So I'm not sure what point you are trying to make?
Your chart was assets and liabilities as a proportion of disposable income.
My point is that all assets are contingent liabilities for the future buyer. So if current asset prices put gross assets as 650% of disposable income, then future liabilities for future buyers of those assets (who have no assets themselves) are also 650% of disposable income, unless the assets are inherited and withdrawn from the market, pushing asset prices (and corresponding liabilities) even higher.
* If asset prices rise faster than disposable income, then future liabilities are outpacing the capacity to service those liabilities. Once the threshold is reached you get one of two things happen. Either (a) financial assets decrease in price until serviceability levels are reached or (b) a brutal banana republic and crushing, pervasive poverty as the cost of accommodation consumes a greater and greater percentage of real incomes, crushing capital formation,small business, entrepreneurship and finally, democracy. (See Venezuela as Exhibit A). For Australia's future, we appear to be heading towards option (b), but we may escape with option (a).
* If asset prices rise at the same rate as disposable income, then in real terms, prices are going backwards (unless AWE and CPI converge to the same value), even though in nominal terms they are rising. This is Keynes' famous 'animal spirits' effect of nominal increases in incomes, that have zero effect in real terms. It assumes (probably correctly) that the majority of the population are morons. This worked well in Australia for some time, before the age of poll politics.
* If asset prices rise slower than disposable income, then your economy is probably experiencing virtuous deflation, the best of the three scenarios, and one that Australia is unlikely to experience as long as the morons are in control. Given the current make up of the Senate and Cabinet, it would appear that trend is accelerating rather than abating.
Speak when you are angry and you will make the best speech you will ever regret. Ambrose Bierce
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