It's been a little while since I talked about the Australian economy here. I have been interested, but my focus here as been elsewhere.
I am finding it very difficult to interpret at the moment. It has tracked broadly as expected. The mining boom was choked off to a degree by rising costs and increasing market uncertainties. Other parts of the economy have been slow to take up the slack. The Australian dollar has remained high. All this was relatively easy to see without too much reliance on the tea leaves. But I'm not quite sure where it's going now.
One of the really big question marks in my mind is the Australian dollar. The world is awash with money. This is keeping the dollar up. However, this can't continue. The quantitative easing must end, official interest rates move up. As that happens, the value of the dollar is likely to fall. But when?
My feeling is that its going to happen sooner than presently expected. The Aussie is already of the boil, dropping back towards parity with the US dollar despite the sea of global cash. Assuming no catastrophic events, I'm inclined to think that quantitative easing is nearing its end. Who knows, of course. But its interesting.