This week, as the dust settles on another quarter of global economic uncertainty, we’re trying to find pockets of optimism. We actually found one right here at home. Domenique kicks us off with a surprising announcement. She's launched a new dip company with her partner in New South Wales! We take that local entrepreneurship and immediately zoom out to the world of finance, where gold prices are up a remarkable 50% this year. The whole conversation becomes a search for the connections between small-scale ventures and the massive forces that drive the world economy.

In our first major segment, What’s in the News, we dive into three of the week's biggest movers including the Reserve Bank of Australia’s recent decision to hold rates, the latest Nobel Prize in Economic Sciences, and the World Intellectual Property Organization’s innovation rankings. This leads to a discussion about the true engines of progress. We look at everything from the history of scientific thought to the painful but necessary concept of creative destruction. Our conclusion? Sustained, meaningful growth doesn't come from policy alone. It relies on how well societies connect foundational knowledge, invention, and an institutional openness to radically new ideas.

We transition into a hard look at global stability. In The Hand, we break down the surprising resilience of Russia’s war economy, the shadowy and often misunderstood hidden oil trade, and what a slowing GDP across major nations actually means for global risk. Then, we wrap up with The Invisible, which tackles Elon Musk’s insistence that population collapse is the greatest long-term threat to civilization. This prompts us to consider the future of growth itself, and whether an aging, shrinking global populace can still power the world forward.

Episode Highlights: 

[02:12] Our conversation shifts to investment regrets and the surge in gold prices, up over 50% this year.

[03:21] We debate whether gold remains a safe haven or if it’s now overvalued in a volatile global economy.

[05:01] We preview key topics from What’s in the News including the RBA’s rate decision, the Nobel Prize in Economics, and global innovation rankings.

[05:44] Discussion begins on the Reserve Bank of Australia holding rates steady at 3.6% amid sticky inflation.

[07:54] Paul explains how tariff policies and inflation dynamics are complicating economic forecasts.

[10:13] He predicts stable interest rates for the remainder of the year, with only a slim chance of increases.

[11:08] The focus shifts to the Nobel Prize in Economic Sciences and its origins with Sweden’s central bank.

[13:29] They reveal this year’s winners: Joel Mokyr, Philippe Aghion, and Peter Howitt.

[15:10] Discussion of Mokyr’s research on linking scientific knowledge and technological progress to growth.

[16:22] Aghion and Howitt’s model of creative destruction and endogenous growth is explored in depth.

[18:39] Domenique and Paul compare the two approaches and their policy implications for innovation ecosystems.

[20:05] We transition to the Global Innovation Index released by the World Intellectual Property Organization (WIPO).

[21:14] Germany drops out of the top 10, replaced by China, sparking debate on innovation metrics.

[25:31] They reveal the top-ranking countries: Switzerland, Sweden, the US, South Korea, Singapore, and others.

[27:16] Australia ranks 22nd, reflecting its reliance on low-tech industries despite strong economic size.

[28:28] Domenique calls for more “creative destruction” to boost Australia’s innovation standing.

[28:43] In The Hand, the discussion turns to Russia’s war economy and its resilience under sanctions.

[31:36] Despite falling export revenues, oil production remains high with shadow trade and barter deals.

[36:00] Russia’s GDP slows from 6.2% to 1.1% as the war drags on, though unemployment stays low.

[38:25] Paul argues that both Russia and Ukraine face economic exhaustion in a prolonged war of attrition.

[40:22] In The Invisible, we explore Elon Musk’s claim that population collapse is civilization’s greatest threat.

[41:23] We discuss declining birth rates, aging populations, and the economic ripple effects of demographic change.

[42:00] Reflections on long-term sustainability, growth, and humanity’s capacity to adapt.

Resources & Links Related to this Episode

• The Invisible Hand Podcast
• The Reserve Bank of Australia (RBA)
• Nobel Prize in Economic Sciences
• WIPO Global Innovation Index

Australia’s economy is growing, but the gains aren’t keeping pace with the past. Domenique and Paul open with a sharp focus on stalled productivity growth and why it matters. Along with how it shapes living standards, and why it feels like today’s prosperity is being borrowed from tomorrow. From there, what’s in the news takes over. We discuss housing prices climbing for the sixth straight month with Darwin leading the charge, commodities bouncing around on tariff headlines, solar panels and home batteries taking off as energy bills keep rising, and Trump’s tariffs ruled illegal by a federal appeals court but still hanging in limbo until the Supreme Court decides.

With the headlines as backdrop, they turn to the hand that’s steering the bigger story: Australia’s productivity puzzle. Despite decades of growth, productivity has flatlined, and in some years even gone backwards. Domenique and Paul dig into why including slow adoption of new technology, a heavy reliance on mining, and government spending propping things up instead of real efficiency gains. The result is a gap with other economies that are moving faster, and GDP per capita that’s slipping instead of rising. They call it a kind of “intergenerational theft,” where today’s Australians are coasting on the work of earlier generations rather than building new strength for the future.

