A very interesting speech from the Governor of the Reserve Bank of Australia today. The full text of the speech can be read here : http://www.rba.gov.au/speeches/2011/sp-gov-070911.html . Granted that it is a speech on the economy and can therefore be seen as rather dry. However, if you are interested in gaining a broader perspective of the ‘state-of-play’ here in Australia then this speech is a good starting point. And it is quite short. i particularly liked this bit…

Conclusion to Glenn Stevens' speech to the WA Chamber of Commerce Sept 2011

What a sage piece of advice

These are the good times

There are many things that make up the list of ‘issues to be worried about’ in todays world but most of those which make it into the evening news are not in the list. At the same time, there are many things that we here in Australia should be very grateful for. Here is my short list:

We have a national ethos which works. We have no civil wars brewing, and most Australians are fairly happy to be Australians. We don’t have cities rising in arms against the Government nor do we have calls for this to happen.
We have good roads, a coherent national infrastructure framework and it’s fairly easy to travel from one side of the country to the other – or even right through the middle – if you want to. You can fly where you want, drive where you want, and catch a train when you want, with no-one looking over your shoulder or mandating your activities.
As Governor Stevens mentions, 95 out of 100 people who want work are in a job. They may not be in the job they want, they may sit on a PC checking Facebook all day or they may hate their boss/workmates/workplace but they have a job, and are getting paid to do whatever it is that they do.
Food is readily available, and in levels of abundance that would be the envy of the bulk of people living anywhere else on the planet or any of our ancestors from more than two generations ago. We live in a time of plenty – arguably a time of excess.
We have a choice about how we spend our time and how we spend our money. We can work more or work less. We can choose to earn more or earn less – it’s up to us individually to decide on the lifestyle we want to to work towards the career that will deliver the income to fund that lifestyle. If we want more, we can work more/harder/better or study to improve our prospects to be able to enjoy obtaining those wants in the future.
If we think houses are too expensive we can rent. If we think rents are too high then there is a range of suburbs/ house styles that are lower cost and it is up to us to decide how much glamour our egos can forgo to help make our bank accounts happy.
If we want to see the world, it is currently on sale at generationally low prices. Today, the world is Australia’s oyster.

These are the bad times

But Michael, i hear you shout, what about all the turmoil on global markets? What about the US debt ceiling, the Greek debt crisis, the Italian debt crisis, the Irish debt crisis, the Spanish, the Portugese and the Japanese debt crisis? What about the market volatility and the Swiss Franc? What about rising inflation in China and India, the threat of deflation in America and stagflation in Australia? Oil is running out, the world is about to turn into either an iceblock or a sauna and we don’t yet know which. Australia has a refugee problem so huge that i am sure i’m not seeing as many white people around anymore. The government is going socialist and turning the country into a Communist state. The fiat monetary system is in a terminal decline and a return to the Gold Standard will hammer world growth, Australian’s are buying books and electronic gadgets from overseas businesses because it is cheaper and more convenient that shopping locally and bananas are so expensive that i can’t even enjoy my Saturday morning banana milkshake without feeling guilty!!!!

True. The world is in a state of continuous change. Personally, i don’t see that as being anything different from what was the case yesterday or what is likely to be the case tomorrow. My current read is “A War Like No Other”, a reinterpretation of the Peloponnesian War – and it certainly makes todays world feel very comfy and stable and safe. http://www.amazon.com/War-Like-Other-Athenians-Peloponnesian/dp/1400060958.

My reading sends me far and wide, and looking up comparisons and studies of our current times against past crisis periods (such as 1987, the Asian Crisis, LTCM Crisis, ’94 crisis, ’70’s Oil Crisis, Great Depression, banking panics of 1873, 1874, 1890, 1893 and 1907, South Sea Bubble, and the impact of paying Richard I’s ransom in 12th Century England). It seems that this one is fairly tame, when all is said and done. It may yet evolve into something worse but at this stage it is not so much economic muscle as political will that is in the way of better outcomes.

So maybe my view of the worries our news teams work so hard to remind us of each night is just a little jaded…

Financial Planning in Strange Times

Ok. Let’s just sit back, empty our minds, close our eyes and enjoy a moment of quiet internal reflection.

What can we do with the resources we have to help make sure that we get more of the things we like and want, and have to deal with less of the things that we don’t like or want?

And NOW we are beginning to get an idea of where to start improving on our personal world, and after a couple of trys at clarifying these thoughts then we will be ready to start working on taking the same attitude to our financial planning world.

I’ll leave you with a few pictures that have been circulating the email world recently. This is not to belittle the challenges we face today but do help to remind us that investigative research suggests comparisons with the Great Depression are a little lame.