Sorry I don’t have them unmester.

Here is a great article from Chris Martenson which clearly outlines the problems I have previously highlighted, on the amount of debt which needs to be financed internationally and the problems faced by China and Japan the key countries which have historically funded that debt.

It is a train wreck waiting to happen that would have huge implications for the Aussie banks, which are also trying to refinance their debts.

http://www.chrismartenson.com/blog/breakdown-draws-near/56594

Here are some fascinating graphs…

First, US house prices, inflation adjusted, 1890 to present.

http://www.ritholtz.com/blog/wp-content/uploads/2011/04/2011-Case-SHiller-updated.png

Now Australian house prices, inflation adjusted, 1880 to present.

http://cdn.debtdeflation.com/blogs/wp-content/uploads/2011/04/041011_2142_ThisTimeHad111.png

Note the huge heights of the blue line. Very scary if it reverts to the mean as is currently happening in USA.

It amuses me that this is exactly the sort of reaction Roubini got in 2006 from his peers when he made his predictions for USA.

Have a look at the rubbishing that another person that saw the US collapse coming, Peter Schiff received on national tv…. we all know who had the last laugh.
http://www.youtube.com/watch?v=V5sDKwMP6Pc&feature=related

Nice to know I’m in good company.

Melbourne house prices dropped 6% in the last quarter.
http://www.news.com.au/money/property/melbourne-home-property-prices-plunge/story-e6frfmd0-1226040207600

excerpt
After peaking at $601,000 late last year, the median price has fallen to $565,000 – down $36,000.
The 6 per cent slump is the biggest quarterly drop in more than two years and one of the biggest the Real Estate Insititute of Victoria has recorded since the height of the global financial crisis.

Using analysis from RP data
http://macrobusiness.com.au/2011/04/hooked-on-property/

“During the 2009-10 financial year, state and local governments raked in almost $32 billion in taxes from property – the highest amount on record….

Property related taxes are the biggest cash cow for state and local governments, accounting for more than 48% of total tax revenue during 2009-10….

In what is sure to be unwelcome news for state and local governments, the 2010-11 financial year looks set to see a drop in property related taxation revenues. Between May 2010 and February 2011 capital city dwelling values have fallen by -1.6% and sales volumes during 2010 were their lowest on an annual basis since 1996. For the remainder of the financial year sales volumes are unlikely to record a significant rebound and value growth looks unlikely to return.

As a result of these current soft conditions we expect that state and local governments will experience a budgetary hole at the end of this financial year due to fewer transactions within the sector which accounts for their greatest source of taxation revenue.

Over the past decade, Australia’s state and local governments have rode on the back of skyrocketing property prices. The revenues received have funded all kinds of expenditure – from public servants’ salaries to health care, schools and infrastructure.

The story is similar at the federal level, where tax collections have surged on the back of growing property values and rising debt levels, which have boosted consumer spending, employment and the economy more generally.

Should Australia’s housing market encounter a significant correction, rather than the price stagnation and falling volumes experienced currently, then government finances will likely take a hammering as consumer spending dries-up, unemployment rises, tax collections haemorrhage, and welfare payments rise. And the impact will be a whole lot worse should Australia’s other economic pillar – mining – experience a sharp contraction of demand and falling commodity prices.”

Latest articles backing this up….

Beijing house prices dropped 26.7% this month!!! http://en.21cbh.com/HTML/2011-4-12/4NMjM0XzIwOTg4Ng.html

PIMCO has now taken a short position in US Treasuries http://www.zerohedge.com/article/exclusive-bill-gross-now-short-us-debt-hikes-cash-73-billion-all-time-record

Here is an excerpt of an article from Chris Martenson on the impact of the end of QE and the reversal of Japan's position as a net lender to the world to bringing that money back in. You can read the full version here http://www.chrismartenson.com/blog/global-tsunami-courtesy-fed/55822

A Disturbance in the Force The biggest risk here, aside from parts shortages and supply chain difficulties, is what happens when the flood of liquidity that has emanated from Japan over the past two decades reverses course and flows in the other direction. This is a major transition (which I expounded upon more deeply in a recent post for my enrolled members) for which both Japan and the world economy at large are wholly unprepared.

If we add the idea of the Fed's termination of QE, which has been enormously supportive of Treasury prices (and therefore low interest rates) to the idea of Japan suddenly becoming a net importer of funds instead of an exporter, we can quickly arrive at the risk of a rather unpleasant period for US Treasuries — and, by extension, many other government bonds.

<moderator: delete additional 5 paragraphs. please see link>

I actually think we are only at step 1 now and about to move into step 2. True credit rationing isn’t happening to the average customer that I am aware of at this stage. I would see a timeframe similar to the USA. The concern is that you get stuck in a viscious spiral.