Michael Janda

And there's already fuel surcharges coming through in the construction sector.

So we saw in COVID how building prices rose.

We're already seeing it again and we're only weeks into this energy crisis.

And, you know, as we discussed earlier, it could go on months and the effects could last years if this energy infrastructure in the Middle East is seriously damaged.

And this was one of the lessons from COVID, which we're still learning and now learning again, which is, you know, we'd focused on globalised supply chains just in time because it's the most efficient way to do things and that therefore generally the cheapest way to do things.

which is great when everything's working just fine, when there's no geopolitical tensions, when there's no great power rivalry with one of your major export destinations and also one of the major manufacturing hub in the world in China.

But when you've got the two superpowers, China and the US, arguing with each other,

And this spills over into places like the Middle East, where there is some element of this China-US struggle feeding through into the US actions in Iran.

Australia's just sitting on the sidelines and as the Canadian PM said, middle powers like us, unless we group together and do something about it, one of which would be supply chain security, we just end up being the collateral damage.

Well, and then there's the third order effect, if you like, is because of those second order effects, we've already seen the Reserve Bank of Australia decide to raise interest rates this month, which they might not have done.

They might have waited till May if this whole energy crisis hadn't happened.

That then has impacts on the economy.

Already on the weekend, auction clearance rates are the weakest they've been in many months since the low point in the market in mid-December, which is a dead time for real estate.

We're in the middle of autumn selling season, which should be peak time.

But people aren't out there buying.

People are starting to get scared about selling because of the rising interest rates and the global uncertainty.

So this event has ramifications all the way through the economy, through rising prices, through rising interest rates.

And it's one of the reasons why share markets are selling off really hard, because the value of shares is priced against the return that you can get from parking your money in government bonds or in the bank in cash.

And that return is going up.

because of the fears around inflation and rising interest rates.