May 21, 2025 • 33 mins
Joe and Michael explore how Trump's tariffs are reshaping the Australian economy through currency devaluation, interest rate changes, and property market shifts, with surprising benefits for some and challenges for others.
Overall, these won't affect Australia too negatively, in fact, they might actually improve things for the Australian economy as we look to other markets, particularly China and Europe.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Trump saw an opportunity to completely
disrupt China.
I always say tariffs is themost beautiful word to me in the
dictionary Tariff or tariffs.
Speaker 2 (00:09):
This is the director.
During this trade war, Chinamight start looking towards
Australia for more favourabledeals and stuff like that, so
that's good for our economygenerally speaking.
Speaker 1 (00:19):
So what happens with that sort of stuff is, all of a
sudden, they've lost an exportpartner.
Our GDP is heavily dependent onexport.
The only way we're going to beable to avoid a recession or
further deflation is if wedevalue our currency.
We will become a moreattractive trade partner.
The tariffs are going to affectyou.
They're going to affect you ina way that you don't see on a
(00:43):
macro level, but on a microlevel you will have more
spending power, butunfortunately, we don't have the
savings at the moment.
Speaker 2 (00:48):
My advice is Welcome to the Finance Show with Joe.
He's Joe, I'm Michael, andtoday we're going to be talking
about the Trump tariffs and howthey affect Australia.
Or do they affect Australia?
I can't imagine they don'taffect us.
They're affecting the entireworld.
Speaker 1 (01:08):
Oh man, this is.
I've got juices flowing throughme because it's.
This sounds kind of gross.
I'm excited.
I'm not excited because thetariff implication affects us on
a global scale, not so much.
It's actually beneficial on amicro scale.
(01:29):
So the individual in Australiais going to be I don't want to
say better off, because we'realways going to get fucked
somehow.
But me outside, looking in,using my previous qualifications
as an economist, the individualis actually going to benefit
and there's several reasons why.
But before we get into that,michael, yeah, highlight what
(01:52):
happened okay.
Speaker 2 (01:54):
So just so everyone is aware and you're not, you
know, you're not glued to yourscreens constantly.
So australia copped the 10 10baseline tariffs that every
country in the world copped fromthe us, correct?
So we've got that.
The important thing is still ananimal.
They're still an aluminum.
Fuck steel and aluminiumtariffs.
Speaker 1 (02:13):
I'll say it five times, I can't even say it once.
Speaker 2 (02:16):
Uh, those are at 25 percent.
Um, we do have items exemptfrom us tariffs.
This includes timber and lumber, copper, semiconductors,
semiconductor manufacturingequipment and select
pharmaceutical products.
Some other things to note isthat the US only imports 0.6% of
(02:36):
Australia's steel, iron andaluminium exports.
The US only buys 5% ofAustralia's total exports period
.
So early estimates.
They also suggest a $27 billionloss for Australia, which is
about 1% of Australia's totalexports period.
So early estimates.
They also suggest a $27 billionloss for Australia, which is
about 1% of GDP.
That's under the worstpredictions.
Our largest export to the US isbeef.
25% of US beef imports comefrom Australia and that's
(02:59):
actually mostly due to the USdrought, which has really
affected cattle farming there.
So it's actually risen to 30%in 2025.
So that's where we're at.
Those are the numbers to keepin mind.
Speaker 1 (03:10):
So I love a good trade war and we are a speck on
Trump's radar and that's why hedid 10%, because he was like, oh
, I can't show.
Speaker 2 (03:24):
Well, literally every country in the world copped 10%
, even that island that doesn'thave any people living on it.
I saw that one, the fuckingpenguin island, got 10%.
Speaker 1 (03:31):
But Trump saw an opportunity to completely
disrupt China Completely, andwhat I mean by that is, I think,
how much of America's importsare from China?
It would be 30% something.
It would be a huge amountbecause you go to any Walmart or
(03:52):
you go to any one of theirstores.
Everything is made in China.
China currently has a housingissue before any of this.
So, a lot of their housing wasbacked by government and a lot
of their housing was backed bytheir own institutional funds.
So whenever you hear aboutChinese money, it's the same
(04:16):
players and they're all aroundthe world.
They're the reason whyVancouver went so high.
It's why Sydney's propertymarket went so high.
We all know what it is.
They were building in their owncountry and they had invested a
lot of money, and a lot oftheir money that they leverage
(04:37):
comes from exports.
So all of a sudden if anAmerican company needs to pay
84% to import something inthey're obviously not going to
bother.
They're not going to bother,they're going to find another
resource.
Oh, canada makes porcelain, forexample.
Speaker 2 (04:53):
Argentina has beef.
Canada's a poor example.
Now they're going through theirown little tiff right now.
Speaker 1 (05:01):
Don't get me started on them.
Don't get me started on them.
Yeah, um, but what he saw wasan opportunity to completely
cripple the chinese market.
Yeah, by destabilizing thehousing market, because now
you've got all theseinstitutional funds that were
depending on profits from theirexports and now they're not
getting a cent, and this iswhat's interesting for Australia
(05:27):
.
Speaker 2 (05:28):
We might like I don't know what's going to happen
with China, Because China isessentially the manufacturer of
the world.
That's where most manufacturingcomes from.
Speaker 1 (05:38):
They've got 1.4 billion people.
They're going to build stuff.
Speaker 2 (05:41):
It happens.
Well, they can also just do itat the most competitive rate as
as well.
That's why manufacturing is notin the us.
Yeah, um uh.
But for for for australia.
During this trade war, chinamight start looking towards
australia more, um, you know,for more favorable deals and
stuff like that.
So that's good for our economygenerally speaking.
(06:03):
Yes, that's just more money.
Um the downs, like, obviously,from china's point of view,
we're not exactly going to plugup the gap that the us.
We don't even have like a halfthe population that the us does.
Speaker 1 (06:14):
Yeah, so we've got one tenth or one eleventh their
population there you go.
Speaker 2 (06:18):
We're not plugging that gap is what I'm trying to
say.
So, yeah, we might get more you, more you know, and Europe as
well.
So for the consumer like us,individuals potentially, but the
real big one that we think wemight benefit from is lower
interest rates, sort of acrossthe world, because as global
demand for capital goes down,interest rates also go down.
Speaker 1 (06:39):
Do you know the reason why they decreased our
interest rates?
Speaker 2 (06:43):
No, not the economists.
Speaker 1 (06:44):
Well, they had an emergency meeting, so there's a
number of factors that went intothis emergency meeting.
Our GDP is heavily dependent onexports.
Speaker 2 (06:53):
Yeah.
Speaker 1 (06:55):
I've mentioned it countless times, but we've built
on iron ore mining beef, as youmentioned earlier Mining
agriculture and education.
Speaker 2 (07:03):
are our earlier mining agriculture and education
their biggest exports there?
Speaker 1 (07:06):
are big, biggest exports.
So who got affected?
Very quickly, you've got ginareinhardt, you got rio tinto,
you've got, uh, bhp, you've gotall the big companies.
So all of a sudden, there, Ithink, I think gina lost like
250 million in a day or 200.
It was a large amount of moneythat she lost.
Yeah, yeah, um, paper money.
It's not actual money, but itwas was.
Oh no, my shares are worthless.
Speaker 2 (07:27):
Yeah, the value has gone down.
Speaker 1 (07:29):
Our chief economists actually made a very good move,
and a lot of people won't beaware of this, so they would see
the interest rates go down.
Mind you, this pissed me thefuck off, but we'll get into
that later.
When your interest rate goesdown, that means the value of
your dollar is actually cheaper,yeah, which means more people
(07:50):
will export and they'll tradewith you.
So let's say the euro stays theeuro, like that doesn't change.
Australia drops their interestrates and all of a sudden, what
would cost you a dollar ineurope costs you 50 cents in
australia.
Do you remember back in theearly 2000s when they filmed the
matrix here and missionimpossible and everything?
(08:11):
oh, yeah, yeah it's becausefilming was 50 cheaper than what
it would be in america and youget, and you get all the
benefits of being in america aswell.
Speaker 2 (08:18):
It's not like our cultures are that different and
no.
Speaker 1 (08:20):
So what they did was they called an emergency meeting
at the Reserve Bank ofAustralia and they said guys,
the only way we're going to beable to avoid a recession or
further deflation because we'regoing through some serious like
inflation is coming right, thefuck down right now.
Speaker 2 (08:37):
Yeah, yeah.
Speaker 1 (08:38):
The only way we're going to actually be able to
reduce this is if we devalue ourcurrency.
We will become a moreattractive trade partner with a
lot of the world europe.
