Can Australia’s Housing Bust Morph into a Financial Crisis?
As the housing bust in Australia progresses in its methodical manner, will it trigger a mortgage crisis that hits the big four banks, and the remainder of Australia’s financial system to the point where there’s a banking panic and a financial crisis in Australia? And what will this do to the global financial system? (12 minutes)
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What would happen to the AUD in case of a crisis? How low can it get against USD?
Well it’s not nicknamed the Pacific Peso for nothing
– One can make the case that Australia – with its heavy reliance on commodity exports – is actually an “Emerging Market” (a friendly term for a 3rd world country)
And because of large exposure to china many firms are using it as a proxy to short the yuan.
Common parlance has it that there are Developed Countries, and Developing Countries. I feel that Australia is in another category, viz: an Undeveloping Country. Once had respectable capabilities, but now out of its depth in most technologies.
Manufacturing industry is of ever decreasing importance. Mining, and the ceaseless construction of residential apartment towers to accommodate a huge influx of immigrants is what the economy is based on.
Do people know what AUD look like?
Seventy cents to the dollar, led one analyst to be bullish based on their gold reserves, which are priced cheaply.
I was sent some money from OZ back in the crash, not only was I a panhandler but I guess a bit of a cyber-panhandler, and a guy in Oz sent me some. The money’s plastic so you can keep it in your surfing trunks and it won’t be damaged, and has a little window in it!
Who cares? A country with a sovereign currency can never ” bankrupt” Australia is not dependent on the USD, in any event it has enough problems of it’s own
“A country with a sovereign currency can never ” bankrupt”
You mean like Brazil, Argentina, Venezuela, Zimbabwe
Brazilian hyperinflation lasted from 1985 to 1994, an accumulated inflation of 184,901,570,954.39%  caused by uncontrolled printing of money.  there were many economic plans that tried to contain hyperinflation with zeros cuts, price freeze and even confiscation of bank accounts. 
Argentina’s annual inflation rate hit 12,000% in 1989, according to The New York Times. The overall effect of hyperinflation was severe: one 1992 peso = 100 billion pre-1983 pesos
If all spending by a national government is in a currency that this govt issues, and is not subject to loans from another country or entity, please explain how it is possible for that country to be bankrupted.I think the countries you list had massive foreign loans or other commitments, such as reparations just like the other often quoted example of Weimar Germany
Record low was 47c in 2002.
My best guess, 60-65 cents and a recession we need to have. It won’t be fun for some though.
Thanks’s Wolf – as a priced-out Sydney-sider this is music to my ears. I’ve been waiting 10+ years for housing to become affordable here. What has been particularly disturbing here the last couple of months is that even some long time bears have capitulated and have backed-off from their crash calls. They even seem embarassed by them. This includes the guys at Macrobusiness.com.au, a usually quite bearish site. Stories that the falls are levelling-out have gotten excessive publicity, and most Aussies still can’t conceive of a full-blown housing bust or financial crisis. But I value your rich experience and wisdom above all of these other talking heads.
Watch what happens with the RBA interest rate decision tomorrow. A cut is quite possible, mainly as a prop to the housing market. Also watch the federal election in a couple of weeks: The property lobby are strongly behind the sitting Liberal/National government.
– The worst is still to come. Because the australian construction boom (fueled by cheap credit) is about to implode. More and more socalled “tradies” are losing their jobs in the construction sector. But the question is and remains at what pace ? We could see a gradual slide for a few more months and then a sudden drop.
Interest rates don’t matter all that matters is the Chinaman. If the locals knew this in the first place they would have known when to sell and conversely know when to buy. The Chinese only buy into markets that start to skyrocket. In other words you’re looking at seemingly endless falling prices until the locals can afford anything.
“I’ve been waiting 10+ years for housing to become affordable here. ”
And you missed out on what, 50, 60 70% appreciation during that time?
If you can’t afford the ” ante up ” you can’t get into the crap game can you ???
The “missed” appreciation is nothing more than wishful thinking if you’re standing on the outside looking in.
As an aside, I could have sold my home in 1989 before that crash for exactly what my kids sold it for in 2009 after their mother passed away. Risky bets are best relegated to the casino IMO.
BTW : That selling price in 1989 would’ve been 6X what I paid for it back in 1981. Timing and location are everything, right ??
