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Why Australia can't avoid a recession; (& Canada, Korea, China and others)
Topic Started: 12 Dec 2016, 11:25 PM (8,494 Views)
Rufus
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Simon_S
15 Dec 2016, 07:34 AM
Are they like all the other Doomster Cults like the IMF World Bank OECD RBA US FED and god knows anyone else that doesn't preach booms and rising house prices to the Moon.


Maybe you should read the Report....

Or maybe just read what I posted but here it is again:



Aggregate savings is a fairly ridiculous measure. Savings is what the citizens are left with after taxation.
People can't spend away aggregate savings.

There is a formulae if you're interested, which you probably aren't.
Jon Snow
14 Dec 2016, 10:01 PM
I can post all the charts I like to make it as simple as possible, and still you don't understand. Or maybe you do, and are just being dishonest.
Yep keep posting those little charts, but wages are rising despite your best efforts to kid yourself that they are falling.
Edited by Rufus, 15 Dec 2016, 07:50 AM.
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Simon_S
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Rufus
15 Dec 2016, 07:45 AM
Aggregate savings is a fairly ridiculous measure. Savings is what the citizens are left with after taxation.
People can't spend away aggregate savings.

There is a formulae if you're interested, which you probably aren't.


I'm more interested in the How much they will have left over now that interest rates are Rising.......

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Rufus
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Simon_S
15 Dec 2016, 08:53 AM
I'm more interested in the How much they will have left over now that interest rates are Rising.......
That doesn't alter much. Higher interest rates are a result of rising inflation which includes rising wages, and higher interest rates mean higher dividends for savers and superannuation funds.

The equation is - (S – I) + (G – T) + (M- X) = 0

An explanation is here - http://monetaryrealism.com/s-i-s-i-the-most-important-equation-in-economics/

Essentially people can't spend their savings away, it can only change hands. EG If I buy a car from you for $10,000 then my savings has reduced by $10,000 but your savings have increased by $10,000 so no matter how hard we try to spend our savings away, they remain, but in someone else's pocket. That's why aggregate national savings is a BS measure, people save what their government allows them to save, its essentially a function of government spending.

If a government has a surplus, then savings will be negative unless the private sector is amassing debt, which they are forced to by the government surplus.

If after taxation Australians are saving at 8% and we know that employees are paying 9.5% into super, then the 1.5% shortfall has to be borrowed (if everyone contributed 9.5% - which they don't)

Understand?
Edited by Rufus, 15 Dec 2016, 09:24 AM.
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Simon_S
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Rufus
15 Dec 2016, 09:21 AM
Essentially people can't spend their savings away, it can only change hands.

Savings are forever.........

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Rufus
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Simon_S
15 Dec 2016, 09:33 AM
Savings are forever.........
Yes they are, unless they are used to pay down debt. Then both the savings and the debt disappear.

What you are quoting is GROWTH in savings, not savings per se'
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Simon_S
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Rufus
15 Dec 2016, 09:38 AM
Yes they are, unless they are used to pay down debt.
The one that is rising in Cost.......

Now tell me again how the rising cost debt servicing is good for our economy.......And Asset Values.....

Edited by Simon_S, 15 Dec 2016, 09:49 AM.
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Rufus
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Simon_S
15 Dec 2016, 09:48 AM
The one that is rising in Cost.......

Now tell me again how the rising cost debt servicing is good for our economy.......And Asset Values.....
Rising interest rates are good for savers and bad for borrowers, which is why the RBA is probably going to reduce rates in February.
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Simon_S
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Rufus
15 Dec 2016, 09:55 AM
Rising interest rates are good for savers and bad for borrowers, which is why the RBA is probably going to reduce rates in February.
Will the RBA continue to lower as the US FED continues to raise......

Ahhhh.....Fun times.
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Rufus
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Simon_S
15 Dec 2016, 10:01 AM
Will the RBA continue to lower as the US FED continues to raise......

Yes for a while I think that's likely, in fact we have cut this year twice whilst the last Fed move was up.
Edited by Rufus, 15 Dec 2016, 10:27 AM.
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Trollie
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Timo is confused because the situation is more complex than how he is going to spend his tuckshop money.
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