Perhaps there’s an opening for the Village People to regroup, tinker with the lyrics along the lines suggested by our headline, and get back into the charts.
My guess is that 2009 is going to be one of those years where anything could happen.
As one US financial commentator predicted this week, it will be a matter of only months before we start looking back on 2008 as not being all that bad.
We have Whitlam Redux in Canberra – with everyone getting a big handout except, of course, the people who pay most of the tax. It’s real plus-a-free-set-of-steak-knives time.
And the beautiful, sublime thing about it is that these billions of dollars are not going to make a blind bit of difference in 2009 other than perhaps another brief upward blip on retail sales (mostly benefiting the Chinese, Japanese and Korean manufacturers who make most of our stuff these days).
None of the infrastructure spending will kick in before the global – and Australian – economies goes down the drain this year, as they certainly will.
And even the infrastructure spending will have minimal effect on our productive capacity.
Tarting up school buildings is great for the tradies, but there was nothing in the Rudd-Swan spend-it-while-you-have-it plan for the provider of most of our critical source of export earnings – the mining industry.
But that’s no surprise, and it really isn’t worth wasting breath and words trying to get that through the thick heads in our national capital.
A country is only as good as what it produces, not what it consumes.
You can be sure of one thing: the federal deficit will end up being far bigger than the government predicts.
It’s madness everywhere. The United States federal deficit for the first three months of the new fiscal year came in at $US485 billion.
Next week, a record – yes, record – $US67 billion in Treasury notes and bonds are being auctioned.
Canada’s deficit is tripling. And nobody seems to be able to stop the madness.
But what staggers this writer is that so few people are worried by this profligacy.
Some newspapers are today running stories saying that Malcolm Turnbull is raising fury by trying to stand between people and their $950 or more cheques from Canberra.
Don’t they realise that we got into this problem by running up debt and throwing money around?
So we are solving it by throwing money around and getting back in debt as a nation – and having a central bank that over-tightened now clearly in panic mode as it tries to undo the havoc it wrought.
By way of contrast, let’s take a look at the resource junior sector.
Yes, I know, we’ve all taken pot shots over the years – at the perennial dry holers in oil, the lifestyle boys looking after themselves while the company funds dwindle away, the acquisition of projects that guarantee plenty of business class flights to the other side of the world (preferably involving layovers in Paris or London), the spivs, the incompetents, the metallurgical problems that weren‘t foreseen.
But, overall, the sector is looking pretty good compared to the people running Australia.
And pretty good, too, by comparison with our own masters of the universe – the management teams at BHP Billiton, Rio Tinto and OZ Minerals.
By the way, the news that Rio sold its Argentine potash property to Vale should be seen in a wider context – that is, the fact that Vale is trying to get control of phosphate exports out of Tunisia to provide for Brazilian farmers.
How come the people who got Rio into this mess, when it has to sell some of its best assets (which were actually owned by the shareholders, not Tom Albanese), are trusted to get it out of that mess?
The latest flood of quarterlies showed that, in many cases, management in the junior sector is being very prudent.
True, many of the companies should never have been floated (e.g. in the uranium sector) and a great many of them have too little to show for what they have spent so far.
But they are watching the pennies. In many cases, directors are taking shares instead of cash.
Exploration spending is being trimmed and much greater focus is being placed on giving the best projects priority rather than a scatter-gun approach.
Moreover, directors are buying their own stock, showing they believe in their companies.
Tim Goyder, for example, has just spent $117,640 on more stock in Chalice Gold Mines.
At the other end of the scale, Bill Oliver has just acquired his first share parcel in the company on whose board he sits, Signature Metals. It was only a $300 trade, but a positive gesture nevertheless.
The other big surprise from the quarterlies was that it was only a relatively small number of companies that looked, in cash reserves terms, to be a death’s door.
Most of us had been predicting the need for a mass funeral.
The conclusion to be drawn is that the majority of our smaller companies are working feverishly to survive.
In fact, it may be a blessing in disguise that mining is not getting a federal handout. It has made managers in the sector do what they are paid to do – manage.
Neither International Longwall News nor the author imply any investment recommendations. The writer owns shares in Rio Tinto.