It's very hard to devalue theircurrency because they all
depend on the euro and there's40 countries that depend on it
it's, it's a lot, it's a lot ofcountries yeah, and it's.
Speaker 2 (08:58):
This is what the third biggest economy in the
world or second biggest economyno, third, but it's something
that occurred.
Speaker 1 (09:05):
The second reason, and this is also conspiracy
Joseph in the room.
All right, do we have a hat Ican wear?
Speaker 2 (09:13):
for conspiracies, we'll get the tinfoil hat.
Speaker 1 (09:15):
Yeah, like we need some sort of garbage bag or
something for these sorts ofmoments.
But we saw GNI, we saw all thebig companies.
They get their GDP affected.
Yeah, these guys borrow moneyso that they can produce their
institutional banking is insane.
You will see Amazon borrow $125million and pay it back two
(09:39):
days later.
Speaker 2 (09:40):
Yeah, we've mentioned this on previous episodes.
Speaker 1 (09:42):
yeah, so what happens with that sort of stuff is, all
of a sudden, they've lost anexport partner.
Regardless, 0.6%, 10%, whateverit is, we've lost an export
partner.
This individual has lost $250million.
She owes Commonwealth Bank ofAustralia X amount of dollars in
some sort of facility.
Yeah, okay, she doesn't have$250 dollars sitting in cash in
(10:05):
a bank.
Speaker 2 (10:06):
she might, but I like to imagine her jumping into
like a pile of money, likescrooge mcdark but she doesn't
have that.
Speaker 1 (10:13):
She's got paper money , it's, it's in shares, it's in
her name, it's in the companiesthat she owns yeah, it's not.
It's not liquid money no so, andshe might owe the money and
then all of a sudden, if hershares drop, her ability to
repay that money drasticallygoes down.
That she owns, yeah, it's notliquid money, no so, and she
might owe them money and then,all of a sudden, if her shares
drop, her ability to repay thatmoney drastically goes down as
well.
Yes, I yet again conspiracy Joein the room.
(10:34):
I'm of the belief that thoseinterest rates dropped
significantly.
They had the emergency meetingswhen they realized the larger
companies are going to beaffected the most.
They didn't give a shit whenthe everyday showing was gone,
homeless or no, you know,inflation was sky high and
people couldn't afford theirgroceries.
(10:54):
Look at walworths.
Walworths and coals are theperfect example.
Nothing has come of thatinquiry.
No, they've spent 80 mil.
How much did they spend on theinquiry?
Speaker 2 (11:05):
80 million dollars, 800 million it was, no, it
wasn't 800 million, but Ithought yeah, it was a
significant no.
No, 80 million is not nothingto sneeze at, but it wasn't 800
million, no no, no, no they.
Speaker 1 (11:14):
They spent a significant amount of money on
that inquiry and I have seennothing come of it.
I have not seen a refund.
I have not seen guys, you haveto drop your prices 30%, your
price gouging.
I saw a video the other day abox of Coke costs $50.
24 cans of Coke costs $50.
It's a case of beer.
When did we become so stupid asa society that we thought that
(11:36):
that was something that we like?
When did we become brainwashedand think to ourselves yeah,
that's a good buy.
Speaker 2 (11:42):
Well, we've only got the two major supermarkets who
own half of everything, likeeach own a half of everything.
It's like Woolworths, westFarmers and the Woolworths Group
.
Speaker 1 (11:51):
You know I think, for every dollar spent in Australia
, I think 65% of it goes throughthose two companies.
It's insane.
That's what I mean.
Speaker 2 (11:57):
Like it's a duopoly rather than a monopoly, which is
not.
I guess it's minorly better.
No, yeah, but it's really.
It's not.
You don't want a monopoly.
Speaker 1 (12:07):
Yeah, but as we can see, as soon as tariffs were
declared, all of a sudden, heyguys, oh shit, we've got to pay
our money back.
All right, make it cheaper.
So this coming Tuesday, rba'smeeting oh yeah, yeah, there's
been so many reports ofinflation is now down and we're
looking at this statistic and wewant the Australian individual
(12:28):
to be able to spend money again.
Yeah, they need us.
They need us back.
Speaker 2 (12:34):
All of a sudden, consumer spending is important
again.
Speaker 1 (12:37):
It wasn't important two years ago, but now, all of a
sudden, australia needs tore-stimulate the market.
They're not going to look atthe exports.
They're not going to look atthe exports, they're going to
look at the individual.
I won't be surprised if there'sa new change in the BCA, the
Building Code of Australia.
I won't be surprised if thathappens to get more people
actively purchasing homes.
Perfect example Labor's come inwith an extension of the first
(13:00):
home guarantee policy, wherethey are now increasing the
price caps to $1.5 million forNew South Wales-based properties
, and I think Victoria is $1.2million.
Huge amounts, yeah, yeah, yeah,from $950 to $1.5 million.
Speaker 2 (13:16):
Well, I guess because the median prices have gone up.
Like, what's the median pricein Sydney now?
$1.2?
.
Speaker 1 (13:21):
Yeah, somewhere around there, all it's going to
do is increase that.
It's going to increase economicactivity.
It's going to increase uh, youknow, the average build, the
average builders dependence onbricks and timber because, guess
what, they're going to havemore buyers coming knocking at
their doors because they've gotmore pre-approvals.
Yeah, I'm not opposed to this,because I'm going to be busier,
okay, and we're going to be ableto facilitate a lot more
(13:42):
lending.
But there's underlying issues.
People think, oh, he's justdone this because he can, he's
obnoxious, he doesn't know whathe's doing.
I'm telling you now that blokewent in there and he's like I'm
going to destabilize everything.
I've already got X, y, z set upwith Elon Musk and I'm going to
make sure that I am the mostprofitable man out of this room
(14:03):
afterwards.
Speaker 2 (14:04):
Look, yeah, I'm not, no, no, I'm just straight up.
I'm not an economist and, interms of something like this, I
don't know what the result couldbe.
I couldn't even predict it andI just don't have much of an
opinion on it because, as I wasmentioning earlier, like
Australia itself doesn't getimpacted too severely in a
(14:28):
negative way, especially becausewe didn't retaliate, and it's
not because, oh, we didn'tretaliate, because we're Trump's
lapdog or whatever like that.
Speaker 1 (14:38):
We are Trump's lapdog .
Speaker 2 (14:39):
No, no, no, I know, but it was an economic reason
not to retaliate, because if weretaliated, gdp would go down 1%
, unemployment would rise by0.25%, but the inflation would
go down still.
Speaker 1 (14:52):
You said something there Unemployment would go down
0.25%.
Speaker 2 (14:55):
No, no, it would go up 0.25%.
Speaker 1 (14:56):
No, no, it would go up 0.25%.
No, it would go up 0.25%.
There was a report lastSeptember where Michelle Bullock
, the governor of the RBA, saidunemployment is not where we
need it to be.
Yet she said that, sheannounced it and she goes we
need.
Unfortunately, interest rateswill remain this high until
unemployment comes to the levelthat we need it to be at.
(15:21):
I'm going home and you know me,I'm going to do a rant on
instagram about her and thosewords, because I want to see
what's this.
Can you do you have theinternet on there?
Yeah, can you look up thestatistics of unemployment last
september?
Michelle bullock's were alikeand what she spoke about.
Go and chat to APT, you'll findit all there.
But that is the perfect exampleof we're going to switch, we're
(15:47):
going to do a 180 and we'regoing to turn this into a
negative spin on Trump asopposed to something that we
wanted.
Because, if unemploymentincreased due to the Reserve
Bank of Australia's rates beingthat high, and then they slowly
brought them down and everything, then they would be like oh
look guys, we did it, butbecause an external factor came
in and caused it all.
That is the issue.
(16:09):
That is the reason why they sayno, no, no, no, no, we're going
to decrease interest rates.
We want people to work again.
Get fucked, Sorry.
Furthermore, whilst you'redoing your research, and stuff.
I'm just going to keep ramblinghere.
Furthermore, behind all of thisis the inside trades that are
happening at the moment.
They announced the tariffs,walked it back three days later
(16:33):
and I think Ivanka Trump or oneof the Trump kids net wealth
grew by $100 million.
Speaker 2 (16:39):
Yeah, I've heard calls about insider trading and
things like that and marketmanipulation.
Speaker 1 (16:45):
So I'm going to, as somebody that's been around,
that it all exists, yeah, yeah,where there's smoke, there's
fire.
There you go, that's it.
Speaker 2 (16:58):
Yeah, I wouldn't be surprised, but that's just my
bias.
Speaker 1 (17:02):
He's in for four years.