Hi, see Martin North on YouTube, he posts often under Walk the World which focuses on Aussi markets and sometimes NZ. He has a totally different opinion to the MSM.
MAcrobusiness article was a surprise to me. As a long standing member of that site i could not believe my eyes. Even prompt me to believe they were made to write it by the government as situation is actually getting worse and everyone has to play their part to prevent panic and bank runs. Last two weeks Corelogic daily indices have been pointing to accelerated falls again. The seasonal uplift recorded only one or two small weekly price hikes in Melbourne while Sydney falls slowed down by falls never the less.
Last two weeks falls accelerated again and it appears we are heading for the crash. Rate cuts won’t save the day this time around as there aren’t enough left.
People already struggle to service current levels of debt so two rate cuts will not allow them to borrow more. More than 2 rate cuts will crush the AUD (as we will be cutting while others don’t) and trigger price hikes on food, petrol and everything else therefore cancel any savings made on home loans.
Issue is we hit maximum borrowing capacity around mid 2016 but we managed to get through as there were still enough Chinese (and some Indians in marginal areas) buyers to prop the market. That masked the problems as almost no one sold a house at a loss. Anyone in financial distress would sell, pay the debt and have some money left due to prices going up ~15% per year.
The moment Chinese hot money left and the tide with them, we can now see that lot of people were swimming naked.
Interesting times ahead for Oz.
I watched, and the RBA didn’t cut :-]
Cut is coming next month or July the latest – my view. Reading RBA commentary they almost openly admitted they have no choice.
RBA is trying to force a fiscal stimulus from Fed Gov as they know there aren’t many cuts left to play with.
Corelogic indices are showing SYd price falls accelerating again. Biggest problem is everyone is maxed and there is no room to load up on more debt. So rate cuts will not have big impact. People struggle to service their IO loans now let alone to try to pay principal. Too many bought so they can flip the property in 12-24 months and walk away with $200k+ profit.
Only wage hikes can help but I can’t see that one coming – time will tell if I am right.
– Agree. Australia isn’t big enough to drag the world economy into the (economic) gutter all by itself.
– A falling AUD will increase the (financial) pressure on australian household (think: higher import prices) and speed up the deflationary (credit) pressures on the aussie economy.
– In other words, a falling AUD is (price) inflationary) but it is (credit) deflationary.
The financial crisis of 1997 was started in Thailand. It only takes one snowflake to start the avalanche.
Australia does NOT have an economy!
It has a phoney Economic structure that has been eroded by the simultaneous mismanagement of the consecutive Australian governments in the last 30 odd years plus the financialization of the Economy that have seen the ASX highly tilted towards the financial services (this includes the banks, insurance and a whole host of fin services that rely completely on selling snake oil packaged as investment products).
While this kind of structure is not exclusive to the land of the kangaroos, the size of the market there and the virtual non existent of diversity in the sectors of the Normal Advanced Economy that are viable enough or robust enough to warrant larger investment influx has seen the country’s economy largely shaded by the monotone of the industries that revolve around the banking and services sectors.
Gone are the “real Industrial bases “ that counter this risky Fundamental error by the over regulation of Manufacturing the boosting to the research and development of new technologies and the killing off of the small and medium businesses through outdated and arcane taxation system that lead the majority of employment creating enterprises to either fold or migrate to better and more prudent jurisdictions that offer kinder environment to grow and produce.
This process didn’t happen overnight, it took the Australian governments around thirty plus year to methodically and comprehensively destroy the versatility and the viable nature of that fantastic market.
Wolf’s report accurately points to the reality of these observations and furthermore to the reality of the small size of the Aussie market in relation to the world leading major economies.
So the fear that the implosion is near is largely the result of the “ creative “! Efforts of the government and the apathy and collusion demonstrated by the Australian public of which but a small number of genuine voices have raised concerns over the years about the road to ruins that the country have been taken into for a painful future/ near future ride.
Good point. I’ve never seen a product with the tag “Made in Australia”. Except for beer.
When’s the last time you saw something with “Made in Norway”? Probably never. Yet it’s in the top 5 world’s GDPs (not including the Monaco and Lichtenstein type “countries”).
Norway’s main export is energy. This is not a retail consumer product with a ‘Made In…’ label.
Yes exactly, that’s my point. A country doesn’t need to make “stuff” in order to be rich.
