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Oh dear my fellow bears, I truly am thinking we're screwed Brothers :); The baskets are even getting their plan in place to do "QE for The People" 'next time 'round'
Topic Started: 18 Sep 2015, 08:47 AM (7,773 Views)
peter fraser
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Terry
18 Sep 2015, 03:55 PM
Hence, the high cost structures in Australia and NZ. Hence, without increasing costs, including human labor, it becomes unsustainable, which is something we should learn from the Japan experience. If you tie your future to ever increasing asset prices, the piper needs to be paid at some point.
I didn't say that there won't be imbalances, but lets please not follow Japan down the road of negative inflation, that encourages savings and discourages spending, and as Loki has informed you - one persons spending is another persons income.

If that persons stops spending another person has his/her income reduced.
Any expressed market opinion is my own and is not to be taken as financial advice
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Jimbo
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peter fraser
18 Sep 2015, 04:28 PM
I didn't say that there won't be imbalances, but lets please not follow Japan down the road of negative inflation, that encourages savings and discourages spending, and as Loki has informed you - one persons spending is another persons income.

If that persons stops spending another person has his/her income reduced.
So what model would you suggest?

The one where we spend everything we earn, plus everything we will ever earn, today?

Do you think that we can collectively continue to live like this forever?
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Matthew
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createdby
18 Sep 2015, 10:28 AM
Fucking naïve to think you can turn $2 a day factory workers into a nation of the consumers overnight.

It is more like A$50 per day. So I stopped reading after that because if you are basing everything on $2 a day you are wrong.

Would recommend all others to do the same.

Clearly though you have never been to China......
My only hope for my three boys is that they turn out nothing at all like Chris.
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peter fraser
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Jimbo
18 Sep 2015, 04:47 PM
So what model would you suggest?

The one where we spend everything we earn, plus everything we will ever earn, today?

Do you think that we can collectively continue to live like this forever?
It's good for the economy if we all spend most of what we earn, but as individuals it's best for us if we save as much as possible (or needed)
Veritas linked "the Paradox of Thrift" by Keynes a little earlier.

The theory is that if we all spent every dollar we earned, we would all be better off. Of course that will never happen.

By targeting a modest inflation rate the RBA want prices to continue to rise gradually. That encourages savers to buy what they are saving up for earlier.

If we had negative inflation that would encourage people to not spend, but save longer instead as prices fall. That's the scenario that Japan has been in for quite some time and that's why their economy is suffering.

In a depression for example, anyone with a secure job is better off as the cost of goods and services plummet. Their cost of living decreases.
However the millions out of work aren't better off, so the economy as a whole is suffering even though some individuals are better off.
Edited by peter fraser, 18 Sep 2015, 05:04 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Matthew
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createdby
18 Sep 2015, 12:37 PM
Ooooooooh 56000 yuan average wage per year. Or about $12000 aussie. $230 per week. Or about $46 a day or $5 an hour for your average (not median so not representative of reality) Chinese.

Sorry for insulting the chiners reading who earn $5 an hour. You are the saviors of the world economy and you deserve more respect. /s
Cost of living is cheaper, housing is cheaper, everything is cheaper. It is all relative.

And you are a fucking moron.
My only hope for my three boys is that they turn out nothing at all like Chris.
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Terry
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peter fraser
18 Sep 2015, 05:03 PM


The theory is that if we all spent every dollar we earned, we would all be better off. Of course that will never happen.

Depending on your metric, we do spend every dollar we earn....and more. However, there appears to be no threshold for peak debt. It's part of "the system."
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The Whole Truth
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peter fraser
18 Sep 2015, 09:40 AM
Like it or not we live in an economy driven by consumption (spending)

Savers are a drag on the economy and spenders benefit the economy. Housing is such an important part of that spending, governments will do almost anything to maintain that spending. Crashing the housing market is not on their agenda.

Peter you are seeing things only through the personal lens of your chosen business. Consumption driven economics is nothing new. The roaring twenties was built on it with everyone demanding a radio and an automobile. Likewise there was a big residential property bubble that began to unwind leading up to what we call the great depression. The similarities between the 2 eras are uncanny when you look at them.

And to say savers are a drag on the economy is simply retarded. Money held in savings accounts is used for loans for productive enterprises like starting businesses or constructing houses.
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." John Stuart Mill
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peter fraser
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Terry
18 Sep 2015, 05:13 PM
Depending on your metric, we do spend every dollar we earn....and more. However, there appears to be no threshold for peak debt. It's part of "the system."
Savings are not lost when they are spent - they just change hands.
The Whole Truth
18 Sep 2015, 05:29 PM
Peter you are seeing things only through the personal lens of your chosen business. Consumption driven economics is nothing new. The roaring twenties was built on it with everyone demanding a radio and an automobile. Likewise there was a big residential property bubble that began to unwind leading up to what we call the great depression. The similarities between the 2 eras are uncanny when you look at them.

And to say savers are a drag on the economy is simply retarded. Money held in savings accounts is used for loans for productive enterprises like starting businesses or constructing houses.
Well I didn't say that credit was necessary in the equation, although we all know that some level of purchasing on credit has always existed.

Your savings will probably become spending at some point, but if they sit in an account for years then that money isn't helping the economy. But I'm not saying you shouldn't save, for you as an individual it's good to have savings, but you can see what would happen to the economy if we all stopped spending. We would all lose our jobs.
Edited by peter fraser, 18 Sep 2015, 05:38 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Andrew Judd
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peter fraser
18 Sep 2015, 05:32 PM
Savings are not lost when they are spent - they just change hands.

Well I didn't say that credit was necessary in the equation, although we all know that some level of purchasing on credit has always existed.

Your savings will probably become spending at some point, but if they sit in an account for years then that money isn't helping the economy. But I'm not saying you shouldn't save, for you as an individual it's good to have savings, but you can see what would happen to the economy if we all stopped spending. We would all lose our jobs.
Peter, your theory on savers being the enemy makes more sense when there are not trillions in savings being created by government deficit spending.

On the face of it your suggestion of making the savers the enemy sounds good but in reality there is no easy fix along those lines?
Edited by Andrew Judd, 18 Sep 2015, 05:58 PM.
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peter fraser
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Andrew Judd
18 Sep 2015, 05:58 PM
Peter, your theory on savers being the enemy makes more sense when there are not trillions in savings being created by government deficit spending.

On the face of it your suggestion of making the savers the enemy sounds good but in reality there is no easy fix along those lines?
Andrew I'm not trying to represent savers as the enemy, I'm saying that the RBA wants people to spend and not save, and they do that be targeting modest inflation.
Any expressed market opinion is my own and is not to be taken as financial advice
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