Yahoo Finance Australia ‘headed for recession’ and RBA powerless to stop it
Australia, and other economies heavily reliant on China for business, will be hit by a recession, says one of the world’s top hedge fund managers.
Crispin Odey, of London-based Odey Asset Management, says China is losing its competitiveness and its economy is decelerating, as capital continues to flow out of the country.
China reported a deficit of $91.2 billion under its capital and financial account for the last quarter in 2014 – its largest deficit on record since at least 1998.
Also read: Economist expects recession in 2015
Odey told Fairfax Media that Australia would be in the firing line and there was little for the Reserve Bank to do.
“China is everything to Australia in lots of ways,” Odey told Fairfax.
Odey indicated that monetary policy by the central banks may not be able to thwart a crash.
Also read: Aust recession 'extremely remote', says Hockey
“Central banks are not all singing and all dancing, they cannot basically avoid the natural consequences of what we are doing,” he said.
Odey says the resources industry needs to step up and respond adequately to a plunge in commodity prices.
"The trouble is today's players, whether they are the miners of the oil companies...they are not doing the right thing," he said.
