Australia, After America || Peter Zeihan

The Australians are one of the few countries that will stay under the United States' wing as the Order collapses, but they have a few things to figure out first.

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#australia #globalization #usa

[bentaxelrod]

We used to make almost everything in Australia, including high end electronics before during and after WW2.
We were the third country to launch an Australian built satellite from our territory.
Since the early 80’s that has all declined.
We now rely on mining, tourism, education and agriculture.
As a manufacturer who exports world wide, I am very frustrated with our 2 major political parties.
I’m sick of the excuse that we can’t compete with China.
We don’t have to!
We can do things where they have to try to compete with us.

[tonywilson]

*AUSTRALIAN HERE:*
I wrote to Peter at the start of this series and spoke about some of this.
I hope he pins this comment sorry if its longish

- On the Chinese - Peter is 100% right. We are way too heavily invested in China buy our raw materials. I have worked in our mining industry for most of the last 20 years and when the Chinese hit the wall we will be screwed and their construction industry has been so out of control that it won't be able to do anything but collapse and with that the demand for our raw materials will vanish. We got a taste of it when the GFC hit and as Peter said we didn't learn from that lesson.

Luckily we have the rise of India that will compensate for the loss of China. The question is what happens as China falls and India rises as in how much overlap there'll be.

- On the value adding thing and manufacturing - Peter is 50% right. Before working in mining i worked in manufacturing for over a decade BEFORE OUR ECONOMISTS killed it. We used to make steel and smelt alumina and make cars. We do make flour but only for our market which isn't unusual because transporting flour is a hassle compared to grain. We do make sugar locally and export tons of it. We also export staggering amounts of dairy to Japan and Korea.

What killed our manufacturing was our version of *NEOLIBERAL ECONOMICS.* America called it Reaganomics, the Brits called it Thatcherism and we called it Economic Rationalism. We had treasurers on both sides of politics who loved it (Paul Keating & Kevin Costello). They privatised everything they could promising _"Competition would provide better services and lower prices"_ and it DIDN'T. They have spun everything that's gone wrong into _"Its awesome because investors won."_ and yes its been awesome for INVESTORS but the other 90% of us have been smashed, screwed and thrown under the bus.

- On the subprime comparison Peter is again 50% right. None of our home loans are guaranteed, *its the banks who are guaranteed.* Its another part of the Economic Rationalism -> Protect the investors and make everyone else pay for it. The effect is that our banks have been way too open handed at supplying money for home loans. that's driven prices to idiotic levels and when that bubble bursts it will be volcanic and we might not recover.

- On the American links the main reason America will protect us before protecting a lot of other places, IS NOT just because we've been joined every fight America has invited us too. Its because of American has 2 of its most important bases in the world in Australia. There's Pine Gap and Naval Communication Station Harold E. Holt (also known as Northwest Cape). Both have Wikipedia pages but neither really portrays how significant they are.
FIRST - Because of where Pine gap is, its the ground station for the main US Security/Military satellites in geostationary orbit that look down on Russia, China and the Middle East. as well as being the ground station for any other satellites as they fly over Russia, China and the Middle East. Since 2000 the number of satellite antennas has basically doubled on the site. The YT channel RealLifeLore did a great video on this.

SECOND - there's NSC Holt, which is much smaller than Pine Gap but no less significant. Its where the antennas that let the American Navy communicate with all of its submarines in the Indian Ocean are located.

There's rumours that both these bases are nuclear powered, but there's NOTHING to substantiate those claims. So please don't bother me with that crap.

The ACTUAL SIGNIFICANCE is these 2 bases in a "global exchange" is they are ZERO STRIKE targets. In other words they come BEFORE FIRST STRIKE TARGETS. Many Australians are under the delusion that if we have US bases with B52s we'll be a FIRST STRIKE target. So what - the fact is we have not 1 but 2 far higher value targets than 99.999% of Australians realise and have had them since the 1960s. If Russia, the Chinese or a few others really want to do something huge they have to take out BOTH Pine Gap and NSC Holt *BEFORE THEY DO ANYTHING ELSE.*

That's because Pine Gap is the optic nerve for the "Eyes in the Skye" and NCS Holt is the auditory nerve for the "Ears in the Sea." Basically they are the 2 most important US bases for communications NOT IN AMERICAN territory.

Hope that explains some stuff.
Hope 2024 is better for everyone.

[willwillgill]

In terms of a sub-prime housing crisis, there are fundamental differences between mortgages and taxation in the USA and those in OZ. (1) Australian banks do not issue and never have issued "no recourse" mortgages/loans. You cannot walk away from a mortgage as per "jingle keys" in the US induced GFC. Every Aussie homeowner knows that they are legally liable for their mortgage debt even if the house burns down and they did not have insurance. This focuses the mind to keep up with repayments. (2) fixed rates in OZ are typically for 1, 2 or 3 years only. Very infrequently a 5-year fixed rate is available, but not often. This means that mortgage repayments rise and fall for most Australians with the bank rate. This means loan approvals are more difficult.Down Under, and disciplines borrowers far more than their American cousins. About 70% of mortgages at any one time are not fixed, but fully "variable." (3) Australians cannot deduct their mortgage interest off their personal income taxes. Repeat: Aussies cannot deduct their mortgage interest off their personal income taxes -- IF they reside in their own home. They can do so only if the property is rented out to someone else (and then paying taxes on the rental income), but not their own primary home. This also makes for a far more disciplined group of borrowers. (4) There were 13 rate rises in the calendar year 2023 and the number of distressed borrowers consequently is reported as less than 1% nationally. In fact, the average home-owner is more than a year ahead in their mortgage repayments. (6) There has been a housing shortage in Australia for decades. DECADES. The immigration level is one of the highest in the Western world. This year we had a net 650, 000 migrants after nearly two years of our borders being closed due to Wuhan/Covid-19.
This influx of new arrivals, both temporary visa-holders and permanent migrants, exceeds available housing stock by at least 150, 000 – 200, 000 homes at any time. This fact is the reason that all forecasts by international economists and pundits about the imminent collapse of the Aussie husing m< market, or housing bubble, have proven wrong, wrong, wrong. Harry Dent has forecast at least three Aussie housing bubbles. British forecasters, ditto, . As far as I can see, after owning property in OZ for over thirty years, there could be a downturn, but not a bubble/collapse, if the economy goes into deep recession and people cannot afford to borrow at all. It should be remembered that Australia did not have a recession in 2008/9, and has not had one even technically since 1992. Cheers, William