After that, he's not allowed tobe in anymore.
So he's probably takingadvantage now and being like,
okay, these are all the dealsI'm going to make and this is
how I'm going to do this.
Or and the guy's crazy enoughhe might actually be thinking to
himself hey, this is how I'mactually going to fix shit,
because he is.
When Trump first got voted inin 2016, it was chaos Week after
(17:28):
week.
It's this, it's that, it's this.
And then, three years later,you had a massive uproar of
individuals all across Americabeing like no, we want him in.
They rigged the vote.
These are fake votes.
Dead people will vote Like justanything and everything and
conspiracy joking and go evenfurther.
But what I'm trying tohighlight is he's been in for
four months.
Speaker 2 (17:49):
Yeah, 100 days marked , was it the other day?
Speaker 1 (17:51):
Yeah, he's been in for four months.
By the end of the year,everybody could be singing a
different tune.
In two years' time, they couldbe singing a different tune.
In two years' time, they couldbe singing a different tune.
Speaker 2 (18:00):
Yeah, look for me.
I'm sitting and waiting becauseI don't know Like.
I have my opinions on thesocial issues, but when it comes
to the economic stuff, I knowwhen I'm out of my league I
don't know what I'm talkingabout.
I'm not going to pretend like Ido.
Speaker 1 (18:15):
So I just want to give some strong tips to our
listeners.
Speaker 2 (18:20):
Whoever you are singular um if you know who you
are, if you were planning totravel this year, don't oh yeah,
I was literally in in the ukwhen the, the trump, the, when
the sorry the tariff chaos washappening.
When it was, it went this andthen the markets went nuts and
then he backflipped and then itwent nuts again and then he went
(18:40):
back again and everyone's likeI don't know what's going on and
I'm like I need pounds.
I need some pounds sterlingplease.
Speaker 1 (18:47):
It's too expensive.
Speaker 2 (18:49):
Yeah.
Speaker 1 (18:49):
And it's too expensive to travel outside of
Australia.
Speaker 2 (18:51):
Right yeah, just travel domestically, byron.
Speaker 1 (18:54):
Bay is pretty cool, but I'm just going to highlight
I think our dollar reached 56 or52 cents.
Speaker 2 (19:03):
For the US dollar.
Speaker 1 (19:05):
Yeah, that is extremely weak.
Speaker 2 (19:07):
We are $1.56 for one US dollar.
Speaker 1 (19:11):
No, but our low was like oh the low.
Speaker 2 (19:14):
Yeah, it was $1.56, actually, let me flip this
around.
Speaker 1 (19:18):
Yeah, I think Let me flip this around I?
Speaker 2 (19:19):
yeah, I think let me flip this around you're throwing
numbers at me that don't makesense when I first read it.
Okay, one australian dollar is64 us cents.
That was the lowest, um.
That's what it is right now.
Yep uh.
On the 8th of april it was 60cents.
Um, that was the.
That's the low 60 cents so.60.
Speaker 1 (19:38):
So if it's trading at $0.60 on there, that means
you're buying it at about $0.58.
If you're at the airport, $0.52.
You are going to get ruined ifyou try and travel overseas
right now.
Absolutely ruined.
Speaker 2 (19:49):
Yeah, I was lucky that the pound sterling thing
only went down like $0.02 orsomething like that, rather than
anything like crazy.
I mean, on the graph it looksvery dramatic but in terms of my
actual spending balance, likemaybe a dollar or two more, but
you're not the type of person tospend stupidly either.
No, there's that as well.
Yeah, the more you spend, themore it actually starts to make
a difference.
Speaker 1 (20:12):
But I was only like a couple hundred dollars here,
22-year-old me gone, absolutelygone.
Speaker 2 (20:22):
The bloke would not like, like he'd come back with
no shoes.
I had to sell a kidney man.
Speaker 1 (20:24):
no, like I'm just remembering, like just the boys
trips we used to have, you knowparties, all that sort of stuff,
and I'm just thinking to myself, wow, like, thankfully our
dollar was strong when I wasthere because, wow, I was a
stupid kid.
Yeah, like that's it, and allI'm trying to say to our
listeners right now is hey guys,if you're going to do some
(20:44):
online shopping, don't useAmerican websites.
You're going to get smashed.
Make sure that, if you aregoing to travel, try and go
somewhere that might be cheaperJapan is really good right now
Japan, new, zealand, domestic.
Yeah, they're close by.
Don't go to europe right now.
That is extremely expensive.
Yeah, um, and you're going tobe there, they're going to and
(21:05):
they're going to when I travel.
I've got money put aside forrip-off money because I'm going
to get ripped off by some personsome taxi driver, someone's
going to rip me off at somepoint in time as it's, or as you
just expect to pay more forthings exactly so that 200 could
quickly become 300.
Whilst I'm overseas, just forspeaking, just for taking a
client call in the middle, likewhilst I'm traveling or
(21:26):
something oh, do you have yourphone number switched on or how
you would?
Speaker 2 (21:30):
uh, you couldn't turn it off.
The dream, the dream, and Idefinitely switched mine off
when I travel now.
Speaker 1 (21:40):
This is how bad it's gotten.
When I travel now, I amresearching the flights for
hours to see how strong theirwi-fi connection is.
Allison just sleeps, she, justsleeps, she.
You know she just hangs out.
Speaker 2 (21:56):
Sarah does the same thing.
I'm jealous, I'm just sittingthere.
Speaker 1 (21:59):
Yeah, I'm sitting there, I'm answering Teams
messages for the most random.
I'm getting emails from lenders.
I'm just like guys.
It's right there.
It's a salary sacrifice.
Every doctor has it.
What are you doing?
And, unfortunately, the worldthat I live in is quite often
(22:19):
source dependent.
It can't come from.
Michael Azina cannot be sendingan email on behalf of Joseph
Dalwood.
It has to be coming from JosephDalwood.
Yeah, yeah, okay, that's howyou've got to be able to process
loans and unfortunately, I haveto have internet on the fly.
Speaker 2 (22:34):
Well, I guess that's why they have it Like.
There were people near me whowere doing that.
No one was taking a call as faras I was aware.
They were definitely on theirphones and laptops doing
tippy-typing and all that sortof stuff.
Speaker 1 (22:45):
The US dollar is going to be a very powerful
thing again in the coming times.
It's always been thecentralized currency.
It's backed Since World War II,yeah, but I think they recently
brought gold back in as likethe number one thing that's
backing it.
I'm not too sure I've leftthose days behind me.
(23:07):
Are we back to the gold?
Speaker 2 (23:09):
standard.
Yeah, that's crazy.
Speaker 1 (23:12):
It's precious metal.
Speaker 2 (23:14):
Yeah, we haven't done that since one of the World
Wars.
Speaker 1 (23:17):
I actually can't remember which one it was.
I think it was just afterVietnam.
To be honest, I think it wasafter that.
Why didn't we get rid?
Speaker 2 (23:21):
of the gold standard.
This is just for my owncuriosity.
Speaker 1 (23:24):
For the individual that's it 71,.
Speaker 2 (23:26):
By the way, I was close, I said 68.
Yeah.
Speaker 1 (23:31):
Going back to everything, back to Michael's
questions are the tariffs reallygoing to affect the everyday
Australian?
Yes and no.
Speaker 2 (23:40):
Yeah, it's not scary or as dramatic as one might
think or at least forAustralians.
I can't speak for the rest ofthe world.
Speaker 1 (23:51):
It's to a point that they're dropping the interest
rates.
This is the scary part that youhave to think to yourself and I
always say just get in theproperty market because you'll
fucking make money.
I said, was it this episode orthe last episode?
The average savings of anAustralian has gone down from
39,000.
Speaker 2 (24:07):
Last episode.
Speaker 1 (24:09):
the average savings has gone down from 39,000 to
29,000.
It's a very important factor.
So property is more expensivethan what it was three years ago
.
I think it grows at 11% or 12%a year across Australia.
Rent is more expensive 19% moreexpensive.
So people have less savings.
They've got less of a chance tohave a house deposit.
(24:30):
People who already haveproperty are going to have the
opportunity to borrow more moneyon those properties to go buy
extra property.
So there's going to be a largerinequality gap that's actually
created with these interestrates dropping.
It was very similar to COVID,if you remember in COVID you had
the 0.1% interest rates, cashrates, sorry.
(24:52):
You had a 0.1% cash rate, butyou also had the business owners
benefiting the most.
Speaker 2 (24:58):
Oh yeah, because they were getting the job seeker
stuff.
Speaker 1 (25:00):
Yeah, they were getting job seeker, there were
other government funds andpeople were making record
profits through COVID.
