Jen’s Note, February 2009

Interest rates down to pre decimal currency levels……….. hottest and driest weather for seventy years in the southern states and the opposite in the northern states…………. Europe almost at a standstill with heavy snow and storms…………….  unemployment rising………….confidence sinking………………. is this the end of the world????!!!!

Probably not.  Is it climate change?   Maybe!   But what we are all in is the same boat.   Someone asked me not long ago what I thought would be one positive outcome from all the problems the world faces at present and my answer is that I thought that the environment was going to get a breather.

As we all change our lifestyles to adjust to our new financial circumstances almost everyone is rethinking just how they use the resources they have. This includes physical and well as financial resources. We are all saving water, turning off lights, making shopping lists to make sure we bring home just what we need rather than what we think might be nice to have.

Many people are not renewing gym memberships but are instead buying a good pair of walking shoes and either taking the dog for a walk or joining a walking group to keep fit. In doing so they are meeting new friends and making new contacts. From the change in activity that is happening will come some of the greatest benefits from new relationships that will create new types of employment in areas that never were considered in the past.

If you consider all the van based services that you see around your suburb every day from dog washing to lawn mowing, window washing to home cleaning these are all businesses that have been developed out of adversity.

The past thirty years has seen a huge growth in micro businesses that are either part of a franchise group or are simply someone local that has had an idea and is giving it a good go. Home delivery of milk and vegetables was the normal thing when I started work in the late1950s. We had a fridge on the back porch and the green grocer would deliver as well as the butcher and the grocer and put the perishables in the fridge for you. This was after they had rung you before you went to work to get your order for the day.

Nowadays we all trundle off to the supermarket to be enticed into buying many items we really do not need. Buying from the Internet will become much more sensible for those tempted by “specials” and promotional ladies offering tasty titbits in the super market.

The government is certainly throwing money at the economy to try to alleviate the worst aspects of a recession. It appears that most everyone will get some assistance of some type. We hope that these efforts will stimulate employment and encourage those who do become unemployed to think about creating a job for themselves if there is not one in the industry they have left.

Paying down debt particularly credit card debt is a very sound idea even if the government would like you to get out and spend. But if you are going to spend, then it’s better to save up first then spend. The effect on the economy is the same,  just a little delayed.

We think that house prices may go down a little but we do not think that there will be a wholesale crash as some pundits have speculated. Our reason for this thinking is that there still is a housing shortage particularly in Victoria. The first home buyer grants plus the low interest rates will keep house prices supported at least for some time. The longer term will of course depend on how bad the employment market becomes.

The government proposals to fund stimulus from going into a deficit budget is quite sound and will provide eventually some good opportunities to buy Commonwealth Government Bonds. The only question is how will the government issue the bonds.
If they do as has been done in the past which is to offer bonds in $10,000 lots at a good rate of interest for 3, 5, and 10 year periods then these bonds will provide a very secure investment for retirees to have sound income streams.

So let’s hope that in all this stimulating that is going on we have offerings that will assist working families and those in the community who have retired and do their bit by spending what they have saved. The other hope is that the recession will not be as bad as it could be, that we all remember that “a penny saved is a penny earned” or maybe I should apply the same to dollars and in the next few years we will have good environmental outcomes, a much more connected and locally focused community and the economy will recover to the prosperity we have previously enjoyed and we all are more careful abut our spending habits in future.

Try to stay cool, Lina the canine receptionist offers this advice to keep cool; either stay in the office and watch the air cooler does not go off or do what she does, dig a big tunnel and sit in that and of course hop into her paddling pool then cool off by shaking the water all over anyone who is standing nearby. That way she shares the cooling down.

Jen is very mean about her tunnel efforts as once she gets down deep enough for the tunnel to cave in Jen smashes the tunnel and poor Lina has to start again. Still she is a very diligent little doggie and never gives up. What an inspiration to us all.

The market is struggling to make progress and it is, very slowly. Let us hope that little by little further progress is made

Regards,

Jen, Rose and Lina the canine receptionist