• Clifford Bennett, Chief Economist at ACY


• 10.01.2022 11:15 am
#stocks , Clifford Bennett has over 36 years of market trading experience and was named the 'World's most accurate currency forecaster' by Bloomberg New York. He has advised some of the world's largest organisations, billionaire investors, and political leaders and spoken at the prestigious APEC summit on reserve currency issues. Clifford is the Chief Economist at ACY Securities.

Says it all really,

Screenshot Bloomberg.com

The Great Australian SetBack

gets worse before it gets better.

Good morning,

The Omicron surge continues to smash all records in several countries, but none more so than in Australia.

As a proportion of the population the Omicron infection appears to know no bounds. Everyone should expect to get it the Deputy Health Minister says.

The worse this new variant crisis has become, in lock step the government has been removing safety measures. Remember our leaders encouraging everyone to go out and enjoy New Years celebrations? Now they are saying this is like nothing we have seen before. That is correct, but we knew that back then. If we cared to look overseas.

There is good news, if you can call it that, we are now hurtling at break-neck speed toward herd immunity. Probably within 3-8 weeks. Which is very fast.

The problem with this is the tremendous strain on our health system. It is all very well for the politicians to pontificate upon the resilience of our health workers, but they are not the ones on the front lines. How do health workers feel about a vaccine break-through super contagious variant, being given free rein by the unwinding of safety protocols?

It is one thing to argue we have to live with covid, this is true, but did we need, after all the previous sacrifice of Australians, to totally allow this variant freedom in tour vulnerable society. Spread obviously easily and rapidly by the vaccinated. Everyone.

There is a human toll to be paid along this freeway of overcrowded and broadly infected hospitals to achieve herd immunity.

One that may be significantly higher than all that modelling ever countenanced. 35 deaths in just the past two days in NSW and rising. Hospitalisations now at 2030.

While our politicians want us to focus on ICU beds as to the severity severity of the situation, that is a nonsense. It is hospitalisations that stress the health system and this does not include the far greater number of people now getting hospital care at their homes.

John Kopkins Hospital in the USA is today saying Omicron is about half the serious illness and death level of Delta. I hope not. If this proves to be the case in Australia then we really should steady our selves for what is coming over the next few weeks.

Australia was particularly vulnerable due to our previous extremely low level of cases and therefore virtually zero herd immunity. I have written many times how Oxford University warned the world that "herd immunity by vaccination was a myth". But no one listened in the rush to oversimplify the situation.

A fear response to believe that to have the jab would make everything OK. Vaccination in association with opening up cautiously was the correct approach. We abandoned all caution at precisely the wrong time.

Australia was a target rich environment for Omicron and we dropped our guard entirely.

The economic impact is going to be off the charts.

It is already immediately being felt by every household on the eastern seaboard as shelves empty at supermarkets and what happens if fuel deliveries slow. Not to mention the recoil of families to sensibly spend more time at home. Hospitality doesn't have a chance.

The storm will pass, but it is one hell off a storm.

The Australian Dollar and stock market remain vulnerable indeed.

Clifford Bennett

ACY Securities Chief Economist.

The view expressed within this document are solely that of Clifford Bennett’s and do not represent the views of ACY Securities.

All commentary is on the record and may be quoted without further permission required from ACY Securities or Clifford Bennett.

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