DFA Live Q&A HD Replay: Economics Now: Leith van Onselen

This is an edited version of our live discussion about the current state of the economy, with a specific focus on Australian property with Leith van Onselen, the Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.

Original stream here:

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  1. I said when Labor won the election liberals would be a sigh of relief, who would want to be in government with a recession and high interest rates good luck Labor.

  2. Tax Payer carrying the Can? what about the botched submarine deal with France circa $850m gone up in smoke. And guess what? no accountability to the tax payer. There should be Jail time for this sort of negligence.

  3. Hi Martin, very interesting content as usual. What would you recommend for a similar style of content more focused on Europe? Any commentators or experts that you hold in high regard for that?

  4. Gym memberships and cafes are not a real economy. They ought to be curtailed. And if mortgage payments go up by $1500 a month, too bad, savers are being screwed by that amount too right now. Why endless concern for borrowers and zero concern for savers? A bit asymmetrical, wouldn't you say? I reckon this is the root cause of all these problems today. So I totally disagree with this guy's assessment of where rates should be. There is nothing wrong with HUGE price adjustments when prices are HUGELY overvalued.

  5. Dead cat bounce today on the ASX following Lowe’s announcement that the RBA predict Australia is unlikely to have a recession and inflation rate will likely peak at 7%. 🤥🤥 They purchased a new crystal ball 🔮on Ebay, because they finally figured out that their old one was broken……… we all have nothing to worry about right!! 🫣

  6. Central Bankers hardly ever see anything coming because they are too busy looking at their data which is akin to looking at the economy through the rear view mirror. Of the last 11 US recessions the Fed missed 8. In. other words on 8 occasions the US was in recession before the Fed acknowledged it. We can now make it 9 out of 12

  7. Never ask a macroeconomist to understand a question in political economy. His mechanical engineering mind hasn't the imagination to grasp anything organic. But, this latest bald discussant you have exposed us to demonstrates one thing: macroeconomics is not rocket science and can be explained by an average mind paying attention to economic facts that is prepared to submit his thinking to the principles of rudimentary logic.

    Discussions such as these are useful Mr. North, they present alternatives that silence your millenarian instincts. Your guest is telling you much you should mull over, especially his remarks on the most elementary principles on the question of the efficiency of a land tax. It's uncomfortable eh to have your middle class chauvinism destroyed with such simple statements isn't it. His limitations are found in the limited depth of his analysis. We live in an open economy and his stumbling over our exchange rate in the context of emerging interest rate differentials reveal that he is educating no one except those with no knowledge of economics, like yourself. High interest rates are not going to address the supply shock generating inflation, duh. But that is not what they are protecting – they are also protecting an exchange rate that if it collapses (due to our excessive dependence on China) will activate a wave of imported inflation that will devastate the consumption he acknowledges is the bulk of this economy of fragile affluence. Remember the current account chum? Someone who sold his soul to Goldman Sachs should at least be aware of the effects of hot money, but alas. His bombastic rants about Australia being the 'Saudi Arabia' of gas expose a profound ignorance of the history of a people occupying a rich continent they have never been able to defend. But, this is more a reflection of the basic education delivered to students of economics over the last quarter century. He is hardly to be condemned for this.

    I didn't pay too much attention to this, it was too often tiresome and more than a little bit conceited. But you have a tradesman in your presence Mr. North who knows a great deal more about economics than you. Cultivate him he is so much more enlightening than the zealots who have hypnotised you to your detriment.

    See you in September.

  8. Sorry mate, the NSW Libs have lost me after 30 years and the Stamp duty changes was the final straw. If I want to pay more tax I would vote for Labor party.

  9. If the sheep just roll over and don't lobotomise the elite it leaves no option but to eat the sheep.

    Our Westminster clownshow is four flavours of the same corporate fascism and no alternative can exist.

    This ship is sunk

  10. A 3% cash rate is "suicidal", for how much of history has the cash rate been at 3% or greater?…..This ain't normal. A "neutral" cash rate of 1.25%! How pathetic! The economy is that much in debt it can't even handle a normal cash rate (long term normal).

  11. Hi @WalkTheWorldDFA love LVO on the show. Would have liked to had a discussion on the importing of inflation discussed – LVO said he didn't want the cash rate raised too high (I assume to protect mortgages) as it won't resolve the type of inflation Aus is experiencing.

    If the value of the Aussie dollar goes down, wouldn't this exacerbate some of this imported inflation anyway? I acknowledge that raising interest rates doesn't help mortgagees, but a poor exchange rate impacts everybody (including mortgage holders).

  12. It seems to me that interest rates are increasing mostly to maintain the value of $A so our OS debt repayments can be met. Local inflation due to supply issues is just an excuse. Interest rates in the USA will be the best indicator for Australian rates.

  13. Great discussion guys but Leith is completely wrong on the most important point of the discussion. Leith said that raising interest rates up won’t fix the cost push inflation in regards to the energy crisis. This is correct but that is not the point of putting interest rates up. If the RBA don’t raise interest rates in this environment, what do you think is going to happen? Anyone with cash in the bank will withdraw it and spend it, faster than you can blink and bonds yields across the market will skyrocket because there will be no buyers. This is exactly why the RBA is raising rates right now.

  14. The guest is the more intelligent contributor in the room – on these matters. It is disconcerting that you laugh when the energy situation (and the theft of the country’s sovereign wealth) is discussed. The people should receive cheap energy and the successive governments should not have allowed big corporations to hijack our gas ( for example).

  15. War will end in October, a sudden natural resolution of all these issues, and in further 3 months rates take a downward trend, slowly and Australia will regain its glorious days.

  16. raising intetest rates to 3%~4% when the median house price in Sydney and Melbourne is $1 million at the same time wages are being suppressed via the importation of hundreds of thousands of overseas students is a disaster waiting to happen.

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