Money buys power


Published in the Geelong Advertiser, June 2013 by Dale Gillham

It doesn’t take Einstein to work out how allowing donations to political parties can influence government policy.

However, the money to fund our political system, which seems to be ever increasing, has to come from somewhere.

What is important for all Australians to decide is whether governments ought to be permitted to accept political donations.

Consider the political process in the US as an example of where this occurs and in my opinion has gone completely wrong.

The saying "money is power" couldn’t be more true there and we have seen the ramifications of what happens to an economy when this occurs.

So should Australia continue to allow this practice here when we have already seen examples where financial muscle outweighs the interests of ordinary Australians? I don’t think so, and this is why changes to legislation are important, even if they don’t go all the way to addressing the issue.

Just getting people talking about "one vote one dollar" means we are heading in the right direction.

So what do we expect in the market?

This week the Australian market continued to move down, surpassing my lower limit of 4750 points, to be trading around 4700 points.

The decline has extended to four weeks and therefore my analysis suggests that the market is likely to turn around and trade up next week, or at least begin to move in a sideways direction.

This outlook is further confirmed by this week’s trading range so far, which is smaller than we saw occur during trade the previous week.

What this tells me is that selling momentum is beginning to wane.

Remember that overall the market is still bullish and therefore we need to assume it is likely to remain so until it tells us otherwise.

A clearer picture on the market will be possible on confirmation of the next low as it is the way the market unfolds from this point that will greatly determine the direction for the second half of the year.

A strong rise over the next fortnight back towards 5000 points will provide an indication of a continuing move to the upside.

Given this, investors need to continue to be patient over the coming weeks.


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