A Storm is Brewing for the Australian Economy and Housing Bubble; Ignore the thunder, get washed away in the rain. Troubling combination of factors that cannot be ignored.
Tweet Topic Started: 23 Jan 2013, 05:47 AM (23,231 Views)
Over the past 150 years, Australia has experienced two macroeconomic depressions, both of which coincided with worldwide depressions.1 The first of these was in the 1890s and the second in the 1930s. These were also times of financial distress both domestically and in the rest of the world. For Australia there were many similarities across both depressions. Indeed Sinclair (1965, p. 85) suggests: ‘There is such an obvious similarity between the economic depressions which occurred in Australia in the 1890s and the 1930s that it is tempting to suggest that history was repeating itself in the latter case’
Quote:
The central argument of this paper is that variation in the performance of the financial system across the two depressions was primarily due to variation in the condition of the financial system prior to each depression. We show this by examining the behaviour of a range of indicators of financial stability over the decade prior to each depression.4 These indicators are: (i) the level and nature of investment; (ii) property market speculation; (iii) credit growth; (iv) capital inflows; (v) degree of risk management within the financial system; and (vi) competitive pressures in the financial sector.
Look there it is again..........
Now what about those:
Record Levels of Private Debt.... Record High Asset Values......... Record Low Interest Rates........ 26 years of Uninterrupted Economic growth...........Remember that thing Called the Business Cycle........
Shit Even Trollie Backed the f*** away:
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Simon_S 4 Nov 2016, 09:38 PM So You're saying:
The Boom will never end..............We can never have another recession. Interest Rates can never Rise........They will forever stay at record lows. Asset Values can never fall............They will continue higher because its Impossible for them to fall. Private Debt will never matter..........Because we can forever take on more.
Oh so If I choose the "Right Metrics" I can be right..............LOL
Trollie:
No I'm not saying any of that.
And Just In case you missed it here it is Again:
1890's Private Debt was 75% of GDP (Depression and Banking Collapse) 1930's Private Debt was 45% of GDP (Just a Depression) 2017 its now over 125% of GDP.........Hmmm Wonder what we'll get this Time Around..........
Well, subject ta building 'n pest 'n blah blah, tha youngs have just bought their next one. So yep, I wasn't wrong about me punt they were starting to sound serious.
Will give 'em maybe $825k in equity 'n $725k in debt by my calcs. (Which I suspect might be seen as rather 'conservative' these days? - Leastways tha banks aren't askin' 'em ta put their own home up as collateral - So I reckon that sounds good.)
I'd of never had tha guts ta do it - But good on them I reckon. (It just ain't tha same world as when 'I woz a boy' it seems ... )
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