In light of the proposed trade sanctions proposed on our region, we wanted to pose the questions, where does Australia tie itself? Where should it?
As we recently wrote about in our blog on the North Korean Missile Crisis there is significant influence possible by President Putin over North Korea’s Supreme Leader. Putin characteristically takes an attacking or threatening action when threatened. Kim Jun Un appears to be modelling this behaviour.
Whilst “influence” over North Korea may come from China or Russia, any trade sanctions with North Korea need to be made by China as trade with China accounts for 85 to 90 per cent of North Korea’s overseas trade. But Beijing appears to lack the will to take on North Korea in trade.
From an Australian perspective, we need to examine the USA and China – as we have a foot in 2 camps. But what about …. Japan? In answering this lets look at China, US and consider Japan in a different way.
Japan is part of our region and Australia is historically more connected to Japan than China or America. The cultural links with Japan are stronger than with China – as in the post war period we have relied on them. We have been more influenced by Japanese products and culture even though there aren’t that many Japanese residents in Australia.
As a people, Japanese are fiercely independent – and a competitor of China.
USA: Military Might?!
Considering the US, a significant reason for our linkage is the perceived and actual Military Might of the USA.
But realistically the Military is expensive for a country which is growing so slowly and so heavily indebted. There are no doubts that Military Might needs to be supported by Financial Might.
In America, it isn’t.
Is it time for a rethink ?
Anecdotally we hear more Australians questioning our Military presence in far away places. The reasons given are always about supporting America in case our time of need comes. But if the US can’t sustainably afford its Military, and it is one of the major reasons for our connection to America – why are we so aligned? ….. Isn’t it time for a rethink?
Australia should have a balance of trade to Japan and China – but of course this is a balancing act.
Currently we have a foot in the US camp and now one in the China camp. We believe it more appropriate to bind with China and Japan. In this we would achieve more balance and a more culturally equal society.
Japan is not out to Colonise any more. Australia has historically outsourced manufacturing to Japan who have knowledge and know-how. Australia could build significant partnerships with Japanese companies eg Ship Building.
Were we to re-build a Japanese relationship again, notwithstanding the war, we believe it would be more than acceptable to the Australian people …….can the same be said for China currently?
What do we do?
We follow the changes in our Pythagoras Investment Timing Indexes. They offer a mathematical understanding of the stock market through Volatility, which show that price sensitive events are predictable from changes in Volatility (i.e. in advance of price moves). These changes lead to buy/sell recommendations.
We recommend a sell when the market/stock is at risk of going down, or no-where. At these times we recommend investing in cash and await the buying opportunity. When the market/stock is less risky, and it’s going to go up, we reinvest to profit.
How Do You Protect Yourself ?
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