Must admit I am a little surprised at the sudden upturn in the economy.

Was it not only three plus months ago that we were undergoing the largest economic downturn since the great depression.

Demand was sliding, unemployment was going to rise, low interest rates due to low inflation expectations, housing prices falling, stockmarket on a freefall, debt out of control and then suddenly everything appears to be pretty rosy.

Has anything actually changed? My humble opinion is no. Why?

- Demand still rising slightly mainly due to access to debt, helped by a little stimulus – thanks Kevin and well done for avoiding that recession.

- My understanding of the definition of unemployment is that it only kicks in for those working less than 12 hours per week. Not only have many workers’ hours been cut in the last 6-12 months but I reckon many of those middle management workers who were lucky enough to cop a redundancy still aren’t standing in the dole queue.

- Interest rates are on the rise. The RBA in their wisdom state that inflation is above acceptable levels and hence textbook monetory policy says to raise interest rates to calm things down. Hello folks have a look beyond the numbers and perhaps see why your ‘basket of goods’ is getting a little more expensive. We have the most ridiculous duopoly in the 2 major supermarkets Coles and Woolies which was quantified by a report over the last few days which stated grocery prices had increased 41% since 2002 (Imagine how many consultants it took to find that out). Petrol prices up, gaming up yet strangely enough no real pressure on wages which is actually one of the main reasons to raise interest rates when inflation rises. Honestly.

- Housing prices are starting to rise in a few areas. Helped a little bit by the dash for the first home owners grant. Construction sector also going pretty well thanks to more of Kev’s stimuli. Both props ending very shortly so should be interesting to see how the market goes.  In fairness there is a bit of a shortage of housing as our population grows. One thing for housing prices to go up due to an increasing population and another to determine where everyone is actually going to work in 20 years. Any ideas Kev, Julia or shoud I read the 2020 summit paper more closely.

- Great to see the stockmarket rise back to the levels it was nearly 12 months ago. Obviously massive multiples on company earnings is justified. Things surely have to get better, in fact fifteen to twenty times better. We have a lot riding on the value of superannuation to help ease the burden of the ageing population so go the All Ords. And well done JBWere for sponsoring the Masters and having a couple of your senior execs have a round with Tiger. I am sure those people who paid you your large commissions when having to sell at a huge loss over the past 12 months would at least be happy to see their hard earned money well spent.

- Debt has been reigned in a little thanks to a few government bailouts mainly o/s. Apart from that debt is still alive and well and is a sleeping giant. The sooner something serious is done (by all concerned) the better.

So things are looking good. A little cynical yes. My advice;

- Do something good for those around you and even those you dont know

- INNOVATE at work, at home and wherever else you choose to spend your time

- Buy BHP shares.

Why, because it Just Makes Sense.