[warwickmorris]

Thanks Peter. An Aussie here too. A few corrections: we do convert bauxite to Aluminum on a large scale, we do refine quite a bit of copper, zinc, lead and nickel. We now produce downstream Lithium products (but not batteries). We do some rare earth production steps but unbelievably can't approve making final product because of thorium radiation concerns. We do make steel and one of our main steel manufacturers is also one of the bigger US producers as well. We do produce some local downstream natural gas products such as fertilizer and explosives and some plastics. We have nearly lost all our oil refining capabilities because our governments are very short sighted. We are not big manufacturers because our pay rates are high and most our governments are big on government and small on private enterprise and in fact they feel comfortable with China which is pretty stupid but there you are. We are pretty good at complex construction and our best companies work nearly everywhere in the world. I could go on. A lot wrong but a lot right too. Oh, and we are intent on supplying India with whatever it needs to grow. We are also one of the most ethnically mixed countries in the world with large

[pragmatic-ez]

Wife of an Aussie veteran who was in the middle east, Afghanistan etc. and I never really understood why we needed to be there (I was obviously very worried) but my husband tells me the bond between the US and Australia defence wise is absolutely unbreakable and that if the US is somewhere then so are we...I guess most civies will never get it but he assures me that our ties together are deep, so hearing you say the US won't drop us makes me understand what he says even more!

[michaeldavis]

As an American, here's hoping our Aussie brothers can move forward with manufacturing and their housing markets. And I hope the US with all our problems will still continue to be as good a friend to Australia as Australia has been to us.

[Talwyn]

When the first planes crashed into the towers on 9/11, Prime Minister John Howard immediately invoked the ANZUS clause that states if a member of the alliance is attacked, the others would take up arms in defense of their ally. John Howard was welcomed by Congress in the special joint session and applauded for that. Australia was the first to step up and back the US. Its not been forgotten.

[jsmorritt]

As an Australian, I agree 100%
House $$$ are nuts for years
I work in the mining industry and have said for years we need to do more than just dig rocks out of the ground. And 100% Aus is a great friend to the USA

[johnryan]

Honestly Peter as an Aussie I’d love to see you do a proper deep dive into the failures of this country.
I’m turning 40 this year and don’t recognise this country anymore compared to when I was a kid

[sandybottom]

I would venture to say that Australia does not have a sub prime problem. Australia has always been rather hard and strict.

[tonybloomfield]

The reason Australia sells such a massive amount of raw materials to China is because China produces so much of the consumer goods for the entire world, including Australia's good friends in the US. If the rest of the world did not outsource so much of their manufacturing to China, and indeed manufactured at home, Australia's spread of commodity exports would be directed to where the manufacturing actually occurred and be much more diverse.

[davidkingsford]

Thanks Peter for doing an Australian segment
As an Aussie, I agree with your assessment. We'll all need to work hard together. 👍

[asmodeus]

He's right. As Australians we ought to have begun properly industrializing decades ago and what little industrial and manufacuring capacity we did build and develop before, during, and after the Second World War we allowed to run down and dwindle to nothing from about the mid-1970's onwards. And we are going to pay for this lack of perception and foresight in a big, big way.

It was even said back in the 1960's when I was a kid that we needed to be much more industrially developed than we were and our manufacturing base much larger than it was.

[forestcottage]

I was born in Australia and have been around a while. All I can say is we are blindly walking into a nightmare! We have a corrupt government, no foresight, have sold our utilities to foreign countries, have allowed way too much land, both productive agricultural and private property to be sold to the highest bidder, who doesn't reside here. And as you have said, we dig our earth and ship it out of here, with no real manufacturing. We have ridiculously insane immigration, without proper planning, the infrastructure cannot support these numbers! There are no houses, not enough hospitals, and people are dying as the ambulance system in Victoria is broken like many other things. The inequity continues and the gap between the haves and have nots continues to widen. Its beyond disgusting that young people feel hopeless and will never own their own homes, with or without a degree! And renting, well there wont be any of those either! We are just too backward!

[stevoschannel]

Housing prices in Australia are beyond bonkers and successive governments have only compounded the housing crisis. The gov will do just about anything to inflate house prices until they can’t anymore. The question I have Peter is, when do you see the housing bubble bursting in Australia? And how long before Australia feels the Chinese decline? Love your work by the way! Cheers!

[grendalsuncle]

Part of the problem in Australia is that since the 1980s ( if not before) instead of expanding our manufacturing capacity it has been sold off to other countries (including USA) and moved offshore

[rossbaker]

Thanks for doing this one Peter. As an Aussie it’s so important to hear your thoughts.

[isaac]

As an Australian it is a little scary how correct an American can be about our future, its a shame our governments dont seem to see it.

[anthonydwyer]

Also as an ozzi i was offended by the “Swallow whatever the chinese put in your mouth” comment 😂 😂

[georgejolkesky]

I would love if you made a video on the US' outstanding debt