The conversation closes with the invisible connections between energy and housing. Homeowners are cashing in on rooftop solar and rebates, trimming bills and even selling power back to the grid. Renters are largely left out with less than 10% of rental properties having solar. They’re stuck shouldering higher energy costs with none of the upside. Domenique and Paul go back and forth on whether governments should give landlords stronger incentives to install panels, or whether the real fix is helping more renters become owners in the first place. Either way, it’s a clear example of how ownership, incentives, and policy end up deciding who gets ahead and who falls behind.

Episode Highlights: 

[00:06] Domenique and Paul open with protests, bridge closures, and a surprise story about Nauru’s costly deal with Australia.

[03:07] They outline the episode structure: what’s in the news, the hand on productivity, and the invisible link between housing and energy.

[03:44] Housing prices continue rising nationally, with Darwin up 2.2% and listings still down 20%.

[04:27] Commodity updates: iron ore up 6%, oil down 4.1%, copper whipsawed by U.S. tariffs.

[05:18] Rooftop solar now makes up 20% of Australia’s electricity, with battery installations up 62% year on year.

[07:04] Trump’s tariffs were ruled illegal by a federal appeals court but left in place pending Supreme Court review.

[08:36] The hand turns to Australia’s productivity puzzle, with stalled growth, weak tech adoption, and reliance on mining.

[13:32] Discussion of services, government spending, and how low productivity erodes wealth slowly over time.

[17:07] Tax reform flagged as the biggest lever to unlock productivity gains, though political will is lacking.

[19:40] Productivity explained as growing the pie with efficient sectors like mining, banking, and education.

[21:26] The invisible emerges in energy and housing, with one in three households now having rooftop solar.

[23:30] Less than 10% of rental properties have panels, while wealthier households capture most benefits.

[27:43] Debate over government incentives to push solar into rentals versus broader solutions to help renters buy.

[31:03] Broader fixes suggested: education, jobs, health, and housing supply to move renters into ownership.

[34:55] Closing thoughts on the government's role in providing core services like education, health, and safety.

Resources & Links Related to this Episode

• The Invisible Hand Podcast
• The Productivity Commission
• The Reserve Bank of Australia (RBA)

Domenique and Paul dig into the economic pressures shaping the world right now, kicking off with What’s in the News. They break down the Fed’s decision to hold interest rates at 4.5%, despite internal dissent and political pressure. With U.S. GDP bouncing back to 3% in Q2 and inflation holding at 2.7%, they look at how front-loaded imports to beat tariffs distorted the numbers—and why Jerome Powell is under fire once again.

The segment also covers Trump’s latest tariff hikes: Brazil gets hit with a jump from 10% to 50%, and India faces a new 25% rate over ties to Russian oil and arms. As a wildcard, the hosts turn to luxury giant Hermès, whose 9% sales increase and surge past LVMH in market cap says a lot about rising inequality and the power of capital in an inflationary world.

In The Hand, focus shifts to Australia, where the RBA also held its rate at 3.85%. Domenique and Paul unpack the meeting minutes, revealing a split board trying to weigh falling inflation against new global shocks. With unemployment still at record lows and job growth coming largely from the public sector, the RBA is stuck trying to make forward-looking decisions in a world that keeps shifting.

Finally, in The Invisible, they explore Southeast Asia’s rising role in the global AI race. With over two gigawatts of data center capacity, countries like Singapore and Malaysia are becoming a vital link between U.S. and Chinese tech ambitions. Billions are pouring in from Amazon, Microsoft, and Alphabet. While firms like Huawei and Alibaba quietly route around U.S. restrictions. It’s a clever move for global players and a missed opportunity for Australia.

Episode Highlights: 

[02:37] What's In The News: The FED kept the interest rate unchanged at 4.5%. The US economy grew at 3% in Q2.

[03:22] Jerome Powell is under a lot of political pressure.

[05:07] No one knows what to do with these unpredictable outcomes.

[06:10] Trump would still like the rates cut, and he raised tariffs on Brazil. He's also adding an additional 25% tariff on India.

[06:48] It's difficult for economists to make predictions that are based on political decisions.

[10:39] Hermès reported a 9% year-on-year sales increase in Q2. Driven by continued demand for their beautiful Birkin handbag.

[11:11] Increased consumption of high-end luxury goods when the cost of living is going up. What we are seeing around the world is the impact of inflation on wealth distribution.

[13:35] The Hand: The RBA surprised markets in July by holding the cash rate steady at 3.85%, despite widespread expectations of a cut. The RBA is treading carefully.

[14:53] They have a data-driven view, in spite of political pressure.

[15:49] The great challenge for rate decisions is that they affect the future.

[16:25] How the labor market fits in to this.

[18:31] The Federal Government workforce in Australia is going to expand.

