Another global financial crisis would likely see Australia plunge into recession as the government would be unable to bail out the banks a second time, warns former Labor adviser and economist Ross Garnaut.
Employment were you only have to work 1 hr a week to be considered employed?
So the Government will get the money from where again.........The over indebted Private sector?
Household Saving Rate in Australia decreased to 8 percent in the second quarter of 2016 from 8.10 percent in the first quarter of 2016...... a record low of -0.70 percent in the fourth quarter of 2002.
So household savings have increased significantly since 2002.
Thanks for acknowledging that.
My only hope for my three boys is that they turn out nothing at all like Chris.
When private debt to GDP is at 125%...................
Lots of convincing facts in that post.........
So House hold formation will drive economic growth in Australia..........
You mean After they have Deleveraged........LOL
Private savings not including housing equity is at 250-300% of GDP if private debt is at 125%. Therefore it is at an all time record high.
Even relative to wages savings have rarely been higher since 1988.
You are such a drama queen Simon. You mix and match numbers to suit yourself - when the household savings total figure does not suit you try to use current savings as a % of income in your desperation to find some negative news.
Total debt should be compared with total savings and total wealth and as long as these are tracking well together then there is nothing to be so scared about.
Dump the doomsters Simon - they will turn you into a frustrated angry person who is much much less well off than your peers. Look at Jon Snow/ Terry etc do you really want to follow in their whining perpetually negative view of the world.
foxbat
14 Dec 2016, 09:38 AM
Only good for a time, then the game has to go through a reset.
The low interest rates have turned a lot of people into glorified renters.
I have debt, running at about 15% of assets.
Would like that to get to 0%.
Peter
The 5% interest i pay i would like in my pocket, not the banks.
Foxbat is not particularly smart - it is easy to get returns much better than 5% on borrowed money at the moment, we made more than 30% on our shares this year. Debt is a tool and very valuable for building long term wealth.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
NATIONAL AUSTRALIA BANK and Westpac borrowed billions of dollars in emergency funds from the US Federal Reserve at the height of financial crisis, according to documents just released by the central bank.
What are emergency funds again.......
skamy
14 Dec 2016, 10:50 AM
Private savings not including housing equity is at 250-300% of GDP if private debt is at 125%. Therefore it is at an all time record high.
Skummy you posted a chart of Annual House Hold wealth against Disposable Income not GDP.........
Household assets and debt continue to surge, approaching record levels, with growth relatively broad-based across property and financial assets. Banks continue to finance this growth by borrowing abroad, which leaves the Australian financial system and economy more vulnerable to financial shocks that originate overseas.
Quote:
vulnerable to financial shocks that originate overseas.
Simon if you divide two numbers by the same number ie household income - they will be in the same ratio of each other when divided by any other number eg GDP. Household savings (not including home equity) are more than double household debt. Therefore household debt to GDP will be less than half household savings to GDP. Are you really that slow Simon?
You are so brainwashed by these doomsters who have been predicting Armageddon and greater depressions and recessions every day of the week since I was a child.
If we had listened to them we would be so so much poorer than we are today, instead we bet with the most probable outcome ie house prices rising and we never once regretted it. Dump the doomster Simon and use your brain take a punt on a more positive future and get yourself away from the depression merchants.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Simon if you divide two numbers by the same number ie household income - they will be in the same ratio of each other when divided by any other number eg GDP. Household savings (not including home equity) are more than double household debt. Therefore household debt to GDP will be less than half household savings to GDP. Are you really that slow Simon?
You are so brainwashed by these doomsters who have been predicting Armageddon and greater depressions and recessions every day of the week since I was a child.
If we had listened to them we would be so so much poorer than we are today, instead we bet with the most probable outcome ie house prices rising and we never once regretted it. Dump the doomster Simon and use your brain take a punt on a more positive future and get yourself away from the depression merchants.
According to the national accounts, Australian households save a lot. Over the past few years, households have been saving roughly 10% of their disposable income. The Consensus view is that households are likely to run down their saving as the RBA cuts rates, and as asset prices rise. Accordingly, consumption should grow faster than disposable income in the period ahead, enabling the economy to transition away from mining-led growth. However, we believe that the high household saving rate is somewhat illusory. The official measure includes compulsory saving (superannuation) and does not properly take into account principal payments on mortgages
Quote:
However, we have confirmed with Australian Bureau of Statistics (ABS) officials, that the official household saving rate does include compulsory saving in the form of superannuation. While complusory saving is technically still saving, the issue is that most people cannot access it until retirement age. So the potential to draw on this saving pool to consume remains limited. Historically, superannuation contributions have risen from around 6% of disposable income in the early 1980s, to 8% more recently. Removing superannuation from the official saving rate, lowers the discretionary saving rate to 2% from 10%. T
WOW really 2%.........
Quote:
But another, more serious problem with the ABS measure of the saving rate is that it does not properly take into account mortgage principal payments – currently a large proportion of the cash cost of housing. We can measure net mortgage principal payments as the difference between gross loan approvals and credit growth. Adjusting for both superannuation and principal payments, we find that the discretionary saving rate falls to -3.6% from 2%. This measure of the discretionary saving rate is not only low in absolute terms – it is also low by historical standards
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