In the US, you can buy grass-fed Australian beef at Trader Joe’s. Australian wines are everywhere. And there are all kinds of tech companies. There are movies and music that are “made” in Australia and exported to the US, and there are many other products from Australia, but in terms of manufactured hardware… well, the microphone I used for this podcast was “designed in Australia,” as it says, by an Australian company, but was manufactured in China :-]
On our last trip to the USA in 2004 I kept an eye out for Australian products, including food at restaurants and wine anywhere.
Nearest I found was New Zealand lamb chops (tiny) and a Australian white in a bottle shop. Both as expensive as hell.
Would like to add that here in CA Australian lamb is and has been one of Aus major exports for many years. I prefer CA lamb because it is sweeter and tastier but Aus lamb is replacing much of CA lamb. CA lamb is still grown and marketed by many individual small producers but not like decades ago.
Yep there’s even a shop that sells Australian stuff on Stevens Creek Blvd. not that far from me, Aussie wine is cheap and plentiful, as well as expensive and plentiful if that’s what you like.
I’m wearing Australian made boots right now (in the USA). Lots of Asian steel is made with Australian ore.
There’s that company (forget the name for the moment ) that makes good-quality jeans, moleskins and boots.
The moleskin trousers are almost indestructible – still have some that are 20 years old and going strong.
In USA I bought a pair of new gamma ray spectrometers from Australia. I also bought an ignition system for my 1966 Triumph bike, but that was NZ.
Thirty or so years ago there were many small suppliers of good replacement parts for the two seat ragtop market. Not much any more.
My brother who was in manufacturing got out in disgust, started buying selling real estate and made a lot more money without the hassle.
Have you lived in Australia before? I think you’re barking up at the wrong Gumtree! Australia despite their political instability have a much stronger economy than you think! The political flip-flop between the Coalition & Labour govts ensure no govt are entrenched long enough to do harm to the Australian economy. In addition, the Australian electorate are pragmatic enough to see through the fake political ideology espoused by the crony capitalist MSM (Mainstream Mass Media). Australia is linked to the robust Asian Economies for their future growth. Can’t say for the other economies who rely on financial engineering & phony QEs to ramp up their 1%/99% economies. Get real!
I can remember when Malcolm Fraser was about to loose an election, he offered a 2 dollar a week tax cut and got reelected.
Votes are cheap in Oz.
Completely untrue. Aussies se all in for the msm
Anyone would think that the hollowing out of the economic bases of the western developed economies by the Chinese was deliberate. Use domestic slave labour to out compete developed economies supported by nil environmental standards and minimal welfare….but keep target countries’ currency high by recycling trade surpluses back into property markets, thus stopping the formerly natural manner for economies’ trade to fall back into balance. All supported by global companies attracted by the ability to utilise said slave labour conditions whilst still having access to markets.
The international trading system is bust and needs a fundamental overhaul to bring trade back into some semblance of balance for the benefit of everyone (apart from the few).
Citizens of the US and other developed economies currently suffering such imbalances have only themselves to blame….for voting in low tax, low regulation politicians. Some countries have turned the tide, investing in high technology, education, social welfare programs – ie. Canada, Germany, a few others… The US forgot about it’s most important asset, it’s people.
Canada‘s economy mirrors the Australian economy not the German economy.
Canada isn’t turning a tide, very high tax with no high tech work or educational gains to come from the taxes. Even more confusing to see the taxes going up and the national debt climbing as well. Doesn’t make any sense.
You’re kidding right? (This is for Frank.) Canada’s high tech economy is actually quite robust in Vancouver, TO, Montreal, and Quebec City. Where I live in west coast logging country the trucks haul 12 hours per day, 7 days per week. This blazing forest industry (Hopefully not literal….. on fire this summer) is based on two foundations, the deliberate 75 cent cdn dollar and efficient mechanized production. Unfortunately, softwood tariffs forced many Cdn sawmills to move to WA state the last 15 years.
Yes, The Libs have foolishly frittered away money and increased our debt, however, we actually have infrastructure building and revitalization presently underway.
Anecdotal, but my Millenial and Gen X kids are doing very well with their employment and house purchases, as are the children of my friends. If you have skills there is work. Lots of work. I emphasise the word “skills”.