[19:55] The Invisible: The burgeoning AI industry in Southeast Asia. Singapore's new Prime Minister, Lawrence Wong said that economic restrictions are futile in an interconnected world, while on a trip to China.

[21:13] Southeast Asia is the central hub for the global tech race between America and China.

[22:46] Singapore has created a great centrally planned economy.

[24:47] Singapore is walking on both sides of the fence with the US and China.

[25:50] How China is involving themselves in Southeast Asia to avoid US restrictions. Through Southeast Asia, China is able to get tech that they otherwise wouldn't be able to get.

[27:34] The US, China, and large tech companies are heavily investing in Southeast Asia.

[28:52] The US has pressured Malaysia to tighten export controls.

[30:04] How the US and China have different approaches when doing business in other countries.

Resources & Links Related to this Episode

• The Invisible Hand Podcast
• The Black Swan: Second Edition: The Impact of the Highly Improbable: With a new section: "On Robustness and Fragility"
• Odd Lots Podcast

What happens when political forecasts miss the mark, global rules evolve, and economic models don’t quite capture reality? In this episode, we dive into the major political and economic stories shaping Australia’s role on the world stage. Co-hosts Domenique Sherab and Paul Scanlon take you through a three-part format, delivering insightful analysis and grounded perspectives on the key forces driving markets and policy decisions.

We start by unpacking Australia’s recent federal election, where the Labor Party achieved a historic re-election while the Liberal campaign faced an unexpected and significant setback which caught many by surprise. Next, Domenique and Paul turn their attention to the U.S. lifting long-standing sanctions on Syria, exploring what this move might mean for the region’s recovery, trade opportunities, and shifting geopolitical dynamics.

Then our focus shifts to the Reserve Bank of Australia’s latest interest rate cut, highlighting the growing uncertainties in the global economy and the potential return of inflation amid changing trade landscapes.

Wrapping up, the conversation broadens to a global scale with Moody’s recent downgrade of the U.S. credit rating, ending its AAA status, and what this signals about fiscal trustworthiness and the evolving rules around sovereign debt. Throughout, Domenique and Paul bring a distinctly Australian viewpoint to help make sense of a fast-changing economic environment.

Episode Highlights: 

[00:57] Paul has recently returned from a holiday in South Africa and other African regions.

[01:28] We'll be discussing the new government in Australia, Syrian sanctions, the latest RBA cut, and Moody's downgrade of the US economy in our segments: "What's in the News?", "The Hand", and "The Invisible".

[02:06] What's in the news? The Australian election was on May 3rd. Anthony Albanese was re-elected. 

[03:52] We share our analysis of the election. 

[07:16] On May 12th, Donald Trump announced the US would lift sanctions on Syria.

[10:30] The speed or pace at which Syria can benefit from that re-entry into global trading markets will be dependent on the speed and ability for it to rebuild that trade and economic infrastructure.

[12:13] The hand: The RBA lowered rates last week.

[15:31] The preemptive cut to stimulate the economy is appropriate.

[16:27] How the rate cut will affect keeping inflation and unemployment rates stable.

[25:54] A big shout out to the Odd Lots podcast. 

[28:35] Paul talks about what all this analysis means for his January predictions.

[30:01] The invisible: On May 16th, 2025, Moody's downgraded the United States credit rating, making it the last major rating agency to strip the US of its AAA rating.

[31:54] Credit ratings are important and they affect the price of your debt.

[36:46] This debt issue is what Trump is trying to address.

[37:28] How many countries have AAA credit rating? There are 12 including Australia.

Resources & Links Related to this Episode

• The Invisible Hand Podcast
• Odd Lots Podcast
• The Butterfly Effect: How Your Life Matters

In episode 15, Domenique and Paul try to avoid talking about Trump's tariffs but end up doing it alot. In between, they discuss housing affordability in Australia and the major parties policy proposals to address this before the upcoming Australian election; and whether the Euro could ever become the global reserve currency. 

In this episode, Domenique and Paul throw out the plan for the episode to discuss the biggest economic news story of the day: the fall out from Trump's new tariff regime on the world.

In this episode, Domenique and Paul discuss Trump's tariffs and Chinese consumption, dive deep into the findings of the Knight Frank Wealth Report and consider the big economic risks for 2025. 

In the 12th episode, Domenique and Paul discuss the latest Australian inflation print and economic decisions coming from the new Trump administration. In the second section, we discuss Deepseek and how it is disrupting markets and whether this will have long term global and Australian economic impacts. In our final segment, we discuss the current financial malaise in China and some local factors contributing to this. 

In the first episode for 2025, Domenique puts Paul back in the hot seat while he sets his predictions for the year ahead: from GDP and inflation, to whether Trump will go ahead with his trade war. 

In the final episode for 2024, Domenique and Paul discuss the RBA's latest decision to hold the cash rate in the face of weak wages and GDP growth and review Paul's economic predictions for the year to see how he fared.