Speaker 2 (25:09):
Yeah, which the whole point was that it was economic
activity was going down.
Speaker 1 (25:12):
And the average employee was spending money like
crazy online shopping, goingout to restaurants anything.
Speaker 2 (25:18):
Everyone bought an Adidas tracksuit.
Speaker 1 (25:21):
It's different now.
We don't have the governmentstimulus.
If Albo comes out and he saysjob seeker, I'm going to be like
what?
That'd be crazy, lose mymarbles.
But that's where the inflationcame from the first time.
Yeah, yeah.
And if interest rates dropsthis time okay, they drop a
percent the first home buyer isgoing to experience more
(25:44):
expenses.
The person that bought twoyears ago is going to be fucking
cheering.
They're going to be so happy.
The person that bought thisyear is going to be so excited.
Speaker 2 (25:53):
Almost two years.
Speaker 1 (25:55):
But they're going to be so happy because their
properties are going to shoot upin value.
And why?
And I keep going back to theexact same point Supply, and
it's all about these tariffs,it's all about everything.
Speaker 2 (26:06):
Supply and demand, supply and demand, we're going
to let it pour out Simplestconcept to know in economics.
Speaker 1 (26:11):
We're going to let in more people, we're not going to
approve as many dwellings andwe're going to make it more
expensive for a developer tobuild.
Speaker 2 (26:16):
And we're going to make it more expensive for a
developer to build.
Okay, Demand goes up.
Speaker 1 (26:21):
supply stays where it is.
Final point before we end thisepisode.
Do you know why?
Speaker 2 (26:29):
a lot of the developers are moving regional.
I assumed it was cheaperconstruction costs.
Speaker 1 (26:33):
No, no, construction costs are actually more
expensive.
Speaker 2 (26:35):
Oh, because you've got to transport the materials
and stuff there.
Speaker 1 (26:38):
Yeah, Cheaper land land, yeah, makes sense.
When you are a large-scaledeveloper or a builder of sorts,
your biggest cost land purchaseland purchase, stamp duty, land
tax, holding costs yes, soyou'll buy the block of land.
(27:00):
You've got to get a DA on it.
Da takes time.
It used to take 9 to 12 months.
Now it takes what was it like?
18 months or something?
18 to 24.
So, instead of you being ableto quickly act, get it going.
You can't.
So if I go buy a block of landin Parramatta and it costs 10
times as much to buy it inParramatta than it does over
(27:21):
there, I'm not going to buy itin Parramatta because I'm
running a business and you'vealso got to pay the holding fee
or holding tax, whatever thehell it's called, and while
you're waiting for that approvaland all that sort of stuff.
Speaker 2 (27:31):
So you're not making any money.
You're not making any progress.
Makes sense.
Speaker 1 (27:35):
So they say to themselves okay, well, we don't
have as many buyers here,because for us to be able to
sell an apartment here it has tobe a million dollars.
And how many first-home buyerscan afford a million dollars?
None, literally.
Yeah, I ran the numbers theother day.
Okay, no, no, no, you know whatwe'll do.
We'll attract the investors.
We'll go and we'll attract theinvestor market, because
(28:01):
investors can borrow, yeah, andsomeone who's a first-time buyer
will.
And they think to themselvesI'm going to save, I'm going to
do stamp gd, everything.
Fucking.
Open a book, come see me, I'lldraw pictures.
Okay, and I'm about to go onone of my rants.
I'm about to get reallyaggressive.
You can't just no, but I'vejust.
I, I'm, I crack the shitsbecause people don't, they don't
pay attention to what'shappening For people to get
(28:23):
their visa in Australia.
What do they need to do,michael?
Speaker 2 (28:25):
I would have no idea they need to complete three.
Speaker 1 (28:28):
I think it's anywhere between three months to two
years of rural work.
So you need to go to theoutskirts, okay.
So you're going to your milldrawers, you're going to your
gold bins.
These are the areas you need togo to to work for two years.
Okay, the developer, the smartdeveloper, isn't sitting there
going to himself yeah, cause I'mgoing to go build a duplex.
Do you know what he's saying tohimself?
Okay, you know what?
(28:49):
The cost of land in those areasis going to be so much cheaper.
I'm going to be able to buildso much more because the
government wants me to buildthere, to build those towns.
And then, on the other side ofthat, I'm going to have active
tenants straight away.
Why am I going to have activetenants?
Because we're letting in somany people.
And guess what?
I'm probably going to be ableto achieve pre-sales because
(29:13):
Michael can get pre-approved foran investment loan of 800,000.
So Michael might be able to buytwo properties and he might be
able to positively gear thembecause they're going to be $500
or $600 or $700 each a week inrent.
Speaker 2 (29:26):
Yeah, Positively geared property.
The dream right I know, look itup to the stars.
Speaker 1 (29:33):
But this is what people aren't seeing.
They're thinking to themselvesoh, I've got to go compete with
this person, I'm going to go dothis, I'm going to hire better
trades.
No, no, no.
The smart developer is aimingtowards regional and rural Okay,
and they know that they will beable to achieve pre-sales.
They'll be able to do the houseand land packages and you see
(29:54):
them all the time Dual keyoccupancy.
I've got a house and I've got agranny flat in the back and
you're going to be able to rentboth for $850 together.
That exists because ofmigration.
And when interest rates go down, don't go.
I'm not allowed to say itbecause I'm connected with some
people.
Don't go buying something thatwill depreciate in value if
(30:18):
interest rates went up.
Go buy something that is finite.
And what is something that isfinite?
Speaker 2 (30:25):
Land, land.
Speaker 1 (30:27):
Why do people prefer land?
Because they don't want peopleknocking upstairs, knocking
downstairs.
I could smell the person's food.
I can hear people screamingacross the other-.
Speaker 2 (30:37):
A couple having an argument next door.
Speaker 1 (30:38):
yeah, yeah, that's the reason why because there's
privacy.
Also, strata's expensive, butthat's another thing.
The main reason is truthfullyprivacy.
Speaker 2 (30:46):
Yeah, yeah, and it's also part of the Australian
dream, you know.
Speaker 1 (30:49):
Correct.
Speaker 2 (30:49):
To you know, yeah, yeah, picket fence, all that
sort of stuff.
Speaker 1 (30:53):
So going back to what I was originally saying.
Going back to what I wasoriginally saying, which I know,
I've tangented off a millionand one times, as we always do
here on the Finance Show withJoe.
Speaker 2 (31:03):
What is on topic?
Speaker 1 (31:05):
That is how the tariffs will affect us.
The interest rates will go down.
You'll have people that alreadyown property looking regional.
They'll be able to buy more ofthose properties.
We'll bring in more peoplebecause we'll be like, oh no,
economy's not working, We've gotto bring more people.
We can't fit them in Sydney.
Go to Goldman and guess what?
The smart person's going to bealready invested there and
(31:25):
making money.
Speaker 2 (31:26):
Yeah, I mean it's about time that a region of
Australia also gets somedevelopment, just in general.
Speaker 1 (31:32):
No, no, disagree with that entirely.
I disagree.
Like people are like, oh, it'sabout their damn time all this
stuff and those places getdevelopment.
I agree with that to a point,but man, it's hot okay let's
talk about the climate.
Okay, like no, no, even evenlike um, like up towards
newcastle and things like thatalong the coast, like it doesn't
(31:52):
have to be okay, good, allright, I just I just mean
outside of the, the major citiesin general man, there's like
northern parts of SouthAustralia that, like bro, you're
going to have sweat coming outof places you didn't know
existed.
Anyways, I've gone to Bankstownnow.
It's been the Finance Show withJoe.
If you don't want to learnabout tariffs, you can listen to
this episode, because-.
Speaker 2 (32:13):
I don't even think we learned anything today.
Speaker 1 (32:18):
Basically, to summarize this show the tariffs
are going to affect you.
They're going to affect you ina way that you don't see on a
macro level, but on a microlevel.
You will have more spendingpower, but unfortunately we
don't have the savings at themoment.
The average australian doesn'thave the savings.
At the moment, people who arealready landholders and property
holders are going to benefitthe most.
(32:39):
People who have not yet enteredthe market.
They are going to benefit theleast, and my advice general
advice that should not be takenseriously speak to a financial
advisor or financialprofessional is speak to a
mortgage broker.
Get yourself in the market,Because I haven't seen a single
(32:59):
policy from the government thisweekend that says this is how
we're going to increase housingsupply.
They've just been throwingrandom hot keywords.
Anyways, thank you so much forlistening to the Finance Show
with Joe.
As always, I'm Joe, that'sMichael, and if you need any
help with your finance or yourproperty needs, you can contact
us at wwwitsimplecomau.
