What we are seeing in the Australian economy can be better explained by psychologists than economists.
The mass of foreign debt gets bigger. There have been two months of uncertainty over the Budget and several more over Mabo. The Government’s industrial-relations “”reforms” amount to next to nothing. The mass of jobless remains constant. (I refrain from calling it a jobless queue, because a queue presumes that one’s turn will come and a bus will arrive or fish and chips will be served.) And the dollar behaves like a broken yo-yo _ it only goes down. These things would normally add up to business gloom.
Yet the share market has been on a steady climb for nearly a year. At the end of 1992 it was at a post Gulf War nadir of 1400 points. It has now busted 2000 and keeps on climbing.
It must have more to do with the forces of greed and fear than the forces of supply and demand. Or more correctly, the irrational, erratic forces of greed and fear are driving supply and demand.
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