Medium Term Outlook Most economist expect Australian GPD (Gross Domestic Product) will be the highest amongst the developed nations over the next 5 to 10 years. Why, because they expect developing nations such as China, India, Indonesia and Thailand to continue on their path of industrialisation which requires resources. Lot’s of resources. A second interesting point is that it does not pay to invest in commodities such as iron ore, oil, coal and gold over the longer term because the worlds miners continually get better and better at digging things out of the ground and increasing supply. In the attachment you can see both concensus forecast on the Australian GDP and the trend decline in the commodity-price index over the last 160 years. Why do commodity prices fall over time, because unlike enterprise (business), shelter (property) and money lending (cash) commodities do not produce an income stream and so as supply increases prices eventually fall. At Newealth we are always looking to innovate and improve our ongoing services wherever possible and if you have any ideas or comments, please feel free to email me via ‘Contact Us’ at www.newealth.com.au or to call me on +61 2 9267 2322.
25th-May-2010 | 