I am a bit of an old fashioned no debt codger who believes in self-reliance. However, every day I give thanks for our medical system and universal access. I also give thanks for our abundant natural resources, including 2X energy self -sufficiency. Until recently, even our political discourse was quite civil, (and I do readily admit JT is a joke). But you know what? We can vote him out this October and force a minority Govt to reach out and work with other interest groups, or go totally Conservative for a new path forward.
This is a good situation to have these days of so much unrest and division.
Now, back to work as I am filling the woodsheds that I never let drop below 5 years supply. We had some new neighbours move in from the city and I had to ‘lend’ them some wood this past winter. Appropriate old saying, “Never a borrower or lender be”..arh arh arh.
I disagree, politicians are not supposed to be crooked towards the best interests of irredeemables in any time horizon, it’s unacceptable.
If your sole criterion for voting for your politicians is how much money those politicians will put into your own personal pockets – you get the politicians and the [eventually third-world] society you deserve.
…and your kids/grandkids will have to suck up the consequences of your ‘aspiration’.
Employment translates to money in your pocket, what’s not to like about that? I’ll vote for that any day as opposed to the same old taxpayer-subsidized offshoring.
China Crisis to be the clincher
In the UK, they are hawing Australian Retirement Visas which are being sold for AUD $ 595,000 that give olde farts Aussie residency. Some of this money goes to the state in which you retire/ buy a property.
Seems to tie in with what Wolf has said about lack of liquidity, looks like money is needed badly to prop up the country.
China however is a double whammy for Australia , as they buy most of its natural resources and also buy businesses and properties.
China has now got a BIG problem of its own to deal with however called African Swine Fever.
This could lead to ALL of the pigs being culled,since no cure and over 95% fatal , highly transmissible and is now in ALL chinese provinces. It is already pushing up Chinese inflation rates.
A China financial crisis could spark a Global Meltdown as Wolf has said.
ASF might be worth an article Wolf IMO it will last 4 to 5 years and cost the world over $2 Trillion .
A portmanteau of Hawking and Whoring?
Real estate prices on the eastern seaboard of Aust are not dependent on low interest, it’s always demand
I’ve lived here in Sydney for about 40yrs, in that time there has been 3 major booms in real estate, they run in 10 yr cycles, some of these in the 1980,s my bank interest rates on commercial topped out at 19.5%, before droppin to” normal” levels of 12%
We survived then, and simply I cannot see even a poor investment in this low interest envronment as a problem except in cases of excessive stupidity
The most poorly considered real investment would have seen a reduction of 17% in the last 2 years, however a more sensible investment in the last 8 years, same suburb would see a max 17% reduction on a property that has increased 80% plus
Better suburbs, better properties the increase has been 100% plus over the same period and the current drop, marginal
seen through a US prism it is never really explained that a borrower here is well and truly on the hook, walking and telling the bank it’s their problem is not really a viable option.On the ground it’s about demand, this ebbs slightly, stalls, then again rises, interest rates within reason play little in this, and for the foreseeable future it seems interest rates will remain low
Perhaps our ex PM Paul Keating has the explanation, ” if your not living in Sydney, you’re just camping out”
“seen through a US prism it is never really explained that a borrower here is well and truly on the hook, walking and telling the bank it’s their problem is not really a viable option.”
This is a common illusion many Australians and Canadians have – and it has been misreported in the media for years.
In the US, only 12 states have non-recourse mortgages. The remaining 28 states and DC have full-recourse mortgages, just like Australia, and walking away is not an option.
These 38 states with full-recourse mortgages include Florida, the epicenter of the mortgage crisis. The thing is, if millions of people default on their mortgages, it overwhelms the system. Plus, going after someone who doesn’t have anything anymore is a thankless job, and when banks are already in trouble, they’re loath to waste money on useless legal proceedings.
This explains the system in the US and the parallels to Australia and Canada. So read it to see what can happen in Australia:
Thanks for the clarification,the rates of residential lending default here has always been historically low compared to the USA on any basis you care to name, Australia is also made up of states,the policy is consistent across the nation.
The current situation in Australia is that a growing number of commentators here regard the bottom of this correction has been reached, for what it’s worth mine also.
Watching property sales, the % selling is still very reasonable, and a loss or a profit is not crisstalised until a sale takes place, some of the properties sold in the last 2 weeks have been considerably above reserve.