He won't answer, I will andyeah, we'll go from there.
Speaker 2 (33:21):
That's right, I won't answer.
Trump saw an opportunity to completely
disrupt China.
I always say tariffs is themost beautiful word to me in the
dictionary Tariff or tariffs.
Speaker 2 (00:09):
This is the director.
During this trade war, Chinamight start looking towards
Australia for more favourabledeals and stuff like that, so
that's good for our economygenerally speaking.
Speaker 1 (00:19):
So what happens with that sort of stuff is, all of a
sudden, they've lost an exportpartner.
Our GDP is heavily dependent onexport.
The only way we're going to beable to avoid a recession or
further deflation is if wedevalue our currency.
We will become a moreattractive trade partner.
The tariffs are going to affectyou.
They're going to affect you ina way that you don't see on a
(00:43):
macro level, but on a microlevel you will have more
spending power, butunfortunately, we don't have the
savings at the moment.
Speaker 2 (00:48):
My advice is Welcome to the Finance Show with Joe.
He's Joe, I'm Michael, andtoday we're going to be talking
about the Trump tariffs and howthey affect Australia.
Or do they affect Australia?
I can't imagine they don'taffect us.
They're affecting the entireworld.
Speaker 1 (01:08):
Oh man, this is.
I've got juices flowing throughme because it's.
This sounds kind of gross.
I'm excited.
I'm not excited because thetariff implication affects us on
a global scale, not so much.
It's actually beneficial on amicro scale.
(01:29):
So the individual in Australiais going to be I don't want to
say better off, because we'realways going to get fucked
somehow.
But me outside, looking in,using my previous qualifications
as an economist, the individualis actually going to benefit
and there's several reasons why.
But before we get into that,michael, yeah, highlight what
(01:52):
happened okay.
Speaker 2 (01:54):
So just so everyone is aware and you're not, you
know, you're not glued to yourscreens constantly.
So australia copped the 10 10baseline tariffs that every
country in the world copped fromthe us, correct?
So we've got that.
The important thing is still ananimal.
They're still an aluminum.
Fuck steel and aluminiumtariffs.
Speaker 1 (02:13):
I'll say it five times, I can't even say it once.
Speaker 2 (02:16):
Uh, those are at 25 percent.
Um, we do have items exemptfrom us tariffs.
This includes timber and lumber, copper, semiconductors,
semiconductor manufacturingequipment and select
pharmaceutical products.
Some other things to note isthat the US only imports 0.6% of
(02:36):
Australia's steel, iron andaluminium exports.
The US only buys 5% ofAustralia's total exports period
.
So early estimates.
They also suggest a $27 billionloss for Australia, which is
about 1% of Australia's totalexports period.
So early estimates.
They also suggest a $27 billionloss for Australia, which is
about 1% of GDP.
That's under the worstpredictions.
Our largest export to the US isbeef.
25% of US beef imports comefrom Australia and that's
(02:59):
actually mostly due to the USdrought, which has really
affected cattle farming there.
So it's actually risen to 30%in 2025.
So that's where we're at.
Those are the numbers to keepin mind.
Speaker 1 (03:10):
So I love a good trade war and we are a speck on
Trump's radar and that's why hedid 10%, because he was like, oh
, I can't show.
Speaker 2 (03:24):
Well, literally every country in the world copped 10%
, even that island that doesn'thave any people living on it.
I saw that one, the fuckingpenguin island, got 10%.
Speaker 1 (03:31):
But Trump saw an opportunity to completely
disrupt China Completely, andwhat I mean by that is, I think,
how much of America's importsare from China?
It would be 30% something.
It would be a huge amountbecause you go to any Walmart or
(03:52):
you go to any one of theirstores.
Everything is made in China.
China currently has a housingissue before any of this.
So, a lot of their housing wasbacked by government and a lot
of their housing was backed bytheir own institutional funds.
So whenever you hear aboutChinese money, it's the same
(04:16):
players and they're all aroundthe world.
They're the reason whyVancouver went so high.
It's why Sydney's propertymarket went so high.
We all know what it is.
They were building in their owncountry and they had invested a
lot of money, and a lot oftheir money that they leverage
(04:37):
comes from exports.
So all of a sudden if anAmerican company needs to pay
84% to import something inthey're obviously not going to
bother.
They're not going to bother,they're going to find another
resource.
Oh, canada makes porcelain, forexample.
Speaker 2 (04:53):
Argentina has beef.
Canada's a poor example.
Now they're going through theirown little tiff right now.
Speaker 1 (05:01):
Don't get me started on them.
Don't get me started on them.
Yeah, um, but what he saw wasan opportunity to completely
cripple the chinese market.
Yeah, by destabilizing thehousing market, because now
you've got all theseinstitutional funds that were
depending on profits from theirexports and now they're not
getting a cent, and this iswhat's interesting for Australia
(05:27):
.
Speaker 2 (05:28):
We might like I don't know what's going to happen
with China, Because China isessentially the manufacturer of
the world.
That's where most manufacturingcomes from.
Speaker 1 (05:38):
They've got 1.4 billion people.
They're going to build stuff.
Speaker 2 (05:41):
It happens.
Well, they can also just do itat the most competitive rate as
as well.
That's why manufacturing is notin the us.
Yeah, um uh.
But for for for australia.
During this trade war, chinamight start looking towards
australia more, um, you know,for more favorable deals and
stuff like that.
So that's good for our economygenerally speaking.
(06:03):
Yes, that's just more money.
Um the downs, like, obviously,from china's point of view,
we're not exactly going to plugup the gap that the us.
We don't even have like a halfthe population that the us does.
Speaker 1 (06:14):
Yeah, so we've got one tenth or one eleventh their
population there you go.
Speaker 2 (06:18):
We're not plugging that gap is what I'm trying to
say.
So, yeah, we might get more you, more you know, and Europe as
well.
So for the consumer like us,individuals potentially, but the
real big one that we think wemight benefit from is lower
interest rates, sort of acrossthe world, because as global
demand for capital goes down,interest rates also go down.
Speaker 1 (06:39):
Do you know the reason why they decreased our
interest rates?
Speaker 2 (06:43):
No, not the economists.
Speaker 1 (06:44):
Well, they had an emergency meeting, so there's a
number of factors that went intothis emergency meeting.
Our GDP is heavily dependent onexports.
Speaker 2 (06:53):
Yeah.
Speaker 1 (06:55):
I've mentioned it countless times, but we've built
on iron ore mining beef, as youmentioned earlier Mining
agriculture and education.
Speaker 2 (07:03):
are our earlier mining agriculture and education
their biggest exports there?
Speaker 1 (07:06):
are big, biggest exports.
So who got affected?
Very quickly, you've got ginareinhardt, you got rio tinto,
you've got, uh, bhp, you've gotall the big companies.
So all of a sudden, there, Ithink, I think gina lost like
250 million in a day or 200.
It was a large amount of moneythat she lost.
Yeah, yeah, um, paper money.
It's not actual money, but itwas was.
Oh no, my shares are worthless.
Speaker 2 (07:27):
Yeah, the value has gone down.
Speaker 1 (07:29):
Our chief economists actually made a very good move,
and a lot of people won't beaware of this, so they would see
the interest rates go down.
Mind you, this pissed me thefuck off, but we'll get into
that later.
When your interest rate goesdown, that means the value of
your dollar is actually cheaper,yeah, which means more people
(07:50):
will export and they'll tradewith you.
So let's say the euro stays theeuro, like that doesn't change.
Australia drops their interestrates and all of a sudden, what
would cost you a dollar ineurope costs you 50 cents in
australia.
Do you remember back in theearly 2000s when they filmed the
matrix here and missionimpossible and everything?
(08:11):
oh, yeah, yeah it's becausefilming was 50 cheaper than what
it would be in america and youget, and you get all the
benefits of being in america aswell.
Speaker 2 (08:18):
It's not like our cultures are that different and
no.
Speaker 1 (08:20):
So what they did was they called an emergency meeting
at the Reserve Bank ofAustralia and they said guys,
the only way we're going to beable to avoid a recession or
further deflation because we'regoing through some serious like
inflation is coming right, thefuck down right now.
Speaker 2 (08:37):
Yeah, yeah.
Speaker 1 (08:38):
The only way we're going to actually be able to
reduce this is if we devalue ourcurrency.
We will become a moreattractive trade partner with a
lot of the world europe.
It's very hard to devalue theircurrency because they all
depend on the euro and there's40 countries that depend on it
it's, it's a lot, it's a lot ofcountries yeah, and it's.
