Record High Prosperity

The US stock market is at all-time record highs just like we said it would be.

The Australian stock market will be playing catch up rather quickly, and all the hesitation about Australian property values may well evaporate quicker than a snowflake on Ayers Rock!

In the past week, we have seen an ever increasing “acceptance” by the world’s central banks and political leaders that the world may actually be doing OK. We have known this for many years of course, but it is nice nonetheless that they are catching up.

People like the Chair of the US Federal Reserve, Janet Yellen still has trouble comprehending just how great things are. They think it has all come at a rush, but the prosperous reality of our times has been right there in front of them all this time. It is just that they were looking at the world from an old script of defunct economic theories that never really worked anyway.

In fact, I would go far as to say, that never before in the history of the world has a profession been so generally wrong and inept, yet become so totally powerful as economics.

It is bizarre that the economists who get things wrong, get appointed to positions of power. This has certainly been the case in the US where the key people who oversaw the GFC debacle in policy and regulation, were both responsible and surprised, were re-appointed by Obama despite his rhetoric of change in the economic sphere.

This is why, including here in Australia, we will continue to experience a deluge of confusing and ill informed comments, bizarrely from the very “experts” in the field.

The reason for the resurgence in global prosperity, and our strong belief in the future outlook for the world economy and even an OK, but well below potential Australian economy, remains one of ordinary people being for the first time empowered to compete with the powerful elite.

Education, developing new ideas, design, investment in markets and property is no longer the domain of just the wealthy. And it is the working class and lower middle classes of the world that have the greater drive to succeed and push ahead despite what economic leaders suggest. It is their unbridled and wonderful enthusiasm for opportunity and success for their families that has been driving global growth for the past decade.

The decisions of central bankers and even political leaders matter not, in an environment of a surging working class in the billions. Competition is here to stay. Low inflation is here to stay.Investing in one’s future, and the future of our families, has never been so available. It is a historically “just born” phenomenon. We have many years of previously unseen prosperity ahead of us.

Clifford Bennett // Chief Economist