The flags of the CFMEU were flying proudly.
The ‘pop-up’ marquees have all the ‘mod cons’…lounge chairs, dining tables.
The boys looked like they’re in for a long stay.
The only thing missing was the chant…‘Workers united will never be defeated’.
The workers’ dark mood was in stark contrast to the picture perfect Sunday that greeted us on the Gold Coast yesterday.
The picket line has been established outside ‘The Jewel’…a Chinese-financed property development.
As reported by ABC News on 28 September 2018…
‘Subcontractors and the construction union say they fear for the future of businesses and workers on a $1 billion Surfers Paradise development after some construction was suspended and workers were laid off.
‘The CFMEU estimates 150 of the 2,000 people employed on the Jewel development site at Burleigh Road have lost work this week and believes there are more cuts to come.’
The surprise in this announcement is not the level of potential job losses…but that it’s taken so long for this predictable outcome to be reached.
Here’s an extract from the 26 January 2018 edition of The Gowdie Letter…
‘The former Queensland Premier, the late Sir Joh Bjelke-Petersen, had a bird’s eye view of the Brisbane skyline from his Executive Building office.
‘He told the gathered press gallery to look at the number of cranes dotted around the city. This was Joh’s simple (and effective) indicator of Queensland’s economic prosperity.
‘The “crane index” was born.
‘After being in Europe for two months, the first thing I noticed when we arrived back on the Gold Coast was the number of cranes…thoughts of Sir Joh came flooding back.
‘The Gold Coast development sector is booming…once again.
Numerous buildings are in various stages of completion.
Billboards for proposed developments have popped up like mushrooms.
‘There’s nothing quite like a boom to stir the animal spirits.
Success begets success…until it doesn’t.
‘To me, this has all the look, feel and odour of previous episodes of euphoria.
‘Youngish real estate agents step out of their leased European cars and swagger into the coffee shops. A year or two ago they were the ones on the other side of the coffee counter.’
The bubble hasn’t popped…but it is deflating.
The big bang is yet to come.
What we’re seeing on the Gold Coast is a sneak-peek into the future.
Scenes like this are going to play out around the world in the coming years.
Last week, Don Mackay-Coghill, Chairman of the Perth Mint, delivered this sobering assessment of the global financial mess we are in (emphasis is mine)…
‘…. Don Mackay-Coghill has launched a broadside against the loose monetary policy of central banks in the past decade, warning it has inflated a big bubble.
‘He said it was not just Australia where debt has grown.
‘Unprecedented low global (interest) rates encouraged a spree of public and private debt accumulation…
‘Some attribute today’s destabilising excesses and asset inflation to the very central banks whose job it is to manage it,
‘Central banks had a little help from hedge funds, the wolves of Wall Street and the shadow banking system.
‘They say that those who fail to learn from history, or in this case can’t remember what happened in 1987, 1997 and 2008, are doomed to repeat it.
‘Does anyone doubt that today’s mega bubble will burst?’
Business News 3 October 2018
The only people who think this bubble won’t burst are the ones who are not thinking at all…which includes central bankers.
The biggest asset bubble in history
It’s global. It’s huge. It’s a disaster in waiting.
In The Gowdie Letter of 26 January 2018, I wrote…
‘It’s almost a decade since Bear Stearns was rescued by JP Morgan Chase.
‘The events of March 2008 marked the beginning of the end for a period of excess and greed.
‘The debt crisis of 2008/09 should have been heeded as a sign to correct the errors of the past.
‘Less debt accumulation. More savings. Rethink our obsession with growth.
‘This was the opportunity to step back, reassess and put the global economy on sounder footings.
‘But there were too many powerful vested interests for the greater good to ever prevail.
‘Politicians. Wall Street. Central Bankers. IMF. Highly indebted businesses and households.
‘They all needed growth…no matter what it would take.
‘The extraordinary efforts of the world’s central bankers are well chronicled.
‘The “success” of their Zimbabwean-like policies is evident all around us.
‘The always rising, never falling Dow Jones index.
Cash burning tech companies valued in the billions of dollars.
Major city property prices.
The ballooning net worth of billionaires.
‘These are the highest of the “financial crane”’ on the global skyline.
The unmissable symbols of our economic prosperity.’
Since late January 2018, some of the symbols of prosperity are revealing themselves as symbols of greed and gullibility.
The US share market faltered in late January and thanks to The Donald’s tax cuts there has been some recovery. The cuts were a one-off sugar hit. The US share market looks vulnerable to rising interest rates.
Tech companies are still burning cash. However, raising more cash — by offering a higher rate of return — to burn is going to be a tough ask. Expect to see many more stories about Chapter 11 (bankruptcy) filings in the business pages in the next twelve months.
Ah…crypto-mania. Fools and their money were soon parted on this scam.
Investors (and I use that word oh-so-loosely) have vaporised 90% or more of their money on the ‘Tulips of the 21st century’.
Major city property prices are coming off the boil…across the globe.
Sydney. New York. London. Toronto.
The laws of gravity have not been repealed.
Any market can be propelled higher by easy money, but eventually it becomes a victim of its own success…for two reasons.
Prices soar too high and you run out of ‘bigger fools’ to fuel the mania.
In due course, as the global debt crisis spreads through the system, the ranks of the Rich List are going to be thinned out. Watch for headlines of fortunes lost. The people in these future stories belong in the queue of those who believed booms never bust…this conga line also includes those who believe in the Easter Bunny and the Tooth Fairy.
These inflated assets all have one thing in common…they’re united by debt.
In due course, market forces will succeed in correcting the excesses of the past decade.
And when that happens, central bankers will suffer a most comprehensive defeat.
Unfortunately, the real losers are going to be those who believed you could cure a debt crisis by adding even more debt to the system.
Editor, The Gowdie Letter