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Will the Australia economy keep its head above water?

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posted on Oct, 19 2009 @ 04:08 PM
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Politicians, most of the economists and most of the Australian people think that everything in Australia is fine and we have nothing to worry about.
Australia has been one of the better off countries during this economic crisis, but it’s not over yet. Every now and then there is an article coming outsaying it will get worse in Australia, the only thing that has kept us going is the stimulus pack and the interest rate cut and now interest rates are going back up (which sux for me


Here are a couple of articles i have come across

GFC 'bullet' on its way to Australia, warns Access Economics


money.ninemsn.com.au...

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.


money.ninemsn.com.au...

Australian property market risks US-style collapse



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.


What do you guys think? Will we stay as srong as we have been? or are we just sinking slower then the rest of the world??


[edit] forgot link



[edit on 19/10/2009 by wycky]




posted on Oct, 19 2009 @ 04:41 PM
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I personally think its not over yet,I wish it wasnt so but thats what my guts telling me.Alot of homes in Oz are over priced and have been for awhile so I think we are in for a crash on Real Estate.I feel for home ownwers,but I rent and it might be good for me.



posted on Oct, 19 2009 @ 04:59 PM
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The Aussie economy will not crash, it will however find balance.

Real estate for instance has been notoriously inflated to stupid prices over the last few decades.

So do not become upset when these prices crash and many investors lose a bundle because of this.

The economy will find it's own balance despite the many attempts by brokers to inflate and imbalance it.

I personally believe that the Aussie industrial sector is quickly changing just like the American or European economies.

There are new types of jobs appearing and new sectors of the economy being uncovered, as the OLD jobs are disappearing and moving to third world nations. (manufacturing etc)

So do not fret, just update your thinking and move on to the new economy that is rising from the ashes of the old one. Consider it an emerging job opportunity.

For example, consider how many legit jobs you can get on the Internet in Australia. These jobs did not exist 10years ago. But they do now.

And in 10 more years this will be the central economic marketplace, if it is not already.

So in short, NO the Australian economy will not collapse. Neither did America's despite what others will claim.

The economy will SHIFT to a new paradigm though, this is for certain.
Balance will always be found.

Good luck, and keep pushing ahead my friends across the Pacific!



posted on Oct, 19 2009 @ 05:09 PM
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Australian property prices may be overpriced. But in the near future we still have a major housing shortage and until new builds catch up to demand there is little room for a crash.

We do not have any of the fundamental issues that caused the US property crash. In that, most people that have purchased homes over the last few years were actually means tested to be able to afford them.

In the short term, investors that over reached during the boom and are struggling to keep additional investment properties may be forced to sell. And although this may not be an insignificant number, there are still buyers, so it would represent an adjustment, and not a crash.

Until China eases on its resource demands, Australia will continue to be well insulated from a financial crash.



posted on Oct, 19 2009 @ 05:15 PM
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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?



posted on Oct, 19 2009 @ 05:25 PM
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reply to post by dingleberry77
 


I guess thats where the pricing adjustment comes in.

The biggest adjustment that we need is in rental prices. And I don't see that happening any time soon.

As for hours and wages going down: I work in IT and media. The word going around the industry is that things are finally picking up here again. Media spending is finally on the rise, a very good sign for the economy.



posted on Oct, 19 2009 @ 05:28 PM
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reply to post by wycky
 


I keep wondering this myself. There seems to be a real Aussie pride at the moment in regards to our dollar and economy coming out on top..
Anyone watching 60 minutes last week might have seen the story on our "booming economy", with China's huge demand for our iron ore and finding large pockets of natural gas under the ocean which will potentially keep us going strong for years to come...

I just couldn't agree with any of it... Isn't it just an illusion that we are going strong? I'm no economics expert but isn't the majority of the world still in the crapper? I keep reading and hearing about an American economic collapse on the cards, well if this has real merit then aren't we still in the crapper also?

With an overpopulating world, and massive populations of countries like China, the demand for resources goes up, giving us an illusion of "hell yeah we are going great!"...

