I suppose at the end of the week many people are saying: What does this international financial turmoil mean for Australia?
Well, one thing it will mean is there'll be an acute shortage of US dollars globally. And therefore liquidity in Australian markets will be under pressure - that is banks getting hold of the money that you and companies and borrowers need.
It might be for infrastructure, it might be for mining. It might be for buying a house.
Our Reserve Bank has injected almost $12 billion dollars into our banking system to make sure our banks had enough cash. Our banks borrow 50 per cent of their cash from overseas. So since global credit markets stopped working normally, our banks have found cash expensive and difficult to borrow.
On top of this, analysts are saying that Germany and France and Italy, which are the leading economies in what's called the Euro zone, are now said to be on the brink of recession.
Business confidence surveys released this week have hit lows not known for years. Now this could mean that if America has the flu, then at least Europe are starting to cough.
Business confidence in Germany, which is Europe's largest economy, dropped for a fourth straight month in September to its lowest level since May 2005. And business sentiment has plummeted across most other European economies.
When these things happen, common sense goes out the window and panic takes over. As I've said often, you wouldn't want some of these financial managers on the front line in war or in the front row in a Rugby Test. They'd sure as hell go backwards in a hurry.
But all this highlights the varying responses by leaders.
The German Chancellor Angela Merkel said this week that she would seek to dramatically water down the impact of new rules to the existing European Union carbon emissions trading scheme. In the current crisis, she's concerned about the impact of this on German business. She said she wouldn't support the destruction of German jobs through an ill-advised climate policy.
Well, compare this with our Prime Minister.
He said in New York on Wednesday he still intended to introduce a carbon emissions trading scheme in Australia in 2010, even if the current global financial crisis had the effect of further slowing economic growth. Whose side is this bloke on? And what does he know about economic management?
If that doesn't indicate an ignorance of economics and an ideological obsession, then I don't know what does.
Our Prime Minister seems to be saying that it doesn't matter what happens or what the consequences may be, he'll be introducing a carbon emissions scheme in 2010.
Well he might, but by the time it gets through the Parliament there'll be another Federal election and at the rate he's going, he won't be here.
He would do well while on his travels to have a word with Angela Merkel, the German Chancellor.
He might find a saner and more economically literate approach to the new religion of climate change.