Speaker 2 (08:58):
This is what the third biggest economy in the
world or second biggest economyno, third, but it's something
that occurred.
Speaker 1 (09:05):
The second reason, and this is also conspiracy
Joseph in the room.
All right, do we have a hat Ican wear?
Speaker 2 (09:13):
for conspiracies, we'll get the tinfoil hat.
Speaker 1 (09:15):
Yeah, like we need some sort of garbage bag or
something for these sorts ofmoments.
But we saw GNI, we saw all thebig companies.
They get their GDP affected.
Yeah, these guys borrow moneyso that they can produce their
institutional banking is insane.
You will see Amazon borrow $125million and pay it back two
(09:39):
days later.
Speaker 2 (09:40):
Yeah, we've mentioned this on previous episodes.
Speaker 1 (09:42):
yeah, so what happens with that sort of stuff is, all
of a sudden, they've lost anexport partner.
Regardless, 0.6%, 10%, whateverit is, we've lost an export
partner.
This individual has lost $250million.
She owes Commonwealth Bank ofAustralia X amount of dollars in
some sort of facility.
Yeah, okay, she doesn't have$250 dollars sitting in cash in
(10:05):
a bank.
Speaker 2 (10:06):
she might, but I like to imagine her jumping into
like a pile of money, likescrooge mcdark but she doesn't
have that.
Speaker 1 (10:13):
She's got paper money , it's, it's in shares, it's in
her name, it's in the companiesthat she owns yeah, it's not.
It's not liquid money no so, andshe might owe the money and
then all of a sudden, if hershares drop, her ability to
repay that money drasticallygoes down.
That she owns, yeah, it's notliquid money, no so, and she
might owe them money and then,all of a sudden, if her shares
drop, her ability to repay thatmoney drastically goes down as
well.
Yes, I yet again conspiracy Joein the room.
(10:34):
I'm of the belief that thoseinterest rates dropped
significantly.
They had the emergency meetingswhen they realized the larger
companies are going to beaffected the most.
They didn't give a shit whenthe everyday showing was gone,
homeless or no, you know,inflation was sky high and
people couldn't afford theirgroceries.
(10:54):
Look at walworths.
Walworths and coals are theperfect example.
Nothing has come of thatinquiry.
No, they've spent 80 mil.
How much did they spend on theinquiry?
Speaker 2 (11:05):
80 million dollars, 800 million it was, no, it
wasn't 800 million, but Ithought yeah, it was a
significant no.
No, 80 million is not nothingto sneeze at, but it wasn't 800
million, no no, no, no they.
Speaker 1 (11:14):
They spent a significant amount of money on
that inquiry and I have seennothing come of it.
I have not seen a refund.
I have not seen guys, you haveto drop your prices 30%, your
price gouging.
I saw a video the other day abox of Coke costs $50.
24 cans of Coke costs $50.
It's a case of beer.
When did we become so stupid asa society that we thought that
(11:36):
that was something that we like?
When did we become brainwashedand think to ourselves yeah,
that's a good buy.
Speaker 2 (11:42):
Well, we've only got the two major supermarkets who
own half of everything, likeeach own a half of everything.
It's like Woolworths, westFarmers and the Woolworths Group
.
Speaker 1 (11:51):
You know I think, for every dollar spent in Australia
, I think 65% of it goes throughthose two companies.
It's insane.
That's what I mean.
Speaker 2 (11:57):
Like it's a duopoly rather than a monopoly, which is
not.
I guess it's minorly better.
No, yeah, but it's really.
It's not.
You don't want a monopoly.
Speaker 1 (12:07):
Yeah, but as we can see, as soon as tariffs were
declared, all of a sudden, heyguys, oh shit, we've got to pay
our money back.
All right, make it cheaper.
So this coming Tuesday, rba'smeeting oh yeah, yeah, there's
been so many reports ofinflation is now down and we're
looking at this statistic and wewant the Australian individual
(12:28):
to be able to spend money again.
Yeah, they need us.
They need us back.
Speaker 2 (12:34):
All of a sudden, consumer spending is important
again.
Speaker 1 (12:37):
It wasn't important two years ago, but now, all of a
sudden, australia needs tore-stimulate the market.
They're not going to look atthe exports.
They're not going to look atthe exports, they're going to
look at the individual.
I won't be surprised if there'sa new change in the BCA, the
Building Code of Australia.
I won't be surprised if thathappens to get more people
actively purchasing homes.
Perfect example Labor's come inwith an extension of the first
(13:00):
home guarantee policy, wherethey are now increasing the
price caps to $1.5 million forNew South Wales-based properties
, and I think Victoria is $1.2million.
Huge amounts, yeah, yeah, yeah,from $950 to $1.5 million.
Speaker 2 (13:16):
Well, I guess because the median prices have gone up.
Like, what's the median pricein Sydney now?
$1.2?
.
Speaker 1 (13:21):
Yeah, somewhere around there, all it's going to
do is increase that.
It's going to increase economicactivity.
It's going to increase uh, youknow, the average build, the
average builders dependence onbricks and timber because, guess
what, they're going to havemore buyers coming knocking at
their doors because they've gotmore pre-approvals.
Yeah, I'm not opposed to this,because I'm going to be busier,
okay, and we're going to be ableto facilitate a lot more
(13:42):
lending.
But there's underlying issues.
People think, oh, he's justdone this because he can, he's
obnoxious, he doesn't know whathe's doing.
I'm telling you now that blokewent in there and he's like I'm
going to destabilize everything.
I've already got X, y, z set upwith Elon Musk and I'm going to
make sure that I am the mostprofitable man out of this room
(14:03):
afterwards.
Speaker 2 (14:04):
Look, yeah, I'm not, no, no, I'm just straight up.
I'm not an economist and, interms of something like this, I
don't know what the result couldbe.
I couldn't even predict it andI just don't have much of an
opinion on it because, as I wasmentioning earlier, like
Australia itself doesn't getimpacted too severely in a
(14:28):
negative way, especially becausewe didn't retaliate, and it's
not because, oh, we didn'tretaliate, because we're Trump's
lapdog or whatever like that.
Speaker 1 (14:38):
We are Trump's lapdog .
Speaker 2 (14:39):
No, no, no, I know, but it was an economic reason
not to retaliate, because if weretaliated, gdp would go down 1%
, unemployment would rise by0.25%, but the inflation would
go down still.
Speaker 1 (14:52):
You said something there Unemployment would go down
0.25%.
Speaker 2 (14:55):
No, no, it would go up 0.25%.
Speaker 1 (14:56):
No, no, it would go up 0.25%.
No, it would go up 0.25%.
There was a report lastSeptember where Michelle Bullock
, the governor of the RBA, saidunemployment is not where we
need it to be.
Yet she said that, sheannounced it and she goes we
need.
Unfortunately, interest rateswill remain this high until
unemployment comes to the levelthat we need it to be at.
(15:21):
I'm going home and you know me,I'm going to do a rant on
instagram about her and thosewords, because I want to see
what's this.
Can you do you have theinternet on there?
Yeah, can you look up thestatistics of unemployment last
september?
Michelle bullock's were alikeand what she spoke about.
Go and chat to APT, you'll findit all there.
But that is the perfect exampleof we're going to switch, we're
(15:47):
going to do a 180 and we'regoing to turn this into a
negative spin on Trump asopposed to something that we
wanted.
Because, if unemploymentincreased due to the Reserve
Bank of Australia's rates beingthat high, and then they slowly
brought them down and everything, then they would be like oh
look guys, we did it, butbecause an external factor came
in and caused it all.
That is the issue.
(16:09):
That is the reason why they sayno, no, no, no, no, we're going
to decrease interest rates.
We want people to work again.
Get fucked, Sorry.
Furthermore, whilst you'redoing your research, and stuff.
I'm just going to keep ramblinghere.
Furthermore, behind all of thisis the inside trades that are
happening at the moment.
They announced the tariffs,walked it back three days later
(16:33):
and I think Ivanka Trump or oneof the Trump kids net wealth
grew by $100 million.
Speaker 2 (16:39):
Yeah, I've heard calls about insider trading and
things like that and marketmanipulation.
Speaker 1 (16:45):
So I'm going to, as somebody that's been around,
that it all exists, yeah, yeah,where there's smoke, there's
fire.
There you go, that's it.
Speaker 2 (16:58):
Yeah, I wouldn't be surprised, but that's just my
bias.
Speaker 1 (17:02):
He's in for four years.
After that, he's not allowed tobe in anymore.
So he's probably takingadvantage now and being like,
okay, these are all the dealsI'm going to make and this is
how I'm going to do this.