But really we aren't, because it's only a result from overpopulation, economic worries of other countries, dwindling resources around the globe..
I'd say we are seeing a boom in our economy because the rest are still sinking giving a boost to a few others, but what good is that if like I say the rest are sliding into oblivion? I don't know, maybe its not as bleak as all that?

I just think we aren't out of the woods yet, and our Aussie economy is high on its hit of heroin (stimulus), but will come crashing down with the rest again soon



posted on Oct, 19 2009 @ 05:29 PM
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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?


I agree.
I have a relative in Mexico who is wealthy.
He came to Australia to visit and while here looked at some properties to invest in, he couldn't beleive the prices, he has properties all over Mexico and the US and a few in other countires, he bought nothing in Australia, he said it comparison its not worth it, and beleive me he is not short on cash.



posted on Oct, 19 2009 @ 05:32 PM
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Originally posted by muzzleflash

So in short, NO the Australian economy will not collapse. Neither did America's despite what others will claim.



I think the Australian economy will remain fairly robust because it is underpinned by commodities. Regardless of what else people DON'T need - they will always need food and raw materials - although demand may slump.

Housing prices falling, and interest rates increasing may cause some problems - try to cut debt and increase savings - diversify into commodities and commodity stocks - or bullion.


The American economy has NOT collapsed - YET!

While I am not an expert in a conventional sense - there aren't many on ATS I think who have a better understanding on whats going on with the US and global economy than myself - not that are posting anyhow.

The US economy is being held (purposefully) in a deflationary depression (thats right, depression).

The purpose of this seems self evident - they wish to cause cause domestic bankruptcies. They WANT to force people out of their real estate. The real estate is then transferred through whatever lender - and is washed clean and held by the Fed. This is GRAND LARCENY!

The overflowing 'stimulus' package is a ruse - it was simply to inject liquidity into favored BANKS - not into the economy. This huge amount of liquidity is splashing around in those commercial banks - and they are plugging it willy nilly into the stock market. This has lead the surge of the US market over 10,000. The current P/E of the index is ... wait for it .... 140!!!!

Tell me that is nice and sustainable. It is a deadly bubble - and any moron worth a dime can see it.

To save the domestic economy - the US dollar MUST be devalued by the Federal Reserve. But they ARE NOT DOING IT!? Why not?

Because they don't WANT to preserve the domestic economy - is the only conclusion you can come to.

My view is they want to collect the real estate - in fact they want the commercial defaults to start rolling in more.

Perhaps if you were not so cynical you might say, it is due to international pressure (from China? From Saudi?).

Or perhaps they want to take their hands off the wheel and let the market reset the value of the dollar? That way they can't be directly blamed.

In the meantime - average Americans are going BANKRUPT! The economy is getting crushed - and the false spin up of the markets purely on investment bank speculation is keeping everyones eyes off the road kill.

The exponential increase in debt is required by the fiat currency system - that debt is going vertical is expected, and required. However, it is clearly at the end of its theoretical limit - and banks simply will not lend into a deflationary economy - so despite all the talk of 'injection' of cash - what we are seeing is a massive CONTRACTION of the effective money supply and economy.

There is plenty of money around - but its sloshing around the banks - they aren't lending - and things are going south fast.

There are really two alternatives;

1) Government spending directly into the domestic economy - in whatever form DOES NOT MATTER. Preferably in infrastructure or something of value - otherwise - just throw money into the streets.

2) Reset the value of the US dollar to a lower value. This decreases debt burdens instantly - freeing up liquidity and stimulating business. The effect would be instantaneous.

The stimulus is a hoax - purely to keep afloat the favored banks so the deflationary economy does not send them bankrupt. It has NO USE AT ALL to the economy, or average citizen.

The crash is coming soon - commercial real estate will crash out - then more bank bailouts - new declared losses for the investment banks .. probably then a bank holiday and a reset of the dollars value must occur.

Its coming fairly soon - within 6 months I would guess - but it could be next week.



posted on Oct, 19 2009 @ 05:35 PM
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Originally posted by dingleberry77
Who's going to continue to pay the stupid housing prices?


Exactly.

This will cause prices to fall, and they Should.

