What has struck me almost daily when in Canada and the United States was how strong the Australian dollar is compared with the local currencies. We are not so productive relative to them that things should look so cheap to me. I think the $A is heading for a fall, and so does Glenn Stevens:

RESERVE Bank governor Glenn Stevens has warned investors to brace for a slump in the Australian dollar when the US Federal Reserve starts to lift interest rates and questioned whether ultra-loose monetary policy was fostering the right kind of risk-taking.

There are so many ways the Australian economy might unravel. I watch from this distance the Opposition and non-Coalition Senators playing Russian roulette with the Australian economy. It’s one thing to have a different policy view but to let the many economic problems Australia has fester so that they can take over an economy that has been devastated by the fiscal measures they introduced is no small worry.

There will almost surely be a double dissolution in which the question will be whether the country wishes to live in a fool’s paradise or whether it wishes to deal with the problems that are clearly visible. I think Australia may still be able to work it through and come to the right decision in a vote. Or perhaps not, but that will likely be the kind of election we will be having in the next year or two. Because whatever else, things cannot go on as they are.