Or and the guy's crazy enoughhe might actually be thinking to
himself hey, this is how I'mactually going to fix shit,
because he is.
When Trump first got voted inin 2016, it was chaos Week after
(17:28):
week.
It's this, it's that, it's this.
And then, three years later,you had a massive uproar of
individuals all across Americabeing like no, we want him in.
They rigged the vote.
These are fake votes.
Dead people will vote Like justanything and everything and
conspiracy joking and go evenfurther.
But what I'm trying tohighlight is he's been in for
four months.
Speaker 2 (17:49):
Yeah, 100 days marked , was it the other day?
Speaker 1 (17:51):
Yeah, he's been in for four months.
By the end of the year,everybody could be singing a
different tune.
In two years' time, they couldbe singing a different tune.
In two years' time, they couldbe singing a different tune.
Speaker 2 (18:00):
Yeah, look for me.
I'm sitting and waiting becauseI don't know Like.
I have my opinions on thesocial issues, but when it comes
to the economic stuff, I knowwhen I'm out of my league I
don't know what I'm talkingabout.
I'm not going to pretend like Ido.
Speaker 1 (18:15):
So I just want to give some strong tips to our
listeners.
Speaker 2 (18:20):
Whoever you are singular um if you know who you
are, if you were planning totravel this year, don't oh yeah,
I was literally in in the ukwhen the, the trump, the, when
the sorry the tariff chaos washappening.
When it was, it went this andthen the markets went nuts and
then he backflipped and then itwent nuts again and then he went
(18:40):
back again and everyone's likeI don't know what's going on and
I'm like I need pounds.
I need some pounds sterlingplease.
Speaker 1 (18:47):
It's too expensive.
Speaker 2 (18:49):
Yeah.
Speaker 1 (18:49):
And it's too expensive to travel outside of
Australia.
Speaker 2 (18:51):
Right yeah, just travel domestically, byron.
Speaker 1 (18:54):
Bay is pretty cool, but I'm just going to highlight
I think our dollar reached 56 or52 cents.
Speaker 2 (19:03):
For the US dollar.
Speaker 1 (19:05):
Yeah, that is extremely weak.
Speaker 2 (19:07):
We are $1.56 for one US dollar.
Speaker 1 (19:11):
No, but our low was like oh the low.
Speaker 2 (19:14):
Yeah, it was $1.56, actually, let me flip this
around.
Speaker 1 (19:18):
Yeah, I think Let me flip this around I?
Speaker 2 (19:19):
yeah, I think let me flip this around you're throwing
numbers at me that don't makesense when I first read it.
Okay, one australian dollar is64 us cents.
That was the lowest, um.
That's what it is right now.
Yep uh.
On the 8th of april it was 60cents.
Um, that was the.
That's the low 60 cents so.60.
Speaker 1 (19:38):
So if it's trading at $0.60 on there, that means
you're buying it at about $0.58.
If you're at the airport, $0.52.
You are going to get ruined ifyou try and travel overseas
right now.
Absolutely ruined.
Speaker 2 (19:49):
Yeah, I was lucky that the pound sterling thing
only went down like $0.02 orsomething like that, rather than
anything like crazy.
I mean, on the graph it looksvery dramatic but in terms of my
actual spending balance, likemaybe a dollar or two more, but
you're not the type of person tospend stupidly either.
No, there's that as well.
Yeah, the more you spend, themore it actually starts to make
a difference.
Speaker 1 (20:12):
But I was only like a couple hundred dollars here,
22-year-old me gone, absolutelygone.
Speaker 2 (20:22):
The bloke would not like, like he'd come back with
no shoes.
I had to sell a kidney man.
Speaker 1 (20:24):
no, like I'm just remembering, like just the boys
trips we used to have, you knowparties, all that sort of stuff,
and I'm just thinking to myself, wow, like, thankfully our
dollar was strong when I wasthere because, wow, I was a
stupid kid.
Yeah, like that's it, and allI'm trying to say to our
listeners right now is hey guys,if you're going to do some
(20:44):
online shopping, don't useAmerican websites.
You're going to get smashed.
Make sure that, if you aregoing to travel, try and go
somewhere that might be cheaperJapan is really good right now
Japan, new, zealand, domestic.
Yeah, they're close by.
Don't go to europe right now.
That is extremely expensive.
Yeah, um, and you're going tobe there, they're going to and
(21:05):
they're going to when I travel.
I've got money put aside forrip-off money because I'm going
to get ripped off by some personsome taxi driver, someone's
going to rip me off at somepoint in time as it's, or as you
just expect to pay more forthings exactly so that 200 could
quickly become 300.
Whilst I'm overseas, just forspeaking, just for taking a
client call in the middle, likewhilst I'm traveling or
(21:26):
something oh, do you have yourphone number switched on or how
you would?
Speaker 2 (21:30):
uh, you couldn't turn it off.
The dream, the dream, and Idefinitely switched mine off
when I travel now.
Speaker 1 (21:40):
This is how bad it's gotten.
When I travel now, I amresearching the flights for
hours to see how strong theirwi-fi connection is.
Allison just sleeps, she, justsleeps, she.
You know she just hangs out.
Speaker 2 (21:56):
Sarah does the same thing.
I'm jealous, I'm just sittingthere.
Speaker 1 (21:59):
Yeah, I'm sitting there, I'm answering Teams
messages for the most random.
I'm getting emails from lenders.
I'm just like guys.
It's right there.
It's a salary sacrifice.
Every doctor has it.
What are you doing?
And, unfortunately, the worldthat I live in is quite often
(22:19):
source dependent.
It can't come from.
Michael Azina cannot be sendingan email on behalf of Joseph
Dalwood.
It has to be coming from JosephDalwood.
Yeah, yeah, okay, that's howyou've got to be able to process
loans and unfortunately, I haveto have internet on the fly.
Speaker 2 (22:34):
Well, I guess that's why they have it Like.
There were people near me whowere doing that.
No one was taking a call as faras I was aware.
They were definitely on theirphones and laptops doing
tippy-typing and all that sortof stuff.
Speaker 1 (22:45):
The US dollar is going to be a very powerful
thing again in the coming times.
It's always been thecentralized currency.
It's backed Since World War II,yeah, but I think they recently
brought gold back in as likethe number one thing that's
backing it.
I'm not too sure I've leftthose days behind me.
(23:07):
Are we back to the gold?
Speaker 2 (23:09):
standard.
Yeah, that's crazy.
Speaker 1 (23:12):
It's precious metal.
Speaker 2 (23:14):
Yeah, we haven't done that since one of the World
Wars.
Speaker 1 (23:17):
I actually can't remember which one it was.
I think it was just afterVietnam.
To be honest, I think it wasafter that.
Why didn't we get rid?
Speaker 2 (23:21):
of the gold standard.
This is just for my owncuriosity.
Speaker 1 (23:24):
For the individual that's it 71,.
Speaker 2 (23:26):
By the way, I was close, I said 68.
Yeah.
Speaker 1 (23:31):
Going back to everything, back to Michael's
questions are the tariffs reallygoing to affect the everyday
Australian?
Yes and no.
Speaker 2 (23:40):
Yeah, it's not scary or as dramatic as one might
think or at least forAustralians.
I can't speak for the rest ofthe world.
Speaker 1 (23:51):
It's to a point that they're dropping the interest
rates.
This is the scary part that youhave to think to yourself and I
always say just get in theproperty market because you'll
fucking make money.
I said, was it this episode orthe last episode?
The average savings of anAustralian has gone down from
39,000.
Speaker 2 (24:07):
Last episode.
Speaker 1 (24:09):
the average savings has gone down from 39,000 to
29,000.
It's a very important factor.
So property is more expensivethan what it was three years ago
.
I think it grows at 11% or 12%a year across Australia.
Rent is more expensive 19% moreexpensive.
So people have less savings.
They've got less of a chance tohave a house deposit.
(24:30):
People who already haveproperty are going to have the
opportunity to borrow more moneyon those properties to go buy
extra property.
So there's going to be a largerinequality gap that's actually
created with these interestrates dropping.
It was very similar to COVID,if you remember in COVID you had
the 0.1% interest rates, cashrates, sorry.
(24:52):
You had a 0.1% cash rate, butyou also had the business owners
benefiting the most.
Speaker 2 (24:58):
Oh yeah, because they were getting the job seeker
stuff.
Speaker 1 (25:00):
Yeah, they were getting job seeker, there were
other government funds andpeople were making record
profits through COVID.
Speaker 2 (25:09):
Yeah, which the whole point was that it was economic
activity was going down.
Speaker 1 (25:12):
And the average employee was spending money like
crazy online shopping, goingout to restaurants anything.