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.



posted on Oct, 19 2009 @ 05:39 PM
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Truthfully - what should and must occur to free people from being slaves to the banks - is sound money must be implemented.

Where money is issued debt free, and preferably NOT by a central authority. Personally I can think of a few ways to do it - but the most WIDELY accepted, simplest system is to use silver and gold.

If only people understood how they are slaves to the banks. Click the link on my sig for a video series that describes the basics.



posted on Oct, 19 2009 @ 05:46 PM
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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.



posted on Oct, 19 2009 @ 06:04 PM
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reply to post by muzzleflash
 


Once they remove the stupid First Owners Grant, things will be interesting. That is major spanner in the market forces. If you mess with the market that much by giving people fake money like that, when you take it away things will go pear shaped

I have friends that bought a place for a ridiculous amount of money because the FHG was getting lifted. It doesn't make sense. Why buy a place for $60k more because a $14k grant is disappearing? Madness!!



posted on Oct, 19 2009 @ 06:12 PM
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reply to post by beta.services
 


I work in advertising, and things are picking up, although I think it's smoke and mirrors. Everything is linked. We may be protected by the China relationship at the moment, but they are linked to America. Once one card falls down, it's only a matter of time until the rest fall.



posted on Oct, 19 2009 @ 08:34 PM
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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.



You haven't got a CLUE what your talking about.

Ok - the guys controlling the economy - own everything - they own every scrap of money in the western world - and they are owed all of it back with interest.

The economy is going to tank - because it is climbing up an exponential curve of debt. It must - the economy MUST undergo growth to sustain the increasing creation of credit - which is an increasing money supply. If it doesn't - there will not be enough money in the world to repay the debt with interest.

What we are seeing is the final stages where the rate of debt increase is trying to scale the vertical asymptote of an exponential curve - it simply can't do it. The collapse is inevitable.

You cannot use an exponetial money system in a world of finite resources.

The monetary system MUST collapse - then we should kill all the bankers, and nuke the vatican etc - get rid of the problem elites.

Then replace with a sound money system - silver and gold is my favorite - but there are alternatives. Then you outlaw the charging of interest on lending money.

One thing you must also do - is destroy the entire concept of a coroporation - and the entire legal system. If those contiue - then we will quickly arrive back in a slaves world again.

Go read and research - have a look at the video in my sig as a starter to understand money - watch all the parts - my sig only links part 1.



posted on Oct, 19 2009 @ 08:46 PM
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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.


Thanks reply. However I wasnt saying go buy gold and silver (Though it is a good idea) I was saying we need to entirely replace paper money with silver and gold. Ban all paper money - kill all bankers - outlaw charging interest on loaned money - nuke the vatican - chop of a few heads of rockerfellers, rothschilds etc - get rid of the elite - or at least free ourselves from their slavery.

With regard to your idea about gold crashing - dont get over excited. In 1980 the gold price was $850 - thats about $2,300 in inflation adjusted dollars - so it has not hit its inflation adjusted peak yet. (EDIT: I own .. er .. a lot of of gold right now, and a lot of silver - both are good.)

With the current tensions between the US and Iran - the gold price is spiking up today. I am thinking of selling some - but I hate to get caught out - its hard to know at this moment. But I can say - if gold dips to anywhere near or below $1,000 - you will be kicking yourself if you dont at least get a little bit). I see gold over $2,000 end of next year - it could be any value - but between $2k and $3k if things dont completely fall apart - if they do fall apart - then the sky is the limit.

The other thing you dont notice is that every country is using 'stimulus' - which is a fancy term to debasing their currency. Gold isnt going up - all currencies are going down.

Silver is far better than gold as an investment - it is the top industrial metal in my view - it is #1 in the following properties, electrical conductivity, thermal conductivity, optical reflectivity - additionally - any bacteria touching it dies instantly - so all surgical equipment is silver plated at least.

So - looking at its properties - industry will pay whatever it costs for silver, no price is too high. in the last 100 years we have consumed more than 90% of above ground stocks - there is now less silver in the world, than there is gold - I will just repeat that - silver is more RARE than gold.

