While markets rebound as the US prints more money to revive growth the best for us may already be over, writes David Potts.
This might not be as good as it gets, but it's better than what's in store. Unfortunately, the lowest inflation and jobless figures in a generation don't cut it any more.
Not even a record 21 years of continuous economic growth - and a belated happy anniversary, us - will do if the markets have any say in it. As, sadly, they do.
They've become so dependent on the monetary ministrations of the US Federal Reserve, in particular, for an economic fix that anything suggesting crisis is, perversely, just what the doctor ordered.
The worse the global economy, the better because the treatment is more money administered.
Earlier doses account for Wall Street approaching its record high.
Another injection on Friday did the trick but again our sharemarket is struggling to keep up.In fact our market, which is home to the fastest-growing economy in the West, isn't within cooee of its record high, thanks to the Reserve Bank running a tighter ship and a dollar on steroids.
The Fed talks about quantitative easing so it won't frighten the horses - "printing money" sounds desperate, which it is - and although some of this liquidity has spilled into Wall Street, more seems to have gone into commodity prices and anything else that protects against the devaluing US dollar.
Not that it has helped the malaise in Europe, which has given China a secondary infection.
Unfortunately, the most that can be expected of debt-ridden Europe is a slow, drawn-out recovery.
What was that about China? There's another story. It's lifting spending on infrastructure - which is good for steel and therefore our iron ore and coking coal exports - but nothing like the 2008 injection that set off mineral prices and a dangerous property boom that still hasn't been properly reined in.
This time it doesn't have as much room to move. Inflation is starting to creep up again and the local government authorities that supervise the projects are up to, if not well over their necks, in debt.
Imagine your council being entrusted to borrow several billion dollars to spend on its pet projects. Perish the thought. Don't overlook the impact on the Chinese banking system, either.
But more about us. While our economy is statistically in rude health, the reality isn't so rosy.
Just as the jump in mining export prices surged through the economy by curing inflation with a stronger dollar, creating more jobs than were lost from manufacturing and dragging the budget back into the black, or close enough, a fall will do the opposite.
As new mines are producing faster than demand is growing, Australia will take an income hit and you need to prepare for it.
How did it all change so suddenly? After all, the economy was jogging along at an annual 3.7 per cent just a few months ago.
Perhaps not in peak form, but comfortably above the 3.25 per cent long-term average.
Trouble is, most of that growth was in the last half of last year. Since then, there's been a $40 billion fiscal crunch as the budget deficit shifted towards surplus.
In the June quarter, the economy grew just 0.6 per cent, seasonally adjusted (as you do), which, if this were the US, would be annualised by multiplying by four to give an insipid 2.6 per cent.
Every figure that's come out since June suggests growth is closer to the implied 2.6 per cent than the 3.7 per cent.
"We see growth settling around a 2.5 per cent annualised pace over the year ahead," says the head of investment strategy and chief economist at AMP Capital, Shane Oliver.
Nothing is going to plan. Confidence, retail sales and housing are all below where they should be "this far into an interest rate easing cycle", he says.
With low interest rates, a $2 billion shot in the arm from the government's carbon tax compensation and higher family benefits, the wonder is the quarter was as weak as it was.
And it seems to have got worse in July.
Retail sales have been in the doldrums for ages, but temporarily kicked up in June as the government handout cheques were cashed.
The stimulus didn't last. Sales slumped in July, recording an annual growth rate of 3.5 per cent, which is well under the historical average of 5 per cent, according to the senior economist at St George Bank, Jo Heffernan.
That said, broader spending by households, which includes cars and overseas travel, is a lot healthier. But sales of new properties are down to the second-lowest level in 11 years.
"Newly erected homes aren't selling, reducing the requirement for builders to start work on new projects," says the chief economist at CommSec, Craig James, adding, "tradespeople will continue to do it tough."
Scariest is business investment. Although miners are still investing like no tomorrow - though the latest estimate for the next year, the smallest improvement in 19 years, shows dimming enthusiasm - nobody else is.
Non-mining businesses invested less in the June quarter and rising inventories show they were caught out by lower-than-expected sales.
Growth of 2 per cent or 3 per cent is too low to prevent unemployment rising, but it will keep inflation down and probably invite a rate cut or two.
Come to that, the market expects another four cuts during the next year, though you can bet only some will be passed through to mortgages. That would have to mean a lower dollar, too.
So, what's the remedy?
For a start, forget a boom in anything for a long time. There isn't any rush to borrow - which is essential for another bubble - not even for real estate.
But lower rates and a weaker dollar sure sound good for the sharemarket.
The trick is to forget a quick gain and go for the income.
That tells against mining and other speculative stocks and goes in favour of, gulp, retailers, home-building suppliers - to take advantage of the housing shortage - and, who knows, maybe even the downtrodden media. You would certainly be getting them cheap.
Anyway, the next rally will probably be different.
"Markets are no longer being led upwards by sectors that traditionally do well when confidence returns - like commodities and banks - but by mainstream sectors like consumer discretionary, pharmaceuticals and technology, relatively dull sectors with steady dividend streams that offer investors a store of value," the investment director at Fidelity Worldwide Investment, Tom Stevenson, says.
Real estate investment trusts (REITs) are clear winners from falling interest rates, and there's the bonus that many are trading below the value of their investments.
Term deposits are also better than they first appear since, in real terms, you're getting about 3 per cent for no risk at all, making them almost unbeatable if you don't pay tax.
A lower dollar would make international share funds more attractive as well.
Remember, lots of markets have been doing better than ours.
There, that didn't hurt.
21 years continuous growth
Average growth rate is 3.25 per cent.
In 2011-12 it was 3.4 per cent, fastest in four years.
Committed $260 billion to mining investment
Wages rising in real terms
Annual inflation of 1.6 per cent
Sixth lowest tax ratio to GDP in developed world
Farm produce booming
Unemployment slowly rising
Housing in doldrums
Non-mining investment falling
Growing trade deficit
Budget surplus under threat
Interest rates need to fall
INTENSIVE CARE WARD
Falling iron ore and coal prices