Speaker 2 (25:18):
Everyone bought an Adidas tracksuit.
Speaker 1 (25:21):
It's different now.
We don't have the governmentstimulus.
If Albo comes out and he saysjob seeker, I'm going to be like
what?
That'd be crazy, lose mymarbles.
But that's where the inflationcame from the first time.
Yeah, yeah.
And if interest rates dropsthis time okay, they drop a
percent the first home buyer isgoing to experience more
(25:44):
expenses.
The person that bought twoyears ago is going to be fucking
cheering.
They're going to be so happy.
The person that bought thisyear is going to be so excited.
Speaker 2 (25:53):
Almost two years.
Speaker 1 (25:55):
But they're going to be so happy because their
properties are going to shoot upin value.
And why?
And I keep going back to theexact same point Supply, and
it's all about these tariffs,it's all about everything.
Speaker 2 (26:06):
Supply and demand, supply and demand, we're going
to let it pour out Simplestconcept to know in economics.
Speaker 1 (26:11):
We're going to let in more people, we're not going to
approve as many dwellings andwe're going to make it more
expensive for a developer tobuild.
Speaker 2 (26:16):
And we're going to make it more expensive for a
developer to build.
Okay, Demand goes up.
Speaker 1 (26:21):
supply stays where it is.
Final point before we end thisepisode.
Do you know why?
Speaker 2 (26:29):
a lot of the developers are moving regional.
I assumed it was cheaperconstruction costs.
Speaker 1 (26:33):
No, no, construction costs are actually more
expensive.
Speaker 2 (26:35):
Oh, because you've got to transport the materials
and stuff there.
Speaker 1 (26:38):
Yeah, Cheaper land land, yeah, makes sense.
When you are a large-scaledeveloper or a builder of sorts,
your biggest cost land purchaseland purchase, stamp duty, land
tax, holding costs yes, soyou'll buy the block of land.
(27:00):
You've got to get a DA on it.
Da takes time.
It used to take 9 to 12 months.
Now it takes what was it like?
18 months or something?
18 to 24.
So, instead of you being ableto quickly act, get it going.
You can't.
So if I go buy a block of landin Parramatta and it costs 10
times as much to buy it inParramatta than it does over
(27:21):
there, I'm not going to buy itin Parramatta because I'm
running a business and you'vealso got to pay the holding fee
or holding tax, whatever thehell it's called, and while
you're waiting for that approvaland all that sort of stuff.
Speaker 2 (27:31):
So you're not making any money.
You're not making any progress.
Makes sense.
Speaker 1 (27:35):
So they say to themselves okay, well, we don't
have as many buyers here,because for us to be able to
sell an apartment here it has tobe a million dollars.
And how many first-home buyerscan afford a million dollars?
None, literally.
Yeah, I ran the numbers theother day.
Okay, no, no, no, you know whatwe'll do.
We'll attract the investors.
We'll go and we'll attract theinvestor market, because
(28:01):
investors can borrow, yeah, andsomeone who's a first-time buyer
will.
And they think to themselvesI'm going to save, I'm going to
do stamp gd, everything.
Fucking.
Open a book, come see me, I'lldraw pictures.
Okay, and I'm about to go onone of my rants.
I'm about to get reallyaggressive.
You can't just no, but I'vejust.
I, I'm, I crack the shitsbecause people don't, they don't
pay attention to what'shappening For people to get
(28:23):
their visa in Australia.
What do they need to do,michael?
Speaker 2 (28:25):
I would have no idea they need to complete three.
Speaker 1 (28:28):
I think it's anywhere between three months to two
years of rural work.
So you need to go to theoutskirts, okay.
So you're going to your milldrawers, you're going to your
gold bins.
These are the areas you need togo to to work for two years.
Okay, the developer, the smartdeveloper, isn't sitting there
going to himself yeah, cause I'mgoing to go build a duplex.
Do you know what he's saying tohimself?
Okay, you know what?
(28:49):
The cost of land in those areasis going to be so much cheaper.
I'm going to be able to buildso much more because the
government wants me to buildthere, to build those towns.
And then, on the other side ofthat, I'm going to have active
tenants straight away.
Why am I going to have activetenants?
Because we're letting in somany people.
And guess what?
I'm probably going to be ableto achieve pre-sales because
(29:13):
Michael can get pre-approved foran investment loan of 800,000.
So Michael might be able to buytwo properties and he might be
able to positively gear thembecause they're going to be $500
or $600 or $700 each a week inrent.
Speaker 2 (29:26):
Yeah, Positively geared property.
The dream right I know, look itup to the stars.
Speaker 1 (29:33):
But this is what people aren't seeing.
They're thinking to themselvesoh, I've got to go compete with
this person, I'm going to go dothis, I'm going to hire better
trades.
No, no, no.
The smart developer is aimingtowards regional and rural Okay,
and they know that they will beable to achieve pre-sales.
They'll be able to do the houseand land packages and you see
(29:54):
them all the time Dual keyoccupancy.
I've got a house and I've got agranny flat in the back and
you're going to be able to rentboth for $850 together.
That exists because ofmigration.
And when interest rates go down, don't go.
I'm not allowed to say itbecause I'm connected with some
people.
Don't go buying something thatwill depreciate in value if
(30:18):
interest rates went up.
Go buy something that is finite.
And what is something that isfinite?
Speaker 2 (30:25):
Land, land.
Speaker 1 (30:27):
Why do people prefer land?
Because they don't want peopleknocking upstairs, knocking
downstairs.
I could smell the person's food.
I can hear people screamingacross the other-.
Speaker 2 (30:37):
A couple having an argument next door.
Speaker 1 (30:38):
yeah, yeah, that's the reason why because there's
privacy.
Also, strata's expensive, butthat's another thing.
The main reason is truthfullyprivacy.
Speaker 2 (30:46):
Yeah, yeah, and it's also part of the Australian
dream, you know.
Speaker 1 (30:49):
Correct.
Speaker 2 (30:49):
To you know, yeah, yeah, picket fence, all that
sort of stuff.
Speaker 1 (30:53):
So going back to what I was originally saying.
Going back to what I wasoriginally saying, which I know,
I've tangented off a millionand one times, as we always do
here on the Finance Show withJoe.
Speaker 2 (31:03):
What is on topic?
Speaker 1 (31:05):
That is how the tariffs will affect us.
The interest rates will go down.
You'll have people that alreadyown property looking regional.
They'll be able to buy more ofthose properties.
We'll bring in more peoplebecause we'll be like, oh no,
economy's not working, We've gotto bring more people.
We can't fit them in Sydney.
Go to Goldman and guess what?
The smart person's going to bealready invested there and
(31:25):
making money.
Speaker 2 (31:26):
Yeah, I mean it's about time that a region of
Australia also gets somedevelopment, just in general.
Speaker 1 (31:32):
No, no, disagree with that entirely.
I disagree.
Like people are like, oh, it'sabout their damn time all this
stuff and those places getdevelopment.
I agree with that to a point,but man, it's hot okay let's
talk about the climate.
Okay, like no, no, even evenlike um, like up towards
newcastle and things like thatalong the coast, like it doesn't
(31:52):
have to be okay, good, allright, I just I just mean
outside of the, the major citiesin general man, there's like
northern parts of SouthAustralia that, like bro, you're
going to have sweat coming outof places you didn't know
existed.
Anyways, I've gone to Bankstownnow.
It's been the Finance Show withJoe.
If you don't want to learnabout tariffs, you can listen to
this episode, because-.
Speaker 2 (32:13):
I don't even think we learned anything today.
Speaker 1 (32:18):
Basically, to summarize this show the tariffs
are going to affect you.
They're going to affect you ina way that you don't see on a
macro level, but on a microlevel.
You will have more spendingpower, but unfortunately we
don't have the savings at themoment.
The average australian doesn'thave the savings.
At the moment, people who arealready landholders and property
holders are going to benefitthe most.
(32:39):
People who have not yet enteredthe market.
They are going to benefit theleast, and my advice general
advice that should not be takenseriously speak to a financial
advisor or financialprofessional is speak to a
mortgage broker.
Get yourself in the market,Because I haven't seen a single
(32:59):
policy from the government thisweekend that says this is how
we're going to increase housingsupply.
They've just been throwingrandom hot keywords.
Anyways, thank you so much forlistening to the Finance Show
with Joe.
As always, I'm Joe, that'sMichael, and if you need any
help with your finance or yourproperty needs, you can contact
us at wwwitsimplecomau.
He won't answer, I will andyeah, we'll go from there.
Speaker 2 (33:21):
That's right, I won't answer.
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