If we keep consuming at current rates - it will be gone in 10 yrs - before that time of course - its price will spike out of sight. I if the western world doesnt collapse completely - and billions of people arent killed off (though I consider it extremely likely that will happen) then silver will most definitely fetch a higher price per ounce than gold.

If you want an example - rhodium (a rather mundane metal compared to silvers properties) went from $300 an ounce to $10,000 an ounce in 2 years. Though its settled now around $1,500 an ounce.

I think silver is going to have a similar future - certainly exceeding the gold price is almost certain - might take a few more years though.

[edit on 19-10-2009 by Amagnon]



posted on Oct, 19 2009 @ 08:59 PM
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Australia will keep its head above water, if china continues to place bricks under the feet of the Australian.

our mining boom is throwing buckets of cash into our economy, its creating thousands of jobs which pay good.

it causes positive reactions, growth in confidence and spending.

Yes, today Australia looks good.

God forbid should China go down ,if China goes down our mining boom goes down, and that’s the 'only' thing keeping Australia on top.

China will sink, if America sinks.

And America will sink if American people don’t wake up and start a revolution.



posted on Oct, 19 2009 @ 09:19 PM
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The economy will go to hell in a hand basket when this carbon tax gets up and running.

My Aunt who is a Pensioner just saw a 30% increase on her past Electricity Bills and the thing hasn't even started yet.
When the price of essential items like food petrol etc go through the roof, people will spend even less than they are currently and the SHTF big time.

People also are going to be pretty peeved as the carbon compensations will go nowhere near covering the costs.

There already is a huge shell game that's started by the government.
Example......

They recently gave Pensioners a $30 per week raise in their pensions BUT did away with all their allowances which amounted to $650 a year roughly.
The raise equals $1,400 .......so in actual fact Pensioners are really getting
$750 extra a year. But wait, electricity bills just went up 30% which for my Aunt was an extra $60 so times that by 4 and you have $240.
$750 - $240 and we now have .......$510 extra a year.
Which equates to $9 per week.
But wait, grocery items have also risen which equals an extra you guessed it, $9 a week on a $90 a week shop.

So now Pensioners have a taxable extra $1,400 that has already been gobbled up in lost allowances, price rises and now they have the added burden of an extra taxable income that will mean even more income loss.

So they are now WORSE OFF than if they never got the raise in the first place. And yet the government is beating it's chest saying how generous the Pension raise was.


Of course, this doesn't include those in government housing who will have to pay 25% of that in extra rent. Which will also make them 25% worse off than if they didn't get the raise.

So, if they handle the rest of the economy like the hatchet job they just did to the pensioners, then I think we are in a LOT of trouble.

The situation with my Aunts pension has made me realise how figures can be manipulated to where they no longer resemble the reality of the situation.

Just wanted to add that the rise to the old age Pension is expected to have an inflationary effect on the economy and with retired people not getting any real benefit, you have to ask yourself why they even bothered.


[edit on 19-10-2009 by Flighty]



posted on Oct, 19 2009 @ 09:24 PM
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Access Economics was predicting a far worse crash at the start of the GFC.
In fact their predictive modelling for our ecomny is so dissapointing since this trouble, that I rarely read them any more. Though our GDP has been declining and now inclinig we never hit the techincal term for recession.
Whilst we are in Chinas' sights for trade and China is trying to avoid buying US bonds, we will be fine.
The Aussie dollar is now back over 90 cents to the us dollar, a long way from the start of the crash where it hit low 60s, mostly from global panic than a true reflection of our trade value.

If the USD collapses, we will be in trouble, we are the same fiat currency however, our strong trading partnerships with asia, and our raw resources will keep us above water.

[edit on 19-10-2009 by zazzafrazz]



posted on Oct, 19 2009 @ 10:26 PM
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Originally posted by Flighty
The economy will go to hell in a hand basket when this carbon tax gets up and running.


I haven't lived in Oz for about 3 yrs - whats this about carbon tax? They are implementing a carbon tax?

Bah - filthy NWO - lets start killing all the western politicians and bankers - they are worse in the UK and Australia then in the US - its just the standard of living in Oz is still ok.



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