For those looking at a paper loss currently, the situation maybe, (a) a loss, (b) Breakeven, (C,) hang on and hope It’s really no different to any other investment, but the upside currently for any of these scenarios, and for foreseeable future is interest rates, low low
This is largely a manufactured correction,the 4 major lending institutions have taken one of the only two options they seem to know.
When no one is looking, hand out funds to all and sundry, when a light is shined in, retreat into a shell and introduce conditions that are commercially stupid in an opposite direction
Demand has not lessened ,and I would predict that if the major banks do not adopt sensible adjustments a second force will emerge to finance this market, it’s too lucrative and safe to ignore
We should add that in the old (frankly, utterly played-out) economies the electorate are simply mesmerized by bubble real estate valuations which allow them to contemplate many zeros after their names – they feel rich in consequence, and vote accordingly.
Everyone in the game is happy: financiers, industrialists, career politicians.
No trade deal between America and China will spell the end of the Australian banks. Like I said before and in time this will be etched in stone as fact “all that matters is the Chinaman”. The Chinese never buy into any falling market of any type especially real estate. They only buy into markets that are in the midst of skyrocketing.
The Fed’s Everything Bubble is toast once Powell, Draghi, etc. run out of road to kick the can.
– Sheer nonsense. Some 98% of all US debt that was issued up to mid 2008, was issued by US commercial banks, NOT by the FED !!!!
– An increase of money & credit requires rising prices. If prices would fall – year upon year – then the amount of credit would fall – year upon year- as well.
Australia is a function of China.
When General Marshall lost China on Oct 1949, the DOW jumped.
It rose from 161.60 on June 1949 to 1001.11 on Feb 1966, or x6.2 in 16 years.
For to the 70Y anniversary celebration, the Shanghai stock exchange make a bungee jump, ==> a gift from Trump.
But within a yea before Nov 2020 election, the reaction will make a lower high.
Australia is a spectator on the sideline.
Australia on the world stage is about as influential as a fart is in a hurricane. In fact Australia is heading to be a third world country. If it wasn’t for the strategic location in the southern hemisphere we’d still be rubbing sticks together to start a fire. Will have to do that eventually anyway once our electricity supply collapses.
You know- I was just thinking…
Of all the Economic, Financial, Geopolitical Websites, and blogs that I go to.. WolfStreet is a top quality commentary and reporting site, with, hands down, bar none.. The best Commentary from fans EVER. It is almost better than the Content!
Big thank you and Kudos, to a high quality community, and to Wolfe, for building and maintaining such an incredible and enjoyable site. I took the time to Donate here! I have Never done that before!
We are truly blessed (secret reveal) I still miss TESTOSTERONE PIT!!
The name made me smile :) every time I opened my browser!
Morty Mc Mort
I kind of miss the name too, and it still makes me smile, but it was just too ghastly for many folks :-]
Given the state of the declining RE market in Australia, I’m surprised the banks continue to have such high market capitalization. Investors must be certain that Australia will follow the US playbook – public bailouts and freebees to banks to keep them out of crisis.
Privatize the profits, socialize the losses. Slaughter the hapless fools who trust legislators to operate on their behalf.
The Canadian real estate sector is in the same boat as the Australian’s.
Vancouver real estate sales have fallen to a 19 year low, as prices continue to fall and losses mount.
Mortgage debt growth is the slowest since 1983, as is Canadian household credit growth.
Housing sales volume has been greatly reduced but housing prices have fallen very little.
Is it possible sellers are simply waiting for the central bankers to come to their rescue?
Central banker’s only know how to create credit and if pressed, print money.
Looking at the ‘average’ Australian family, I see most or many with dad in a job he hates and worried about losing it.
I see mum with a tribe of kids and spending her second car fuel taking then to school and back.
I see them in the Mall on Saturday morning, and the first thing they look at is the price tag.
Kmart etc are full of shoppers with empty bags, and the middle and upper class shops are empty.
The RE market is definately heading south, and I doubt it has finished yet.
My bet is the Banks will start worrying when the % delinquencies reaches a certain level and the ‘Interest only’ loans start growing, then the foreclosures will start. The for sale boards will not say so but they will be “bank owned” I think you call them.
Very soon the supply will far outreach the demand.
Then the builders and tradies will start going broke.
“things are crook……….”
(and 80+% of our exports come from the mine and the farm!
Old Codger: Well as you Aussies used to say to me:
“Don’t worry mate, she’ll be there tomorrow”!
