Welcome Guest [Log In] [Register]


Reply
Australia is essentially a foie gras economy. The burst is going to be monumentally painful.
Topic Started: 7 Oct 2014, 08:39 PM (654 Views)
Barista
Member Avatar


Between us we have all reached for the nub of the absurdity crafting the Australian economy.

There is no way out as far as I can see. Unless we can find that rainbow to hit us up the arse.

Look at where Australia is now – right at the top of a real estate boom that has well and truly deformed the economy, but hasn't yet burst.

The beauty (for lack of a better expression) of that situation is that there is no way to craft policy at that point. What on earth would someone do with a policy at that point?

What would be the objective? To pump it up more? Or to slowly deflate it? If you try and drive it higher it will burst. If you were to meaningfully try and deflate it at this point it will almost burst. Indeed, from here just leave it alone …………and it will almost certainly burst. We are essentially in a policy cul de sac where momentum is driving us further in, but every side is hemmed.

That burst is going to be monumentally painful. Down below is reference to the Melbourne burst of the 1890s, without having done any considered analysis of that, I assume that what we are drifting towards will be of similar magnitude. But it is only guesswork. Sure, I joke about it, plenty do, but the joke represents about all that can be done now that the economy (and our society) is in the position it is in – we certainly can’t shape economy policy, or relate current policy settings to a framework which has any intellectual rigour. Nor, seemingly, can we realistically argue for the adoption of policy setting which may either put us on the track of something economically meaningful, or even to continue the deformed present we currently live in. Everything has too many costs, for too many interests, so that all that is left is a series of ad hoc responses to exigencies of the moment – many of which wont make a lot of sense when seen from further away than either the ideology they are supposed to be driven by or the exigency they are supposed to address (and most of what we are currently seeing don’t even make sense from there).

What policy is about is identifying objectives and planning to achieve them.

In this particular circumstance if you think about economic policy and what it is for you would come up with an objective which reads along the lines of – maximise the social welfare of the nation through ensuring economic growth to utilise the greatest possible number of citizens and enable them to contribute meaningfully to their own prosperity (maybe with added words ……in an economy which is globally competitive, diverse and positioned to ensure lasting economic opportunity for future generations [or something like that]).

But the situation in which we are now is that to ensure the maximisation of economic growth now we are taking away from lasting economic opportunity into the future. To buttress the economy now involves narrowing down Australia’s economic base (vis the departure of tradables – services and manufacturing) while force feeding the economy with debt and internationally funded mortgages which are doing nowt productive but fattening up house prices.

Australia is essentially a foie gras economy. There is only one policy.

Thats a tad gloomy for this hour, maybe I need a drink.
Profile "REPLY WITH QUOTE" Go to top
 
herbie
Member Avatar


Ah, dear little ole debt free cashed up me is FINALLY gunna kill the pig! :)

Tho' must admit I'd feel even just a tad MORE hopeful, IF the RBA 'n all Oz pollies of all political persuasions 'n all the banks 'n businessmen 'n pretty much just everyone else generally (plus all their ilks in all the rest of the world), didn't actually hate me just QUITE so bad as they actually do ... :D
Edited by herbie, 7 Oct 2014, 09:56 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
Profile "REPLY WITH QUOTE" Go to top
 
peace
Unregistered

11 tonnes of nuclear waste from France comming soon and expected to be costing the French $200million. Plenty more to come back as well and Tony knows it....
"REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
« Previous Topic · Australian Property Forum · Next Topic »
Reply



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy