Okay, so that was the Boom…

Happy to finally be back in Perth after another two weeks circling the globe.  What a ride it’s been though, watching the world’s markets fall apart close-up and in real time.

I don’t like the way that so much of the world’s press and politicians are talking about panic — in the US they were even threatened with Martial Law — because to some extent at least, it’s only virtual money that’s been lost so far.  It’s only when the rhetoric scales out of proportion that things get really scary.

Anyway, we know that the boom is over now.  Due to some fortunate econo-political circumstances, it looks like it’s going to roll off reasonably slowly rather than falling off a cliff, whch is great news.  However, don’t be fooled that there is any chance the boom will continue; the credit market pretty much doesn’t exist anymore, which pretty much guarantees that there won’t be any new mine projects that aren’t already funded (and some of the ones that are will stall or fail).  it looks like the Chinese might be able to maintain growth rates roughly half of what they currently are, which is more good news but still means a lot less heat and much harder negotiation.

This is good news!

A soft landing!  It’s more than we could ever hope for and while it’s still a dream, it is still in the future!  We have time to work out what industries we want to promote in Western Australia’s post-boom economy.  I mean, we always knew it would end and there have been previous efforts to broaden the Western Australian economy but clearly they were always focussed on the future, not RIGHT NOW, which makes it hard.  Things have changed now, the date that the boom stopped is in the history books, so let’s get busy working on creating the fundamentals of a solid economy that is properly diversified and will keep our society employed and productive no matter what happens in the global credit markets.

We need to kick this debate into a high gear though; everyone loves to watch a disaster and the ongoing rhetoric of the panic-stricken train-wreck of the US financial markets, replete with toxic bonds and tsunamis of bank failure will make it hard to concentrate on the real issue.  Which is, incidentally, how we diversify our little, geographically isolated, overly focussed economy, making it ready for the next wave of opportunities and improving our economic resiliance.

I’ve got a few ideas as to what we can do here in Perth that I’ll talk about in future posts.  Perhaps surprisingly, they aren’t all focused on games either!