Not Open for Business
It is amazing that humans can squabble and worry about the most trivial things, yet have an ability to rapidly adapt when we need to. In March we all existed in a surreal, post-apocalyptic world that was the stuff of movies. The limited information and the rapidly changing advice were a whirl wind. In a short space of time we have seen personal and economic restrictions that were previously unheard of.
Even during WWII there was nowhere near these levels of restrictions. If you wanted to go out and drink your blues away, that was an option and it was all hands-on deck, rather than ‘do not do anything’. While, we definitely would not equate being locked in your house to the sacrifices of soldiers in WWII, we are at war. The enemy just too small to see.
Once the restrictions were understood, it does not take much imagination to guess what shutting down huge parts of the economy was going to do. The Australian policy makers, as with many countries around the world, have shown that they understand the economic problem. When a severe downturn strikes, the Global Financial Crisis has shown us that when needed, policy makers have a huge arsenal of monetary and fiscal stimulus to turn to.
As they have effectively turned the economy off for the first time ever, there has to be some sort of depression, as economic growth will fall more than ever before. However, this does not mean it will be like the Great Depression, which is what most people immediately think of. That was a failure of policy, both in terms of the actions taken and the restrictions on the powers of policy makers. They raised interest rates and cut spending!
Fortunately, we have become much smarter since then and the computers help! So, we put business into hibernation and introduce policies to ensure that as many businesses as possible are strong enough to restart on the other side.
Intralink will continue to provide you with information and updates that we feel will enhance your understanding of what is going on in this confusing time. We are always available to answer any queries that you may have.
For further information or to discuss how we can help you, please speak to your adviser.