Every Generation makes the same mistakes as the last, This is human nature.
Everything was fine and dandy back in 1928, nothing could go wrong, but in the following years the middle class was wiped out, along with everyones savings.
Though the difference today is the Ratio of debt is many times higher and loans are not for businesses (Good Debt, Self Paying) but for new HSV's Jet Ski's and High Definition TV's (Consumer Debt)
Along with all the the 107% Mortage loans, Honey Moon rates and other housing Trinkets there is another unforeseen undercurrent, Not only have houses doubled in the past few years but so has Credit Card debt and still people see a optimistic outlook.
:Interest Rates won't just rise a few more times this year and then be 4% again.
:Housing prices won't take a small dent and then continue to see 20% rises
:Growth will not continue to be unprecedented
:No matter how far you sweep debt under the carpet, It will not go away, the longer and greater it is allowed to grow the more dramatic the final consequenceYou can see the effects of debt build up over a long period of time in the US, They borrow 3 Billion Dollars a day to sustain there ecconomy. It won't be long before people realise they are not in a resession but a Depression, and will mark the end of the Dollar as the world currency and the collapse of the American Empire.
Firstly if we have a recession economic interest rates will be low as an RBA tool to stimulate growth,
Secondly I totally agree about education and information making investment decisions easier. The tools available on the internet make researching demographics, market stats, etc so much easier. Sites like this, realestate.com.au etc etc and reports like myrp etc provide masses of information to help produce better quality investment decisions.
I work in education with many highly educated academics and everyday i never cease to be amazed at how poor the populations financial eduacation is.The media headlines on Credit Card debt cannot be taken on face value. While i dont doubt for a mooment there are heaps of people out there with rediculous credit card debt, I myself would feature in these statistics yet on a false and misleading ledger.
My wife and I are on decent income and we put all our monthly expenses on credit card then pay the entire balance on the due date without fail every month. We are just like many hundreds of thousands of others that would be putting $5000+ per month on credit card then paying the full balnce without ever paying a cent in interest.These media grabbing statistics do little to reflect the true situation. If we were insulated from the world markets wed still go through cycles of reaching unsustainable debt, then slowing to recover, then rising debt etc. The fact is humans including Austrailians like to have what they can today and will borrow to get it. At present the US is paying dearly for over indulgence, however they will bounce back in a few years as will we.
As long as our population keeps growing and our wages keep increasing well located property that people will compete for will continue to rise in value over the medium to long term. With the pent up supply shortage for property currently in Australia, rest assured as soon as debt consumers regain thier confidence there will be a great deal of profit to be made in property.
The only question that remains in my mind is how many rate rise will it take to control the current inflation problem. In the mean time the properties that affluent buyers compete for will continue to enjoy the spoils of a bouyant economy.
Sorry about spelling or typos in a hurry.
Yes condog, I was reading the weekend courier mail the other day that 53% of Australians pay off their credit card within the interest free period (me and probably most of us on this forum are in this category)
Same survey said only 13% paid only othe minimum off their monthy credit card bill. All the media hype of Australia's debt is media hype. I'm not saying it isn't significant. but it is not as bad as it the media would have us believe.hbbehrendorff wrote:Every Generation makes the same mistakes as the last, This is human nature.Everything was fine and dandy back in 1928, nothing could go wrong, but in the following years the middle class was wiped out, along with everyones savings.
Though the difference today is the Ratio of debt is many times higher and loans are not for businesses (Good Debt, Self Paying) but for new HSV's Jet Ski's and High Definition TV's (Consumer Debt)
Along with all the the 107% Mortage loans, Honey Moon rates and other housing Trinkets there is another unforeseen undercurrent, Not only have houses doubled in the past few years but so has Credit Card debt and still people see a optimistic outlook.
:Interest Rates won't just rise a few more times this year and then be 4% again.
:Housing prices won't take a small dent and then continue to see 20% rises
:Growth will not continue to be unprecedented
:No matter how far you sweep debt under the carpet, It will not go away, the longer and greater it is allowed to grow the more dramatic the final consequenceYou can see the effects of debt build up over a long period of time in the US, They borrow 3 Billion Dollars a day to sustain there ecconomy. It won't be long before people realise they are not in a resession but a Depression, and will mark the end of the Dollar as the world currency and the collapse of the American Empire.
I agree with you totally-the amount of BLIND optimism out there is staggering and frightening!!!
condog wrote:Firstly if we have a recession economic interest rates will be low as an RBA tool to stimulate growth,
.Yes but do you think this will solve the problem over night? It takes years for things to get bad and then years to fix things up again-look at Japan and the U.S, do you think that by dropping the rates instantly things are better? Im sure interest rates will go over 10%-there is just to much optimism out there (justread the majority of the posts in this forum) for people to slow down, they are going to have to be FORCED to reign in their spending, and about +10% will do it…
Milly wrote:Yes condog, I was reading the weekend courier mail the other day that 53% of Australians pay off their credit card within the interest free period (me and probably most of us on this forum are in this category)
Same survey said only 13% paid only othe minimum off their monthy credit card bill. All the media hype of Australia's debt is media hype. I'm not saying it isn't significant. but it is not as bad as it the media would have us believe.You would be surprised just how much debt there is out there…..wages havent increased but debt sure as hell has…..
Okays Im from the uneducated school… However I continue to ask myself isnt there something we can all do to soften the blow of the recession?
Think of the HIV ads and the skin cancer ads. They aparently work.
Can't the government create an ad campaign to help us? Im not educated so I dont know the messages for the ad, but surely things like pay cash, not credit, share accom, take the train, etc, etc, etc. It could help???
Mat
mathewc73 wrote:Okays Im from the uneducated school… However I continue to ask myself isnt there something we can all do to soften the blow of the recession?Think of the HIV ads and the skin cancer ads. They aparently work.
Can't the government create an ad campaign to help us? Im not educated so I dont know the messages for the ad, but surely things like pay cash, not credit, share accom, take the train, etc, etc, etc. It could help???
Mat
Like Ive said before people are stupid creatures who are driven by greed and continue to make the same mistakes over and over again..
Regardless of what the government tell them as long as they think everything is cool they will keep spending-just look at the peope on this board, try to tell em things might start to slow up and you get laughed of the net
mathewc73 wrote:Okays Im from the uneducated school… However I continue to ask myself isnt there something we can all do to soften the blow of the recession?- Stay out of debt
- Get a 'recession-proof' job or the nearest thing (police/fire/teacher/ambo/nurse etc)
- Build up a cash-buffer – start with 6 months of living expenses, then shoot for 12 months. Once you've got 2+ yrs worth you'll feel pretty secure no matter what the future holds.
Cheers, F. [cowboy2]
And when the ecconomy is suffering from high interest rates, you can't just magically change the % number and fix everything, Thats not how things work, you have to print more money to lower interest rates and weaken the dollar which makes everything worse. Just look at U.S of A
You must be logged in to reply to this topic. If you don't have an account, you can register here.
