25 Jan THE TRUMP EFFECT
Whether or not you believe that the newly-inaugurated President Trump will, indeed, make America great again, a lot of Australians are wondering about things closer to their own backyards.
And the one question on a lot of people’s lips is: What does the Trump Presidency really mean for Australia?
Making Australia Great Again?
The answer differs, clearly, depending on what side of the political fence you’re on.
But here is a snapshot of what some political and economic experts are predicting:
One undeniable fact is that Trump campaigned strongly on the issue of what he regarded as damage caused by the North American Free Trade Agreement (NAFTA) – the FTA between the US, Mexico and Canada. According to Trump, the agreement takes jobs away from Americans. As a by-product of this direct opposition to NAFTA, the Trans-Pacific Partnership (TPP) — an agreement that involves 12 Pacific Rim countries, including Australia — has also been tarred with a similar brush.
Australia has an existing trade agreement with the US (AUSFTA), but Trump’s plans will mean that Australia will miss out on trade with other TPP signatories. His protectionist approach signals a move away from global trade – something that will give more power to anti-globalisation forces.
For the small, open Australian economy, many experts predict this will have a negative impact.
WHAT WILL HAPPEN TO THE AUSTRALIAN ECONOMY?
Although many experts predicted an immediate downturn in US markets following his victory, the truth is that their dollar strengthened.
The flow-on effect may be that the Australian dollar will be pushed up – something that may be good news for importers and those on wages, but bad news for exporters. There are many experts who predict that, in the uncertain climate of the Trump Presidency, Australians looking for security in investments will actually create a surge in the local property market.
If that is true, it makes now a great time to be looking at Australian property, rather than waiting for what had been previously predicted – that the housing market may fall in 2017.
WHAT ABOUT THE ANZUS TREATY?
Unless he launches into his leadership with a war – and nobody wants that – the ANZUS Treaty is looking pretty safe.
STAYING POSITIVE IN A NEGATIVE WORLD
The negativity on social media and in newspaper headlines can be enough to make you want to stick your head back under the covers and stay there but don’t let it weigh you down.
Your own backyard is still largely in your control and if you have your eyes on the prize of home ownership or property investment, it’s important to keep on keeping on and continue your hard work and strategic savings plan to help you achieve your goal.
Maximising your savings starts with a smart, realistic budget and your best efforts to stick to it.
Conscious spending is the key – each time you reach into your pocket for that ATM or credit card, ask yourself if spending is what you really need to be doing at that moment and try to talk yourself out of non-essential purchases to help you reach your savings targets faster.
No matter what is happening in the global political stage and as the saying goes “the one truth about buying property is that sooner, rather than later, will always be the best decision”
a: 43 James Street, Northcote VIC 3070
*Disclaimer: This blog is generic in nature. All financial and investment decisions should be considered wisely and based on your personal and financial circumstances. Seek proper advice before committing to any course of financial or investment action. This is not deemed as advice.