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Australia has not dodged the 'bullet' of the global financial crisis, experts have warned, with the economy facing a slow recovery.
Cash-strapped families with shrinking incomes will be unable to provide the boost the economy needs, Access Economics said today.
Australians are currently only saving 4 percent of their incomes, but even this has been artificially supported by Kevin Rudd's cash splash and the Reserve Bank's interest rate cuts.
The two measures temporarily boosted the average family income by 10 percent, Access said in its quarterly economic outlook.
The "sea of stimulus" helped push household interest payments down from 14.4 percent of incomes to 9.1 percent - and encouraged shoppers to spend 7 percent more than when the crisis hit, according to Access estimates.
The Australian dream of home ownership is slipping away, leaving a threat of a US-style collapse in house prices, according to a team of university researchers.
Analysis by researchers from South Australia's Flinders University has revealed home ownership in the 10 years from 1996 rose only 0.8 per cent despite strong economic growth and low interest rates in that period.
The Flinders Institute for Housing, Urban and Regional Research analysis found home ownership fell by 15 per cent over the two decades to 2006 for low income earners over 45 years of age and medium-high income earners under 45 years.
Originally posted by dingleberry77
reply to post by beta.services
Hey, I think the housing shortage argument is a bit of a joke. Sure, there might not be a lot of new housing being built, but that's not the point. Where is all the money going to come from to keep the bubble inflated. Wages and hours are going down, and banks aren't willing to lend as much. Who's going to continue to pay the stupid housing prices?
Originally posted by muzzleflash
So in short, NO the Australian economy will not collapse. Neither did America's despite what others will claim.
Originally posted by dingleberry77
Who's going to continue to pay the stupid housing prices?
Originally posted by muzzleflash
These are market forces that exist and actually have far more control over the situation than any one person does.
That is not the problem, the problem I believe, is that there are people who think they CAN control the economy and will attempt to shape it to their liking. However history shows this always backfires.
Supply vs Demand will find balance, it always does.
The only reason our economic situations look somewhat shabby, is because there are people attempting to manipulate these greater market forces without using any foresight or legitimate planning. This is why the situation looks somewhat dire.
But have no fear. The market will recover from their poking and prodding and will resume it's course towards the emerging future.
An investor is like a sailboat, and the market forces are the wind.
Originally posted by muzzleflash
reply to post by Amagnon
I agree completely with your sentiments.
But beware, gold is inflated too right now.
I prefer silver personally because it is far easier to obtain and it is far more plentiful.
Gold is just way over priced, because of the hard push to sell as much of it as possible while it remains inflated. This is a trap I think.
In the future when gold is devalued to a more reasonable level, then it will become viable again. But right now I just cannot imagine it being a viable alternative.
Silver is a much better alternative because it has not been jacked up to the same astronomical levels that gold has. But even silver has seen severe manipulation. (What has not been manipulated?)
I mean, look at the index for gold and consider the last 50 years of it's market history. It has to crash sometime. At least, this is what my logic keeps screaming to me.
Originally posted by Flighty
The economy will go to hell in a hand basket when this carbon tax gets up and running.