Supply will never outstrip supply, because the Government keeps a very short leash on residential land availability, and imports lots of affluent immigrants.
Bill Shorten, the Leader of the Australian Labor Party has a secret plan to finance his grandiose promises. He plan to raise the GST (Sales Tax) from 10% to 17%, including all foods.
Good Luck to all Aussies!
Too much of generalisation of Big Economies like Australia & Canada which doesn’t tell the real story. I’ve lived in both countries & I can appreciate their inner workings. Australia & Canada are basically primary resource economies – their star Western state/provinces are Western Australia, Alberta & British Columbia respectively. The populous states/provinces which are located in the East feed off the rich Western state & provinces re: Queensland, New South Wales & Victoria for Australia while Ontario & Quebec for Canada. In addition, there are Welfare dependent states & provinces re: Northern Territories, South Australia, Tasmania for Australia & the Atlantic Provinces for Canada. Saskatchewan & Manitoba are simply granary states producing grain for export but hardly anyone would want to live there except farmers.
If Western Australia & Alberta/British Columbia executes a BREXIT on the Commonwealth of Australia & the Canadian Federal Govt – watch sparks fly! The populous states & deadbeat states/provinces economies would tank at the prospect & the rich/poor divide would be very clear for everyone to see.
Yeah, but we’re talking about the Australian housing market here, and what major home price declines (collateral) along with defaulting mortgages and developer loans might do to the banking system.
The overinflated Australian housing market are Sydney & Melbourne basically. Both these housing market were inflated by China money (Capital Flight). Bulk of developers’ loans were mainly for high rise developments which Aussies don’t really buy – they prefer land & house packages instead. The units are exclusively marketed overseas to Asians in China, Hong Kong & S’pore. Just look at the uploaded videos of the Opal Towers issue in Sydney a few months ago. Many residents there looked Asian & are Asians.
The present Aussie economic dilemma is the Australian-China trade factor which is causing stress in the Australian Economy. Presently, there is a lack of Investments that is creating issues for the Aussie Economy, not the housing market.
There are 2 factors at work here – the depressed economy (Australia-China trade) which is driven primarily by one state, Western Australia. The previous migrant favourable policies which is responsible for the overinflated housing prices in Sydney & Melbourne has already been nipped at the bud with more stringent immigration quotas going forward.
The next business cycle when it comes will see 2 different sides for Australia. Western Australia will forged ahead while the Eastern States will lagged behind. China’s belt & road strategies will take shape by then. Australia’s housing & mortgage problems aren’t like US 2008 mortgage fraud induced problems & subsequent QEs. It’s just a business cycle phase which would correct itself.
Nonsense. The housing bubble is in every state and in both cities and regional areas. Anyone that thinks this phenomenon is strictly concentrated in Melbourne and Sydney is living in lala land.
As for those blaming Chinese buyers for bubbly prices, most people buying and paying high prices have been local “investors”.
I have to take issue with your proposition/ description that SA & Tas are welfare dependent states.
If Not for the stupidity of the governments of these two jurisdictions and the Federal Gov policies the south Australian state would be and still could sustain a bigger growth than most other states “ If” the stupid conditions restricting the Exporting of Uranium be torn and replaced with more realistic policies.
South Australia could become the next Liechtenstein ( speaking per capita here)!
As for Tassie ( as aussies call it)
this states economic progress have been chocked by the stranglehold that the lunatic “ Greens “ have on the process of parliament .
which inhibit the move to self sustaining economic conditions.
( so again it’s the political class that screw up the prosperity of the populace) ,
that said it’s the old adage that you only deserve the government you voted for and accepted after they betray your trust.
So in reality what you said is wrong and doesn’t hold water . Educate yourself more before venturing into “ generations “!!
…and the fools that vote them into power!
“vote socialist for more free stuff”
What I’ve said are backed by facts – Centrelink handouts are the highest for these 2 States. You’re arguing on “What if” while I’m just stating real facts.
South Australia suffered the most recently after the Australian Car Industry closed down (Ford, Holden & Toyota closed their plants) but what must not be missed was that Australian taxpayers had been paying those Car Manufacturers billions of AUD$ over the years to create senselessly uncompetitive (high paying) auto assembly jobs for South Australia. If South Australians could stand on their own 2 feet, this wouldn’t be necessary. And clean renewables technologies have rendered Uranium obsolete which makes your argument totally redundant. How can South Australia become the next Liechtenstein when the closest hinterland to them is Antarctica. It’s not like Singapore or Hong Kong which are located within massive pools of liquidity within Asia?
