/2010

3 Year Chart

…..

We have been promised for at least the last 12 months now that we are coming out of, or we are already out of the global credit crisis.

Maybe someone should have told Europe, the last few days there has been hundreds of thousands of people rioting in the streets of Greece, Portugal, Ireland, Slovenia and Lithuania over budget cuts.

Some news headings over the few days:

Fury sweeps Europe
Spain has first general strike in decade as Europe marches
Ten million on strike
100,000 protesters descend on Brussels

Now the latest from the UK -

UK ‘On Cusp Of Second Banking Failure

High street banks are on the verge of another credit crunch and taxpayers may be forced to plug a £25bn-a-month funding gap, an economic think-tank has claimed.

Faced with a huge financial black hole, the New Economics Foundation (NEF) has said the banks could turn again to the Government for support.

Can anyone tell me why none of this news as hit the Main Stream Media yet???

Here in Australia we were pretty well protected and pulled through no thanks to the Labour Government but because of our great exports, China and the massive surplus left by the Liberal Government.

How well will we handle round 2? we now have a debt of over 100 Billion! during the first crisis we had a surplus of 40 billion?….?…..?……

Wycky is back online

Sorry to my 5 readers out there I have been a bit busy being lazy and starting a new job and stuff.

I know its the 13 of July (as I write this) but I give it  time to get the info right and sort out the truth from the lies (or Rumours)

I have put together a summary of  utility increases, I know some don’t seem like much but when you take in the other increase such as rego, petrol etc (which I will cover next) it all adds up and will put strain on your finance’s. Also keep in mind people are saving less and retail sales are currently lower then the 08/09 financial crisis and these increase’s will hurt the retail industry even more!

UTILITIES

Electricity

For ActewAGL customers, prices will increase by around 4 per cent from 1 July 2010 and by a total of 11 per cent over the 3 years (including inflation). Rises in network charges account for around 85 per cent of these increases.

For AGL business customers, bills will increase by 10 per cent over the 3 years, while

Origin Energy business customers face increases of 11 per cent over the same period.

Country Energy’s business customers’ bills will increase by 16 per cent over the 3 years

ActewAGL business customers bills will increase by 9 per cent over the 3 years.

“Under our final decision, typical customers in Sydney, Newcastle and Wollongong will see moderate increases in their annual bills, but in some regional areas increases will be higher.

Source

Gas

AGL’s average regulated tariffs increase by 5% from 1 July 2010 and by a cumulative total of 13% over the 3 years to 2012/13.

Spain has been warned by the IMF to curve their spending to cut government deficits to prevent another “Greece” from happening.

The IMF statement, issued at the end of a routine consultation with the country, served as a reminder of how the same issues that have caused an acute panic in Greece are troubling other European nations.

In Greece’s case, issues including high government debt and uncompetitive labor markets pushed the country to a near-default before the IMF and a collection of European Union countries offered an emergency bailout.

But the long list of IMF recommendations for Spain shows just how tough a climb it might be for the euro area, as it tries to renew growth and regain its competitive footing.

Spanish labor markets are “dysfunctional,” the IMF said, using a set of collective bargaining agreements that “hamstrings” companies’ ability to hire and fire and set wages.

Full Story

If you watched the video I posted here of Gerald Celente he said the next country to fall would be Spain… so far he is on target

The worlds top forecasters all believe 2010 is going to be a bad year, worse then the collapse of 2008 (and yes it was a collapse, if the US government didn’t pump $500 Billion into the economy it would have collapsed in ’08) and much worse then the great depression.

Bob Chapman
First 6 months of 2010, Americans will continue to live in the ‘unreality’…the period between July and October is when the financial fireworks will begin.

Gerald Celente
Terrorist attacks and the “Crash of 2010″. 40% devaluation at first = the greatest depression, worse than the Great Depression.

Igor Panarin
Forecast the probable disintegration of the USA into six parts in 2010 (at the end of June – start of July 2010, as he specified on 10 December 2000

Neithercorps
Have projected that the third and final stage of the economic collapse will begin sometime in 2010. Barring some kind of financial miracle, or the complete dissolution of the Federal Reserve

There is Much more to be read here

All these forecast are mainly based on the US and UK which will of course effect the rest of the world.

I’m Australian and a lot of  people say so what, how will it affect us ? so lets look at why this would effect us, its pretty easy just follow the chain of events.

The Largest countries in world which purchase consumer products is the US, UK and Europe. These 3 countries are all currently in dire straights and these big 3 are all predicted to fall by the end of the year (2010). Once the Economy falls people can’t afford consumer goods, people will only be purchasing the bare necessities to survive.

Where does all the consumer good come from? manufacturing countries like China & Japan mostly but also Twain, Indonesia, India  etc. So if the big 3 can’t afford to buy products then manufacturing countries have nothing to produce and millions will lose their jobs and thousands of manufacture’s will close their doors.

Where do the manufacturing companies get the raw materials from to make there products?…. Australia!

Raw materials are big business here in Australia: mining, wool, meat etc. The manufacturing companies will no longer require our Raw materials which would crush the Australian economy.

Every Country is intertwined like its more like a network of Companies then countries our whole world is ran like a giant business and that’s a big problem.

As Europe is bailed out to the tune of nearly $1 trillion dollars, Congressman Ron Paul warns that the constant monetization of debt, allied with taxpayer-funded bailouts, will inevitably lead to runaway inflation and the collapse of paper currencies.

Under the terms of the Federal Reserve’s credit swap deal with the EU – in addition to an additional IMF bailout of which U.S. taxpayers will be picking up 20 per cent ($57 billion dollars) of the tab, Paul pointed out that not just taxpayers but “anybody that buys anything” will be funding the European bailout because of the attendant inflationary consequences.

“The prices are going up already, producer prices are going up, the cost of living will go up so everyone in American will suffer and eventually the whole world will suffer because we cannot carry the whole world with our dollar,” Paul told Fox Business, adding that eventually people

Full Story

A Good Interview below with Gerald Celente. He starts of with an “I told you so” about Greece, then talks about what to expect this year and why it is happening.

I believe Gerald is 100% right about the economy, our fiat monetary system and the coming collapse of 2010.

Anyone notice that 1000 point drop in the Dow Jones, apparantly the cause was human error – fat finger syndrome  !

A HUMAN trading error at a “major firm” may have caused a huge plunge in the US share market overnight.

A TRADING error known as the “fat finger problem” at a major investment bank may have caused a huge plunge in the US stock market overnight.

The crash began shortly before 2.25pm local time, when in a white-knuckle 20 minutes America’s top 30 firms saw their share prices dive 998.5 points, almost nine per cent, wiping out billions in market value.

The drop eclipsed even the crashes seen when markets reopened after September 11, 2001 and in the wake of the Lehman Brothers collapse.

Rumours swirled around the market that a trader had reportedly entered a “b” for billion instead of an “m” for million in a trade involving Procter and Gamble, reports said.

This set off a chain of trades that led to the largest intra-day plunge in the history of the Dow Jones Industrials average.

Shares in Procter and Gamble fell from $US61.56 ($69.50) a share to $US39.37 a share and then quickly bounced back again.

WOW amazing what one typo can do…. if you believe that’s what really happened …..

Source