Tassie relies heavily on timber harvesting & logging which is an unsustainable industry. The Greens were right to stop this destructive & eco-unfriendly industry for future generations. And it has taken a long time for Tasmania to find their own feet to replace their logging mainstay.
I could go on about the Nuclear plants role in the next 30-50 years, before your beloved solar or renewable energy becomes viable options. But have a read through this mate!
To see what Australian Economy would be missing on ( If) they Canberra politicos acquiesce to the desires of the US government to restrict Uranium production and trade.!!!
And since you think the world is going through melting down anyway “ Antarctica” Wouldn’t be such a bad place to visit ( via Adelaid)!
Tassie IS a dead-beat state, the home of the Greens and the mad left. Why? Because of all the in-breeding; there may be 6 levels of separation generally – in Tassie more like 2 and a bit..why not marry your first cousin, everyone else does. Martin Bryant was not exceptional. I’ve spent a bit of time there and boy many/most locals are truly thick as a brick..decided not to buy as didn’t want neighbours with IQ’s under 50.
I think Wolf is wrong about the big 4 getting bailed out when TSHTF. The crisis will be much larger than most imagine. All four majors (esp CBA) have HUGE mortgage exposure and when one goes, the rest will follow and quickly. The resultant crisis will overwhelm d’ gubermint (by 18th this month either virulent socialist or hung (and so they should be) and totally useless. (sorry for so many parenthesis).
Anyway, we’ll see fairly soon. Personally I’m all cashed up & well prepared and look forward to becoming richer (just hope I live long enough to enjoy it)
Ooops! (I did it again, didn’t I..)
Re-reading my last para., I come across as a self-satisfied, horrible, selfish, uncaring person! Yep, that’s exactly who I am.
Having been self-employed/own business since since mid 20’s (my then age, not the year), I’ve paid vast amount of taxes to support large numbers of people who choose not to work as they know ‘the state’ (that’s me and people like me) will take care of them.
Well, this worm turned a while ago and IDGAF what happens to them in the up-coming inferno.
In the GFC, when a massive digital Oz bank run was taking place, the Oz banking system was saved, literally, by PM Kev 007 who declared that all bank/financial a/c’s were ‘guaranteed’ by d’ gubermunt (not the RBA who are essentially useless, possibly corrupt & certainly self-serving & stupid. And BTW we, the dumbed-down public, were not informed of this for YEARS. Nor were we informed that the US Reserve bank injected many billions into the RBA/ Oz banking system, without which we would have gone down the gurgler despite Kev’s actions).
Now, bank a/c’s are “guaranteed” up to AUD250K. When the banks go down one after the other, let’s see how that works out.
The veneer of civilization is thinner than we think. I’ve been in riots where ordinary people turn into savages capable of murder. Ugly. I’ve had firearms pointed in my direction (angrily). Even more ugly. Was it Le Bonn in the Madness Of Crowds who said (something like) ‘ people go mad in groups, become sane slowly, one by one’ ?
Wolf has a fine, analytical mind but has under-estimated the coming financial conflagration & contagion. All the ducks are in place. It could lead to ‘The Fourth Turning’, probably with major international conflict.
It will start when the first supermarket closes, the ATM’s stop working & banks close their doors. Then watch out below.
(well I enjoyed my little rant..to myself as the caravan has moved on. But feel free to delete if just one too many (…) )
I wish more people thought that way. Meanwhile, Tassie is being overun by tourists and mainlanders who want to retire here and every second 20 something that plans to strike it rich. House prices through the roof by Sydney transplants who moan that it’s not enough like Sydney. The odd Sydney transplant works though. Long may you all hate it.
As for forestry being un-eco, well that’s gone well this year. Half the state’s been on fire. Leave those forests alone, don’t manage them, and then watch them burn. Much better than using the trees and making some money and providing jobs. Our biggest industries here are still agriculture, mining and manufacturing. Bring on the lower dollar, it will be good for Tassie manufacturing.
Property prices are still rising in Tasmania
Which means I guess that some Aussies are selling up mainland and going further south, can’t see it being just foreigners.
When the mainlanders can’t sell anymore then the music stops in Tassie perhaps